1
SOFAMOR XXXXX GROUP, INC.
2,800,000 Shares of Common Stock
Underwriting Agreement
, 1998
X.X. Xxxxxx Securities Inc.
PaineWebber Incorporated
Xxxxx Xxxxxx Inc.
As Representatives of the several Underwriters
listed in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Sofamor Xxxxx Group, Inc., an Indiana corporation (the "Company"),
proposes to issue and sell 1,200,000 shares (the "Company Shares") of Common
Stock, no par value (the "Common Stock"), of the Company, and certain
shareholders of the Company named in Schedule II hereto (the "Selling
Shareholders") propose to sell 1,600,000 shares (the "Selling Shareholder
Shares," and, together with the Company Shares, the "Underwritten Shares") of
Common Stock of the Company as set forth in Schedule II hereto, to the several
Underwriters listed in Schedule I hereto (the "Underwriters"), for whom you are
acting as representatives (the "Representatives"). In addition, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, the Company proposes to sell to the Underwriters, at the
option of the Underwriters, up to an additional 420,000 shares of Common Stock
of the Company (the "Option Shares"). The Underwritten Shares and the Option
Shares are herein referred to as the "Shares". The shares of Common Stock of the
Company to be outstanding after giving effect to the sale of the Shares are
herein referred to as the "Stock".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3, including a prospectus, relating to the Shares. The
registration statement as amended at the time when it shall become effective,
including information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the
2
-2-
form first used to confirm sales of Shares is referred to in this Agreement as
the "Prospectus". If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Any reference
in this Agreement to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the effective date of the Registration Statement or the
date of such preliminary prospectus or the Prospectus, as the case may be, and
any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
1. The Company agrees to issue and sell the Company Shares and each
of the Selling Shareholders agrees, severally and not jointly, to sell the
Selling Shareholder Shares set forth opposite the name of such Selling
Shareholder on Schedule II hereto to the several Underwriters as hereinafter
provided, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase, severally and not jointly, from each of the Company and each
of the Selling Shareholders at a purchase price per share of $ (the "Purchase
Price") the number of Underwritten Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Underwritten Shares to be sold by each of the Company and each of the Selling
Shareholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Underwritten
Shares to be purchased by such Underwriter as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
aggregate number of Underwritten Shares to be purchased by all the Underwriters
from the Company and all the Selling Shareholders hereunder.
In addition, the Company agrees to issue and sell the Option Shares
to the several Underwriters as hereinafter provided, and the Underwriters, on
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, shall have the option to purchase, severally
and not jointly, from the Company, for the sole purpose of covering
over-allotments (if any) in the sale of Underwritten Shares by the several
Underwriters, the Option Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Under-
3
-3-
written Shares set forth opposite the name of such Underwriter in Schedule I
hereto (or such number increased as set forth in Section 9 hereof) bears to the
aggregate number of Underwritten Shares being purchased from the Company and all
the Selling Shareholders by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the Representatives in their
sole discretion shall make.
The Underwriters may exercise the option to purchase the Option
Shares at any time (but not more than once) on or before the thirtieth day
following the date of this Agreement, by written notice from the Representatives
to the Company. Such notice shall set forth the aggregate number of Option
Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than
the Closing Date or later than the tenth full Business Day (as hereinafter
defined) after the date of such notice (unless such time and date are postponed
in accordance with the provisions of Section 9 hereof). Any such notice shall be
given at least two Business Days prior to the date and time of delivery
specified therein.
2. The Company and the Selling Shareholders understand that the
Underwriters intend (i) to make a public offering of the Shares and (ii)
initially to offer the Shares upon the terms set forth in the Prospectus.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified to the Representatives by
the Company, in the case of the Company Shares, and to the account specified to
the Representatives by the Attorneys-in-Fact (as defined below), or either of
them, in the case of the Selling Shareholder Shares, on , 1998, or at
such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representatives and the Company and the Selling
Shareholders may agree upon in writing, or to an account specified to the
Representatives by the Company, in the case of the Option Shares, on the date
and time specified in accordance with the Agreement by the Representatives in
the written notice of the Underwriters' election to purchase such Option Shares.
The time and date of such payment for the Underwritten Shares are referred to
herein as the "Closing Date" and the time and date for such payment for the
Option Shares, if other than the Closing Date, are herein referred to as the
"Additional Closing Date". As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date, registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or
4
-4-
the Additional Closing Date, as the case may be, with any transfer taxes payable
in connection with the transfer to the Underwriters of the Company Shares and
the Option Shares duly paid by the Company and any transfer taxes payable in
connection with the transfer to the Underwriters of the Selling Shareholder
Shares duly paid by the Selling Shareholders. The certificates for the Shares
will be made available for inspection and packaging by the Representatives at
the office of X.X. Xxxxxx Securities Inc. set forth above not later than 1:00
P.M., New York City time, on the Business Day prior to the Closing Date or the
Additional Closing Date, as the case may be.
4. (A) The Company represents and warrants to each Underwriter and
the Selling Shareholders that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with (i) information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein and (ii)
information relating to the distribution of the Shares furnished to the
Company in writing by the Representatives expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any amendment
or supplement thereto, contain 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 not misleading, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date or Additional
Closing Date, as the case may be, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not
5
-5-
apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with (i) information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein and (ii)
information relating to the distribution of the Shares furnished to the
Company in writing by the Representatives expressly for use therein;
(c) the documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act,
and will not contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(d) the consolidated financial statements of the Company, and the
related notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and its consolidated subsidiaries as of
the dates indicated and the results of their operations and changes in
their consolidated cash flows for the periods specified; and said
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be
stated therein;
(e) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change"), otherwise than as set forth or contemplated in
the Prospectus; and except as set forth or contemplated in the Prospectus,
neither the Company nor any of its subsidiaries has entered into any
transaction or agreement (whether or not in the ordinary course of
business) material to the Company and its subsidiaries, taken as a whole;
6
-6-
(f) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect on
the business, prospects, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken
as a whole (a "Material Adverse Effect");
(g) each of the Company's subsidiaries has been duly incorporated or
formed, as the case may be, and is validly existing as a corporation,
partnership or limited liability company, as the case may be, under the
laws of its jurisdiction of incorporation or formation, as the case may
be, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus other than where
the failure to have such power and authority would not have a Material
Adverse Effect, and has been duly qualified as a foreign corporation,
partnership or limited liability company, as the case may be, for the
transaction of business and is in good standing under the laws of each
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a Material
Adverse Effect; and all the outstanding shares of capital stock or other
ownership interests of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and non-assessable, and are
owned by the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered
by the Company;
(i) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters
to the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and are
not subject to any preemptive or similar rights; and, except as described
in or expressly contemplated by the Prospectus, there are no outstanding
rights (including, without limitation, preemptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable for,
any shares of capital stock or other equity interest in the Company or any
of its subsidiaries, or any contract, commitment, agreement, understanding
or arrangement of any kind
7
-7-
relating to the issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any such
rights, warrants or options;
(j) the Company Shares have been duly authorized, and, when issued
and delivered to and paid for by the Underwriters in accordance with the
terms of this Agreement, will be duly issued and will be fully paid and
non-assessable and will conform to the description thereof in the
Prospectus; and the issuance of the Company Shares is not subject to any
preemptive or similar rights;
(k) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under its certificate or articles of incorporation or organization
or by-laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company and its
subsidiaries, taken as a whole; the issue and sale of the Shares to be
issued and sold by the Company hereunder and the performance by the
Company of its obligations under this Agreement and the consummation of
the transactions contemplated herein will not conflict with or result in a
breach 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 or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will any such action result in any violation
of the provisions of the certificate or articles of incorporation or
organization or the by-laws of the Company or any of its subsidiaries or
any applicable law or statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company,
its subsidiaries or any of their respective properties; and no consent,
approval, authorization, order, license, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Shares to be issued and sold by the Company
hereunder or the consummation by the Company of the transactions
contemplated by this Agreement, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as have
been obtained under the Securities Act and as may be required under state
securities or Blue Sky Laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(l) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the
8
-8-
knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to which
the Company or any of its subsidiaries is or may be a party or to which
any property of the Company or any of its subsidiaries is or may be the
subject which, if determined adversely to the Company or any of its
subsidiaries, could individually or in the aggregate have, or reasonably
be expected to have, a Material Adverse Effect, and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and there are no
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required;
(m) the Company and its subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred
to in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are
held by them under valid, existing and enforceable leases with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries;
(n) no relationship, direct or indirect, exists between or among the
Company or any or its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of
its subsidiaries on the other hand, which is required by the Securities
Act to be described in the Registration Statement and the Prospectus which
is not so described;
(o) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and
sale of the Shares;
(p) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(q) Coopers & Xxxxxxx L.L.P. ("Coopers & Xxxxxxx"), who have
certified certain financial statements of the Company and its
subsidiaries, are independent public accountants as required by the
Securities Act;
9
-9-
(r) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or
any of them to the extent that such taxes have become due and are not
being contested in good faith; and, except as disclosed in the
Registration Statement and the Prospectus, there is no tax deficiency
which has been or might reasonably be expected to be asserted or
threatened against the Company or any subsidiary;
(s) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Common Stock;
(t) since the respective dates as of which information is given in
the Prospectus and in the Registration Statement, the human clinical
trials conducted by the Company or in which the Company has participated
that are described in the Registration Statement and Prospectus, or the
results of which are referred to in the Registration Statement and
Prospectus, and to the Company's knowledge, such studies and tests
conducted on behalf of the Company, were and, if still pending, are being
conducted in accordance with experimental protocols, procedures and
controls pursuant to, where applicable, accepted professional scientific
standards; the descriptions of the results of such studies, tests and
trials contained in the Registration Statement and Prospectus are accurate
and complete in all material respects; and the Company has not received
any notices or correspondence from the United States Food and Drug
Administration ("FDA") or any other governmental agency requiring the
termination, suspension or material modification of any clinical trials
conducted by, or on behalf of, the Company or in which the Company has
participated that are described in the Registration Statement and
Prospectus or the result of which are referred to in the Registration
Statement and Prospectus;
(u) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry
on its business as conducted as of the date hereof, except where failure
of the Company or any of its subsidiaries to own, possess or have obtained
such licenses, permits, certificates, consents, orders, approvals or other
authorizations from, and to have made such declarations or filings with,
such entities would not, singly or in the aggregate, have a Material
Adverse Effect, and neither the Company nor any such subsidiary has
received any actual notice of any proceeding relating to revoca-
10
-10-
tion or modification of any such license, permit, certificate, consent,
order, approval or other authorization, except as described in the
Registration Statement and the Prospectus and except where such revocation
or modification would not have a Material Adverse Effect; and each of the
Company and its subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as conducted as of the
date hereof, except where failure by the Company or any of its
subsidiaries to be in compliance with such laws or regulations would not,
singly or in the aggregate, have a Material Adverse Effect; the Company is
not in violation of any foreign, state or local law, order, rule,
regulation, writ, injunction or decree of any court or governmental agency
or body including but not limited to, the FDA; all of the descriptions in
the Registration Statement and Prospectus of the legal and governmental
procedures by or before the FDA or any foreign, state or local government
body exercising comparable authority are true, complete and accurate in
all material respects;
(v) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which are believed by the Company to be reliable;
(w) except for compensation to be received by the Underwriters under
this Agreement, the Company does not know of any outstanding claims for
services, either in the nature of a finder's fee or origination fee, with
respect to any of the transactions contemplated hereby;
(x) the Company owns or possesses the patents, patent rights,
licenses, inventions, trademarks, service marks, trade names, copyrights
and know-how, including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures (collectively, the "Intellectual Property"), reasonably
necessary to carry on the business conducted by it, except to the extent
that the failure to own or possess such Intellectual Property would not
have a Material Adverse Effect, and, except as described in the
Registration Statement and the Prospectus, the Company has no knowledge of
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property, except for notices the content of which if
accurate would not have a Material Adverse Effect;
(y) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which are likely to have a Material Adverse Effect;
(z) the Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic sub-
11
-11-
stances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a Material Adverse Effect;
(aa) each employee benefit plan, within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance with its
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended (the "Code"). No prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption. For each such plan
which is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the
fair market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeded the present value of
all benefits accrued under such plan determined using reasonable actuarial
assumptions; and
(bb) the Company has delivered to the Representatives written
agreements, substantially in the form set forth as Exhibit A hereto (each,
a "Lock-Up Agreement"), of each of its directors and executive officers
and certain stockholders previously identified by the Representatives,
pursuant to which each has agreed, except as provided therein, not to
sell, offer, agree to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock, any options, warrants or rights to
purchase Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock for a period of 90 days after the date of
this Agreement, without the prior written consent of X.X. Xxxxxx
Securities Inc.
(B) Each of the Selling Shareholders severally represents and
warrants to, and agrees with, each of the Underwriters and the Company that:
(a) all consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement
and the Power of Attorney (the "Power of Attorney") and the Custody
Agreement (the "Custody
12
-12-
Agreement") hereinafter referred to, and for the sale and delivery of the
Selling Shareholder Shares, have been obtained; and such Selling
Shareholder has full right, power and authority to enter into this
Agreement, the Power of Attorney and the Custody Agreement and to sell,
assign, transfer and deliver the Selling Shareholder Shares; this
Agreement, the Power of Attorney and the Custody Agreement have each been
duly executed and delivered, and to the extent necessary authorized, by or
on behalf of such Selling Shareholder;
(b) the sale of the Selling Shareholder Shares and the compliance by
such Selling Shareholder with all of the provisions of this Agreement, the
Power of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated 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 statute, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such
Selling Shareholder is a party or by which such Selling Shareholder is
bound or to which any of the property or assets of such Selling
Shareholder is subject, nor, to the best knowledge of such Selling
Shareholder, will such action result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Selling Shareholder or the property of such
Selling Shareholder;
(c) such Selling Shareholder has good and valid title to the Selling
Shareholder Shares to be sold at the Closing Date by such Selling
Shareholder hereunder, free and clear of all liens, encumbrances, equities
or adverse claims; such Selling Shareholder will have, immediately prior
to the Closing Date, good and valid title to the Selling Shareholder
Shares to be sold at the Closing Date by such Selling Shareholder, free
and clear of all liens, encumbrances, equities or adverse claims; and,
upon delivery of the certificates representing such Selling Shareholder
Shares and payment therefor pursuant hereto, good and valid title to such
Selling Shareholder Shares, free and clear of all liens, encumbrances,
equities or adverse claims, will pass to the several Underwriters;
(d) such Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Selling Shareholder Shares; and
(e) to the best knowledge of the Selling Shareholders, the
Registration Statement and the Prospectus (as amended or supplemented)
comply or will comply, as the case may be, in all material respects with
the Securities Act and do not and will not, as of the applicable effective
date of the Registration Statement and any
13
-13-
amendment thereto and as of the date of the Prospectus and any amendment
or supplement thereto, contain any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and the Prospectus, as
amended or supplemented, if applicable, at the Closing Date will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to statements or
omissions in the Registration Statement or the Prospectus made in reliance
upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representatives expressly for use therein.
Each of the Selling Shareholders represents and warrants that
certificates in negotiable form representing all of the Selling Shareholder
Shares hereunder have been placed in custody under a Custody Agreement relating
to such Selling Shareholder Shares, in the form heretofore furnished to you,
duly executed and delivered by such Selling Shareholder to the Company, as
custodian (the "Custodian"), and that such Selling Shareholder has duly executed
and delivered Powers of Attorney, in the form heretofore furnished to you,
appointing Xxxxx-Xxxxxx Xxxxxx Plais and X.X. Xxxxxxx, or either of them, as
such Selling Shareholder's attorneys-in-fact (the "Attorneys-in-Fact" or either
one of them the "Attorney-in-Fact") with authority to execute and deliver this
Agreement on behalf of such Selling Shareholder, to determine the purchase price
to be paid by the Underwriters to the Selling Shareholders as provided herein,
to authorize the delivery of the Selling Shareholder Shares to be sold by such
Selling Shareholder hereunder and otherwise to act on behalf of such Selling
Shareholder in connection with the transactions contemplated by this Agreement
and the Custody Agreement.
Each of the Selling Shareholders specifically agrees that the
Selling Shareholder Shares represented by the certificates held in custody for
such Selling Shareholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder, and that the arrangements made by such
Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable. Each of the Selling Shareholders specifically agrees that
the obligations of such Selling Shareholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any individual Selling
Shareholder, or, in the case of an estate or trust, by the death or incapacity
of any executor or trustee or the termination of such estate or trust, or in the
case of a partnership or corporation, by the dissolution of such partnership or
corporation, or by the occurrence of any other event. If any individual Selling
Shareholder or any such executor or trustee should die or become incapacitated,
or if any such estate or trust should be terminated, or if any such partnership
or corporation should be dissolved, or if any other such event should occur,
before the deliv-
14
-14-
ery of the Selling Shareholder Shares by it hereunder, certificates representing
such Selling Shareholder Shares shall be delivered by or on behalf of such
Selling Shareholder in accordance with the terms and conditions of this
Agreement and the Custody Agreement, and actions taken by the Attorneys-in-Fact
pursuant to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred, regardless
of whether or not the Custodian, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
5. (A) The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act and to file promptly
all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; and to furnish copies
of the Prospectus to the Underwriters in New York City prior to 10:00
a.m., New York City time, on the Business Day next succeeding the date of
this Agreement in such quantities as the Representatives may reasonably
request;
(b) to deliver, at the expense of the Company, to the
Representatives four signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein, and to each
other Underwriter a conformed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case without
exhibits but including the documents incorporated by reference therein
and, during the Specified Period (as defined below), to each of the
Underwriters as many copies of the Prospectus (including all amendments
and supplements thereto) and documents incorporated by reference therein
as the Representatives may reasonably request;
(c) prior to the expiration of the Specified Period, before filing
any amendment or supplement to the Registration Statement or the
Prospectus, whether before or after the time the Registration Statement
becomes effective, to furnish to the Representatives a copy of the
proposed amendment or supplement for review and not to file any such
proposed amendment or supplement to which the Representatives reasonably
object;
(d) to advise the Representatives promptly, and to confirm such
advice in writing, (i) when the Registration Statement has become
effective, (ii) when any
15
-15-
amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi) of the occurrence of any event, within
the Specified Period, as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, and (vii) of the receipt by the
Company of any notification with respect to any suspension of the
qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to use
its best efforts to prevent the issuance of any such stop order, or of any
order preventing or suspending the use of any preliminary prospectus or
the Prospectus, or of any order suspending any such qualification of the
shares, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the
public offering of the Shares, in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to be
delivered in connection with sales by the Underwriters or any dealer (such
period during which a prospectus relating to the Shares is required by law
to be so delivered being the "Specified Period"), any event shall occur as
a result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at the expense of the Company, to the
Underwriters and to the dealers (whose names and addresses the
Representatives will furnish to the Company) to which Shares may have been
sold by the Representatives on behalf of the Underwriters and to any other
dealers upon request, such amendments or supplements to the Prospectus as
may be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so
long as reasonably required
16
-16-
for distribution of the Shares; provided that the Company shall not be
required to file a general consent to service of process in any
jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter
of the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
(h) during the period of three years after the date of this
Agreement, to furnish to the Representatives copies of all reports or
other communications (financial or other) furnished to holders of the
Shares, and copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange;
(i) for a period of 90 days after the date of the initial public
offering of the Shares not to (i) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock of the
Company or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of Common
Stock of the Company, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock of the Company
or such other securities, in cash or otherwise without the prior written
consent of the Representatives, other than the Shares to be sold hereunder
and any shares of Common Stock of the Company issued upon the exercise of
options granted under existing employee stock option plans and the
issuance under such plans of options to purchase shares of Common Stock of
the Company;
(j) to use the net proceeds received by the Company from the sale of
the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(k) to list, subject to notice of issuance, the Shares to be issued
and sold by the Company hereunder on the New York Stock Exchange (the
"Exchange"); and
(l) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all costs and expenses incident to the performance of its obligations
hereunder, including
17
-17-
without limiting the generality of the foregoing, all costs and expenses
(i) incident to the preparation, registration, execution, issuance and
delivery of the Shares, (ii) incident to the preparation, printing and
filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in
connection with the registration or qualification of the Shares under the
laws of such jurisdictions as the Representatives may designate (including
fees of counsel for the Underwriters and its disbursements), (iv) in
connection with the listing of the Company Shares on the Exchange, (v)
related to the filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc., (vi) in connection with the
printing of this Agreement, any Blue Sky Memoranda and the furnishing to
the Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided, (vii)
any expenses incurred by the Company in connection with a "road show"
presentation to potential investors, (viii) the cost of preparing stock
certificates and (ix) the cost and charges of any transfer agent and any
registrar; provided the Selling Shareholders may pay certain of the costs
and expenses set forth in this paragraph (l); provided, however, nothing
contained in this paragraph (l) will relieve the Company's obligations to
pay or cause to be paid the costs and expenses set forth herein in full in
compliance herewith.
(B) Each of the Selling Shareholders covenants and agrees with each
of the several Underwriters as follows:
(a) for a period of 90 days after the date of the initial public
offering of the Shares not to (i) offer, pledge, announce the intention to
sell, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock of the
Company or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of Common
Stock of the Company, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock of the Company
or such other securities, in cash or otherwise or (iii) make any demand
for or exercise any right with respect to the registration of any shares
of Common Stock of the Company or any security convertible into or
exercisable or exchangeable for Common Stock of the Company without the
prior written consent of the Representatives, in each case other than the
Shares to be sold by such Selling Shareholder hereunder; and
18
-18-
(b) to deliver to the Representatives prior to or at the Closing
Date a properly completed and executed United States Treasury Department
Form W-9 (or other applicable form or statement specified by the Treasury
Department regulations in lieu thereof) in order to facilitate the
Underwriters' documentation of their compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company and each of the Selling
Shareholders of their respective obligations hereunder and to the following
additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than
5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall
have been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company and the
Selling Shareholders contained herein are true and correct on and as of
the Closing Date or the Additional Closing Date, as the case may be, as if
made on and as of the Closing Date or the Additional Closing Date, as the
case may be, and each of the Company and the Selling Shareholders shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be;
(c) since the respective dates as of which information is given in
the Prospectus, there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
Material Adverse Change, or any development involving a prospective
Material Adverse Change, otherwise than as set forth or contemplated in
the Prospectus, the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares on the Closing Date or the Additional
Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus; and neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included or incorporated by reference
19
-19-
in the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus;
(d) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, (1) a certificate
of an executive officer of the Company, with specific knowledge about the
Company's financial matters, satisfactory to the Representatives to the
effect set forth in subsections (a) through (c) (with respect to the
respective representations, warranties, agreements and conditions of the
Company) of this Section and to the further effect that there has not
occurred any Material Adverse Change, or any development involving a
prospective Material Adverse Change, from that set forth or contemplated
in the Registration Statement and (2) a certificate of the Selling
Shareholders, satisfactory to the Representatives, to the effect set forth
in subsection (b) of this Section 6 (with respect to the respective
representations, warranties, agreements and conditions of the Selling
Shareholders);
(e) Xxxxxxxxx, Daily, Xxxxxxx & Xxxxx, Indiana counsel to the
Company, shall have furnished to the Representatives its written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Representatives, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
state of Indiana;
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus;
(iii) The authorized, issued and outstanding shares of capital
stock of the Company have been duly and validly issued and are fully
paid and nonassessable, and, to our knowledge, have not been issued
in violation of or subject to any preemptive or similar right;
(iv) The Company Shares or the Option Shares, as the case may
be, to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery
against payment therefor in accordance with the terms thereof, will
be duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any
preemptive or similar right;
20
-20-
(v) The Company has the corporate power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver to
the Underwriters the Company Shares (and Option Shares) to be issued
and sold by it thereunder;
(vi) The Underwriting Agreement has been duly authorized by
all necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company;
(vii) the Company is not, and with the giving of notice or
lapse of time or both will not be, in violation of, or in default
under, its amended and restated articles of organization (the
"Articles") or by-laws; the issue and sale of the Shares being
issued and sold by the Company hereunder on the Closing Date or the
Additional Closing Date, as the case may be, and the performance by
the Company of its obligations under this Agreement and the
consummation of the transactions contemplated herein will not result
in any violation of the provisions of Articles or the by-laws of the
Company; and
(viii) the statements under "Description of Capital Stock --
Common Stock" and "Description of Capital Stock -- Preferred Stock"
insofar as such statements constitute a summary of the terms of the
capital stock of the Company, legal matters, documents or
proceedings referred to therein, fairly present the information
called for with respect to such terms, legal matters, documents or
proceedings;
(f) Xxxxxxx X. Xxxxx, Xx., Vice President, General Counsel and
Secretary of the Company, shall have furnished to the Representatives his
written opinion, dated the Closing Date or the Additional Closing Date, as
the case may be, in form and substance satisfactory to the
Representatives, to the effect that:
(i) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of Tennessee, which is the only foreign jurisdiction
in which it owns or leases properties, or conducts any business, so
as to require such qualification, other than where the failure to be
so qualified or in good standing would not have a Material Adverse
Effect;
(ii) each of the Company's subsidiaries has been duly
incorporated or formed, as the case may be, and is validly existing
as a corporation, partnership or limited liability company, as the
case may be, under the laws of its jurisdiction of incorporation or
formation, as the case may be, with power and authority (corporate
and other) to own its properties and conduct its
21
-21-
business as described in the Prospectus and has been duly qualified
as a foreign corporation, partnership or limited liability company,
as the case may be, for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require
such qualification, other than where the failure to be so qualified
and in good standing would not have a Material Adverse Effect; and
all of the outstanding shares of capital stock or other ownership
interests of each subsidiary listed on Schedule III hereto have been
duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iii) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such
counsel's knowledge, threatened against or affecting the Company or
any of its subsidiaries or any of their respective properties or to
which the Company or any of its subsidiaries is or may be a party or
to which any property of the Company or its subsidiaries is or may
be the subject which, if determined adversely to the Company or any
of its subsidiaries, could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect; to the
best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
and such counsel does not know of any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required;
(iv) the statements under "Description of Capital Stock --
Shares Eligible for Future Sale" and "Business-Legal Proceedings"
and in the Registration Statement in Item 15, insofar as such
statements constitute a summary of the terms of the capital stock of
the Company, legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such terms, legal matters, documents or proceedings;
(v) such counsel believes that (other than the financial
statements and related schedules therein, as to which such counsel
need express no belief) the Registration Statement and the
prospectus included therein at the time the Registration Statement
became effective did not contain 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 not misleading,
22
-22-
and that the Prospectus, as amended or supplemented, if applicable,
does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
(vi) neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in
violation of, or in default under, its certificate or articles of
incorporation or organization or by-laws or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a
party or by which it or any of them or any of their respective
properties is bound, except for violations and defaults which
individually and in the aggregate are not material to the Company
and its subsidiaries, taken as a whole; the issue and sale of the
Shares being issued and sold by the Company hereunder on the Closing
Date or the Additional Closing Date, as the case may be, and the
performance by the Company of its obligations under this Agreement
and the consummation of the transactions contemplated herein will
not conflict with or result in a breach 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 known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will any such
action result in any violation of the provisions of the Articles or
the by-laws of the Company or any applicable law or statute or any
order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company, its subsidiaries or any
of their respective properties;
(vii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Shares
being issued and sold by the Company hereunder or the consummation
of the other transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(viii) such counsel has no reason to believe that the
Prospectus or any further amendment or supplement thereto made by
the Company prior to the
23
-23-
Closing Date or the Additional Closing Date, as the case may be
(other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), when such
documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the Securities Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading;
(ix) to the best of such counsel's knowledge, each of the
Company and its subsidiaries owns, possesses or has obtained all
licenses, permits, certificates, consents, orders, approvals and
other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory
organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to
operate its properties and to carry on its business as conducted as
of the date hereof, and neither the Company nor any such subsidiary
has received any actual notice of any proceeding relating to
revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described
in the Registration Statement and the Prospectus; and each of the
Company and its subsidiaries is in compliance with all laws and
regulations relating to the conduct of its business as conducted as
of the date of the Prospectus;
(x) each of the Company and its subsidiaries owns, possesses
or has the right to use the Intellectual Property employed by it in
connection with the business conducted by it as of the date hereof;
and
(xi) each of the Company and its subsidiaries is in compliance
with all Environmental Laws, except, in each case, where
noncompliance, individually or in the aggregate, would not have a
Material Adverse Effect.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of Tennessee, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable
24
-24-
to the Underwriters' counsel, familiar with the applicable laws including,
as to matters of Indiana law, Xxxxxxxxx, Daily, Xxxxxxx and Xxxxx; and (B)
as to matters of fact, to the extent such counsel deems proper, on
certificates of responsible officers of the Company and certificates or
other written statements of officials of jurisdictions having custody of
documents respecting the corporate existence or good standing of the
Company. With respect to the matters to be covered in subparagraph (ix)
above counsel may state their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto and review and
discussion of the contents thereof but is without independent check or
verification except as specified;
(g) Shearman & Sterling, special counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and when delivered to and paid for the
Underwriters in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and the issuance of
such Shares is not subject to any preemptive or similar rights;
(iii) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Shares
being issued and sold by the Company hereunder or the consummation
of the other transactions contemplated by this Agreement, except
such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the
Securities Act and as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(iv) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
(v) the documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to
25
-25-
the Closing Date or the Additional Closing Date, as the case may be
(other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements
of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder;
(vi) the Registration Statement has been declared effective
under the Securities Act and, to the best of such counsel's
knowledge, no stop order or proceedings with respect thereto are
pending or threatened under the Securities Act; and
(vii) no registration under the Securities Act was required in
connection with the issuance of shares of Common Stock of the
Company in connection with the repurchase by the Company of
3,337,272 shares of Common Stock held by Sofyc, S.A., a personal
holding company of the Selling Shareholders, in exchange for an
aggregate of 2,806,080 shares of Common Stock and other
consideration pursuant to a stock exchange agreement dated as of
January 22, 1998 among the Company and the Selling Shareholders.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the State of New York, to the extent such counsel deems proper and to
the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, including, as to matters of Indiana law, Xxxxxxxxx,
Daily, Xxxxxxx and Xxxxx, familiar with the applicable laws; and (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of
any such other counsel upon which such counsel relied is in form
satisfactory to such counsel and, in such counsel's opinion, the
Underwriters and they are justified in relying thereon. With respect to
the matters to be covered in subparagraph (vi) above, counsel may state
their opinion and belief is based upon their participation in the
preparation of the Registration Statement and the Prospectus and any
amendment or supplement thereto and review and discussion of the contents
thereof but is without independent check or verification except as
specified.
In addition, such counsel shall state in a separate letter to be
addressed to the Representatives that they have participated in
conferences with directors, officers and other representatives of the
Company, representatives of the independent public
26
-26-
accountants for the Company, the Selling Shareholders and counsel for the
Selling Shareholders, the Representatives and counsel for the
Underwriters, at which conferences the contents of the Registration
Statement, the Prospectus and related matters were discussed, and,
although such counsel have not independently verified and are not passing
upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (except to the extent specified elsewhere in such letter or
with reference to such counsel), no facts have come to the attention of
such counsel that lead such counsel to believe that the Registration
Statement and the prospectus included therein at the time the Registration
Statement became effective included any untrue statement of a material
fact or omitted to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or that the Prospectus, at the date thereof or the
Closing Date, includes any untrue statement of a material fact or omits to
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the
financial, statistical and accounting information contained or
incorporated by reference in the Registration Statement or the
Prospectus).
The opinions and letter of Shearman & Sterling described above shall
be rendered to the Underwriters at the request of the Company and shall so
state therein;
(h) Xxxxxxxx & Associes, counsel for the Selling Shareholders, shall
have furnished to the Representatives their written opinion, dated the
Closing Date, in form and substance satisfactory to the Representatives,
to the effect that:
(i) this Agreement has been duly executed and delivered by or
on behalf of each of the Selling Shareholders;
(ii) a Power of Attorney and a Custody Agreement have been
duly executed and delivered by, or on behalf of, each Selling
Shareholder and constitute valid and binding agreements of each
Selling Shareholder in accordance with their terms;
(iii) each Selling Shareholder has valid and marketable title
to all of the Shares to be sold by such Selling Shareholder, and
upon delivery of and payment for such Shares in accordance with the
terms of this Agreement, the Underwriters will acquire valid and
marketable title to such Shares, free and clear of any mortgage,
pledge, security interest, lien, claim or other encumbrance or
restriction on transferability or any adverse claim; and
27
-27-
(iv) the sale of the Shares to be sold by the Selling
Shareholders and the execution and delivery by each Selling
Shareholder of, and the performance by such Selling Shareholder of
its obligations under, this Agreement, and the consummation of the
transactions contemplated herein, (i) to the extent necessary, have
been duly authorized on the part of each of the Selling
Shareholders, and (ii) to the best of such counsel's knowledge, will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement
or instrument to which any Selling Shareholder is a party or by
which any Selling Shareholder is bound or to which any of the
property or assets of any Selling Shareholder is subject, nor will
any such action result in any violation of any applicable law or
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Shareholder or any of such Selling Shareholder's properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or
body is required for the sale of the Shares by the Selling
Shareholder or the consummation by the Selling Shareholders of the
transactions contemplated by this Agreement, except such consents,
approvals, authorizations, registrations or qualifications as have
been obtained under the Securities Act and as may be required under
state securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters.
In rendering such opinions, such counsel may rely as to matters
involving the application of laws other than the laws of France, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws. The opinion of such counsel for the Selling Shareholders
shall state that the opinion of any such other counsel is in form
satisfactory to such counsel, and in such counsel's opinion, the
Underwriters and they are justified in relying thereon;
(i) Xxxxxx Xxxxxxxx LLP, special litigation counsel for the Company,
shall have furnished to the Representatives their written opinion, dated
the Closing Date or Additional Closing Date, as the case may be, in form
and substance satisfactory to the Representatives, to the effect that the
statements set forth under "Risk Factors - Risk of Orthopedic Bone Screw
Litigation" and "Business-Legal Proceedings" (together, the "Orthopedic
Bone Screw Litigation Disclosure"), insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to such
legal
28
-28-
matters, documents and proceedings; the Orthopedic Bone Screw Litigation
Disclosure included in the Registration Statement at the time it became
effective did not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make
such statements not misleading; and the Orthopedic Bone Screw Litigation
Disclosure included in the Prospectus, as amended or supplemented, if
applicable, does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make such statements,
in light of the circumstances in which they were made, not misleading;
(j) Woodward, Emhardt, Xxxxxxxx, Xxxxxxxx & XxXxxx, special
intellectual property counsel for the Company, shall have furnished to the
Representatives their written opinion, dated the Closing Date or
Additional Closing Date, as the case may be, to the effect that the
Company and its subsidiaries own the entire right, title and interest in
and to any and all Intellectual Property used in the Company's or any such
subsidiary's business or licensed by the Company or its subsidiaries for
use by others; any such items licensed to the Company or its subsidiaries
by other parties have been licensed pursuant to a valid and enforceable
license agreement and such use is in conformity with the license
agreement; and to the best of such Counsel's knowledge, other than set
forth or contemplated in the Prospectus, there are no pending or
threatened proceedings or litigation affecting, challenging or with
respect to the validity or otherwise of such patents, trademarks, trade
names or copyrights, or any license for use of such items (whether by or
to the Company);
(k) King & Spalding, regulatory counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that the
statements in the Prospectus and the Registration Statement under "Risk
Factors--Uncertainty of Regulatory Clearances; Regulatory Compliance" and
"Business--Government Regulation" insofar as such statements purport to
summarize applicable provisions of the Federal Food, Drug and Cosmetic Act
and the regulations promulgated thereunder, are correct summaries in all
material respects of the provisions purported to be summarized;
(l) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing
Date, as the case may be, Coopers & Xxxxxxx shall have furnished to you
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, containing statements and information of
the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial informa-
29
-29-
tion contained in the Registration Statement and the Prospectus or
incorporated therein by reference;
(m) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Xxxxxx
Xxxxxx & Xxxxxxx, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Company Shares, the Registration
Statement, the Prospectus and other related matters as the Representatives
may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(n) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on
the New York Stock Exchange, subject, in the case of the Company Shares,
to official notice of issuance;
(o) on or prior to the Closing Date or Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives
such further certificates and documents as the Representatives shall
reasonably request; and
(p) the Lock-Up Agreements between you and certain stockholders,
officers and directors of the Company relating to sales and certain other
dispositions of shares of Common Stock of the Company or certain other
securities, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date or Additional Closing Date, as
the case may be.
7. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein; provided
that the foregoing indemnity with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter)
30
-30-
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and, if required by law, a copy
of the Prospectus (as so amended or supplemented) shall not have been furnished
to such person at or prior to the written confirmation of the sale of such
Shares to such person.
Each of the Selling Shareholders agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use
therein and except that no Selling Shareholder shall be liable under this
Section 7 for an amount exceeding the aggregate Purchase Price of the Shares
sold by such Selling Shareholder hereunder.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act and each Selling
Shareholder to the same extent as the foregoing indemnity from the Company and
the Selling Shareholders to each Underwriter, but only with reference to
information relating to such Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to the preceding
paragraphs of this Section 7, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory
31
-31-
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such control persons of the Underwriters shall be designated in writing by
X.X. Xxxxxx Securities Inc. and any such separate firm for the Company, its
directors, its officers who sign the Registration Statement and such control
persons of the Company shall be designated in writing by the Company and any
such separate firm for the Selling Shareholders will be designated in writing by
the Attorneys-in-Fact. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first three paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to
32
-32-
the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Shareholders on the one hand and
the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Shareholders on the one hand and the Underwriters
on the other hand shall be deemed to be in the same respective proportions as
the net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the Selling Shareholders and the total underwriting
discounts received by the Underwriters, in each case as set forth in the table
on the cover of the Prospectus, bear to the aggregate public offering price of
the Shares. The relative fault of the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether 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 and the Selling Shareholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the Selling Shareholders or
the Underwriters were treated as one entity for such purposes) or by any other
method of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses incurred by such Indemnified Person in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section ll(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective number of Shares set forth
opposite their names in Schedule I hereto, and not joint.
33
-33-
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section
7 and the representations and warranties of the Company and the Selling
Shareholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any other person controlling the Company or the Selling Shareholders and (iii)
acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company and the Selling Shareholders, if after the execution and delivery
of this Agreement and prior to the Closing Date (or, in the case of the Option
Shares, to the Company prior to the Additional Closing Date) (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange or the American Stock Exchange or the
National Association of Securities Dealers, Inc., (ii) trading of any securities
of the Company shall have been suspended on any exchange, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Shares being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Shares to be purchased on such date, the other Underwriters
shall be obligated severally, in the proportions that the number of Shares set
forth opposite their respective names in Schedule I bears to the aggregate
number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwrit-
34
-34-
ers, or in such other proportions as the Representatives may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to Section
1 be increased pursuant to this Section 9 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If on the
Closing Date or the Additional Closing Date, as the case may be, any Underwriter
or Underwriters shall fail or refuse to purchase Shares which it or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Shares are not made within 36 hours after such default, this Agreement (or the
obligations of the several Underwriters to purchase the Option Shares, as the
case may be) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either you or the Company shall
have the right to postpone the Closing Date (or, in the case of the Option
Shares, the Additional Closing Date), but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company or the
Selling Shareholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or the Selling
Shareholders shall be unable to perform their obligations under this Agreement
or any condition of the Underwriters' obligations cannot be fulfilled, the
Company and the Selling Shareholders agree to reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Shareholders, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Shares from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
35
-35-
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
X.X. Xxxxxx Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telefax: (000) 000-0000); Attention: Syndicate Department. Notices
to the Company shall be given to it at Sofamor Xxxxx Group, Inc., 0000 Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxxx 00000 (telefax: (000) 000-0000); Attention: Chief
Financial Officer. Notice to the Selling Shareholders shall be given to
Xxxxx-Xxxxxx Xxxxxx Xxxxx, Xx Xxxxxxxxxx, Xxxxxx X. X. Xxxxxxx 00000 Xx Xxxxxxx,
Xxxxxx (telefax: 011-33-3-21-05-91-79), copy to Xxxxxxxx & Associes, 00 xxx xx
Xxxxxxxxxx, 00000 Xxxxx, Xxxxxx (telefax: 011-33-1-53-83-74-01) Attention:
Xxxxxxxxx Xxxxxxxx.
13. This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
36
-36-
If the foregoing is in accordance with your understanding, please
sign and return four counterparts hereof.
Very truly yours,
SOFAMOR XXXXX GROUP, INC.
By:
----------------------------------
Name:
Title:
SELLING SHAREHOLDERS
By:
----------------------------------
Name:
Title:
As Attorney-in-Fact acting on behalf
of each of the Selling Shareholders
named in Schedule II to this
Agreement.
Accepted: _________, 1998
X.X. XXXXXX SECURITIES INC.
PAINEWEBBER INCORPORATED
XXXXX XXXXXX INC.
Acting severally on behalf
of themselves and the several
Underwriters listed in
Schedule I hereto.
By: X.X. XXXXXX SECURITIES INC.
By:
-----------------------------
Name:
Title:
37
SCHEDULE I
Number of
Underwriter Underwritten
----------- Shares To Be
Purchased
-------------
X.X. Xxxxxx Securities Inc. .....................................
PaineWebber Incorporated ........................................
Xxxxx Xxxxxx Inc. ...............................................
-------------
Total
=============
38
SCHEDULE II
Underwritten Shares to be sold by the
Company and the Selling Shareholders
Number of
Underwritten
Name Shares to be Sold
----------------------------------------------------------- ------------------
Sofamor Xxxxx Group, Inc. 1,200,000
Yves Xxxx Xxxxxx, M.D. 324,490
Xxxxx-Xxxxxx Plais 120,611
Xxxxx Xxxxxx 123,266
Xxxxxxxxx Xxxxxx 123,266
Xxxxx Xxxxxx Xxxxxx 324,491
Xxxxxxxx Xxxxxx 114,415
Xxxx-Xxxxx Xxxxxx 117,365
Xxxxxxxxx Xxxxxx Gauzan 123,266
Xxxxxxxxx Xxxxxx Xxxxxxx 114,415
Xxxxx-Xxxxxxxxx Xxxxxxx 114,415
------------------
Total 2,800,000
==================
39
SCHEDULE III
Material Subsidiaries of the Company
Percent of
Ownership
Name Or Interest
-------------------------------------------------------- -----------------
1. Sofamor S.N.C. 100%
2. Sofamor Xxxxx Asia Pacific Limited 100%
3. Sofamor Xxxxx Canada, Inc. 100%
4. Warsaw Orthopedic, Inc. 100%
5. Sofamor Xxxxx G.m.b.H 100%
6. Sofamor Xxxxx Properties, Inc. 100%
7. Xxxxx Capital Corporation 100%
8. Mednext, Inc. 100%
9. Sofamor Xxxxx Australia Pty. Ltd. 100%
10. Sofamor Xxxxx (Puerto Rico), Inc. 100%
11. Sofamor Xxxxx Nederland B.V. 100%
12. Colorado S.A. 100%
13. Sofamor Xxxxx (NZ) Limited 100%
14. Sofamor Xxxxx South Africa (Pty.) Limited 100%
15. Sofamor Xxxxx (U.K.) Limited 100%
16. Sofamor Xxxxx Holdings, Inc. 100%
17. Sofamor Xxxxx Ireland Limited 100%
18. Surgical Navigation Technologies, Inc. 100%
19. SDGI Holdings, Inc. 100%
20. DMI Tennessee Holdings, Inc. 100%
21. Sofamor Xxxxx X.X. 100%
22. DMI Delaware Holdings, Inc. 100%
23. Sofamor Xxxxx Italia S.r.l. 100%
24. Sofamor Xxxxx Iberica S.A. 100%
25. Sofamor Xxxxx Benelux S.A. 100%
26. Kobayashi Sofamor Xxxxx X.X. 50%
27. Xxxxx Korea Co., Ltd. 50%
28. Somepic Technologie S.A. 33.75%
40
Exhibit A
[FORM OF LOCK-UP AGREEMENT]
_______________, 1998
X.X. XXXXXX SECURITIES INC.
PAINEWEBBER INCORPORATED
XXXXX XXXXXX INC
As Representatives of
the Underwriters named in
Schedule I to the Underwriting
Agreement referred to below
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Sofamor Xxxxx Group, Inc. -- Public Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the
several Underwriters, propose to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Sofamor Xxxxx Group, Inc., an Indiana corporation
(the "Company"), and certain Selling Shareholders named therein providing for
the public offering (the "Public Offering") by the several Underwriters named in
Schedule I to the Underwriting Agreement (the "Underwriters") of Common Stock,
no par value, of the Company (the "Common Stock"). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Underwriting
Agreement.
In consideration of the Underwriters' agreement to purchase and make
the Public Offering of the Underwritten Shares, and for other good and valuable
consideration receipt of which is hereby acknowledged, the undersigned hereby
agrees that, without the prior written consent of X.X. Xxxxxx Securities Inc.,
on behalf of the Underwriters, the undersigned will not, during the period
ending 90 days after the date of the prospectus relating to the Public Offering
(the "Prospectus"), (1) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock, or any securities convertible into or exercisable or exchangeable for
Common Stock (including without limitation, Common
41
-2-
Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant) or (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of X.X. Xxxxxx Securities Inc. on behalf of the Underwriters, it will
not, during the period ending 90 days after the date of the Prospectus, make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this letter agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this letter agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does
not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released form all obligations under this letter agreement.
The undersigned understands that the Underwriters are entering into
the Underwriting Agreement and proceeding with the Public Offering in reliance
upon this letter agreement.
42
-3-
This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof.
Very truly yours,
------------------------------
Name:
Accepted as of the date first set
forth above:
X.X. XXXXXX SECURITIES INC.
PAINEWEBBER INCORPORATED
XXXXX XXXXXX INC.
Acting severally on behalf of themselves and
the several Underwriters named in Sched-
ule I to the Underwriting Agreement
By: X.X. XXXXXX SECURITIES INC.
By:
-----------------------------------------
Name:
Title:
