EXHIBIT 1.1
2,300,000 SHARES
SYMPHONIX DEVICES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
[Date]
XXXXX & COMPANY and UBS SECURITIES LLC,
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Symphonix Devices, Inc., a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of 2,300,000 shares of Common Stock, $0.01 par
value (the "Common Stock"), of the Company. The aggregate of 2,300,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 3 hereof, up to an additional 2,345,000 shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". Xxxxx & Company ("Cowen") and UBS
Securities LLC ("UBS") are acting as representatives of the several Underwriters
and in such capacity are hereinafter referred to as the "Representatives".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(A) A registration statement on Form S-1 (File No. 333-____) in the form in
which it became or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective with respect to the
Stock, including any preeffective prospectuses included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, copies of which have heretofore been delivered to you,
has been carefully prepared by the Company in conformity with the requirements
of the Securities Act and has been filed with the Commission under the
Securities Act; one or more amendments to such registration statement,
1.
including in each case an amended preeffective prospectus, copies of which
amendments have heretofore been delivered to you, have been so prepared and
filed. If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Stock may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term "Registration
Statement" as used in this Agreement shall also include any registration
statement relating to the Stock that is filed and declared effective pursuant to
Rule 462(b) under the Securities Act. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement, or, (A) if the prospectus included in the Registration Statement
omits information in reliance on Rule 430A under the Securities Act and such
information is included in a prospectus filed with the Commission pursuant to
Rule 424(b) under the Securities Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectus filed with the Commission pursuant to Rule 424(b) and (B) if
prospectuses that meet the requirements of Section 10(a) of the Securities Act
are delivered pursuant to Rule 434 under the Securities Act, then (i) the term
"Prospectus" as used in this Agreement means the "prospectus subject to
completion" (as such term is defined in Rule 434(g) under the Securities Act) as
supplemented by (a) the addition of Rule 430A information or other information
contained in the form of prospectus delivered pursuant to Rule 434(b)(2) under
the Securities Act or (b) the information contained in the term sheets described
in Rule 434(b)(3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the term sheets. The term
"Preeffective Prospectus" as used in this Agreement means the prospectus subject
to completion in the form included in the Registration Statement at the time of
the initial filing of the Registration Statement with the Commission, and as
such prospectus shall have been amended from time to time prior to the date of
the Prospectus.
(B) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and, at its
date of issue, each Preeffective Prospectus conformed in all material respects
with the requirements of the Securities Act and did not include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and, when the
Registration Statement becomes effective and at all times subsequent thereto up
to and including each of the Closing Dates (as hereinafter defined), the
Registration Statement and the Prospectus and any amendments or supplements
thereto contained and will contain all material statements and information
required to be included therein by the Securities Act and conformed and will
conform in all material respects to the requirements of the Securities Act and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a material
fact or omit to state any 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; provided, however, that the foregoing
representations, warranties and agreements shall not apply to information
contained in or omitted from any Preeffective Prospectus or the Registration
Statement or the Prospectus or any such amendment or supplement thereto in
reliance upon, and in conformity with, written information furnished to
2.
the Company by or on behalf of any Underwriter, directly or through you,
specifically for use in the preparation thereof; there is no franchise, lease,
contract, agreement or document required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or documents
contained in the Registration Statement are accurate and complete descriptions
of such documents in all material respects.
(C) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Company has incurred any liabilities or
obligations, direct or contingent, nor entered into any transactions not in the
ordinary course of business, and there has not been any material adverse change
in the condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company or any change in
the capital stock, short-term or long-term debt of the Company.
(D) The financial statements, together with the related notes and
schedules, set forth in the Prospectus and elsewhere in the Registration
Statement fairly present, on the basis stated in the Registration Statement, the
financial position and the results of operations and changes in financial
position of the Company at the respective dates or for the respective periods
therein specified. Such statements and related notes and schedules have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis except as may be set forth in the Prospectus. The summary and
selected financial and statistical data set forth in the Prospectus under the
captions "Summary Financial Data" and "Selected Financial Data" fairly present,
on the basis stated in the Registration Statement, the information set forth
therein.
(E) Coopers & Xxxxxxx L.L.P., who have expressed their opinions on the
audited financial statements and related schedules included in the Registration
Statement and the Prospectus are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(F) The Company has been duly organized and is validly existing and in good
standing as a corporation under the laws of the State of Delaware, with power
and authority (corporate and other) to own or lease its properties and to
conduct its business as described in the Prospectus; the Company is in
possession of and operating in compliance with all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and orders
required for the conduct of its business, all of which are valid and in full
force and effect; and the Company is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions where its ownership
or leasing of properties or the conduct of its business requires such
qualification. The Company has all requisite power and authority, and all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public regulatory or
governmental agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a materially
burdensome restriction not
3.
adequately disclosed in the Registration Statement and the Prospectus. The
Company does not own or control, directly or indirectly, any corporations,
associations or other entities.
(G) The Company's authorized and outstanding capital stock is on the date
hereof, and will be on the Closing Date, as set forth under the heading
"Capitalization" in the Prospectus; the outstanding shares of common stock of
the Company conform to the description thereof in the Prospectus and have been
duly authorized and validly issued and are fully paid and nonassessable and have
been issued in compliance with all federal and state securities laws and were
not issued in violation of or subject to any preemptive rights or similar rights
to subscribe for or purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or contemplated by the
Prospectus and the financial statements of the Company and related notes thereto
included in the Prospectus, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to subscribe for
or to purchase any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations, except for options
granted subsequent to the date of information provided in the Prospectus
pursuant to the Company's employee and stock option plans as disclosed in the
Prospectus. The description of the Company's stock option and other stock plans
or arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(H) The Stock to be issued and sold by the Company to the Underwriters
hereunder has 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 nonassessable and free of any preemptive or similar rights and
will conform to the description thereof in the Prospectus.
(I) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its affiliates
is a party or of which any property of the Company or any affiliate is subject,
which, if determined adversely to the Company or any such affiliate, might
individually or in the aggregate (i) prevent or adversely affect the
transactions contemplated by this Agreement, (ii) suspend the effectiveness of
the Registration Statement, (iii) prevent or suspend the use of the Preeffective
Prospectus in any jurisdiction or (iv) result in a material adverse change in
the condition (financial or otherwise), properties, business, management
prospects, net worth or results of operations of the Company and there is no
valid basis for any such legal or governmental proceeding; and to the best of
the Company's knowledge no such proceedings are threatened or contemplated
against the Company or any or affiliate by governmental authorities or others.
The Company is not a party nor subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body or other
governmental agency or body. The description of the Company's litigation under
the heading "Legal Proceedings" in the Prospectus is true and correct and
complies with the Rules and Regulations.
(J) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated (A) will not result in any
violation of the provisions of
4.
the certificate of incorporation, by-laws or other organizational documents of
the Company, or any law, order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its properties or
assets, (B) will not conflict with or result in a breach or violation of any of
the terms or provisions of or constitute a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which it or any of its properties is or may
be bound, the Certificate of Incorporation, By-laws or other organizational
documents of the Company, or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties or will result in the creation of a lien.
(K) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, except such as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or under the Securities Act
or the Securities Exchange Act of 1934, as amended (the "Exchange Act") or the
securities or "Blue Sky" laws of any jurisdiction in connection with the
purchase and distribution of the Stock by the Underwriters.
(L) The Company has the full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder (including to issue,
sell and deliver the Stock), and this Agreement has been duly and validly
authorized, executed and delivered by the Company and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or the public
policy underlying such laws.
(M) The Company is in all material respects in compliance with, and
conducts its business in conformity with, all applicable federal, state, local
and foreign laws, rules and regulations or any court or governmental agency or
body; to the knowledge of the Company, otherwise than as set forth in the
Registration Statement and the Prospectus, no prospective change in any of such
federal or state laws, rules or regulations has been adopted which, when made
effective, would have a material adverse effect on the operations of the
Company.
(N) The Company has filed all necessary federal, state, local and foreign
income, payroll, franchise and other tax returns and has paid all taxes shown as
due thereon or with respect to any of its properties, and there is no tax
deficiency that has been, or to the knowledge of the Company is likely to be,
asserted against the Company or any of its properties or assets that would
adversely affect the financial position, business or operations of the Company.
(O) No person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing or
effectiveness of the Registration Statement or otherwise, except for persons and
entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
5.
(P) Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company.
(Q) The Company has provided you with all financial statements since
January, 1998 to the date hereof that are available to the officers of the
Company, including financial statements for the months of December 31, 1997 and
January 31, 1998.
(R) The Company owns or possesses the right to use all patents, trademarks
(including "Symphonix" and "Vibrant"), trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by it or necessary
for the conduct of its business, and the Company is not aware of any claim to
the contrary or any challenge by any other person to the rights of the Company
with respect to the foregoing. The Company's business as now conducted and as
proposed to be conducted does not and will not infringe or conflict with in any
material respect patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or franchise right of any
person. Except as described in the Prospectus, no claim has been made against
the Company alleging the infringement by the Company of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person.
(S) The Company has performed all material obligations required to be
performed by it under all contracts required by Item 601(b)(10) of Regulation S-
K under the Securities Act to be filed as exhibits to the Registration
Statement, and neither the Company nor any other party to such contract is in
default under or in breach of any such obligations. The Company has not
received any notice of any such default or breach.
(T) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive, key
employee or significant group of employees of the Company plans to terminate
employment with the Company or (B) any such executive or key employee is subject
to any noncompete, nondisclosure, confidentiality, employment, consulting or
similar agreement that would be violated by the present or proposed business
activities of the Company. The Company does not have or expect to have any
liability for any prohibited transaction or funding deficiency or any complete
or partial withdrawal liability with respect to any pension, profit sharing or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company makes or ever has made a
contribution and in which any employee of the Company is or has ever been a
participant. With respect to such plans, the Company is in compliance in all
material respects with all applicable provisions of ERISA.
(U) The Company has obtained the written agreement described in Section
8(j) of this Agreement from each of its officers, directors and holders of
Common Stock listed on Schedule C hereto.
6.
(V) The Company has, and the Company as of the Closing Date will have,
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned or proposed to be owned by it
which is material to the business of the Company, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as would not have a material adverse effect on the Company;
and any real property and buildings held under lease by the Company or proposed
to be held after giving effect to the transactions described in the Prospectus
are, or will be as of [each of] the Closing Date[s], held by it under valid,
subsisting and enforceable leases with such exceptions as would not have a
material adverse effect on the Company, in each case except as described in or
contemplated by the Prospectus.
(W) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged or propose to engage after
giving effect to the transactions described in the Prospectus; and the Company
does not have any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company,
except as described in or contemplated by the Prospectus.
(X) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any brokerage
or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(Y) The Company has complied with all provisions of Section 517.075
Florida Statutes (Chapter 92-198; Laws of Florida).
(Z) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are 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) To the Company's knowledge, neither the Company nor any employee or
agent of the Company has made any payment of funds of the Company or received or
retained any funds in violation of any law, rule or regulation, which payment,
receipt or retention of funds is of a character required to be disclosed in the
Prospectus.
(AB) The Company is not, nor after application of the net proceeds of this
offering as described under the caption "Use of Proceeds" in the Prospectus,
will it become, 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.
7.
(AC) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company as to the matters covered thereby;
and
(AD) The Company has filed with the United States Food and Drug
Administration the "FDA"), and all applicable state and local regulatory bodies,
for and received approval of, all material registrations, applications,licenses,
requests for exemptions,permits and other regulatory authorizations necessary to
conduct the Company's business as it is described in the Registration Statement
and Prospectus based on all available information provided to the Company
through the date hereof by applicable regulatory authorities; the Company is in
compliance with all such registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations, and all applicable FDA,
state and local rules, regulations, guidelines and policies, except where the
failure so to comply would not have a material adverse effect on the business or
condition (financial or otherwise) of the Company; and the Company has no reason
to believe that any party granting any such registration, application, license,
request for exemption, permit or other authorization intends to limit, suspend
or revoke the same and knows of no basis for any such limitation, suspension or
revocation.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS--CLOSING DATES. The
Company agrees to sell to the Underwriters the Firm Stock, and on the basis of
the representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase the Firm Stock from the Company, the
number of shares of Firm Stock to be purchased by each Underwriter being set
opposite its name in Schedule A, subject to adjustment in accordance with
Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the Company will
be the price per share set forth in the table on the cover page of the
Prospectus under the heading "Proceeds to the Company" (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 9:00 a.m., San Francisco Time, on the second full business day preceding the
First Closing Date (as defined below) or, if no such direction is received, in
the names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in immediately
available funds (same day funds), payable to the order of the Company, all at
the offices of Wilson, Sonsini, Xxxxxxxx & Xxxxxx, PC 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000-0000. The time and date of the delivery and closing
shall be at 7:00 A.M., San Francisco Time, on _______________, 1997, in
accordance with Rule 15c6-1 of the Exchange Act. The time and date of such
payment and delivery are herein referred to as the "First Closing Date". The
First Closing Date and the location of delivery of, and the form and form
8.
of payment for, the Firm Stock may be varied by agreement between the Company
and Cowen. The First Closing Date may be postponed pursuant to the provisions
of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., New York Time, on the business day preceding the First Closing Date
at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
It is understood that Cowen or UBS, individually and not as Representatives of
the several Underwriters, may (but shall not be obligated to) make payment to
the Company on behalf of any Underwriter or Underwriters, for the Stock to be
purchased by such Underwriter or Underwriters. Any such payment by Cowen or UBS
shall not relieve such Underwriter or Underwriters from any of its or their
other obligations hereunder.
The several Underwriters agree to make an initial public offering of the Firm
Stock at the initial public offering price as soon after the effectiveness of
the Registration Statement as in their judgment is advisable. The
Representatives shall promptly advise the Company of the making of the initial
public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase, severally and
not jointly, up to the aggregate number of shares of Optional Stock set forth on
Schedule B hereto. The price per share to be paid for the Optional Stock shall
be the Purchase Price. The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the effective date of this Agreement. No
Optional Stock shall be sold and delivered unless the Firm Stock previously has
been, or simultaneously is, sold and delivered. The right to purchase the
Optional Stock or any portion thereof may be surrendered and terminated at any
time upon notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving written
notice from Cowen to the Company setting forth the number of shares of the
Optional Stock to be purchased by them and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than ten (10) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates".) All purchases of Optional Stock from the Company shall be
made on a pro rata basis. Optional Stock shall be purchased for the account of
each Underwriter in the same proportion as the number of shares of Firm Stock
set forth opposite such Underwriter's name in Schedule B hereto bears to the
total number of shares of Firm Stock (subject to adjustment by the Underwriters
to eliminate odd lots). Upon exercise of the option by the Underwriters, the
Company agrees to sell to the Underwriters the number of shares of Optional
Stock set forth in the written notice of exercise and the Underwriters agree,
severally and not jointly and subject to the terms and conditions herein set
forth, to purchase the number of such shares determined as aforesaid.
9.
The Company will deliver the Optional Stock to the Underwriters (in the form of
definitive certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing given at or prior to 9:00 a.m.,
San Francisco Time, on the second full business day preceding the Option Closing
Date or, if no such direction is received, in the names of the respective
Underwriters or in such other names as Cowen may designate (solely for the
purpose of administrative convenience) and in such denominations as Cowen may
determine, against payment of the aggregate Purchase Price therefor by certified
or official bank check or checks in Clearing House funds (next day funds),
payable to the order of the Company all at the offices of Wilson, Sonsini,
Xxxxxxxx and Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000-0000. The Option Closing Date and the location of delivery of,
and the form and form of payment for, the Option Stock may be varied by
agreement between the Company and Xxxxx. The Option Closing Date may be
postponed pursuant to the provisions of Section 12.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(A) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A of the of the Rules and
Regulations, use its best efforts to cause the Registration Statement to become
effective, (ii) if the Company and the Representatives have determined to
proceed pursuant to Rule 430A of the Rules and Regulations, use its best efforts
to comply with the provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representatives have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations, to use its best
efforts to comply with all the applicable provisions thereof. The Company will
advise the Representatives promptly as to the time at which the Registration
Statement becomes effective, will advise the Representatives promptly of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the institution of any proceedings for that
purpose, and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible the lifting thereof, if issued. The
Company will advise the Representatives promptly of the receipt of any comments
of the Commission or any request by the Commission for any amendment of or
supplement to the Registration Statement or the Prospectus or for additional
information and will not at any time file any amendment to the Registration
Statement or supplement to the Prospectus which shall not previously have been
submitted to the Representatives a reasonable time prior to the proposed filing
thereof or to which the Representatives shall reasonably object in writing or
which is not in compliance with the Securities Act and the Rules and
Regulations.
(B) The Company will prepare and file with the Commission, promptly upon
the request of the Representatives, any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may be necessary to enable the several Underwriters to continue
the distribution of the Stock and will use its best efforts to cause the same to
become effective as promptly as possible.
10.
(C) If at any time after the effective date of the Registration Statement
when a prospectus relating to the Stock is required to be delivered under the
Securities Act any event relating to or affecting the Company occurs as a result
of which the Prospectus or any other prospectus as then in effect would include
an untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to amend
the Prospectus to comply with the Securities Act, the Company will promptly
notify the Representatives thereof and will prepare an amended or supplemented
prospectus which will correct such statement or omission; and in case any
Underwriter is required to deliver a prospectus relating to the Stock nine (9)
months or more after the effective date of the Registration Statement, the
Company upon the request of the Representatives and at the expense of such
Underwriter will prepare promptly such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(D) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as originally filed
with the Commission, and all amendments thereto including all financial
statements and exhibits thereto, and will deliver to the Representatives such
number of copies of the Registration Statement, including such financial
statements but without exhibits, and all amendments thereto, as the
Representatives may reasonably request. The Company will deliver or mail to or
upon the order of the Representatives, from time to time until the effective
date of the Registration Statement, as many copies of the Preeffective
Prospectus as the Representatives may reasonably request. The Company will
deliver or mail to or upon the order of the Representatives on the date of the
initial public offering, and thereafter from time to time during the period when
delivery of a prospectus relating to the Stock is required under the Securities
Act, as many copies of the Prospectus, in final form or as thereafter amended or
supplemented as the Representatives may reasonably request; provided, however,
that the expense of the preparation and delivery of any prospectus required for
use nine (9) months or more after the effective date of the Registration
Statement shall be borne by the Underwriters required to deliver such
prospectus.
(E) The Company will make generally available to its shareholders as soon
as practicable, but not later than fifteen (15) months after the effective date
of the Registration Statement, an earning statement which will be in reasonable
detail (but which need not be audited) and which will comply with Section 11(a)
of the Securities Act, covering a period of at least twelve (12) months
beginning after the "effective date" (as defined in Rule 158 under the
Securities Act) of the Registration Statement.
(F) The Company will cooperate with the Representatives to enable the Stock
to be registered or qualified for offering and sale by the Underwriters and by
dealers under the securities laws of such jurisdictions as the Representatives
may designate and at the request of the Representatives will make such
applications and furnish such consents to service of process or other documents
as may be required of it as the issuer of the Stock for that purpose; provided,
however, that the Company shall not be required to qualify to do business or to
file a general consent (other than that arising out of the offering or sale of
the Stock) to service of process in any such jurisdiction where it is not now so
subject. The Company will, from time
11.
to time, prepare and file such statements and reports as are or may be required
of it as the issuer of the Stock to continue such qualifications in effect for
so long a period as the Representatives may reasonably request for the
distribution of the Stock. The Company will advise the Representatives promptly
after the Company becomes aware of the suspension of the qualifications or
registration of (or any such exception relating to) the Common Stock of the
Company for offering, sale or trading in any jurisdiction or of any initiation
or threat of any proceeding for any such purpose, and in the event of the
issuance of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the Representatives use its
best efforts to obtain the withdrawal thereof.
(G) The Company will furnish to its shareholders annual reports containing
financial statements certified by independent public accountants and with
quarterly summary financial information in reasonable detail which may be
unaudited. During the period of five (5) years from the date hereof, the
Company will deliver to the Representatives and, upon request, to each of the
other Underwriters, as soon as they are available, copies of each annual report
of the Company and each other report furnished by the Company to its
shareholders and will deliver to the Representatives, (i) as soon as they are
available, copies of any other reports (financial or other) which the Company
shall publish or otherwise make available to any of its shareholders as such,
(ii) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange and (iii) from time to time such other information concerning the
Company as you may request.
(H) The Company will use its best efforts to list the Stock, subject to
official notice of issuance, on the Nasdaq National Market concurrently with the
effectiveness of the Registration Statement.
(I) The Company will maintain a transfer agent and registrar for its Common
Stock.
(J) Prior to filing its quarterly statements on Form 10-Q, the Company will
have its independent auditors perform a limited quarterly review of its
quarterly numbers.
(K) The Company will not offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase or otherwise dispose of, other than by
operation of law, gifts, pledges or dispositions by estate representatives, any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock (including, without limitation, Common Stock of
the Company which may be deemed to be beneficially owned by the Company in
accordance with the Rules and Regulations) during the 180 days following the
date on which the price of the Common Stock to be purchased by the Underwriters
is set, other than the Company's sale of Common Stock hereunder and the
Company's issuance of Common Stock upon the exercise of warrants and stock
options which are presently outstanding and described in the Prospectus.
(L) Prior to filing with the Commission any reports on Form SR pursuant to
Rule 463 of Rules and Regulations, the Company will furnish a copy thereof to
the counsel for the
12.
Underwriters and receive and consider its comments thereon, and will deliver
promptly to the Representatives a signed copy of each report on Form SR filed by
it with the Commission.
(M) The Company will apply the net proceeds from the sale of the Stock as
set forth in the description under "Use of Proceeds" in the Prospectus, which
description complies in all respects with the requirements of Item 504 of
Regulation S-K.
(N) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection with the
registration of the Stock under the Securities Act.
(O) Prior to each of the Closing Dates the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim consolidated
financial statements of the Company for any periods subsequent to the periods
covered by the financial statements appearing in the Registration Statement and
the Prospectus.
(P) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no press
conference with respect to the Company, the financial condition, results of
operations, business, prospects, assets or liabilities of the Company, or the
offering of the Stock, without your prior written consent. For a period of
twelve (12) months following the first Closing Date, the Company will use its
best efforts to provide to you copies of each press release or other public
communications with respect to the financial condition, results of operations,
business, prospects, assets or liabilities of the Company at least twenty-four
(24) hours prior to the public issuance thereof or such longer advance period as
may reasonably be practicable.
(Q) During the period of five (5) years hereafter, the Company will furnish
to the Representatives, and upon request of the Representatives, to each of the
Underwriters: (i) as soon as practicable after the end of each fiscal year,
copies of the Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the opinion
thereon of the Company's independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, or the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
5. PAYMENT OF EXPENSES. (A) The Company will pay (directly or by
reimbursement) all costs, fees and expenses incurred in connection with expenses
incident to the performance of its obligations under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to (i) all expenses and taxes incident to the issuance and delivery of the Stock
to the Representatives; (ii) all expenses incident to the registration of the
Stock under the Securities Act; (iii) the costs of preparing stock certificates
(including printing and engraving costs); (iv) all fees and expenses of the
registrar and transfer agent of the Stock; (v) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Stock to the
13.
Underwriters; (vi) fees and expenses of the Company's counsel and the Company's
independent accountants; (vii) all costs and expenses incurred in connection
with the preparation, printing filing, shipping and distribution of the
Registration Statement, each Preeffective Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments and
supplements provided for herein, the "Agreement Among Underwriters" between the
Representatives and the Underwriters, the Master Selected Dealers' Agreement,
the Underwriters' Questionnaire and the Blue Sky memoranda (including related
fees and expenses of counsel to the Underwriters) and this Agreement; (viii) all
filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with exemptions from the qualifying or registering
(or obtaining qualification or registration of) all or any part of the Stock for
offer and sale and determination of its eligibility for investment under the
Blue Sky or other securities laws of such jurisdictions as the Representatives
may designate; (ix) all fees and expenses paid or incurred in connection with
filings made with the NASD; and (x) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section.
(B) In addition to its other obligations under Section 6(a) hereof, the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
(i) any statement or omission or any alleged statement or omission, (ii) any act
or failure to act or any alleged act or failure to act or (iii) any breach or
inaccuracy in its representations and warranties, it will reimburse each
Underwriter on a quarterly basis for all reasonable legal or other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse each Underwriter for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, each Underwriter shall promptly return
it to the Company together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by Citibank, N.A., New
York, New York (the "Prime Rate"). Any such interim reimbursement payments which
are not made to an Underwriter in a timely manner as provided below shall bear
interest at the Prime Rate from the due date for such reimbursement. This
expense reimbursement agreement will be in addition to any other liability which
the Company may otherwise have. The request for reimbursement will be sent to
the Company.
(C) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in paragraph (b) this Section 5,
including the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of Governors of the New
York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of
the NASD. Any such arbitration must be commenced by service of a written demand
for arbitration or written notice of intention to arbitrate, therein electing
the arbitration tribunal. In the event the party demanding arbitration does not
make such designation of an arbitration tribunal in such demand or notice, then
the party responding to said demand or notice
14.
is authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in paragraph (b) of this Section
5 and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of Section
6.
6. INDEMNIFICATION AND CONTRIBUTION. (A) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of the Securities Act and the respective
officers, directors, partners, employees, representatives and agents of each of
such Underwriter (collectively, the "Underwriter Indemnified Parties" and, each,
an "Underwriter Indemnified Party"), against any losses, claims, damages,
liabilities or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the Securities Act, or any
other statute or at common law, (i) on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus as from
time to time amended or supplemented) includes or allegedly includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, unless such
statement or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof or (ii) for any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or expense arising out of or based upon matters
covered by clause (i) above (provided that the Company shall not be liable under
this clause (ii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage, or liability or
expense resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct). The Company will be entitled to participate at its own expense in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Company elects to assume the defense,
such defense shall be conducted by counsel chosen by it and reasonably
acceptable to the Underwriters. In the event the Company elects to assume the
defense of any such suit and retain such counsel, any Underwriter Indemnified
Parties, defendant or defendants in the suit, may retain additional counsel but
shall bear the fees and expenses of such counsel unless (i) the Company shall
have specifically authorized the retaining of such counsel or (ii) the parties
to such suit include any such Underwriter Indemnified Parties, and the Company
and such Underwriter Indemnified Parties at law or in equity have been advised
by counsel to the Underwriters that one or more legal defenses may be available
to it or them which may not be available to the Company, in which case the
Company shall not be entitled to assume the defense of such suit notwithstanding
its obligation to bear the fees and expenses of such counsel. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Company might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter Indemnified
Party.
15.
(B) Each Underwriter severally and not jointly agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively, the "Company
Indemnified Parties") against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter or Underwriters elect to assume the
defense, the reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or several,
which arise out of or are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, but only insofar as any such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Underwriter, directly or through
the Representatives, specifically for use in the preparation thereof; provided,
however, that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party, against whom the action is
brought unless such Company Indemnified Party shall have notified such
Underwriter in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon the Company Indemnified Party, but failure to notify such
Underwriter of such claim shall not relieve it from any liability which it may
have to any Company Indemnified Party otherwise than on account of its indemnity
agreement contained in this paragraph. Such Underwriter shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if such
Underwriter elects to assume the defense, such defense shall be conducted by
counsel chosen by it. In the event that any Underwriter elects to assume the
defense of any such suit and retain such counsel, the Company Indemnified
Parties and any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them, respectively. The Underwriter
against whom indemnity may be sought shall not be liable to indemnify any person
for any settlement of any such claim effected without such Underwriter's
consent. This indemnity agreement is not exclusive and will be in addition to
any liability which such Underwriter might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in equity to
any Company Indemnified Party.
(C) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to herein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) 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 from the offering of the Stock. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law,
16.
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses (or actions in respect thereof), 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
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating, defending, settling or compromising any
such claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. The
Underwriters' obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any of its officers or directors or any
controlling person, and shall survive delivery of and payment for the Stock.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder shall be subject to the accuracy, at and (except
as otherwise stated herein) as of the date hereof and at and as of each of the
Closing Dates, of the representations and warranties made herein by the Company
to compliance at and as of each of the Closing Dates by the Company with its
covenants and agreements herein contained and other provisions hereof to be
satisfied at or prior to each of the Closing Dates, and to the following
additional conditions:
17.
(A) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or the Representatives, shall be threatened by the Commission, and
any request for additional information on the part of the Commission (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the Representatives.
Any filings of the Prospectus, or any supplement thereto, required pursuant to
Rule 424(b) or Rule 434 of the Rules and Regulations, shall have been made in
the manner and within the time period required by Rule 424(b) and Rule 434 of
the Rules and Regulations, as the case may be.
(B) The Representatives shall have been satisfied that there shall not have
occurred any change prior to each of the Closing Dates in the condition
(financial or otherwise), properties, business, management, prospects, net worth
or results of operations of the Company, or any change in the capital stock,
short-term or long-term debt of the Company, such that (i) the Registration
Statement or the Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact which, in the opinion of the Representatives, is
material, or omits to state a fact which, in the opinion of the Representatives,
is required to be stated therein or is necessary to make the statements therein
not misleading, or (ii) it is unpracticable in the reasonable judgment of the
Representatives to proceed with the public offering or purchase the Stock as
contemplated hereby.
(C) The Representatives shall be satisfied that no legal or governmental
action, suit or proceeding affecting the Company which is material and adverse
to the Company or which affects or may affect the Company's ability to perform
their respective obligations under this Agreement shall have been instituted or
threatened and there shall have occurred no material adverse development in any
existing such action, suit or proceeding.
(D) At the time of execution of this Agreement, the Representatives shall
have received from Coopers & Xxxxxxx L.L.P., independent certified public
accountants, a letter, dated the date hereof, in form and substance satisfactory
to the Underwriters.
(E) The Representatives shall have received from Coopers & Xxxxxxx L.L.P.,
independent certified public accountants, letters, dated each of the Closing
Dates, to the effect that such accountants reaffirm, as of each of the Closing
Dates, and as though made on each of the Closing Dates, the statements made in
the letter furnished by such accountants pursuant to paragraph (d) of this
Section 8.
(F) The Representatives shall have received from Wilson, Sonsini, Xxxxxxxx
and Xxxxxx, counsel for the Company, opinions, dated each of the Closing Dates,
to the effect set forth in Exhibit I hereto.
(G) The Representatives shall have received from Xxxxxx Godward LLP,
counsel for the Underwriters, their opinions dated each of the Closing Dates
with respect to the incorporation of the Company, the validity of the Stock, the
Registration Statement and the Prospectus and such other related matters as it
may reasonably request, and the Company shall
18.
have furnished to such counsel such documents as they may request for the
purpose of enabling them to pass upon such matters.
(H) The Representatives shall have received a certificates, dated each of
the Closing Dates, of the chief executive officer or the President and the chief
financial or accounting officer of the Company to the effect that:
(I) No stop order suspending the effectiveness of the Registration
Statement has been issued, and, to the best of the knowledge of the signers, no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act;
(II) Neither any Preeffective Prospectus, as of its date, nor the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, as of the time when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such certificate, included
any untrue statement of a material fact or omitted to state any 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;
(III) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as set forth
or contemplated in the Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, nor entered into any material
transactions not in the ordinary course of business and there has not been any
material adverse change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of the
Company, or any change in the capital stock, short-term or long-term debt of the
Company;
(IV) The representations and warranties of the Company in this
Agreement are true and correct at and as of each of the Closing Dates, and the
Company has complied with all the agreements and performed or satisfied all the
conditions on its part to be performed or satisfied at or prior to the Closing
Dates; and
(V) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as disclosed in or
contemplated by the Prospectus, (i) there has not been any material adverse
change or a development involving a material adverse change in the condition
(financial or otherwise), properties, business, management, prospects, net worth
or results of operations of the Company; (ii) the business and operations
conducted by the Company and its subsidiaries have not sustained a loss by
strike, fire, flood, accident or other calamity (whether or not insured) of such
a character as to interfere materially with the conduct of the business and
operations of the Company; (iii) no legal or governmental action, suit or
proceeding is pending or threatened against the Company which is material to the
Company, whether or not arising from transactions in the ordinary course of
business, or which may materially and adversely affect the transactions
contemplated by this Agreement; (iv) since such dates and except as so
disclosed, the Company has not incurred any material liability or obligation,
direct, contingent or indirect, made any change in its capital stock (except
pursuant to its stock plans), made any material change in its short-term or
funded
19.
debt or repurchased or otherwise acquired any of the Company's capital stock;
and (v) the Company has not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to stockholders of
record on a date prior to the Closing Date.
(I) The Company shall have furnished to the Representatives such additional
certificates as the Representatives may have reasonably requested as to the
accuracy, at and as of each of the Closing Dates, of the representations and
warranties made herein by it them and as to compliance at and as of each of the
Closing Dates by it with its covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to each of the Closing Dates, and
as to satisfaction of the other conditions to the obligations of the
Underwriters hereunder.
(J) Cowen shall have received the written agreements, substantially in the
form of Exhibit II hereto, of the officers, directors and holders of Common
Stock listed in Schedule C that each will not offer, sell, assign, transfer,
encumber, contract to sell, grant an option to purchase or otherwise dispose of,
other than by operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock (including, without limitation,
Common Stock which may be deemed to be beneficially owned by such officer,
director or holder in accordance with the Rules and Regulations) during the 180
days following the effective date of the final Prospectus.
The Nasdaq National Market shall have approved the stock for listing, subject
only to official notice of issuance.
All opinions, certificates, letters and other documents will be in compliance
with the provisions hereunder only if they are satisfactory in form and
substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to each of the Closing Dates, but Cowen,
on behalf of the Representatives, shall be entitled to waive any of such
conditions.
9. EFFECTIVE DATE. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. New York City time on the first full business day
following the effectiveness of the Registration Statement or at such earlier
time after the Registration Statement becomes effective as the Representatives
may determine on and by notice to the Company or by release of any of the Stock
for sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by you of
telegrams (i) advising Underwriters that the shares of Stock are released for
public offering or (ii) offering the Stock for sale to securities dealers,
whichever may occur first.
20.
10. TERMINATION. This Agreement (except for the provisions of Section 5) may
be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be terminated
by the Representatives at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of
this Agreement under this or any other provision of this Agreement, there shall
be no liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First Closing
Date trading in securities on of the Nasdaq National Market shall have been
suspended or minimum or maximum prices shall have been established on any such
exchange or market, or a banking moratorium shall have been declared by New York
or United States authorities; (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market;
(iii) if at or prior to the First Closing Date there shall have been (A) an
outbreak or escalation of hostilities between the United States and any foreign
power or of any other insurrection or armed conflict involving the United States
or (B) any change in financial markets or any calamity or crisis which, in the
judgment of the Representatives, makes it impractical or inadvisable to offer or
sell the Stock on the terms contemplated by the Prospectus; (iv) if there shall
have been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the Representatives,
makes it impracticable or inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus; (v) if there shall be any litigation or
proceeding, pending or threatened, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
on the terms contemplated by the Prospectus; or (vi) if there shall have
occurred any of the events specified in the immediately preceding clauses (i) -
(v) together with any other such event that makes it, in the judgment of the
Representatives, impractical or inadvisable to offer or deliver the Stock on the
terms contemplated by the Prospectus.
11. REIMBURSEMENT OF UNDERWRITERS. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
12. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to
21.
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required hereby or
agree to take up all or part of the shares of Stock of a defaulting Underwriter
or Underwriters as provided in this Section 12, (i) the Company shall have the
right to postpone the Closing Date[s] for a period of not more than five (5)
full business days in order that the Company may effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus which
may thereby be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall be
taken as the basis of their underwriting obligation for all purposes of this
Agreement. Nothing herein contained shall relieve any defaulting Underwriter of
its liability to the Company or the other Underwriters for damages occasioned by
its default hereunder. Any termination of this Agreement pursuant to this
Section 12 shall be without liability on the part of any non-defaulting
Underwriter or the Company, except for expenses to be paid or reimbursed
pursuant to Section 5 and except for the provisions of Section 6.
13. NOTICES. All communications hereunder shall be in writing and, if sent to
the Underwriters shall be mailed, delivered or telegraphed and confirmed to you,
as their Representatives c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 except that notices given to an Underwriter pursuant to Section 6
hereof shall be sent to such Underwriter at the address furnished by the
Representatives or, if sent to the Company, shall be mailed, delivered or
telegraphed and confirmed c/o Xxxxx Xxxxxxx, Symphonix Devices, Inc., 0000
Xxxxxxx Xxxxxxx, Xxx Xxxx, XX 00000.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company and their respective successors and
legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company contained in this Agreement shall also
be for the benefit of the person or persons, if any, who control any Underwriter
or Underwriters within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the indemnities of the several Underwriters
shall also be for the benefit of each director of the Company, each of its
officers who has signed the Registration Statement and the person or persons, if
any, who control the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act.
22.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by Cowen, as Representative, will be binding on all the
Underwriters.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the singular
and the plural include one another. The section headings in this Agreement are
for the convenience of the parties only and will not affect the construction or
interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a
writing signed by the Company and the Representatives.
19. COUNTERPARTS. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
23.
If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
SYMPHONIX DEVICES, INC.
By:_____________________________________
President
Accepted and delivered in
____________, California as of
the date first above written.
XXXXX & COMPANY
UBS SECURITIES LLC
Acting on its own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated,
its general partner
By:______________________________
Xxxx X. Xxxxxx
Managing Director - Syndicate
24.
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
--------- ---------
Xxxxx & Company.....
UBS Securities LLC..
--------- -------
Total 2,300,000 345,000
========= =======
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SCHEDULE C
-26-
EXHIBIT I
[FORM OF OPINION OF ISSUER'S COUNSEL]
[Date]
Xxxxx & Company
UBS Securities LLC
As representatives of the several
Underwriters named in Schedule A
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Symphonix Devices, Inc.
2,300,000 Shares of Common Stock
Dear Sirs:
We have acted as counsel for Symphonix Devices, Inc., a Delaware corporation
(the "Company"), in connection with the sale by the Company and purchase of
2,300,000 shares of Common Stock, par value $0.01 per share, of the Company (the
"Shares") by the several Underwriters listed in Schedule A to the Underwriting
Agreement, dated ____, 1997 among the Company, Xxxxx & Company and UBS
Securities LLC, as representatives of the several Underwriters named therein
(the "Underwriting Agreement"). This opinion is being furnished pursuant to
Section 8(f) of the Underwriting Agreement. All defined terms not defined herein
shall have the meanings ascribed to them in the Underwriting Agreement.
We are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the conduct of
its business requires such qualification, and has all power and authority
necessary to own or hold its properties and conduct the business in which it is
engaged;
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2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and all of the Shares to be issued and sold by the Company to the Underwriters
pursuant to the Underwriting Agreement have been duly and validly authorized
and, when issued and delivered against payment therefor as provided for in the
Underwriting Agreement, shall be duly and validly issued, fully paid and non-
assessable;
3. There are no preemptive or other rights to subscribe for or to purchase,
nor any restriction upon the voting or transfer of, any of the Shares pursuant
to the Company's Certificate of Incorporation or By-Laws or any agreement or
other instrument;
4. There are no legal or governmental proceedings pending to which the Company
is a party or of which any property or assets of the Company is the subject
which, if determined adversely to the Company, could have a material adverse
effect on the Company; and, to the best of our knowledge, no such proceedings
are threatened or contemplated by governmental authorities or other third
parties;
5. The Company owns or possesses all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct of its business,
and the Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company with respect to the foregoing. The
Company's business as now conducted and as proposed to be conducted does not and
will not infringe or conflict with any patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses or other intellectual property or
franchise right of any person;
6. The Company has, and the Company as of the Closing Dates will have, good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned or proposed to be owned by it which is
material to the business of the Company, in each case free and clear of all
liens, encumbrances and defects; and any real property and buildings held under
lease by the Company or proposed to be held after giving effect to the
transactions described in the Prospectus are, or will be as of the Closing
Dates, held by it under valid, subsisting and enforceable leases with such
exceptions as would not have a material adverse effect on the Company considered
as a whole;
7. The Company has full corporate power and authority to enter into the
Underwriting Agreement and to perform its obligations thereunder (including to
issue, sell and deliver the Shares), and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnification
and contribution thereunder may be limited by federal or state securities laws
or the public policy underlying such laws;
8. The execution, delivery and performance of the Underwriting Agreement and
the consummation of the transactions therein contemplated will not result in a
breach or violation
-28-
of any of the terms or provisions of or constitute a default under any
indenture, mortgage, deed of trust, note agreement or other agreement or
instrument to which the Company is a party or by which it or any of its
properties is or may be bound, the Certificate of Incorporation, By-laws or
other organizational documents of the Company, or any law, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its properties or result in the creation of a lien;
9. No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, except such as may be
required by the National Association of Securities Dealers, Inc. (the "NASD") or
under the Securities Act or the securities or "Blue Sky" laws of any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters;
10. The Company is in compliance with, and conducts its business in conformity
with, all applicable federal, state, local and foreign laws, rules and
regulations, including, but not limited to, those of any governmental agency,
court or tribunal; to the best of our knowledge, no prospective change in any of
such federal, state, local or foreign laws, rules or regulations has been
adopted which, when made effective, would have a material adverse effect on the
operations of the Company. The Company is in compliance with all applicable
federal, state, local and foreign laws and regulations relating to the
protection of human health or the environment or imposing liability or requiring
standards of conduct concerning any Hazardous Materials;
11. The Registration Statement was declared effective under the Securities Act
as of __________, 1997, the Prospectus was filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations on __________, 1997 and no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose is pending or, to the best of our knowledge,
threatened by the Commission;
12. The Registration Statement and the Prospectus and any amendments or
supplements thereto comply as to form in all respects with the requirements of
the Securities Act and the Rules and Regulations and the documents incorporated
by reference in the Prospectus, when they became effective or were filed with
the Commission, as the case may be, complied as to form in all respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Rules and Regulations; and any amendment or supplement to any such incorporated
document, when they became effective or were filed with the Commission, as the
case may be, complied as to form in all respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations;
13. To the best of our knowledge, there are no contracts or other documents
which are required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or filed as exhibits to the Registration Statement
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by the
Rules and Regulations;
-29-
14. Other than as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right (other than rights which have been waived or satisfied) to
require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to this Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act;
15. The descriptions in the Registration Statement and Prospectus of statutes,
rules, regulations, legal or governmental proceedings, contracts and other
documents are accurate and such descriptions fairly present the information
required to be disclosed; and to the best of our knowledge, there are no legal
or governmental proceedings, statutes, ruler or regulations, or any contracts or
documents of a character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration Statement which are
not described and filed as required;
16. The statements under the captions "Risk Factors"; and "Business-Government
Regulation", to the extent they reflect matters of federal law arising under the
laws of the United States or legal conclusions relating to such law, accurately
summarize and fairly present the legal and regulatory matters described therein;
17. The Company has complied with all provisions of Section 517.075 of the
Florida Statutes (Chapter 92 - l98; Laws of Florida);
18. The Company is not, nor will it be immediately after receiving the proceeds
from the sale of the Shares, 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 foregoing opinion is limited to matters governed by the Federal laws of the
United States of America, the general corporate law of the States of Delaware
and New York and the laws of the State of California.
We have acted as counsel to the Company on a regular basis, have acted as
counsel to the Company in connection with previous financing transactions and
have acted as counsel to the Company in connection with the preparation and
filing of the Registration Statement and the Prospectus, and based on the
foregoing, no facts have come to our attention which lead us to believe that (i)
the Registration Statement or any amendment thereto, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits to state a material fact Required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) any document
incorporated by reference in the Prospectus or any amendment or supplement to
any such incorporated document made by the Company, when they became effective
or were filed with the Commission, as the case may be, contained, in the case of
a registration statement which
-30-
became effective under the Securities Act, any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, or, in the
case of documents filed under the Exchange Act with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Very truly yours,
-31-
Text of forms of legal opinion
for FDA opinion and patent opinion
to come
-32-
SCHEDULE A
[Underwriters]
-33-
[Date]
Xxxxx & Company
UBS Securities, Inc.
As representatives of the
several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Symphonix Devices, Inc.
____ Shares of Common Stock
Dear Sirs:
In order to induce Xxxxx & Company ("Cowen") and UBS Securities, LLC (together
with Cowen, the "Representatives"), to enter in to a certain underwriting
agreement with Symphonix Devices, Inc., a Delaware corporation (the "Company"),
with respect to the public offering of shares of the Company's Common Stock, par
value $0.01 per share ("Common Stock"), the undersigned hereby agrees that for a
period of one hundred eighty (180) days following the date of the final
prospectus filed by the Company with the Securities and Exchange Commission in
connection with such public offering, the undersigned will not, without the
prior written consent of Cowen, directly or indirectly, offer, sell, assign,
transfer, encumber, pledge, contract to sell, grant an option to purchase or
otherwise dispose of, other than by operation of law, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")).
Anything contained herein to the contrary notwithstanding, any person to whom
shares of Common Stock or Beneficially Owned Shares are transferred from the
undersigned shall be bound by the terms of this Agreement.
-34-
In addition, the undersigned hereby waives, from the date hereof until the
expiration of the one-year period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Common Stock with respect to any shares of Common Stock or
Beneficially Owned Shares.
[Signatory]
By:_________________________
Name:
Title:
-35-
