Exhibit 1.1
Alliance Medical Corporation
4,000,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
________ __, 2001
UNDERWRITING AGREEMENT
________ __, 2001
UBS Warburg LLC
RBC Dain Rauscher Inc.
SG Cowen Securities Corporation
As representatives of the several Underwriters
named in Schedule A hereto
c/o UBS Warburg LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
Alliance Medical Corporation, a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of 4,000,000 shares (the "Firm
Shares") of common stock, $0.001 par value per share, of the Company (the
"Common Stock"). 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 600,000 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, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-13844)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act, and also
including any registration statement filed pursuant to Rule 462(b) under the Act
with respect to the offering contemplated by such registration statement (as so
amended), is herein called the "Registration Statement," and the prospectus, in
the form filed by the Company with the Commission pursuant to Rule 424(b) under
the Act on or before the second business day after the date hereof (or such
earlier time as may be required under the Act) or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time the Registration Statement became effective, is herein called the
"Prospectus."
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the aggregate
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, in each case at a purchase price of $____ per Share.
The Company 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 representations and warranties
and subject to the 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,
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 by you on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth (30th)
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");
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provided, however, that the additional time of purchase shall not be earlier
than the time of purchase (as defined below) nor earlier than the second
business day(1) 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).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by wire transfer of Federal (same-day) funds
against delivery of the certificates for the Firm Shares to you through the
facilities of the Depository Trust Company ("DTC") for the respective accounts
of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time, on _________ __, 2001 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 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 registered 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 and
packaging of the certificates for the Firm Shares by you, the Company agrees to
make such certificates available to you for such purpose at least one full
business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form registered in such names and
in such denominations as you shall specify no later than the second business day
preceding the additional time of purchase. For the purpose of expediting the
checking and packaging 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.
Deliveries of the documents described in Section 6 below with
respect to the purchase of the Shares shall be made at the offices of Dewey
Ballantine LLP, 1301 Avenue of the Americas, New York, New York at 9:00 A.M.,
New York City time, on the date of the closing of the purchase of the Firm
Shares or the Additional Shares, as the case may be.
3. Representations and Warranties. The Company represents and
warrants to each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
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(1) As used herein "business day" shall mean a day on which the New
York Stock Exchange is open for trading.
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(b) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and non-assessable. The holders of the Shares
will not be subject to personal liability by reason of being such holders. The
certificates for the Shares are in due and proper form and conform in all
material respects to the requirements of the Delaware General Corporation Law.
(c) 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 execution, delivery
and performance by the Company of this Agreement, the issuance and sale of the
Shares contemplated hereby and by the Registration Statement, other than
registration of the Shares under the Act and under the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act"), which have been or will be effected by the Company, 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 or under
the rules and regulations of the NASD.
(d) The Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act. When the Registration Statement became or becomes
effective, the Registration Statement and the Prospectus complied or will comply
in all material respects with the provisions of the Act, and the Registration
Statement did not or 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, and the Prospectus did not or 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, in
light of the circumstances under which they were made, not misleading and the
Prospectus, any Preliminary Prospectus and any supplement thereto or prospectus
wrapper prepared in connection therewith, at their respective times of issuance
and at the time of purchase and additional time of purchase, as the case may be,
complied and will comply in all material respects with any applicable laws or
regulations of jurisdictions in which the Prospectus and such preliminary
prospectus, as amended or supplemented, if applicable, are distributed in
connection with the offer and sale of the Shares; provided, however, that the
Company makes no representation or warranty with respect to any statement
contained in the 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 Statement or the Prospectus. Neither the Company
nor, to the Company's knowledge, any of its affiliates (as defined in the Act)
has distributed directly or indirectly any offering material in connection with
the offering or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or any other materials, if any, permitted
by the Act.
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(e) The audited financial statements of the Company included in the
Registration Statement and the Prospectus present fairly the financial
position and results of operations of the Company as of the dates and for
the periods indicated; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved; the pro forma financial data
included in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of Regulation S-X of the Securities Act, and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of
those statements; the other financial and statistical data set forth in
the Registration Statement and the Prospectus are accurately presented and
prepared on a basis consistent with such financial statements and the
books and records of the Company; and there are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement and the Prospectus that are not included as
required.
(f) Each of Nelson Lambson & Co. PLC and Deloitte & Touche LLP,
whose reports on the financial statements of the Company are filed with
the Commission as part of the Registration Statement and Prospectus, are
independent public accountants as required by the Act.
(g) All legal or governmental proceedings, all statutes and
regulations and all contracts, leases or documents of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so described
or filed as required. All statistical and market-related data included in
the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the extent
required.
(h) Except as set forth in the Registration Statement and the
Prospectus: (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it, or register pursuant to the Act,
any shares of capital stock or other equity interests; (ii) no person has
any preemptive rights, co-sale rights, rights of first refusal or other
rights to purchase any shares of Common Stock and (iii) no person has the
right to act as an underwriter, or as a financial advisor to the Company,
in connection with the offer and sale of the Shares. No person has the
right, contractual or otherwise, to cause the Company to register under
the Act any shares of capital stock or other equity interests as a result
of the filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby.
(i) Immediately after the issuance and sale of the Shares to the
Underwriters, no shares of preferred stock of the Company shall be issued
and outstanding, and no holder of any shares of capital stock, securities
convertible into or exchangeable or exercisable for capital stock or
options, warrants or other rights to purchase capital stock or any other
securities of the Company shall have any existing or future right to
acquire any shares of preferred stock of the Company.
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(j) The Company is not, and after the offering and sale of the
Shares, will not be, an "investment company" or an entity "controlled" by
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(k) The Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A
hereto, of each of its officers and directors and each of the holders of
the Outstanding Diluted Common Stock (as defined below). The Company has
provided to UBSW and to Dewey Ballantine LLP, counsel for the
Underwriters, a complete and accurate list of all securityholders of the
Company and the number and type of securities held by each securityholder.
The Company has provided to UBSW and to Dewey Ballantine LLP, counsel for
the Underwriters, true, accurate and complete copies of all of the Lock-Up
Agreements presently in effect or effected hereby. The Company hereby
represents and warrants that it will not purport to release any of its
officers, directors or other securityholders from any Lock-Up Agreements
currently existing or hereafter effected without the prior written consent
of UBSW. For the purposes of this Agreement, "Outstanding Diluted Common
Stock" shall mean the outstanding shares of Common Stock and any shares of
Common Stock issuable upon conversion, exercise or exchange of any
outstanding securities, notes or other instruments (including options and
warrants).
(l) Neither the Company nor any of its affiliates has taken,
directly or indirectly, any action designed to or which has constituted or
which might reasonably be expected to cause or result, under the Exchange
Act or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(m) The Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Delaware and has full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would
not have a material adverse effect on the business, prospects, properties,
condition (financial or otherwise) or results of operation of the Company
and the Subsidiaries (as defined herein), taken as a whole (a "Material
Adverse Effect").
(n) The capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus. As of the date of this Agreement,
the Company has an authorized and outstanding capital stock as set forth
under the heading entitled "Actual" in the section of the Registration
Statement and the Prospectus entitled "Capitalization" and, as of the time
of purchase, and assuming the receipt and application of the net proceeds
as described under the section of the Registration Statement and the
Prospectus entitled "Use of proceeds," the Company shall have an
authorized and outstanding capital stock as set forth under the heading
entitled "Pro forma as adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization." All of the
outstanding shares of
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capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and have not have
been issued in violation of any preemptive right, resale right, right of
first refusal or similar right. The shares of Common Stock issuable upon
conversion of the outstanding preferred stock of the Company upon
completion of the offering contemplated hereby have been duly and validly
authorized and reserved for issuance, and upon issuance, they will be duly
and validly issued and fully paid and non-assessable, will have been
issued in compliance with all federal and state securities laws and will
not have been issued in violation of any preemptive right, resale right,
right of first refusal or similar right.
(o) The Company does not have any subsidiaries (as defined in the
Act) other than as listed in Schedule B annexed hereto (the
"Subsidiaries"). The Company, either directly or through one of the
Company's wholly-owned Subsidiaries, owns 100% of the outstanding capital
stock of each of the Subsidiaries except Applied Medical Technologies,
L.L.C., of which the Company, through one of its wholly-owned
Subsidiaries, owns 72% of the outstanding capital stock. Other than the
Subsidiaries, the Company does not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, limited
liability company, joint venture, association or other entity except as
described in the Registration Statement and the Prospectus. Complete and
correct copies of the charter and bylaws and other organizational
documents of the Company and each of the Subsidiaries and all amendments
thereto have been delivered to you, and except as described in the
Prospectus and set forth in the exhibits to the Registration Statement, no
changes therein will be made subsequent to the date hereof and prior to
the time of purchase or, if later, the additional time of purchase. Each
of the Subsidiaries has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the jurisdiction of
its incorporation and has full power and authority to own, lease and
operate its properties and conduct its business. Each of the Subsidiaries
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a Material Adverse
Effect. All of the outstanding shares of capital stock of each of the
Subsidiaries has been duly and validly authorized and issued and are fully
paid and non-assessable and owned by the Company, free of any security
interest, other encumbrance or adverse claims, have been issued in
compliance with all federal and state securities laws and have not been
issued in violation of any preemptive right, resale right, right of first
refusal or similar right. No option, warrant or other rights to purchase,
agreements or other obligations to issue or rights to convert any
obligation into shares of capital stock or ownership interests in any of
the Subsidiaries are outstanding.
(p) Neither the Company nor any of the Subsidiaries has violated or
is in violation of any federal, state, local or foreign law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or any of
the Subsidiaries, which violation could, individually or in the aggregate,
have a Material Adverse Effect. Each of the Company and the Subsidiaries
has all necessary
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licenses, permits, franchises, authorizations, consents and approvals, and
made all filings required 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
business; and neither the Company nor any of the Subsidiaries is in
violation of, or in default under, any such license, permit, franchise,
authorization, consent or approval, the effect of which could individually
or in the aggregate have a Material Adverse Effect. Without limiting the
generality of the foregoing, each of the Company and the Subsidiaries has
operated and currently is in compliance in all material respects with all
applicable U.S. Food and Drug Administration ("FDA") rules, regulations
and policies, and all deficiencies identified by the FDA with respect to
the Company or the Subsidiaries or their facilities, personnel or
operations as a result of FDA inspections, audits or otherwise have been
corrected.
(q) The clinical, pre-clinical and other studies and tests conducted
by or on behalf of or sponsored by the Company or the Subsidiaries or in
which the Company or the Subsidiaries or the product candidates of the
Company or the Subsidiaries have participated were and, if still pending,
are being conducted in accordance with standard medical and scientific
research procedures.
(r) Neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (and no event has occurred which with
notice, lapse of time or both would result in any breach or violation of,
or constitute a default under), its charter or bylaws or other
organizational documents 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 evidence
of indebtedness, or any lease, contract or other agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which any
of them or any of their properties is bound or affected, the effect of
which could individually or in the aggregate have a Material Adverse
Effect. The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares contemplated hereby and by the
Registration Statement will not conflict with, or result in any breach or
violation of or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach or violation
of, or constitute a default under), any provisions of the charter or
bylaws or other organizational documents of the Company or any of the
Subsidiaries or under any provision of any license, permit, franchise,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or their 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 the
Subsidiaries, the result of which could individually or in the aggregate
have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
contemplated hereby and by the Registration Statement will not conflict
with, or result in any breach or violation of, constitute a default under
(nor constitute any event which with notice, lapse of time or both would
result in any breach or violation of, or constitute a default under) or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries
pursuant to any
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indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or
by which any of them or any of their properties is bound or affected, the
result of which could individually or in the aggregate have a Material
Adverse Effect.
(s) Except as described in the Registration Statement and the
Prospectus, there are no private or governmental actions, suits, claims,
investigations or proceedings pending, threatened or, to the Company's
knowledge, contemplated, to which the Company or any of the Subsidiaries
or any of their directors or officers is subject or of which any of their
properties is subject, whether at law, in equity or before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency.
(t) Except as described in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a
prospective material adverse change, in the business, prospects,
properties, condition (financial or otherwise) or results of operations of
the Company and the Subsidiaries, taken as a whole, (ii) any transaction
that is material to the Company and the Subsidiaries, taken as a whole,
(iii) the incurrence by the Company or any of the Subsidiaries of any
obligation, direct or contingent, and whether or not in the ordinary
course of business, which is material to the Company and the Subsidiaries,
taken as a whole, (iv) any change in the capital stock or other equity
interest or outstanding indebtedness of the Company or any of the
Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock or other equity interest of the Company
or any of the Subsidiaries. Neither the Company nor any of the
Subsidiaries has any contingent obligations that are material to the
Company and the Subsidiaries, taken as a whole, which are not disclosed in
the Registration Statement.
(u) Each of the Company and the Subsidiaries owns or possesses those
trademarks, trademark registrations, service marks, service mark
registrations, trade names, patents, patent rights, copyrights, licenses,
approvals, inventions, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) and other similar rights or intellectual property
described in the Prospectus as being owned or used by or licensed to the
Company or the Subsidiaries or necessary for the conduct of their
respective businesses as currently conducted (collectively, the
"Intellectual Property"). Each of the Company and the Subsidiaries has
taken all steps necessary to secure assignments of the Intellectual
Property from their respective officers, employees, consultants and
contractors. Except as set forth in the Prospectus, none of the technology
employed by the Company or any of the Subsidiaries has been obtained or is
being used by the Company or the Subsidiaries in violation of any
contractual or fiduciary obligation binding on the Company or the
Subsidiaries, their respective directors, executive officers, employees or
consultants; and the Company has taken and will maintain reasonable
measures to prevent the unauthorized dissemination or publication of its
confidential information. Neither the Company nor any of the Subsidiaries
has infringed, interfered with or misappropriated
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any patents, patent rights, trade names, trademarks, copyrights or other
intellectual property rights of others, which infringement, if the subject
of any unfavorable decision, ruling or finding could, individually or in
the aggregate, result in a material and adverse change in the business,
prospects, properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole. Except
as set forth in the Prospectus, there is no pending or, to the Company's
knowledge, threatened private or governmental action, suit, proceeding or
claim (i) challenging the rights of the Company or any of the Subsidiaries
in or to any such Intellectual Property, (ii) challenging the validity or
scope of, or any rights relating to, any such Intellectual Property of the
Company or any of the Subsidiaries or (iii) alleging that the Company or
any of the Subsidiaries infringes or otherwise violates, or would infringe
or otherwise violate, any patent, trademark, copyright, trade secret or
other proprietary rights of others; and the Company is unaware of any
facts which would form a reasonable basis for any of the claims described
in clauses (i), (ii) and (iii) above.
(v) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Registration
Statement and the Prospectus and except as would not individually or in
the aggregate have a Material Adverse Effect. All the property held under
lease by the Company or the Subsidiaries is held thereby under valid,
subsisting and enforceable leases.
(w) Each of the Company and the Subsidiaries is insured by insurers
of recognized financial responsibility against such losses and risks and
in such amount as are customary in the business in which it is engaged.
All policies of insurance insuring the Company or the Subsidiaries or any
of their businesses, assets, employees, officers and directors are in full
force and effect, and each of the Company and the Subsidiaries is in
compliance with the terms of such policies in all material respects. There
are no claims by the Company or any of the Subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.
(x) Neither the Company nor any of the Subsidiaries has sent or
received any notice of termination of any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination has been threatened by the Company or
any of the Subsidiaries or any other party to any such contract or
agreement.
(y) Since the date of the latest audited financial statements
included in the Prospectus, neither the Company nor any of the
Subsidiaries has sustained any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as disclosed in the Prospectus or other
than any loss or interference which could individually or in the aggregate
have a Material Adverse Effect.
(z) Each of the Company and the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are
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executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(aa) Each of the Company and the Subsidiaries has filed all federal,
state, local and foreign tax returns and tax forms required to be filed.
Such returns and forms are complete and correct in all material respects,
and all taxes shown by such returns or otherwise assessed that are due or
payable have been paid, except such taxes as are being contested in good
faith and as to which adequate reserves have been provided. All payroll
withholdings required to be made by the Company and the Subsidiaries with
respect to employees have been made. The charges, accruals and reserves on
the books of the Company and the Subsidiaries in respect of any tax
liability for any year not finally determined are adequate to meet any
assessments or reassessments for additional taxes. There have been no tax
deficiencies asserted and, to the Company's knowledge, no tax deficiency
might be reasonably asserted or threatened against the Company or the
Subsidiaries that could individually or in the aggregate have a Material
Adverse Effect.
(bb) Neither the Company nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, 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 individually or in the
aggregate might result in a Material Adverse Effect.
In addition, any certificate signed by any officer of the Company,
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
4. Certain Covenants. The Company hereby agrees:
(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
11
states as you may designate and to maintain such qualifications in effect
so long as required for the distribution of the Shares; provided, however,
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 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 the Underwriters in New York City, as soon
as practicable after the 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 amendments or supplements thereto after
the effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; and in case any
Underwriter is required to deliver a prospectus beyond the nine-month
period referred to in Section 10(a)(3) of the Act in connection with the
sale of the Shares, the Company will prepare promptly upon request such
amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the 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 such Rules);
(d) to advise you promptly, and to confirm such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or 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 the Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of the Registration Statement, to use its best efforts to
obtain the lifting or removal of such order as soon as possible; to advise
you promptly of any proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment or supplement to
which you shall object in writing;
(e) subject to Section 4(o) hereof, to file promptly all reports and
any definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file in a timely fashion a
registration statement pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five (5) years from the date of this
Agreement (i) copies of any reports or other
12
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, (iii) copies of documents or reports filed with any national
securities exchange on which any class of securities of the Company is
listed and (iv) such other information as you may reasonably request
regarding the Company or the Subsidiaries as soon as such communications,
documents or information becomes available;
(h) to advise the Underwriters promptly of the occurrence 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
would require the making of any change in the Prospectus then being used
so that the Prospectus would not include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading, and, during such time, to prepare, file (subject to Section
4(d) hereof) and furnish promptly to the underwriters, at the Company's
expense, 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;
(i) to make generally available to its securityholders, and to
deliver to you, as soon as practicable an earnings statement of the
Company (which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve (12) months beginning after the effective date
of the Registration Statement (as defined in Rule 158(c) of the Act) and
ending not later than fifteen (15) months thereafter;
(j) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flow of the Company
for such fiscal year, accompanied by a copy of the certificate or report
thereon of nationally recognized independent certified public
accountants);
(k) to furnish to you such number of conformed copies of the
Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) as you shall
reasonably request;
(l) 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 (2) business days prior thereto, a copy of the latest
available quarterly or monthly unaudited interim consolidated financial
statements of the Company and the Subsidiaries, which have been read by
the Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 6(d) hereof;
(m) 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;
13
(n) to pay all costs, expenses, fees and taxes 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) as
provided by Sections 4(b) and 4(k) and otherwise herein, (ii) the
registration, issue, sale and delivery of the Shares, (iii) the producing,
word processing and/or printing of this Agreement, any agreement among
underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction
and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) 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 reasonable legal
fees and filing fees and other disbursements of counsel for 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 the National Association of Securities
Dealers Automated Quotation National Market System ("NASDAQ") and any
registration thereof under the Exchange Act, (vi) the review of the
public offering of the Shares by the NASD, including the associated filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters, (vii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing of
the offer and sale of the Shares to prospective investors and the
Representatives' sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers
of the Company and any such consultants and the cost of any aircraft
chartered in connection with the road show and (viii) the performance of
the Company's other obligations hereunder;
(o) to furnish to you, before filing with the Commission subsequent
to the effective date of the Registration Statement and during the period
referred to in Section 4(h) hereof, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(p) not to sell, offer to sell, contract to sell, hypothecate,
pledge, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or options, warrants or other
rights to purchase Common Stock or any other shares of the Company that
are substantially similar to Common Stock or file a registration statement
under the Act relating to the offer and sale of any shares of Common Stock
or securities convertible into or exercisable or exchangeable for Common
Stock or options, warrants or other rights to purchase Common Stock or any
other shares of the Company that are substantially similar to Common Stock
for a period of one hundred and eighty (180) days after the date hereof
(the "Lock-up Period"), without the prior written consent of UBSW,
14
except for (i) the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Common Stock
upon the exercise of outstanding options or warrants as disclosed in the
Registration Statement and the Prospectus to persons who have entered into
Lock-Up Agreements with the Underwriters and (iii) the issuance of
employee stock options not exercisable during the Lock-up Period pursuant
to stock option plans described in the Registration Statement and the
Prospectus; and
(q) to use its best efforts to cause the Common Stock to be listed
for quotation on the Nasdaq National Market.
5. Reimbursement of Underwriters' Expenses. The Company agrees that
if the Shares are not delivered for any reason other than the termination of
this Agreement pursuant to subsections (ii), (iii) or (iv) of the second
paragraph of Section 7 hereof or the last paragraph of Section 8 hereof or the
default by one or more of the Underwriters in its or their respective
obligations hereunder, it shall, in addition to paying the amounts described in
Section 4(n) hereof, reimburse the Underwriters for all of the out-of-pocket
expenses actually incurred by the Underwriters, including the reasonable fees
and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company on the date hereof and at the time of purchase as
if made 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 of the Company 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, as if made at such time), the timely performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, the opinion of Snell
& Wilmer L.L.P., 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 reasonably satisfactory to Dewey Ballantine LLP, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation and is in good standing under the laws of
the State of Delaware and has full power and authority to own, lease
and operate its properties and conduct its business as described in
the Registration Statement and 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 and is in good standing under
the laws of its jurisdiction of incorporation and has full power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus;
15
(iii) each of the Company and the Subsidiaries is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the ownership or leasing of
its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have
a Material Adverse Effect;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be validly
issued, fully paid and non-assessable;
(vi) the Company has authorized and outstanding shares of
capital stock as set forth in the Registration Statement and the
Prospectus; the outstanding shares of capital stock of the Company
(A) have been duly and validly authorized and issued and are fully
paid and non-assessable, (B) are free of any preemptive rights,
resale rights, rights of first refusal and similar rights under the
Delaware General Corporation Law or under any contract, agreement or
instrument described in or filed as an exhibit to the Registration
Statement or otherwise known to such counsel and (C) to such
counsel's knowledge, were issued in compliance with all applicable
federal and state securities laws; the Shares when issued will be
free of any preemptive rights, resale rights, rights of first
refusal and similar rights under the Delaware General Corporation
Law or the charter or bylaws or other organizational documents of
the Company or under any contract, agreement or instrument known to
such counsel, and the holders of the Shares will not be subject to
personal liability by reason of being such holders; the certificates
for the Shares are in due and proper form and conform in all
material respects to the requirements of the Delaware General
Corporation Law;
(vii) all of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable, are owned of record by the
Company, are not subject to any perfected security interest or, to
such counsel's knowledge, any other encumbrance or adverse claim
and, to such counsel's knowledge, have been issued and sold in
compliance with all applicable federal and state securities laws; to
such counsel's knowledge, no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights
to convert any obligation into shares of capital stock or ownership
interests in any of the Subsidiaries are outstanding.
(viii) the capital stock of the Company, including the Shares,
conforms as to legal matters to the description thereof contained in
the Registration Statement and Prospectus;
(ix) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data
16
contained therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of
the Act;
(x) the Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any
required filing of the Prospectus, and any supplement thereto
pursuant to Rule 424 under the Act, has been made in the manner and
within the time period required by such Rule 424;
(xi) 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 execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation
of the transactions contemplated hereby and by the Registration
Statement, other than those that have been obtained under the Act,
the Exchange Act and the rules of the Nasdaq National Market and
other than any necessary qualification under the state securities or
blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or any necessary approval of the
Corporate Financing Department of NASD Regulation, Inc., as to which
such qualification and approval such counsel need express no
opinion;
(xii) the execution, delivery and performance of this
Agreement by the Company and the transactions contemplated hereby
and by the Registration Statement do not and will not conflict with,
or result in any breach or violation of, or constitute a default
under (nor constitute any event which with notice, lapse of time, or
both, would result in any breach or violation of, or constitute a
default under) or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of the Subsidiaries pursuant to (A) any provision of the charter
or bylaws or other organizational documents of the Company or any of
the Subsidiaries, (B) any provision of any license, permit,
franchise, indenture, mortgage, deed of trust, note, bank loan or
credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument filed as an exhibit to the
Registration Statement or otherwise known to such counsel issued to
the Company or any of the Subsidiaries, or to which the Company or
any of the Subsidiaries is a party or by which any of them may be
bound or affected, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject or may be bound or
affected, (C) any federal, state, local or foreign law, regulation
or rule or (D) any decree, judgment or order applicable to the
Company or any of the Subsidiaries, in each case known to such
counsel;
(xiii) to such counsel's knowledge, neither the Company nor
any of the Subsidiaries is in violation of its charter or bylaws or
other organizational documents, and neither the Company nor any of
the Subsidiaries is in breach or violation of or in default under
(nor has any event occurred which with notice, lapse of time, or
both would result in any breach or violation of, or constitute a
default under), any license, permit, franchise, indenture, mortgage,
deed of trust,
17
bank loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the
Company or any of the Subsidiaries is or was a party or by which it
or its properties may be bound or affected or in violation of any
federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries, the effect of which would individually or in the
aggregate have a Material Adverse Effect;
(xiv) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or other documents of a character which
are required to be filed as exhibits to the Registration Statement
or to be described in the Prospectus which have not been so filed or
described;
(xv) to such counsel's knowledge, there are no private or
governmental actions, suits, claims, investigations or proceedings
pending, threatened or contemplated to which the Company or the
Subsidiaries or any of their directors or officers is subject or of
which any of their properties is subject, whether at law, in equity
or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which are
required to be described in the Prospectus but are not so described;
(xvi) the Company is not, and after the offering and sale of
the Shares, will not be, an "investment company" or an entity
controlled by an "investment company," as such term is defined in
the Investment Company Act;
(xvii) those statements in the Prospectus that are
descriptions of contracts, agreements or other legal documents or of
legal proceedings, or refer to statements of law or legal
conclusions, are accurate in all material respects and present
fairly the information required to be shown; and
(xviii) no person has the right, pursuant to the terms of any
contract, agreement or other instrument described in or filed as an
exhibit to the Registration Statement or otherwise known to such
counsel, to cause the Company to register under the Act any shares
of capital stock or other equity interests as a result of the filing
or effectiveness of the Registration Statement or the sale of the
Shares as contemplated hereby; and to such counsel's knowledge,
except as described in the Registration Statement and Prospectus, no
person is entitled to registration rights with respect to shares of
capital stock or other securities of the Company.
In addition, such counsel shall state that it has 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
Statement 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 Statement or
Prospectus (except as and to the extent stated in subparagraphs (vi), (viii) and
(xvii) above), on the basis of the foregoing nothing has
18
come to the attention of such counsel that causes such counsel to believe that
the Registration Statement or any amendment thereto at the time such
Registration Statement 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
the Registration Statement or Prospectus).
(b) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Covington
& Burling, regulatory counsel to the Company, 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 reasonably
satisfactory to Dewey Ballantine LLP, counsel for the Underwriters,
stating that the statements in the Registration Statement and the
Prospectus referencing regulatory matters, insofar as such statements
constitute summaries of food and drug regulatory matters with respect to
the Company, as of the date of the Registration Statement and the
Prospectus and as of the date of such opinion, are in all material
respects accurate and complete statements or summaries of the matters
therein set forth; and nothing has come to such counsel's attention that
causes such counsel to believe that the above-described portions of the
Registration Statement and the Prospectus, at the date of the Registration
Statement and the Prospectus or at the date of such opinion, contained or
contains an untrue statement of material fact or omitted or omits 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.
(c) 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
Dewey Ballantine LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement, the Prospectus (together with any supplement
thereto) and such other related matters as the Underwriters may require.
(d) You shall have received from each of Nelson Lambson & Co. PLC
and Deloitte & Touche 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 Dewey
Ballantine LLP, counsel for the Underwriters.
(e) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you object in writing.
19
(f) The 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 5:30 P.M.,
New York City time, on the date of this Agreement, unless a later time
(but not later than 5:30 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 and you in writing or by telephone, confirmed in writing;
provided, however, that the Company and you and any group of Underwriters,
including you, who have agreed hereunder to purchase in the aggregate at
least fifty percent (50%) of the Firm Shares may from time to time agree
on a later date.
(g) 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 the 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 Statement 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.
(h) 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 adverse change, or any development involving a prospective
material and adverse change (other than as specifically identified in the
Registration Statement and Prospectus), in the business, prospects,
properties, condition (financial or otherwise) or results of operations of
the Company and the Subsidiaries, taken as 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 the
Subsidiaries.
(i) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of its
President and its Chief Financial Officer to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct as of each such date, that the Company has
performed such of its obligations under this Agreement as are to be
performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be, and the conditions set
forth in paragraphs (f), (g) and (h) of this Section 6 have been met.
(j) You shall have received signed Lock-Up Agreements, dated the
date of this Agreement, from each of the persons described in Section 3(k)
hereof.
(k) The Company 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.
20
(l) The Shares shall have been approved for listing for quotation on
the Nasdaq National Market, subject only to notice of issuance at or prior
to the time of purchase or the additional time of purchase, as the case
may be.
7. 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 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 fifty percent (50%) of the Firm Shares, (i) if, since the
time of execution of this Agreement or the respective dates as of which
information is given in the Registration Statement and Prospectus, there has
been any material adverse change, or any development involving a prospective
material adverse change (other than as specifically identified in the
Registration Statement and Prospectus) in the business, prospects, properties,
condition (financial or otherwise) or results of operations of the Company and
the 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 (ii) 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, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or limitations or minimum prices shall have been established on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market, or
(iii) if a banking moratorium shall have been declared either by the United
States or New York State authorities, or (iv) 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 7, the Company 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
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and
7, if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all
21
Underwriters so defaulting shall have agreed but failed to take up and pay for
does not exceed ten percent (10%) of the total number of Firm Shares, the
non-defaulting Underwriters shall take up and pay for (in addition to the
aggregate number 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 agrees with the non-defaulting Underwriters that it 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 (5) business
days in order that any necessary changes in the Registration Statement 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 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter
or Underwriters agreed to purchase exceeds ten percent (10%) of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five (5) business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, 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, and the successors and assigns of all of
the foregoing persons from and against any loss, damage, 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, the common law or otherwise, insofar as
such loss, damage,
22
expense, liability or claim arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the 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 10 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 such Registration Statement or Prospectus or necessary to
make the statements made therein not misleading, except insofar as any
such loss, damage, 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 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 such Registration Statement or such Prospectus or
necessary to make such information not misleading or (ii) any untrue
statement or alleged untrue statement made by the Company in Section 3 of
this Agreement or the failure by the Company to perform when and as
required any agreement or covenant contained herein or (iii) any untrue
statement or alleged untrue statement of any material fact contained in
any audio or visual materials provided by the Company or based upon
written information furnished by or on behalf of the Company including,
without limitation, slides, videos, films, tape recordings, used in
connection with the marketing of the Shares.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, 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 shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such 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
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those available to
the Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings
23
in the same jurisdiction representing the indemnified parties who are parties to
such Proceeding). The Company shall not be liable for any settlement of any
Proceeding effected without the written consent of the Company but if settled
with the written consent of the Company, the Company 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 sixty (60) 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
thirty (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 and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company or any such person may incur under the
Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, 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 the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof
by the Company) or in a Prospectus.
If any Proceeding is brought against the Company or any such person
in respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, 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 such Underwriter may have to the Company or any such person or otherwise.
The Company 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 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
Proceeding or such Underwriter shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or
24
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding 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 understood,
however, that such Underwriter shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding 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
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 sixty (60) 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 thirty (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 9 is
unavailable to an indemnified party under subsections (a) or (b) of this
Section 9 in respect of any losses, damages, 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, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company 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 on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims,
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company on the one hand and of the Underwriters on the other
shall be determined
25
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 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,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection
(c) above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such
Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement 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 Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such 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 or officers 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 and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale
of the Shares, or in connection with the Registration Statement or
Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
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
UBS Warburg LLC, 299 Park Avenue, New York, New York 10171-0026, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 10232 South
51st Street, Phoenix, Arizona 85044, Attention: Mr. Ricardo M. Ferreira.
11. Information Furnished by the Underwriters. The statements set
forth in the fifth, sixth and eighth paragraphs under the caption "Underwriting"
in the Prospectus constitute
26
the only information furnished by or on behalf of the Underwriters as such
information is referred to in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, 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.
13. Submission to Jurisdiction. Except as set forth below, no Claim
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against UBSW or any indemnified party.
Each of UBSW and the Company (on their respective behalfs and, to the extent
permitted by applicable law, on behalf of their respective stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and 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.
15. Counterparts. This Agreement may be signed by the parties in one
or more counterparts which together shall constitute one and the same agreement
among the parties. Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Company and their successors and assigns and any successor or
assign of any substantial portion of the Company's, and any of the Underwriters'
respective businesses and/or assets.
17. Miscellaneous. UBSW, an indirect, wholly owned subsidiary of UBS
AG, is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBSW is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and
27
purchases of securities. Securities sold, offered or recommended by UBSW 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 UBSW may have lending relationships with
issuers of securities underwritten or privately placed by UBSW. To the extent
required under the securities laws, prospectuses and other disclosure documents
for securities underwritten or privately placed by UBSW 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 UBSW.
28
If the foregoing correctly sets forth the understanding among the
Company 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 and the Underwriters, severally.
Very truly yours,
ALLIANCE MEDICAL CORPORATION
By:____________________________________
Name:
Title:
Accepted and agreed to as of the
date first above written, on behalf of
themselves and the other several Underwriters
named in Schedule A
UBS WARBURG LLC
RBC DAIN RAUSCHER INC.
SG COWEN SECURITIES CORPORATION
By: UBS WARBURG LLC
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
29
SCHEDULE A
Underwriter Number of
- ----------- Firm Shares
-----------
UBS Warburg LLC........................................
RBC Dain Rauscher Inc. ................................
SG Cowen Securities Corporation........................
-----------
Total................................ 4,000,000
===========
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SCHEDULE B
Name of Subsidiary and Ownership Interest* Jurisdiction of Incorporation
- ------------------------------------------ -----------------------------
Sterile Reprocessing Services, Inc. Texas
Crystal Medical Technologies, Inc. (dba ORRIS, Inc.) Nevada
Applied Medical Recovery, Inc. Arizona
Arizona Medical Recovery & Reprocessing, L.L.C.(1) Arizona
Applied Medical Technologies, L.L.C.(2) Arizona
Paragon Health Care Corporation South Carolina
Paragon Reprocessing Services, Inc.(3) Arkansas
- ------------------------------------
* Unless otherwise indicated, all outstanding capital stock of
each of the Subsidiaries are owned by the Company.
(1) All outstanding capital stock of the Subsidiary are owned by
Applied Medical Recovery, Inc., a wholly-owned Subsidiary of the Company.
(2) Of this Subsidiary, 72% of the outstanding capital stock is owned
by Applied Medical Recovery, Inc., a wholly-owned Subsidiary of the Company and
28% of the outstanding capital stock is owned by Dr. Wade Hill.
(3) All outstanding capital stock of the Subsidiary are owned by
Paragon Health Care Corporation, a wholly-owned Subsidiary of the Company.
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EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
32