11,500,000 Shares of Common Stock
INVERESK RESEARCH GROUP, INC.
UNDERWRITING AGREEMENT
November __, 2003
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
as Representatives of the
several Underwriters named in
Schedule I attached hereto (the "Representatives")
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies/Gentlemen:
Inveresk Research Group, Inc., a corporation organized and existing
under the laws of Delaware (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 1,000,000 shares (the
"Company Shares") of its common stock, par value $.01 per share (the "Common
Stock"). The stockholders of the Company listed on Schedule II hereto (the
"Selling Stockholders") severally propose to sell the Underwriters an aggregate
of 9,000,000 shares of Common Stock (the "Selling Stockholders' Shares" and,
together with the Company Shares, the "Firm Shares"). For the sole purpose of
covering over-allotments in connection with the sale of the Firm Shares, at the
option of the Underwriters, certain of the Selling Stockholders propose to sell
to the Underwriters up to an additional 1,500,000 shares (the "Additional
Shares") of Common Stock. The Firm Shares and any Additional Shares purchased by
the Underwriters are referred to herein as the "Shares". The Shares are more
fully described in the Registration Statement and the Prospectus referred to
below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company meets all conditions for the use of Form S-3
in connection with the offer and sale of the Shares (the "Offering"). The
Company has filed with the Securities and Exchange Commission (the "Commission")
a registration statement on Form
S-3 (No. 333-108813), and amendments thereto, for the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of certain securities
(the "Shelf Securities") to be issued from time to time by the Company. The
registration statement and each post-effective amendment thereto filed on or
before the date hereof have been declared effective by the Commission and copies
thereof have heretofore been delivered to the Underwriters. The registration
statement, as amended to the date of this Agreement, including the exhibits
thereto and 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
hereinafter referred to as the "Registration Statement." If the Company has
filed or files a registration statement pursuant to Rule 462(b) under the
Securities Act registering additional shares of Common Stock (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. Other than a Rule 462(b) Registration Statement, which,
if filed, becomes effective upon filing, no other document with respect to the
Registration Statement has heretofore been filed with the Commission. All of the
Shares have been registered under the Securities Act pursuant to the
Registration Statement or, if any Rule 462(b) Registration Statement is filed,
will be duly registered under the Securities Act with the filing of such Rule
462(b) Registration Statement. No stop order suspending the effectiveness of
either the Registration Statement or the Rule 462(b) Registration Statement, if
any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission. The prospectus contained in the Registration
Statement covering the Shelf Securities in the form first used to confirm sales
of the Shares is hereinafter referred to as the "Basic Prospectus," and the
Basic Prospectus as supplemented by any applicable prospectus supplement
specifically relating to the Shares in the form first used to confirm sales is
hereinafter referred to as the "Prospectus," except that if any revised
prospectus or prospectus supplement shall be provided to the Underwriters by the
Company for use in connection with the Offering which differs from the
Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and
Regulations (as defined below)), the term "Prospectus" shall refer to such
revised prospectus or prospectus supplement, as the case may be, from and after
the time it is first provided to the Underwriters for such use. Any prospectus
or prospectus supplement subject to completion included in the Registration
Statement or filed with the Commission pursuant to Rule 424(b) under the
Securities Act prior to the date of the Prospectus is hereafter called a
"Preliminary Prospectus." The Company has filed or shall timely file the
Prospectus and any Preliminary Prospectus, if required by the Securities Act and
the Rules and Regulations, with the Commission pursuant to Rule 424(b) under the
Securities Act. Any reference herein to the Registration Statement, the
Prospectus or any Preliminary Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
as of the date of the Registration Statement, the Prospectus or any Preliminary
Prospectus, as the case may be, and any reference herein to the terms
"amendment," "supplement," "amended" or "supplemented" with respect to the
Registration Statement, the Prospectus or any Preliminary Prospectus shall be
deemed to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), after the date of the Registration
Statement, the Prospectus or any Preliminary Prospectus, as the case may be,
which is deemed incorporated therein by reference. All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration Statement,
the Prospectus or any Preliminary Prospectus, or any amendments or supplements
to any of the foregoing, shall be
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deemed to include any copy thereof filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇"). As used
herein, the "Rules and Regulations" means the rules and regulations adopted by
the Commission under either the Securities Act or the Exchange Act, as
applicable.
(b) At the time of the effectiveness of the Registration
Statement, any post-effective amendment to the Registration Statement or any
Rule 462(b) Registration Statement, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission, and
at the Closing Date and the Additional Closing Date, if any (as hereinafter
respectively defined), the Registration Statement and the Prospectus and any
amendments thereof and supplements thereto complied or will comply in all
material respects with the applicable provisions of the Securities Act and the
Rules and Regulations and did not and will not contain an untrue statement of a
material fact and did not and will not omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (i) in
the case of the Registration Statement, not misleading and (ii) in the case of
the Prospectus or any Preliminary Prospectus, in light of the circumstances
under which they were made, not misleading. When any Preliminary Prospectus was
first filed with the Commission (whether filed as part of the registration
statement for the registration of the Shares or any amendment thereto or
pursuant to Rule 424(b) of the Rules and Regulations) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
Preliminary Prospectus and any amendments thereof and supplements thereto
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and Regulations and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No representation and warranty is made in this subsection (b),
however, with respect to any information contained in or omitted from the
Registration Statement, the Prospectus or any Preliminary Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through you specifically for use therein. The parties acknowledge
and agree that such information provided by or on behalf of any Underwriter
consists solely of the material included in paragraphs three, twelve, thirteen,
fourteen, sixteen, seventeen, eighteen and nineteen under the caption
"Underwriting" in the Prospectus. The documents incorporated by reference in the
Registration Statement, the Prospectus, any Preliminary Prospectus or any
amendment or supplement thereto, when they became effective or were filed with
the Commission, as the case may be, complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Rules and Regulations, and any documents so filed and incorporated by reference
subsequent to the date of the Registration Statement shall, when they are filed
with the Commission, conform in all material respects with the requirements of
the Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations. No such documents when they were filed (or, if amendments or
supplements with respect to such documents were filed, when such amendments or
supplements were filed) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
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(c) Deloitte & Touche LLP, who have audited the financial
statements and supporting schedules of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, and Ernst & Young
LLP, who have certified certain financial statements of PharmaResearch
Corporation included or incorporated by reference in the Registration Statement
and the Prospectus, each are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(d) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as set forth
in the Registration Statement and the Prospectus, the Company has not paid any
dividends on its capital stock and there has been no material adverse change or
any development involving a prospective material adverse change in the business,
properties, condition (financial or other) or results of operations of the
Company and each subsidiary of the Company listed on Exhibit A (the
"Subsidiaries"), taken as a whole, whether or not arising from transactions in
the ordinary course of business (a "Material Adverse Change"), and since the
date of the latest balance sheet included or incorporated by reference in the
Registration Statement and the Prospectus, neither the Company nor any of the
Subsidiaries has incurred or undertaken any liabilities or obligations, direct
or contingent, which are material to the Company and the Subsidiaries, taken as
a whole, except for liabilities or obligations which are reflected in the
Registration Statement and the Prospectus.
(e) This Agreement and the transactions contemplated herein
have been duly and validly authorized by all necessary corporate action of the
Company and this Agreement has been duly and validly executed and delivered by
the Company.
(f) The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
(i) conflict with, require consent under or result in a breach of any of the
terms and provisions of, or constitute a default (or an event which with notice
or lapse of time, or both, would constitute a default) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement, instrument,
franchise, license or permit to which the Company or any of the Subsidiaries is
a party or by which the Company or any of the Subsidiaries or their respective
properties or assets may be bound, except where any such conflict, breach,
default, lien, charge or encumbrance would not have, singly or in the aggregate
with any other such conflicts, breaches, defaults, liens, charges or
encumbrances, a Material Adverse Effect (as hereinafter defined), or (ii)
violate or conflict with any provision of the certificate or articles of
incorporation, by-laws, certificate of formation, limited liability company
agreement, partnership agreement or other organizational documents of the
Company or any of the Subsidiaries or any judgment, decree, order, statute, rule
or regulation of any court or any public, governmental or regulatory agency or
body having jurisdiction over the Company or any of the Subsidiaries or any of
their respective properties, operations or assets. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any public, governmental or regulatory agency or body
having jurisdiction over the Company or any of the Subsidiaries or any of their
respective properties or assets or from any third party is required for the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, by the Registration Statement and by the
Prospectus, including the issuance, sale and delivery of the Shares to be
issued, sold and
4
delivered hereunder, except (i) the registration under the Securities Act of the
Shares, and (ii) such consents, approvals, authorizations, orders,
registrations, filings, qualifications, licenses and permits as may be required
under state securities or Blue Sky laws or the by-laws and rules of the National
Association of Securities Dealers, Inc. or NASD Regulation, Inc. in connection
with the purchase and distribution of the Shares by the Underwriters.
(g) The Company has the authorized capitalization set forth in
the Registration Statement and the Prospectus. All of the issued and outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, and were not issued in violation of
or subject to any preemptive or similar rights; the Shares to be delivered by
the Company on the Closing Date have been duly and validly authorized and, when
delivered by the Company in accordance with this Agreement, will be duly and
validly authorized and issued, fully paid and non-assessable and will not have
been issued in violation of or subject to any preemptive or similar rights that
entitle or will entitle any person to acquire any shares of capital stock from
the Company upon issuance or sale of Shares by the Company hereunder; any shares
issued to any Selling Stockholder pursuant to the exercise of options held by
such Selling Stockholder will have been duly and validly authorized and, when
delivered to such Selling Stockholder, will be duly and validly issued, fully
paid and non-assessable and will not have been issued in violation of or subject
to any preemption or similar rights that entitle or will entitle any person to
acquire any shares of capital stock from the Company upon issuance thereof; all
of the issued shares of capital stock of each of its Subsidiaries has been duly
and validly authorized and issued and 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; and the authorized capital stock of the
Company conforms to the descriptions thereof contained or incorporated by
reference in the Registration Statement and the Prospectus.
(h) The Subsidiaries are the only subsidiaries (as defined in
Rule 405 of the Rules and Regulations) of the Company. Each of the Company and
the Subsidiaries has been duly organized or formed and is validly existing as a
corporation, partnership or limited liability company and (in jurisdictions
where the concept is applicable) is in good standing under the laws of its
jurisdiction of incorporation or formation. Each of the Company and the
Subsidiaries is duly qualified to do business and (in jurisdictions where the
concept is applicable) is in good standing as a foreign corporation, partnership
or limited liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which will not in the aggregate have a
material adverse effect on (and there shall have been no development involving a
prospective material adverse effect on) (i) the condition (financial or
otherwise), results of operations, business or properties of the Company and the
Subsidiaries taken as a whole, or (ii) the consummation of the transactions
contemplated by this Agreement or the Company's performance of its obligations
hereunder (a "Material Adverse Effect"). Each of the Company and the
Subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits (collectively, the "Consents") of and from all public, regulatory or
governmental agencies and bodies, to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, and each such Consent is valid and in full force
and effect, and neither the
5
Company nor any of the Subsidiaries has received notice of any investigation or
proceedings which reasonably might be expected to result in the revocation of
any such Consent, except where the failure of any such Consent to be valid and
in full force and effect would not have, considered individually or when
aggregated with any other such failures, a Material Adverse Effect. Each of the
Company and the Subsidiaries is in compliance with all applicable laws, rules,
regulations, ordinances and directives, except where failure to be in compliance
would not have, considered individually or when aggregated with any other such
failures to be in compliance, a Material Adverse Effect. No Consent contains a
materially burdensome restriction not adequately disclosed in the Registration
Statement and the Prospectus.
(i) Except as described in the Prospectus, there is no legal
or governmental proceeding, including routine litigation, to which the Company
or any of the Subsidiaries is a party or of which any property of the Company or
any of the Subsidiaries is the subject which, if determined adversely to the
Company or any of the Subsidiaries, is reasonably likely to have, considered
individually or when aggregated with any other such proceedings, a Material
Adverse Effect, and to the best of the Company's knowledge, no such proceeding
is threatened or contemplated by governmental authorities or threatened by
others, and the defense of all such claims against the Company and the
Subsidiaries in the aggregate, including routine litigation, will not have a
Material Adverse Effect on the Company.
(j) Neither the Company nor any of its affiliates has taken,
nor will any of them take, directly or indirectly, any action designed to cause
or result in, or which constitutes or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.
(k) Except for the Subsidiaries, the Company owns no capital
stock or other beneficial interest, directly or indirectly, in any corporation,
partnership, joint venture or other business entity.
(l) The financial statements, including the notes thereto, and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries and of PharmaResearch Corporation and
its consolidated subsidiaries as of the dates indicated and the cash flows and
results of operations thereof for the periods specified; except as otherwise
stated in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved and the
supporting schedules included in the Registration Statement present fairly the
information required to be stated therein. The other financial and statistical
information and data included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information included therein and
have been prepared on a basis consistent with that of the financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus and the books and records of the respective entities presented
therein. The pro forma and as adjusted financial information included or
incorporated by reference in the Registration Statement or the Prospectus has
been properly compiled and prepared in accordance with the applicable
requirements of the Securities Act, the Exchange Act and the Rules and
Regulations and includes all adjustments necessary to present fairly the pro
forma financial position of the respective entity or entities presented therein
6
at the respective dates indicated and the results of their operations for the
respective periods specified. All non-GAAP financial measures included or
incorporated by reference in the Registration Statement or the Prospectus comply
with the requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act") and the Rules and Regulations. There are no historical or pro forma
financial statements which are required to be included in the Registration
Statement and Prospectus in accordance with Regulation S-X which has not been
included as so required.
(m) The assumptions used in preparing the pro forma financial
information included or incorporated by reference in the Registration Statement
and the Prospectus provide in the good faith opinion of the Company a reasonable
basis for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments give
appropriate effect to those assumptions, and the pro forma column therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
(n) Except as disclosed in the Registration Statement and the
Prospectus, no holder of securities of the Company has any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the Shares
contemplated hereby, and any such rights so disclosed have either been fully
complied with by the Company or effectively waived by the holders thereof, and
any such waivers remain in full force and effect.
(o) The Company is not, and upon consummation of the
transactions contemplated hereby, and at all times up to and including the
application of net proceeds as described in the Prospectus, will not be, subject
to registration as an "investment company" under the Investment Company Act of
1940, as amended.
(p) The Company and the Subsidiaries have good and marketable
title to all real and personal property reflected as owned by them in the
financial statements, including the notes thereto, referred to in the first
sentence of subsection (l) above (or elsewhere in the Registration Statement or
the Prospectus), in each case free and clear of all liens, encumbrances and
defects except such as are described in the Registration Statement and the
Prospectus or such as would not, singly or in the aggregate, have a Material
Adverse Effect; and any real property and buildings held under lease or sublease
by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as would not, singly or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any of the
Subsidiaries has received any notice of any claim adverse to its ownership of
any real or personal property or of any claim against the continued possession
of any real property, whether owned or held under lease or sublease by the
Company or any of the Subsidiaries, which, individually or when aggregated with
other such claims, would have a Material Adverse Effect.
(q) The Company and each of the Subsidiaries have accurately
prepared and timely (taking into account any permitted extensions) filed all
federal, state and other tax returns that are required to be filed by them and
have paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all sales
and use taxes and all taxes which the Company and each of the Subsidiaries are
obligated to withhold from amounts owing to employees, creditors and third
parties, with respect to the
7
periods covered by such tax returns (whether or not such amounts are shown as
due on any tax return) except where the failure to file or pay could have
(individually or when aggregated with any other such failures) a Material
Adverse Effect. No deficiency assessment with respect to a proposed adjustment
of the Company's or any of the Subsidiaries' federal, state or other taxes is
pending or, to the best of the Company's knowledge, threatened which would have,
individually or when aggregated with any other such deficiency assessments, a
Material Adverse Effect. There is no tax lien, whether imposed by any federal,
state, or other taxing authority, outstanding against the assets, properties or
business of the Company or any of the Subsidiaries.
(r) The Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and files reports with the Commission on
▇▇▇▇▇. The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act and the outstanding shares of Common Stock (including the Shares) are quoted
on The Nasdaq Stock Market's National Market (the "Nasdaq National Market"), and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the Nasdaq National Market, nor has the Company
received any notification that the Commission or the Nasdaq National Market is
contemplating terminating such registration or listing.
(s) There are no contracts or other documents (including,
without limitation, any voting agreement), which are required to be described in
the Registration Statement and the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations and
which have not been so described or filed.
(t) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(u) Based on the evaluation of its internal controls over
financial reporting as at September 30, 2003, the Company is not aware of (i)
any significant deficiency or material weakness in the design or operation of
internal controls which is reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company's internal controls.
(v) Since September 30, 2003, there have been no significant
changes in internal controls that have materially affected, or are reasonably
likely to materially affect, its internal controls over financial reporting.
(w) Neither the Company nor any of the Subsidiaries (i) is in
violation of its charter or by-laws, partnership agreement, limited liability
company agreement or other organizational documents, (ii) is in default under,
and no event has occurred which, with notice
8
or lapse of time or both, would constitute such a default or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its property or
assets is subject or (iii) is in violation in any respect of any statute or any
judgment, decree, order, rule or regulation of any court or governmental or
regulatory agency or body having jurisdiction over the Company or any of the
Subsidiaries or any of their properties or assets, except any violation,
default, lien, charge or encumbrance referred to in (ii) or (iii) above that
would not have, considered individually or when aggregated with any other such
violations, defaults, liens, charges or encumbrances, a Material Adverse Effect.
(x) The Company and each of the Subsidiaries own or possess
adequate right to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses as being conducted and
as described in the Registration Statement and Prospectus and have no reason to
believe that the conduct of their respective businesses conflicts with or will
conflict with, and have not received any notice of any claim of conflict with,
any such right of others. To the best of the Company's knowledge, all material
technical information developed by and belonging to the Company which has not
been patented has been kept confidential. Neither the Company nor any of the
Subsidiaries has granted or assigned to any other person or entity any right to
sell the current services of the Company or those services described in the
Registration Statement and Prospectus.
(y) No labor disturbance by the employees of the Company or
any of the Subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to have a Material Adverse Effect.
(z) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
"Code")), or "accumulated funding deficiency" (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
sponsored or maintained by the Company which could have a Material Adverse
Effect; each employee benefit plan is in compliance in all material respects
with applicable U.S. and non-U.S. law including ERISA and the Code; the Company
has not incurred and does not expect to incur liability under Title IV of ERISA
with respect to the termination of, or withdrawal from any "pension plan"; and
each "pension plan" (as defined in ERISA) for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such qualification.
(aa) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or
9
other hazardous substances by, due to, or caused by the Company (or, to the best
of the Company's knowledge, any other entity for whose acts or omissions the
Company is or may be liable) upon any property now or previously owned or leased
by the Company or any of the Subsidiaries, or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability, except for any violation or liability which would
not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal discharge,
emission or other release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company or any of the Subsidiaries has
knowledge, except for any such disposal, discharge, emission or other release of
any kind which would not have, individually or when aggregated with any other
such disposals, discharges, emissions or releases, a Material Adverse Effect.
(bb) The Company has not prior to the date hereof offered or
sold any securities which would be "integrated" with the offer and sale of the
Shares pursuant to the Registration Statement.
(cc) No relationship, direct or indirect, exists between or
among any of the Company or any affiliate of the Company, on the one hand, and
any director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Securities
Act or by the Rules and Regulations to be described in the Registration
Statement or the Prospectus which is not so described or is not described as
required. There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except as
disclosed in the Registration Statement and the Prospectus. The Company has not,
in violation of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, directly or indirectly, extended or
maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or executive
officer of the Company.
(dd) The statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are derived.
(ee) Each of the Company and the Subsidiaries maintain
insurance with insurers of recognized financial responsibility of the types and
in the amounts (i) generally deemed adequate for their businesses and consistent
with insurance coverage maintained by similar companies in similar businesses
and (ii) required under any of the Company's or any of the Subsidiaries'
agreements, licenses or other contracts, all of which insurance is in full force
and effect; the Company has no reason to believe that it or any of the
Subsidiaries will not be able to renew its existing insurance as and when such
coverage expires or to obtain similar insurance with similar insurers adequate
and customary for its business and sufficient to satisfy any requirements of its
contracts at a cost that would not have a Material Adverse Effect.
10
(ff) As of the date of this Agreement and except as described
in the Registration Statement and the Prospectus, neither the Company nor any of
the Subsidiaries is required to file or obtain any registration, application,
license, request for exemption, permit or other regulatory authorization with
the U.S. Food and Drug Administration or similar state or foreign agency,
authority or governmental body in order to conduct its business as described in
the Registration Statement and Prospectus.
(gg) Each of the Company and the Subsidiaries conduct their
business in compliance with applicable Good Laboratory Practice, Good
Manufacturing Practice and Good Clinical Practice standards, except where any
non-compliance (singly or when aggregated with other such instances) would not
have a Material Adverse Effect.
(hh) No Subsidiary is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring
any of such Subsidiary's property or assets to the Company or any other
Subsidiary, except as described in or contemplated by the Registration Statement
and Prospectus or as set forth in that certain Credit Agreement (the "Credit
Agreement") dated July 28, 2003, among the Company, certain subsidiaries party
thereto, the lenders party thereto, Bank of America, N.A. and Key Corporate
Capital, Inc., as co-documentation agents, Wachovia Bank, National Association,
as administrative agent and security trustee, and Wachovia Capital Markets, LLC,
as sole lead arranger and sole book manager, and the Loan Documents (as defined
in the Credit Agreement).
The certificate referred to in Section 6(e) hereof, when executed and
delivered to the Representatives or to counsel for the Underwriters' pursuant
hereto, shall be deemed to be a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
2. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder severally (but only as to itself and not as to any other
Selling Stockholder) represents and warrants to, and agrees with, each of the
Underwriters as of the date hereof and as of the Closing Date and each
Additional Closing Date that:
(a) Such Selling Stockholder has full right, power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions of such Selling Stockholder
contemplated by this Agreement. This Agreement and the transactions contemplated
by this Agreement have been duly and validly authorized by such Selling
Stockholder. This Agreement has been duly and validly executed and delivered by
such Selling Stockholder and constitutes the legal, valid and binding obligation
of such Selling Stockholder, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
11
(b) Such Selling Stockholder has full right, power and
authority to execute and deliver a Custody Agreement and Power of Attorney
substantially in the form of Exhibits B and C hereto (such Selling Stockholder's
"Custody Agreement" and "Power of Attorney", respectively), to perform its
obligations thereunder and to consummate the transactions of such Selling
Stockholder contemplated thereby. The Custody Agreement and Power of Attorney
and the transactions contemplated thereby have been duly and validly authorized
by such Selling Stockholder. The Custody Agreement and Power of Attorney have
each been duly and validly executed and delivered by such Selling Stockholder
and constitute the legal, valid and binding obligation of such Selling
Stockholder, enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Counterparts of such Selling Stockholder's Custody Agreement, duly signed by (i)
Continental Stock Transfer & Trust Company, as custodian (in such capacity, the
"Custodian") and (ii) ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and D.J. ▇▇▇▇ ▇. ▇▇▇▇▇, as such
Selling Stockholder's attorneys-in-fact (in such capacity, the
"Attorney-In-Fact") have been delivered to the Company and Bear, ▇▇▇▇▇▇▇ & Co.
Inc. on or prior to the date of this Agreement.
(c) Such Selling Stockholder agrees that the Shares and
Additional Shares, if any, to be sold by such Selling Stockholder, whether or
not on deposit with the Custodian, are subject to the interests of the
Underwriters, that the arrangements made for such custody are, subject to the
terms of the Custody Agreement, irrevocable, and that the obligations of such
Selling Stockholder hereunder shall not be terminated, except as provided in
this Agreement or in the Custody Agreement and Power of Attorney, by any act of
such Selling Stockholder, by operation of law or by the occurrence of any other
event. If such Selling Stockholder should die or become incapacitated, or if any
other event should occur impacting the legal status or capacity of such Selling
Stockholder, before the delivery of the Shares and the Additional Shares, if
any, to be sold by such Selling Stockholder hereunder, the documents evidencing
the Shares and the Additional Shares, if any, to be sold by such Selling
Stockholder then on deposit with the Custodian shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such event had not occurred, regardless of whether or not the Custodian shall
have received notice thereof.
(d) Such Selling Stockholder is (or upon the exercise of
options prior to the Closing Date will be) the lawful owner of the Shares and
Additional Shares, if any, to be sold by such Selling Stockholder hereunder and
upon sale and delivery of, and payment for, such Shares and Additional Shares as
provided herein, such Selling Stockholder will convey to the Underwriters good
and marketable title to such Shares and Additional Shares, free and clear of all
voting trust arrangements, pledges, liens, encumbrances, equities, claims and
security interests whatsoever. Certificates for all of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement, in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, have been placed in custody with
the Custodian with irrevocable conditional instructions to deliver such Shares
to the Underwriters pursuant to this Agreement.
(e) Such Selling Stockholder has full legal right and power,
and all authorizations and approvals required by law, to enter into this
Agreement and the applicable
12
Custody Agreement and Power of Attorney, to sell, transfer and deliver all of
the Shares and Additional Shares which may be sold by such Selling Stockholder
pursuant to this Agreement and to comply with such Selling Stockholder's other
obligations hereunder and thereunder.
(f) No Consent of, from or with any judicial, regulatory or
other legal or governmental agency or body or any third party, foreign or
domestic, is required for the execution, delivery and performance by such
Selling Stockholder of this Agreement or its Custody Agreement and Power of
Attorney, or consummation by such Selling Stockholders of the transactions of
such Selling Stockholder contemplated herein or therein, except such as have
been obtained under the Securities Act and such as may be required under the
state securities laws, the blue sky laws of any jurisdiction or the by-laws and
rules of the National Association of Securities Dealers, Inc. or NASD
Regulation, Inc. in connection with the purchase and distribution of such
Selling Stockholder's Shares and such Selling Stockholder's Additional Shares,
if any, by the Underwriters.
(g) The execution, delivery and performance of this Agreement,
the Power of Attorney and the Custody Agreement by such Selling Stockholder and
consummation of any of the other transactions of such Selling Stockholder
contemplated herein and therein by such Selling Stockholder or the fulfillment
of the terms hereof by such Selling Stockholder will not (A) conflict with,
result in a breach or violation of, or constitute a default (or an event that
with notice or lapse of time, or both, would constitute a default) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of such Selling Stockholder pursuant to any law, statute,
rule or regulation or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder is party or bound, or to which any
of the property or assets of such Selling Stockholder is subject, or (B) result
in any violation of the provisions of any charter or bylaws or certificate of
formation, trust agreement, partnership agreement, articles of partnership or
other organizational documents, as applicable, of such Selling Stockholder, or
any judgment, order, decree statute, rule or regulation applicable to such
Selling Stockholder of any court or any public, governmental or regulatory
agency or body, administrative agency or arbitrator having jurisdiction over
such Selling Stockholder.
(h) Such Selling Stockholder does not have any registration or
other similar rights to have any equity or debt securities registered for sale
by the Company under the Registration Statement or included in the offering of
the Shares and the Additional Shares, except for such rights as have been waived
(which waiver remains in full force and effect) or which are described in the
Prospectus (and which have been complied with).
(i) Such Selling Stockholder does not have, or has waived
prior to the date hereof (which waiver remains in full force and effect), any
preemptive right, co-sale right or right of first refusal or other similar right
to purchase any of the Shares that are to be sold by the Company or any other
Selling Stockholder to the Underwriters pursuant to this Agreement.
(j) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
13
(k) All information furnished by or on behalf of such Selling
Stockholder in writing for use in the Registration Statement and the Prospectus
is true, correct and complete in all material respects and does not contain any
untrue statement of a material fact.
(l) Such Selling Stockholder has not taken and will not 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 to facilitate the sale or resale of the Shares or Additional
Shares, if any.
(m) Such Selling Stockholder has not distributed and will not
distribute, prior to the later of the Additional Closing Date, if any, and the
completion of the Underwriters' distribution of the Shares, any offering
material in connection with the offering and sale of the Shares and the
Additional Shares, if any, by the Selling Stockholders other than a Preliminary
Prospectus, the Prospectus or the Registration Statement.
(n) The representations and warranties of such Selling
Stockholder in its Custody Agreement and Power of Attorney are true and correct.
Any certificate signed by or on behalf of the Selling Stockholder and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to each
Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties, covenants
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Company and each Selling Stockholder, severally and not jointly,
agree to sell to each Underwriter and each Underwriter, severally and not
jointly, agrees to purchase from the Company and the Selling Stockholder, at a
purchase price per share of $__.__, the number of Firm Shares set forth opposite
the respective names of such Underwriter on Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the office of Coudert
Brothers LLP, 1114 Avenue of the Americas, New York, New York ("Underwriters'
Counsel"), or at such other place as shall be agreed upon by Bear, ▇▇▇▇▇▇▇ & Co.
Inc. and the Company, at 10:00 A.M., New York City time, on the third or (if the
Shares are priced after 4:30 Eastern time on the date the Shares are priced) the
fourth business day (unless postponed in accordance with the provisions of
Section 10 or 11 hereof) after the date the Shares are priced, or such other
time not later than ten business days after such date as shall be agreed upon by
Bear, ▇▇▇▇▇▇▇ & Co. Inc. and the Company and the Selling Stockholders (such time
and date of payment and delivery being herein called the "Closing Date").
Payment of the purchase price for the Firm Shares shall be by wire
transfer in Federal (same day) funds to the Company and the Custodian (pursuant
to each Selling Stockholder's Power of Attorney and Custody Agreement), as the
case may be, upon delivery of
14
certificates for the Firm Shares to you through the facilities of The Depository
Trust Company for the respective accounts of the several Underwriters against
receipt therefor signed by you. Each Selling Stockholder hereby agrees that (i)
it will pay all stock transfer taxes, stamp duties and other similar taxes, if
any, payable upon the sale or delivery of the Firm Shares to be sold by the
Selling Stockholders to the several Underwriters, or otherwise in connection
with the performance of the Selling Stockholders' obligations hereunder and (ii)
the Custodian is authorized to deduct from such payment any such amounts from
the proceeds to the Selling Stockholders hereunder and to hold such amounts for
the account of the Selling Stockholders with the Custodian under the Custody
Agreement and Power of Attorney. Certificates for the Firm Shares to be
delivered to you shall be registered in such name or names and shall be in such
denominations as you may request at least two business days before the Closing
Date. The Company and the Custodian will permit you to examine and package such
certificates for delivery at least one full business day prior to the Closing
Date.
(c) In addition, on the basis of the representations,
warranties, covenants and agreements herein contained, but subject to the terms
and conditions herein set forth, the Selling Stockholders listed on Schedule II
hereto as selling Additional Shares hereby grant to the Underwriters, acting
severally and not jointly, the option to purchase up to 1,500,000 Additional
Shares at the same purchase price per share to be paid by the Underwriters to
the Company and the Selling Stockholders for the Firm Shares as set forth in
this Section 3, for the sole purpose of covering over-allotments in the sale of
Firm Shares by the Underwriters. This option may be exercised at any time and
from time to time, in whole or in part on one or more occasions, on or before
the thirtieth day following the date of the Prospectus, by written notice by you
to the Selling Stockholders. If the option is exercised in part, the Selling
Stockholders will sell the amount that is proportional to the total number of
Additional Shares listed on Schedule II. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised
and the date and time, as reasonably determined by you, when the Additional
Shares are to be delivered (any such date and time being herein sometimes
referred to as the "Additional Closing Date"); provided, however, that the
Additional Closing Date shall not be earlier than the Closing Date or earlier
than the second full business day after the date on which the option shall have
been exercised nor later than the eighth full business day after the date on
which the option shall have been exercised (unless such time and date are
postponed in accordance with the provisions of Section 10 or 11 hereof).
Certificates for the Additional Shares shall be registered in such name or names
and in such authorized denominations as you may request in writing at least two
full business days prior to the Additional Closing Date. The Custodian, on
behalf of the Selling Stockholders, will permit you to examine and package such
certificates for delivery at least one full business day prior to the Additional
Closing Date.
If the option is exercised as to all or any portion of the
Additional Shares, each Underwriter, acting severally and not jointly, will
purchase that proportion of the total number of Additional Shares then being
purchased which the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 10 hereof) bears to the total number of Firm Shares that the
Underwriters have agreed to purchase hereunder, subject, however, to such
adjustments to eliminate any fractional shares as Bear, ▇▇▇▇▇▇▇ & Co. Inc. in
its sole discretion shall make. The number of Additional Shares to be sold by
each Selling Stockholder shall be the number which bears the same ratio to the
aggregate number of Additional Shares being purchased as the number of
Additional Shares set forth
15
opposite the name of such Selling Stockholder in the second column of Schedule
II hereto bears to 1,500,000, subject, however, to such adjustments to eliminate
any fractional shares as Bear, ▇▇▇▇▇▇▇ & Co. Inc. in its sole discretion shall
make.
(d) Payment of the purchase price for, and delivery of
certificates representing, the Additional Shares shall be made at the office of
Underwriters' Counsel, or at such other place as shall be agreed upon by Bear
▇▇▇▇▇▇▇ & Co. Inc. and the Attorney-In-Fact, at 10:00 A.M., New York City time,
on the Additional Closing Date, or such other time as shall be agreed upon by
Bear ▇▇▇▇▇▇▇ & Co. Inc., the Company and the Selling Stockholders.
Payment for the Additional Shares to be sold by the Selling
Stockholders shall be made to or upon the order of the Selling Stockholders of
the purchase price by wire transfer in Federal (same day) funds to the Custodian
(pursuant to each Selling Stockholder's Power of Attorney and Custody
Agreement), upon delivery of the certificates for the Additional Shares to you
through the facilities of The Depository Trust Company for the respective
accounts of the Underwriters. Each Selling Stockholder hereby agrees that (i) it
will pay all stock transfer taxes, stamp duties and other similar taxes, if any,
payable upon the sale or delivery of the Additional Shares to be sold by the
Selling Stockholders to the several Underwriters, or otherwise in connection
with the performance of the Selling Stockholders' obligations hereunder and (ii)
the Custodian is authorized to deduct from such payment any such amounts from
the proceeds to the Selling Stockholders hereunder and to hold such amounts for
the account of the Selling Stockholders with the Custodian under the Custody
Agreement and Power of Attorney. Certificates for the Additional Shares shall be
registered in such name or names and shall be in such denominations you may
request at least two business days before the Additional Closing Date. The
Custodian will permit you to examine and package such certificates for delivery
at least one full business day prior to the Additional Closing Date.
4. Offering. Upon release by the Company and the Custodian to the
Underwriters of the Firm Shares, the Underwriters propose to offer the Shares
for sale to the public upon the terms and conditions set forth in the
Prospectus.
5. Covenants of the Company; Covenants of the Selling Stockholders.
(a) The Company covenants and agrees with the Underwriters
that:
(i) If Rule 430A is used or the filing of the Prospectus
or any amendment or supplement thereto is otherwise required under Rule 424(b),
the Company will file the Prospectus or any amendment or supplement thereto
(properly completed if Rule 430A has been used) pursuant to Rule 424(b) within
the prescribed time period and will provide evidence satisfactory to you of such
timely filing.
The Company will notify you as promptly as possible (and, if
requested by you, will confirm such notice in writing) (i) when any amendments
to the Registration Statement become effective, (ii) of any request by the
Commission for any amendment of or supplement to the Registration Statement or
the Prospectus or for any additional information, (iii) of the Company's
intention to file or prepare any supplement or amendment to the Registration
Statement or the Prospectus, (iv) of the mailing or the delivery to the
Commission for filing of
16
any amendment of or supplement to the Registration Statement or the Prospectus,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of the initiation, or the threatening, of any proceedings therefor,
it being understood that the Company shall make every effort to avoid the
issuance of any such stop order, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b)) or file any document under the
Exchange Act before termination of the Offering if such document would be deemed
to be incorporated by reference into the Prospectus to which you shall object in
writing after being timely furnished in advance a copy thereof.
(ii) The Company shall comply with the Securities Act
and the Exchange Act to permit completion of the distribution as contemplated in
this Agreement, the Registration Statement and the Prospectus. If at any time
when a prospectus relating to the Shares is required to be delivered under the
Securities Act in connection with the sales of Shares, any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would, in the judgment of the Underwriters or the Company, include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances existing at the time of delivery to the purchaser, not misleading,
or if it shall be necessary at any time to amend or supplement the Prospectus or
Registration Statement to comply with the Securities Act or the Rules and
Regulations or to file any document under the Exchange Act which would be deemed
incorporated by reference in Prospectus to comply with the Securities Act, the
Exchange Act or the Rules and Regulations, the Company will notify you promptly
and prepare and file with the Commission, subject to the second paragraph of
Section 5(a) hereof, an appropriate amendment or supplement (in form and
substance satisfactory to you) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(iii) The Company will promptly deliver to each of you
and Underwriters' Counsel a copy of the Registration Statement, as initially
filed, and all amendments thereto, including all exhibits filed therewith, and
will maintain in the Company's files manually signed copies of such documents
for at least five years after the date of filing. The Company will promptly
deliver to each of the Underwriters such number of copies of any Preliminary
Prospectus, the Prospectus, the Registration Statement, and all amendments of
and supplements to such documents, if any, and all documents incorporated by
reference therein, as you may reasonably request. Prior to 10:00 A.M., New York
time, on the business day next succeeding the date of this Agreement and from
time to time thereafter, the Company will furnish the Underwriters with copies
of the Prospectus in New York City in such quantities as you may reasonably
request.
17
(iv) The Company consents to the use and delivery of the
Preliminary Prospectus by the Underwriters in accordance with Rule 430 and
Section 5(b) of the Securities Act.
(v) The Company will use its best efforts, in cooperation with
you, to qualify the Shares for offering and sale under the securities laws
relating to the offering or sale of the Shares of such jurisdictions as you may
designate and to maintain such qualification in effect for so long as required
for the distribution thereof; except that in no event shall the Company be
obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process.
(vi) The Company will make generally available to its security
holders and to the Underwriters as soon as practicable, but in any event not
later than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company and the Subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(vii) During the period of 90 days from the date of the
Prospectus, the Company will not, directly or indirectly, without the prior
written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., issue, sell, offer or agree to
sell, grant any option, warrant or other right to purchase or otherwise sell or
dispose of (or announce any offer of sale, contract of sale, sale, grant of any
option, warrant or other right to purchase or other sale or disposition of),
pledge, make any short sale or maintain any short position, establish or
increase any "put equivalent position" or liquidate or decrease any "call
equivalent position" (within the meaning of Section 16 under the Exchange Act,
and the rules and regulations thereunder), enter into any swap, derivative
transaction or other transaction or arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock (whether any such transaction is to be settled by delivery of Common
Stock, other securities, cash or other consideration) or otherwise dispose of,
any Common Stock or any other equity security of the Company or any of its
Subsidiaries (or any securities convertible into, exercisable for or
exchangeable for Common Stock or other such equity security) or interest therein
of the Company or of any of the Subsidiaries, other than the sale by the Company
of Shares hereunder and the Company's issuance of Common Stock upon (i) the
conversion or exchange of convertible or exchangeable securities outstanding on
the date hereof; (ii) the exercise of currently outstanding options; and (iii)
the grant and exercise of options under, or the issuance and sale of shares
pursuant to, employee stock option plans in effect on the date hereof.
(viii) During the period of three years from the effective
date of the Registration Statement, the Company will furnish to you copies of
(i) all reports or other communications (financial or other) furnished to
security holders; and (ii) reports, financial statements and proxy or
information statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed.
(ix) The Company will apply the net proceeds it receives from
the sale of the Shares as set forth under the caption "Use of Proceeds" in the
Prospectus.
18
(x) The Company will use its best efforts to list for
quotation the Shares on The Nasdaq National Market.
(xi) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act or the Exchange Act, will file
all documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange
Act and the rules and regulations thereunder.
(xii) The Company will use its best efforts to do and perform
all things required to be done or performed under this Agreement by the Company
prior to the Closing Date or the Additional Date, as the case may be, and to
satisfy all conditions precedent to the delivery of the Firm Shares and the
Additional Shares.
(b) Each Selling Stockholder covenants and agrees with each
Underwriter:
(i) To deliver to the Representatives prior to the Closing
Date, a properly completed and executed United States Treasury Department Form
W-8IMY, Form W-8BEN or Form W-8EXP, as applicable, together with any statements,
certifications and other forms, documents and information required thereunder
(if such Selling Stockholder is a non-United States Person) or Form W-9 (if the
Selling Stockholder is a United States Person), which in each case may be
replaced by any other applicable form or statement specified by Treasury
Department regulations in lieu thereof;
(ii) To notify promptly the Company and the Representatives
if, at any time prior to the date on which the distribution of the Shares as
contemplated herein and in the Prospectus has been completed, as determined by
the Representatives, such Selling Stockholder has knowledge of the occurrence of
any event as a result of which the Prospectus or the Registration Statement, in
each case as then amended or supplemented, would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(iii) To cooperate to the extent necessary to cause to be done
and performed all things to be done and performed under this Agreement prior to
the Closing Date and the Additional Closing Date, if any, and to satisfy all
conditions precedent to the delivery of the Shares pursuant to this Agreement;
(iv) To pay or to cause to be paid all transfer taxes, stamp
duties and other similar taxes with respect to the Shares, if any, to be sold by
such Selling Stockholder; and
(v) If applicable, to deliver to Bear, ▇▇▇▇▇▇▇ & Co. Inc. on
or prior to the date of this Agreement the lock-up agreement referenced in
Section 7(i) hereof.
6. Payment of Expenses. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, the Company
hereby agrees to pay all costs and expenses incident to the performance of the
obligations of the Company hereunder, including the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Securities Act and all
19
other expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing any Agreement
among Underwriters, this Agreement, the blue sky memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws and Canadian federal and provincial securities laws as
provided in Section 5(e) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the blue sky survey; (iv) all fees and expenses in connection with listing
the Shares on The Nasdaq National Market; (v) all travel expenses of the
Company's officers and employees and any other expense of the Company incurred
in connection with attending or hosting meetings with prospective purchasers of
the Shares; (vi) any stock transfer taxes incurred in connection with this
Agreement or the Offering; (vii) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; and (viii) the fees of the Custodian and other fees and
expenses related to the offering of Shares by the Selling Stockholders. The
Company also will pay or cause to be paid: (i) the cost of preparing stock
certificates representing the Shares; (ii) the cost and charges of any transfer
agent or registrar for the Shares; and (iii) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 6. It is understood, however, that
except as provided in this Section, and Sections 8, 9 and 13 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel and stock transfer taxes on resale of any of the Shares by them.
The Selling Stockholders will pay all fees and expenses related to the
offering of the Shares to be sold by them, including (i) the fees and
disbursements of their counsel, if any, and (ii) any applicable stock transfer
or other taxes related to the offering of their Shares.
7. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Firm Shares and the Additional Shares,
as provided herein, shall be subject to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein contained, as of
the date hereof and as of the Closing Date (for purposes of this Section 7
"Closing Date" shall refer to the Closing Date for the Firm Shares and any
Additional Closing Date, if different, for the Additional Shares), to the
absence from any certificates, opinions, written statements or letters furnished
to you or to Underwriters' Counsel pursuant to this Section 7 of any
misstatement or omission, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder, and to each of the
following additional conditions:
(a) If the Company shall have elected to rely upon Rule 430A
of the Rules and Regulations, the Prospectus shall have been filed with the
Commission in a timely fashion in accordance with Section 5(a) hereof; and, at
or prior to the Closing Date, no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued and no
proceedings therefor shall have been initiated or threatened by the Commission.
20
(b) At the Closing Date you shall have received the written
opinion of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Company, dated the Closing
Date addressed to the Underwriters in the form attached hereto as Annex I.
(c) At the Closing Date you shall have received the written
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ W.S., Scottish counsel for the Company, dated the
Closing Date addressed to the Underwriters in the form attached hereto as Annex
II and the written opinion of Stikeman Elliott LLP, Canadian counsel for the
Company, dated the Closing Date addressed to the Underwriters in the form
attached hereto as Annex III.
(d) At the Closing Date you shall have received the written
opinion of counsel to each of the Selling Stockholders dated the Closing Date
addressed to the Underwriters in the form attached hereto as Annex IV.
(e) All proceedings taken in connection with the sale of the
Firm Shares and the Additional Shares as herein contemplated shall be
satisfactory in form and substance to you and to Underwriters' Counsel, and the
Underwriters shall have received from Underwriters' Counsel a favorable opinion,
dated as of the Closing Date, with respect to the issuance and sale of the
Shares, the Registration Statement and the Prospectus and such other related
matters as you may reasonably require, and the Company shall have furnished to
Underwriters' Counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(f) At the Closing Date you shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of the Company, dated
the Closing Date, to the effect that (i) the condition set forth in subsection
(a) of this Section 7 has been satisfied; (ii) as of the date hereof and as of
the Closing Date, the representations and warranties of the Company set forth in
Section 1 hereof are accurate; (iii) as of the Closing Date, the obligations of
the Company to be performed hereunder on or prior thereto have been duly
performed; (iv) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the Company and the
Subsidiaries have not sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding; (v) subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material adverse change or any material
change, or any development involving a prospective material change, in the
business, properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, except in each
case as described in or contemplated by the Prospectus; (vi) each person signing
the certificate certifies that he is responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d(e)) and has designed such disclosure controls and procedures,
or caused such controls and procedures to be designed under his supervision, to
ensure that material information relating to the Company, including its
consolidated subsidiaries, is made known to him by others within those entities,
and has evaluated the effectiveness of the Company's disclosure controls and
procedures as of the end of the fiscal quarter ended September 30, 2003 and
presented in the Company's Quarterly Report on Form 10-Q for such fiscal quarter
his conclusion that the Company has effective disclosure controls and
procedures, and subsequent to that evaluation
21
through the Closing Date nothing has come to his attention that would cause him
to change his conclusion that the Company has effective disclosure controls and
procedures; (vii) to the best knowledge of each person signing the certificate,
there is no legal or governmental proceeding, including routine litigation, to
which the Company or any of the Subsidiaries is a party or of which any property
of the Company or any of the Subsidiaries is the subject which, if determined
adversely to the Company or any of the Subsidiaries, would be reasonably likely
to have, considered individually or when aggregated with any other such
proceedings, a Material Adverse Effect; and, to the best of knowledge of such
person, no such proceeding is threatened or contemplated by governmental
authorities or threatened by others, and the defense of all such claims against
the Company and the Subsidiaries in the aggregate, including routine litigation,
will not have a Material Adverse Effect on the Company; and (viii) each person
signing the certificate has carefully examined the Registration Statement and
the Prospectus, and any amendments or supplements thereto, including any
documents filed under the Exchange Act and incorporated or deemed to be
incorporated by reference therein, and the Registration Statement and any
amendments thereto do not 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, in light of the circumstances under which they were
made, not misleading, and the Prospectus and any supplements thereto do not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received (i) a comfort letter from Deloitte & Touche LLP,
independent public auditors for the Company, dated, respectively, as of the date
of this Agreement and as of the Closing Date addressed to the Underwriters and
in form and substance satisfactory to the Underwriters and Underwriters'
counsel, and (ii) a comfort letter from Ernst and Young LLP, independent public
auditors for PharmaResearch Corporation, dated, respectively, as of the date of
this Agreement and as of the Closing Date addressed to the Underwriters and in
form and substance satisfactory to the Underwriters and Underwriters' counsel.
(h) Subsequent to the execution and delivery of this Agreement
or, if earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been any change in or affecting,
or any development involving a prospective change in or affecting, the condition
(financial or otherwise), results of operations, business or properties of the
Company and the Subsidiaries taken as a whole, including, without limitation,
the occurrence of a fire, flood, hurricane, accident, explosion or other
calamity at any of the properties owned or leased by the Company or any of its
Subsidiaries, the effect of which, in any such case described above, is, in the
judgment of the Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Prospectus
(exclusive of any supplement thereto).
(i) You shall have also received a lock-up agreement from each
of the persons identified on Schedule III hereto substantially in the form
attached hereto as Annex V and such lock-up agreements shall each be in full
force and effect on the Closing Date.
22
(j) At the Closing Date, the Shares shall have been approved
for quotation on The Nasdaq National Market.
(k) At the Closing Date, the NASD shall not have raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(l) At the Closing Date, you shall have received a certificate
of an authorized representative of the Selling Stockholders, dated the Closing
Date, to the effect that the representations and warranties of the Selling
Stockholders set forth in Section 2 hereof are accurate and that each of the
Selling Stockholders has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date.
(m) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the next
business day succeeding the date of this Agreement.
(n) The Company shall have furnished the Underwriters and
Underwriters' Counsel with such other certificates, opinions or other documents
as they may have reasonably requested.
(o) In the event the Underwriters exercise their option to
purchase the Additional Shares, all of the conditions in this Section 7 must be
satisfied in connection with such Additional Shares on or prior to the
Additional Closing Date.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 7 shall not be satisfactory in
form and substance to you and to Underwriters' Counsel, all obligations of the
Underwriters hereunder may be cancelled by you at, or at any time prior to, the
Closing Date and the obligations of the Underwriters to purchase the Additional
Shares may be cancelled by you at, or at any time prior to, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing or by telephone. Any such telephone notice shall be confirmed promptly
thereafter in writing.
8. Indemnification.
(a) The Company shall indemnify and hold harmless (i) each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and (ii) each Selling Stockholder and each person, if any, who controls a
Selling Stockholder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the
23
registration statement for the registration of the Shares, as originally filed
or any amendment thereof, or any related preliminary prospectus or the
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company will not be liable in any
such case to the extent but only to the extent that any such loss, liability,
claim, damage or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter or any Selling Stockholder
expressly for use therein; provided, further, that this indemnity agreement with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, liabilities, claims,
damages or expenses purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus was not sent or given by or on behalf
of such Underwriter to such person, if such is required by law, at or prior to
the written confirmation of the sale of such Shares to such person and if the
Prospectus would have corrected the defect giving rise to such loss, liability,
claim, damage or expense. This indemnity agreement will be in addition to any
liability which the Company may otherwise have including under this Agreement.
(b) Each Selling Stockholder, severally and not jointly, shall
indemnify and hold harmless (i) the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, and (ii) each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act against any and all losses, liabilities,
claims, damages and expenses whatsoever as incurred (including but not limited
to reasonable attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Shares, as originally filed or any amendment thereof, or any
related Preliminary Prospectus or the Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent but only to the extent that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such Selling Stockholder expressly for use therein. This indemnity
agreement will be in addition to any liability that any Selling Stockholder may
otherwise have including under this Agreement.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless (i) the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, and (ii) each Selling Stockholder and each person, if any, who
24
controls a Selling Stockholder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act against any losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Shares, as originally filed or any amendment thereof, or any
related preliminary prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter through you expressly for use therein. The parties
agree that such information provided by or on behalf of any Underwriter consists
solely of the material referred to in the fourth sentence of Section 1 (b)
hereof. This indemnity will be in addition to any liability which any
Underwriter may otherwise have including under this Agreement.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of any claim or the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the claim or the
commencement thereof (but the failure so to notify an indemnifying party shall
not relieve it from any liability which it may have under this Section 8 to the
extent that the indemnifying party is not prejudiced as a result thereof). In
case any such claim or action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with
counsel satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying parties.
No indemnifying party shall, without the prior written consent of the
25
indemnified parties, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or reasonably could have been a party and
indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
and unconditional release of the indemnified party from all liability on claims
that are or reasonably could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of the indemnified party.
9. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 8 hereof is for any reason
held to be unavailable from any indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, the Selling Stockholders
and the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company and the
Selling Stockholders, any contribution received by the Company or any Selling
Stockholder from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company or any Selling
Stockholder within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, officers of the Company who signed the Registration
Statement and directors of the Company) as incurred to which the Company, each
Selling Stockholder and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company, each Selling Stockholder and the Underwriters from the offering of the
Shares or, if such allocation is not permitted by applicable law, in such
proportions as are appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company, each Selling
Stockholder and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company or any Selling Stockholder, on the one hand, and the
Underwriters, on the other hand, shall be deemed to be in the same proportion as
(x) the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company or such
Selling Stockholder and (y) the underwriting discounts or commissions received
by the Underwriters, respectively, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault each of the Company, any
Selling Stockholder and of the Underwriters 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, a Selling Stockholder or 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 Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
26
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) no person guilty of fraudulent misrepresentation (within in
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company and each person who controls any Selling Stockholder
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act shall have the same rights to contribution as such Selling
Stockholder, subject in each case to clauses (i) and (ii) of this Section 9. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 9 or otherwise. The obligations of the Underwriters to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or
their obligation to purchase Firm Shares or Additional Shares hereunder, and if
the Firm Shares or Additional Shares with respect to which such default relates
do not (after giving effect to arrangements, if any, made by you pursuant to
subsection (b) below) exceed in the aggregate 10% of the number of Firm Shares
or Additional Shares, the Firm Shares or Additional Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to
the respective proportions which the numbers of Firm Shares set forth opposite
their respective names in Schedule I hereto bear to the aggregate number of Firm
Shares set forth opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of
the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 10, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Selling Stockholders to sell the Additional Shares shall thereupon
terminate, without liability on the part of the Company or the Selling
Stockholders, as applicable, with respect thereto (except in each case as
provided in Sections 6, 8(a) and 9 hereof) or the Underwriters, but nothing in
this Agreement shall relieve a defaulting Underwriter or
27
Underwriters of its or their liability, if any, to the other Underwriters, the
Selling Stockholders and the Company for damages occasioned by its or their
default hereunder.
(c) In the event that the Firm Shares or Additional Shares to
which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the opinion
of Underwriters' Counsel, may thereby be made necessary or advisable. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 10 with like effect as if it had originally been a party to
this Agreement with respect to such Firm Shares and Additional Shares.
11. Selling Stockholder Default.
(a) If any Selling Stockholder or Selling Stockholders shall
default in its or their obligation to sell and deliver any Shares hereunder,
then you may, by notice to the Company, terminate this Agreement without any
liability on the part of any non-defaulting party except that the provisions of
Sections 1, 2, 6, 8, 9, 12 and 13 hereof shall remain in full force and effect.
No action taken pursuant to this Section 11 shall relieve any Selling
Stockholder so defaulting from liability, if any, in respect of such default.
(b) In the event that such default occurs and the Company and
Underwriters agree to proceed with the Offering, then the Underwriters may, at
your option, or the Company shall have the right, in each case by notice to the
other, to postpone the Closing Date or Additional Closing Date, as the case may
be, for a period not exceeding five business days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees to
file promptly any amendment or supplement to the Registration Statement or the
Prospectus which, in the opinion of Underwriters' Counsel, may thereby be made
necessary or advisable; and in no event shall the Company be obligated to
increase the number of Shares it is required to sell hereunder.
28
12. Survival of Representations and Agreements. All representations
and warranties, covenants and agreements of the Underwriters, the Company and
the Selling Stockholders contained in this Agreement, including the agreements
contained in Section 6, the indemnity agreements contained in Section 8 and the
contribution agreements contained in Section 9, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any Underwriter or any controlling person thereof, by or on behalf of the
Company, any of its officers and directors or any controlling person thereof, or
by or on behalf of any Selling Stockholder or any controlling person thereof,
and shall survive delivery of and payment for the Shares to and by the
Underwriters. The representations contained in Sections 1 and 2 and the
agreements contained in Sections 6, 8, 9, 12 and 13(d) hereof shall survive the
termination of this Agreement, including termination pursuant to Section 10, 11
or 13 hereof.
13. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the execution
of this Agreement.
(b) You shall have the right to terminate this Agreement at
any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, the market for the Company's securities or securities
in general; or (B) if trading on the New York Stock Exchange or on The Nasdaq
National Market shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the New York Stock Exchange or on The Nasdaq National
Market by the New York Stock Exchange or by The Nasdaq National Market or by
order of the Commission or any other governmental authority having jurisdiction;
or (C) if a banking moratorium has been declared by any state or federal
authority or if any material disruption in commercial banking or securities
settlement or clearance services shall have occurred; or (D) (i) if there shall
have occurred any outbreak or escalation of hostilities or acts of terrorism
involving the United States or there is a declaration of a national emergency or
war by the United States or (ii) if there shall have been any other calamity or
crisis or any change in political, financial or economic conditions if the
effect of any such event in (i) or (ii) in your judgment makes it impracticable
or inadvisable to proceed with the offering, sale and delivery of the Firm
Shares or the Additional Shares, as the case may be, on the terms and in the
manner contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 13
shall be in writing.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to Section 10(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
out-of-pocket expenses (including the fees and expenses of their counsel)
incurred by the Underwriters in connection herewith.
29
14. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing, and:
(a) if sent to any Underwriter, shall be mailed, delivered, or
faxed and confirmed in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co.
Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Equity Capital
Markets, with a copy to Underwriter's Counsel at Coudert Brothers LLP, ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇;
(b) if sent to the Company, shall be mailed, delivered, or
faxed and confirmed in writing to the Company at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, with a copy to
its counsel at ▇▇▇▇▇▇▇▇ Chance US LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇;
(c) if sent to the Selling Stockholders, shall be mailed,
delivered, or faxed and confirmed in writing to the Custodian c/o the Company;
provided, however, that any notice to an Underwriter pursuant to Section 8 shall
be delivered or sent by mail or facsimile transmission to such Underwriter at
its address set forth in its acceptance facsimile to you, which address will be
supplied to any other party hereto by you upon request. Any such notices or
other communications shall take effect at the time of receipt thereof.
15. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriters, the Company and the Selling
Stockholders and the controlling persons, directors, officers, employees and
agents referred to in Sections 8 and 9 hereof, and their respective successors
and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this
Agreement or any provision herein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of
the parties hereto and their respective successors, and said controlling
persons, and such persons' officers and directors and their heirs and legal
representatives, and it is not for the benefit of any other person, firm or
corporation. The term "successors and assigns" shall not include a purchaser, in
its capacity as such, of Shares from any of the Underwriters.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, but without regard to
principles of conflicts of law.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
30
19. Time is of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
[signature page follows]
31
If the foregoing correctly sets forth the understanding between you,
the Company and the Selling Stockholders, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company and the Selling Stockholders for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
INVERESK RESEARCH GROUP, INC.
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇. ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ NO. 2
CANDOVER 1997 US NO. 1
CANDOVER 1997 US NO. 2
CANDOVER 1997 US NO. 3
CANDOVER INVESTMENTS PLC
CANDOVER (TRUSTEES) LIMITED
D. J. ▇▇▇▇ ▇. ▇▇▇▇▇
DALAME RESOURCES SA
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
RATHBONE JERSEY LIMITED
IAN SWORD
THE ▇▇▇▇▇▇▇▇ FAMILY TRUST U/D/T
DATED DECEMBER 27, 1991
By:
-------------------------------------
Name:
Title: as Attorney-in-Fact for the
Selling Stockholders
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
32
Accepted as of the date first above written
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
----------------------------------
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
Name:
Title:
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
33
