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EXHIBIT 1.1
____________ SHARES
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
COMMON STOCK
PURCHASE AGREEMENT
_____________________, 2000
U.S. BANCORP PIPER JAFFRAY INC.
BANC OF AMERICA SECURITIES LLC
CHASE SECURITIES INC.
c/o U.S. Bancorp Piper Jaffray Inc.
800 Nicollet Mall
Suite 800
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
American Medical Systems Holdings, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 6,250,000 shares (the "Firm Shares")
of voting common stock, $0.01 par value per share (the "Common Stock"), of the
Company. Warburg, Pincus Equity Partners, L.P., a Delaware limited partnership
("Warburg Pincus"), has granted to the several Underwriters an option to
purchase up to 937,500 additional shares of Common Stock to cover
over-allotments (the "Option Shares"). The Firm Shares and any Option Shares
purchased pursuant to this Purchase Agreement are herein collectively called the
"Securities."
The Company and Warburg Pincus hereby confirm their agreement with respect
to the sale of the Securities to the Underwriters.
1. Registration Statement and Prospectus. A registration statement on Form
S-1 (File No. 333-37488) with respect to the Securities, including a preliminary
form of prospectus, has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations ("Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and has been filed with the Commission;
one or more amendments to such registration statement have also been so prepared
and have been, or will be, so filed; and, if the Company has elected to rely
upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file with the
Commission a registration statement with respect to such increase pursuant to
Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration
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statement as so amended (but only from and after the effectiveness of such
amendment), including a registration statement (if any) filed pursuant to Rule
462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rules 430A(b)
and 434(d) of the Rules and Regulations, is hereinafter called the "Registration
Statement." The prospectus included in the Registration Statement at the time it
is or was declared effective by the Commission is hereinafter called the
"Prospectus," except that if any prospectus (including any term sheet meeting
the requirements of Rule 434 of the Rules and Regulations provided by the
Company for use with a prospectus subject to completion within the meaning of
Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to the Underwriters by the Company for use in connection
with the offering of the Securities (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Underwriters by the Company for such
use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
As part of the offering contemplated by this Agreement, the Underwriters
have agreed to reserve up to _____ shares for sale to the Company's employees,
officers and directors and other parties associated with the Company
(collectively, "Participants"), as set forth in the Prospectus under the heading
"Underwriting" (the "Directed Share Program"). The Securities to be sold by the
Underwriters pursuant to the Directed Share Program (the "Directed Shares") will
be sold by the Underwriters pursuant to this Agreement at the initial public
offering price. Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day following the day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
2. Representations and Warranties of the Company and Warburg Pincus.
(a) The Company represents and warrants to, and agrees with, the
Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from any
Preliminary Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by you, or by any Underwriter through
you, specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or any post-effective
amendment thereto, including a registration statement (if any) filed
pursuant to Rule 462(b) of the Rules and Regulations increasing the size of
the offering registered under the Act) is or was declared effective by the
Commission, upon the filing or first delivery to the Underwriters of the
Prospectus (or any supplement to the Prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations)) and at
the First Closing Date and Second
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Closing Date (as hereinafter defined), (A) the Registration Statement and
Prospectus (in each case, as so amended and/or supplemented) conformed or
will conform in all material respects to the requirements of the Act and
the Rules and Regulations, (B) the Registration Statement (as so amended)
did not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (C) the Prospectus (as so
supplemented), including any prospectus wrapper, did not or will not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are or were made, not
misleading, and (D) the Prospectus (as so supplemented), or any prospectus
wrapper prepared in connection therewith, complied and will comply in all
material respects with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus is distributed in connection with the
offer and sale of Directed Shares; except that the foregoing shall not
apply to statements in or omissions from any such document in reliance
upon, and in conformity with, written information furnished to the Company
by you, or by any Underwriter through you, specifically for use in the
preparation thereof. If the Registration Statement has been declared
effective by the Commission, no stop order suspending the effectiveness of
the Registration Statement has been issued, and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened by
the Commission.
(iii) The consolidated financial statements of the Company, its
subsidiaries and the predecessor of the Company and the consolidated
financial statements of Influence, Inc. ("Influence"), together with the
notes thereto, set forth in the Registration Statement and Prospectus
comply in all material respects with the requirements of the Act and the
Rules and Regulations and present fairly the consolidated financial
condition of the Company, its subsidiaries and its combined predecessor, as
the case may be, as of the dates indicated, the results of operations,
changes in cash flows and changes in stockholders' equity of the Company,
its subsidiaries, the predecessor of the Company and Influence, as the case
may be, for the periods therein specified in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (subject, in the case of unaudited financial statements, to normal
year-end adjustments and except as otherwise stated therein); the
supporting schedules included in the Registration Statement present fairly
the information required to be stated therein and comply in all material
respects with the requirements of the Act and the Rules and Regulations;
and the other financial and statistical information and data set forth in
the Registration Statement and Prospectus are, in all material respects,
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company, its subsidiaries and
its combined predecessor, as the case may be. No other financial statements
or schedules are required to be included in the Registration Statement or
Prospectus. Each of Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers
LLP, which has expressed its opinion with respect to financial statements
and schedules filed as a part of the Registration Statement and included in
the Registration Statement and Prospectus, are independent public
accountants as required by the Act and the Rules and Regulations.
(iv) The pro forma financial data of the Company and its subsidiaries
and the related notes thereto set forth in the Registration Statement and
the Prospectus have been prepared on a basis consistent with the historical
financial statements of the Company and its subsidiaries, give effect to
the assumptions used in the preparation thereof on a reasonable basis and
in good faith and present fairly the historical and proposed transactions
contemplated by the Registration Statement and the Prospectus. Such pro
forma financial data have been prepared in accordance with the applicable
requirements of the Act and the Rules and Regulations. No other pro forma
financial data are required to be included in the Registration Statement
and the Prospectus.
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(v) Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation. Each of the Company and its subsidiaries
has full corporate power and authority to own its properties and conduct
its business as currently being carried on and as described in the
Registration Statement and Prospectus, and is duly qualified to do business
as a foreign corporation in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, condition (financial or
otherwise), prospects, results of operations, assets, liabilities or
properties of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(vi) Except as otherwise stated in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of
any kind with respect to its capital stock and, except as otherwise stated
in the Registration Statement and the Prospectus, there has not been any
change in the capital stock (other than a change in the number of
outstanding shares of Common Stock or Non-Voting Common Stock (as
hereinafter defined) due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term
or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company or
any of its subsidiaries, or any material adverse change, or any development
involving a prospective material adverse change, in the business condition
(financial or otherwise), prospects, results of operations, assets,
liabilities or properties of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Change").
(vii) Except as otherwise stated in the Registration Statement and the
Prospectus, there is not pending or, to the knowledge of the Company,
threatened, any action, suit or proceeding to which the Company or any of
its subsidiaries is a party before or by any court or governmental agency,
authority or body, or any arbitrator, which could reasonably be expected to
result in any Material Adverse Change.
(viii) There are no contracts or documents of the Company or any of
its subsidiaries that are required to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have
not been so filed.
(ix) This Agreement has been duly authorized, executed and delivered
by the Company, and constitutes a valid, legal and binding obligation of
the Company, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it is
bound or to which any of its property is subject, the Company's charter or
by-laws, or any order, rule, regulation or decree of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties; no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as have been
already obtained or
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such as may be required under the Act or state securities or blue sky laws
and such as have been obtained under the laws and regulations of
jurisdictions outside the United States in which the Directed Shares are
offered; and the Company has full power and authority to enter into this
Agreement and to authorize, issue and sell the Securities as contemplated
by this Agreement.
(x) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to employee benefit plans
referred to in the Prospectus, pursuant to the conversion of the Company's
preferred stock on the Closing Date as described in the Prospectus or
pursuant to the exercise of options or warrants referred to in the
Prospectus). All of the issued and outstanding shares of capital stock of
the Company, including any outstanding shares of Common Stock and
non-voting common stock, $0.01 par value per share ("Non-Voting Common
Stock") of the Company, will be at the First Closing and the Second Closing
duly authorized and validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities, and the holders thereof are not
subject to personal liability by reason of being such holders; the
Securities which may be sold hereunder by the Company have been duly
authorized and, when issued, delivered and paid for in accordance with the
terms hereof, will have been validly issued and will be fully paid and
nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders; and the capital stock of the
Company, including the Common Stock and Non-Voting Common Stock, conforms
to the description thereof in the Registration Statement and Prospectus.
Except as otherwise stated in the Registration Statement and Prospectus and
except for the preemptive rights provided for in the Stockholders
Agreement, dated April 17, 2000, among the Company and the stockholders
named therein (the "Stockholders Agreement") which rights terminate upon,
and do not apply to the Securities issued in, the offering, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock or
Non-Voting Common Stock pursuant to the Company's charter, by-laws or any
agreement or other instrument to which the Company is a party or by which
the Company is bound, or, to the knowledge of the Company, to which any
stockholder is a party or by which any stockholder is bound (other than in
the case of the Non-Voting Common Stock as described in the Prospectus with
regard to the voting thereof). Neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated by
this Agreement gives rise to any rights for or relating to the registration
of any shares of Common Stock or other securities of the Company which have
not been fully satisfied or validly waived. All of the issued and
outstanding shares of capital stock of each of the Company's subsidiaries
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise stated in the Registration
Statement and the Prospectus, the Company owns of record and beneficially,
free and clear of any security interests, claims, liens, proxies, equities
or other encumbrances, all of the issued and outstanding shares of capital
stock of each subsidiary of the Company. Except as described in the
Registration Statement and the Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire
from the Company or any subsidiary of the Company any shares of the capital
stock of the Company or any subsidiary of the Company.
(xi) The Company and each of its subsidiaries holds, and is operating
in compliance in all respects with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body required for the conduct of its
business, except where the failure to so hold or comply would not
reasonably be expected to have a Material Adverse Effect. All such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in
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full force and effect; and the Company and each of its subsidiaries is and
has been in compliance in all respects with all applicable federal, state,
local and foreign laws, regulations, orders and decrees, except for
non-compliance which would not reasonably be expected to have a Material
Adverse Effect.
(xii) The Company and its subsidiaries have good and marketable title
to all property described in the Registration Statement and Prospectus as
being owned by them, in each case free and clear of all liens, claims,
security interests or other encumbrances except such as otherwise stated in
the Registration Statement and the Prospectus; and the property held under
lease by the Company and its subsidiaries is held by them under valid,
subsisting and enforceable leases with only such exceptions with respect to
any particular lease as do not interfere in any material respect with the
conduct of the business of the Company or its subsidiaries, taken as a
whole.
(xiii) The Company and each of its subsidiaries owns or has the valid
right to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations,
copyrights, licenses, inventions, trade secrets and rights necessary for
the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration Statement and
Prospectus ("Intellectual Property Rights"); to the knowledge of the
Company, except as otherwise stated in the Registration Statement and
Prospectus, (i) no name which the Company or any of its subsidiaries uses
and no other aspect of the business of the Company or any of its
subsidiaries will involve or give rise to any infringement of, or license
or similar fees for, any Intellectual Property Rights or other similar
rights of others material to the business or prospects of the Company and
neither the Company nor any of its subsidiaries has received any notice
alleging any such infringement or fee; and (ii) the Company is not under
any obligation to pay any material third party royalties or fees of any
kind whatsoever with respect to the Intellectual Property Rights developed,
employed or used in the Company's business as currently conducted and as
proposed to be conducted as discussed in the Prospectus.
(xiv) Neither the Company nor any of its subsidiaries is in violation
of its respective charter, by-laws or certificate or in breach of or
otherwise in default in the performance of any material obligation,
agreement or condition contained in any material bond, debenture, note,
indenture, loan agreement or any other material contract, lease or other
instrument to which it is subject or by which any of them may be bound, or
to which any of the material property or assets of the Company or any of
its subsidiaries is subject.
(xv) The Company and its subsidiaries have filed all federal, state,
local and foreign income and franchise tax returns required to be filed and
are not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than any
which the Company or any of its subsidiaries is contesting in good faith.
(xvi) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by the
Company.
(xvii) The Securities have been approved for listing on the Nasdaq
National Market System, subject to official notice of issuance and, on the
date the Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other
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applicable form under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), became or will become effective.
(xviii) Other than the subsidiaries of the Company listed in Exhibit
21.1 to the Registration Statement, the Company owns no capital stock or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xix) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xx) Other than as contemplated by this Agreement, the Company has not
incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xxi) The Company is not, and upon issuance and sale of the Securities
as contemplated herein and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(xxii) No material labor dispute with the employees of the Company or
any of its subsidiaries exists or is threatened or imminent.
(xxiii) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the business in which they are
engaged; neither the Company nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be able
to renew its existing insurance coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(xxiv) The Company and each of its subsidiaries (A) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (B) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses, except where the failure to
hold any such permit, license or approval would not have a Material Adverse
Effect and (C) are in compliance with all terms and conditions of such
permits, licenses or other approvals except where the failure to comply
with the terms and conditions of such permits, licenses or other approvals
would not, singly or in the aggregate, have a Material Adverse Effect.
(xxv) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of medical wastes, toxic
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries at or upon or from any
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of the property now or previously owned or leased by the Company or any of
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial
action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial
actions a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of any
kind onto such property or of any medical wastes, toxic wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any of
its subsidiaries or with respect to which the Company or any of its
subsidiaries had knowledge, except for any such spills, discharges, leaks,
emissions, injections, escapes, dumpings or releases which would not, or
could not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a Material Adverse Effect; and the terms "medical
wastes," "toxic wastes," "hazardous wastes" and "hazardous substances"
shall have the meanings specified in any applicable local, state, federal
and foreign laws or regulations with respect to environmental protection.
(xxvi) The Company and its subsidiaries and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations
thereunder (collectively, "ERISA") established or maintained by the
Company, its subsidiaries or their "ERISA Affiliates" (as defined below)
are in compliance in all material respects with ERISA. "ERISA Affiliate"
means, with respect to the Company or a subsidiary, any member of any group
of organizations described in Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended, and the regulations and
published interpretations thereunder (the "Code") of which the Company or
such subsidiary is a member. No "reportable event" (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under ERISA).
Neither the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 40 1 (a) of the Code is so qualified and nothing
has occurred, whether by action or failure to act, which would cause the
loss of such qualification.
(xxvii) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or affiliate
located in Cuba.
(xxviii) Neither the Company nor any subsidiary has offered, or caused
the Underwriters to offer, Securities to any person pursuant to the
Directed Share Program with the specific intent to unlawfully influence (A)
a customer or supplier of the Company or any subsidiary to alter the
customer's or supplier's level or type of business with the Company or any
subsidiary, or (B) a trade journalist or publication to write or publish
favorable information about the Company or any subsidiary or their
products.
(xxix) (A) The Registration Statement, the Prospectus and any
Preliminary Prospectus comply in all material respects, and any further
amendments or supplements thereto will comply in all material respects,
with any applicable laws or regulations of foreign jurisdictions in which
the Prospectus or any Preliminary Prospectus, as amended or
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supplemented, if applicable, are distributed in connection with the
Directed Share Program, and (B) no authorization, approval, consent,
license, order, registration or qualification of or with any government,
governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws and regulations of foreign
jurisdictions in which the Directed Shares are offered outside the United
States.
(xxx) The Company 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 Common Stock.
(xxxi) Neither the Company nor any of its subsidiaries nor, to the
best of the Company's knowledge, any employee or agent of the Company or
any subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of
any law of the character required to be disclosed in the Prospectus.
(xxxii) Except as otherwise stated in the Registration Statement and
the Prospectus, the Company is not currently prohibited from paying any
dividends or from making any other distribution on the Company's or such
subsidiary's capital stock, respectively, out of positive retained earnings
or from repaying to the Company or its stockholders, respectively, any
loans or advances to such subsidiary from the Company or to the Company
from such stockholders, as the case may be.
(b) Warburg Pincus represents and warrants to, and agrees with, the several
Underwriters as follows:
(i) Warburg Pincus is the record and beneficial owner of, and has, and
on the First Closing Date and the Second Closing Date will have, valid and
marketable title to the Securities to be sold by Warburg Pincus, free and
clear of all security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other encumbrances; and upon
delivery of and payment for such Securities hereunder, the several
Underwriters will acquire valid and marketable title thereto, free and
clear of any security interests, claims, liens, restrictions on
transferability, legends, proxies, equities or other encumbrances or
adverse claims. Warburg Pincus is selling the Securities to be sold by
Warburg Pincus for its own account and is not selling such Securities,
directly or indirectly, for the benefit of the Company, and no part of the
proceeds of such sale received by Warburg Pincus will inure, either
directly or indirectly, to the benefit of the Company other than as
described in the Registration Statement and Prospectus.
(ii) The certificates representing the Securities to be sold by
Warburg Pincus have been or will be duly and properly endorsed in blank for
transfer, or are or will be at the Second Closing accompanied by all
documents duly and properly executed that are necessary to validate the
transfer of title thereto, to the Underwriters, free of any legend,
restriction on transferability, proxy, lien or claim, whatsoever.
(iii) Warburg Pincus has the power and authority to enter into this
Agreement and to sell, transfer and deliver the Securities to be sold by
it.
(iv) This Agreement has been duly authorized, executed and delivered
by or on behalf of Warburg Pincus and constitutes a valid and binding
agreement of Warburg Pincus, enforceable in accordance with its terms,
except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and except as such enforceability may be
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<PAGE> 10
limited by bankruptcy, insolvency, reorganization or laws affecting the
rights of creditors generally and subject to general principles of equity.
The execution and delivery of this Agreement and the performance of the
terms hereof and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any agreement or instrument to which
Warburg Pincus is a party or by which Warburg Pincus is bound, or any law,
regulation, order or decree applicable to Warburg Pincus; no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the sale of the Securities being sold by
Warburg Pincus, except such as may be required under the Act or state
securities laws or blue sky laws.
(v) Warburg Pincus has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Securities other than any Preliminary Prospectus or the
Prospectus or other materials permitted by the Act to be distributed by
Warburg Pincus.
(vi) Warburg Pincus has reviewed those parts of the Registration
Statement and Prospectus which contain information about Warburg Pincus and
with regard to such information only (A) the Registration Statement does
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) the Prospectus does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, in each case insofar as it
relates to Warburg Pincus or its affiliates.
(c) Any certificate signed by any officer of the Company and delivered to
you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
any certificate signed by or on behalf of Warburg Pincus as such and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by Warburg Pincus to each Underwriter as to the matters covered
thereby.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell the Firm Shares to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto. The purchase price for each Firm Share shall be [$__________]
per share. The obligation of each Underwriter to the Company shall be to
purchase from the Company that number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto. In making this Agreement, each
Underwriter is contracting severally and not jointly; except as provided in
paragraph (c) of this Section 3 and in Section 8 hereof, the agreement of each
Underwriter is to purchase only the respective number of Firm Shares specified
in Schedule I.
The Firm Shares will be delivered by the Company to you for the accounts of
the several Underwriters against payment of the purchase price therefor by
wire/same day funds payable to the order of the Company at the offices of U.S.
Bancorp Piper Jaffray Inc., 800 Nicollet Mall, Suite 800, Minneapolis,
Minnesota, or such other location as may be mutually acceptable, at 9:00 a.m.
Central time on the third (or if the Securities are priced, as contemplated by
Rule 15c6-1(c) under the Exchange Act,
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<PAGE> 11
after 4:30 p.m. Eastern time, the fourth) full business day following the date
hereof, or at such other time and date as you and the Company determine pursuant
to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the "First Closing Date." If U.S. Bancorp Piper Jaffray
Inc. so elects, delivery of the Firm Shares may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by U.S.
Bancorp Piper Jaffray Inc. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to the Company, will
be made available for checking and packaging not later than 10:30 a.m., Central
time, on the business day next preceding the First Closing Date at the offices
of Piper U.S. Bancorp Jaffray Inc., 800 Nicollet Mall, Suite 800, Minneapolis,
Minnesota, or such other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, Warburg
Pincus hereby grants to the several Underwriters an option to purchase all or
any portion of the Option Shares at the same purchase price as the Firm Shares,
for use solely in covering any over-allotments made by the Underwriters in the
sale and distribution of the Firm Shares. The option granted hereunder may be
exercised at any time (but not more than once) within 30 days after the
effective date of this Agreement upon notice (confirmed in writing) by U.S.
Bancorp Piper Jaffray Inc. to Warburg Pincus and the Company setting forth the
aggregate number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the certificates for
the Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being herein
referred to as the "Second Closing" and "Second Closing Date," respectively;
provided, however, that the Second Closing Date shall not be earlier than the
First Closing Date nor earlier than the second business day after the date on
which the option shall have been exercised. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by U.S. Bancorp
Piper Jaffray Inc. in such manner as U.S. Bancorp Piper Jaffray Inc. deems
advisable to avoid fractional shares. No Option Shares shall be sold and
delivered unless the Firm Shares previously have been, or simultaneously are,
sold and delivered.
The Option Shares will be delivered by Warburg Pincus to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by wire/same day funds payable to the order of Warburg Pincus at the
offices of U.S. Bancorp Piper Jaffray Inc., 800 Nicollet Mall, Suite 800,
Minneapolis, Minnesota, or such other location as may be mutually acceptable at
9:00 a.m., Central time, on the Second Closing Date. If U.S. Bancorp Piper
Jaffray Inc. so elects, delivery of the Option Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by U.S. Bancorp Piper Jaffray Inc. Certificates representing the
Option Shares in definitive form and in such denominations and registered in
such names as you have set forth in your notice of option exercise, will be made
available for checking and packaging not later than 10:30 a.m., Central time, on
the business day next preceding the Second Closing Date at the office of U.S.
Bancorp Piper Jaffray Inc., 800 Nicollet Mall, Suite 800, Minneapolis,
Minnesota, or such other location as may be mutually acceptable.
(c) It is understood that any of the Underwriters may (but shall not be
obligated to) make payment to the Company, on behalf of any other Underwriter
for the Securities to be purchased by such Underwriter. Any such payment by you
shall not relieve any such Underwriter of any of its obligations hereunder.
Nothing herein contained shall constitute any of the Underwriters an
unincorporated association or partner with the Company or Warburg Pincus.
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<PAGE> 12
(d) The Company confirms its engagement of Chase Securities Inc. as, and
Chase Securities Inc. confirms its agreement with the Company to render services
as, a "qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the National Association of Securities Dealers, Inc. ("NASD")
with respect to the offering and sale of the Securities. Chase Securities Inc.,
solely in its capacity as qualified independent underwriter and not otherwise,
is referred to herein as the "Independent Underwriter."
4. Covenants.
(a) The Company covenants and agrees with the several Underwriters as
follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to cause
the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you
promptly of the time when the Registration Statement or any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations) has been filed and of any request
by the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has
elected to rely on Rule 430A of the Rules and Regulations, the Company will
prepare and file a Prospectus (or term sheet within the meaning of Rule 434
of the Rules and Regulations) containing the information omitted therefrom
pursuant to Rule 430A of the Rules and Regulations with the Commission
within the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules and
Regulations; if the Company has elected to rely upon Rule 462(b) of the
Rules and Regulations to increase the size of the offering registered under
the Act, the Company will prepare and file a registration statement with
respect to such increase with the Commission within the time period
required by, and otherwise in accordance with the provisions of, Rule
462(b) of the Rules and Regulations; the Company will prepare and file with
the Commission, promptly upon your request, any amendments or supplements
to the Registration Statement or Prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) that, in your
opinion, may be necessary or advisable in connection with the distribution
of the Securities by the Underwriters; and the Company will not file any
amendment or supplement to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) to which you shall reasonably object by notice to the Company
after having been furnished a copy a reasonable time prior to the filing.
(ii) The Company will advise you, promptly after it receives notice or
obtains knowledge thereof, of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceeding for
any such purpose; and the Company will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its withdrawal if such
a stop order should be issued.
(iii) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) relating
to the Securities is required to be delivered under the Act, the Company
will comply as far as it is able with all requirements imposed upon it by
the Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance
of sales of or dealings in the Securities as contemplated by the provisions
hereof and the Prospectus. If during such period any event occurs as a
result of which the Prospectus would include an untrue
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<PAGE> 13
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify you and will amend the Registration
Statement or supplement the Prospectus (at the expense of the Company) so
as to correct such statement or omission or effect such compliance.
(iv) The Company will use its best efforts to qualify the Securities
for sale under the securities laws of such jurisdictions (domestic or
foreign) as you reasonably designate and to continue such qualifications in
effect so long as required for the distribution of the Securities, except
that the Company shall not be required in connection therewith to qualify
as a foreign corporation or to execute a general consent to service of
process in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (three of which will include all exhibits), one set
of executed signature pages to the Registration Statement, each Preliminary
Prospectus, the Prospectus, and all amendments and supplements (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations)
to such documents, in each case as soon as available and in such quantities
as you may from time to time reasonably request.
(vi) During a period of five years commencing with the date hereof,
the Company will furnish to each Underwriter copies of all periodic and
special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, the NASD, the
Nasdaq National Market or any securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning
after the effective date of the Registration Statement that shall satisfy
the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (A) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company's
accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriters' counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Prospectus, and any amendment thereof or supplement
thereto, and the printing, delivery, and shipping of this Agreement and
other underwriting documents, including Blue Sky Memoranda, (C) all filing
fees and fees and disbursements of the Underwriters' counsel incurred in
connection with the qualification of the Securities for offering and sale
by the Underwriters or by dealers under the securities or blue sky laws of
the states and other jurisdictions which you shall designate in accordance
with Section 4(iv) hereof, (D) the fees and expenses of any transfer agent
or registrar, (E) the filing fees and other fees and expenses (including,
without limitation, the reasonable fees and disbursements of counsel for
the Underwriters) incident to any required review by the NASD of the terms
of the sale of the Securities, (F) listing fees, if any, (G) all costs and
expenses of the Underwriters (including, without limitation, the fees and
disbursements of counsel for the Underwriters) in connection with
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<PAGE> 14
matters related to the Directed Shares which are designated by the Company
for sale to the Participants, (H) the expenses of the Independent
Underwriter, if any and (I) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities provided
for herein is not consummated by reason of action by the Company pursuant
to Section 9(a) hereof which prevents this Agreement from becoming
effective, or by reason of any failure, refusal or inability on the part of
the Company or Warburg Pincus to perform any agreement on its or their part
to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company or Warburg
Pincus is not fulfilled, the Company will reimburse the several
Underwriters for all out-of-pocket disbursements (including fees and
disbursements of counsel) incurred by the Underwriters in connection with
their investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company shall
not in any event be liable to any of the Underwriters for loss of
anticipated profits from the transactions covered by this Agreement. The
Company, Warburg Pincus and the Underwriters agree that Chase Securities
Inc. will not receive any additional benefits hereunder for serving as
Independent Underwriter in connection with the offering and sale of the
Securities.
(ix) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder in the manner specified in the
Prospectus under the heading "Use of Proceeds" and will file such
information with the Commission with respect to the sale of the Securities
and the application of the proceeds therefrom as may be required in
accordance with Rule 463 of the Rules and Regulations.
(x) The Company will not, without U.S. Bancorp Piper Jaffray Inc.'s
prior written consent, offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise issue or dispose of any Common Stock,
Non-Voting Common Stock or any securities convertible into or exchangeable
for, or any options or rights to purchase or acquire, Common Stock or
Non-Voting Common Stock, except (A) for the sale by the Company of the
Securities to the Underwriters pursuant to this Agreement, (B) for the
issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing and which are
disclosed in the Registration Statement and the Prospectus, (C) the
issuance of Common Stock upon conversion of Non-Voting Common Stock into
Common Stock in accordance with the Company's Certificate of Incorporation
and (D) for the grant by the Company of any option or right to purchase up
to an aggregate of [500,000] shares of Common Stock pursuant to the
Company's 2000 Equity Incentive Plan and Employee Stock Purchase Plan, each
as in effect on the date of this Agreement, so long as each recipient of
options or rights to purchase 1,000 or more shares of Common Stock executes
the letter contemplated by paragraph (xi), for a period of 180 days after
the date of the Prospectus.
(xi) The Company either has caused to be delivered to you or will
cause to be delivered to you prior to the effective date of the
Registration Statement a letter in the form of Exhibit A hereto from each
of the Company's directors and officers and the shareholders and option
holders identified in Schedule II hereto stating that such person agrees
that he or she will not, without your prior written consent, offer for
sale, sell, contract to sell or otherwise dispose of any shares of Common
Stock or Non-Voting Common Stock or rights to purchase Common Stock or
Non-Voting Common Stock, except to the Underwriters pursuant to this
Agreement, for a period of 180 days after the date of the Prospectus.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has
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<PAGE> 15
constituted, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities, and has
not effected any sales of Common Stock or Non-Voting Common Stock which are
required to be disclosed in response to Item 701 of Regulation S-K under
the Act which have not been so disclosed in the Registration Statement.
(xiii) The Company will not incur any liability for any finder's or
broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xiv) The Company will inform the Florida Department of Banking and
Finance at any time prior to the consummation of the distribution of the
Securities by the Underwriters if it commences engaging in business with
the government of Cuba or with any person or affiliate located in Cuba.
Such information will be provided within 90 days after the commencement
thereof or after a change occurs with respect to previously reported
information.
(b) Warburg Pincus covenants and agrees with the several Underwriters as
follows:
(i) Except as otherwise agreed to by the Company and Warburg Pincus,
Warburg Pincus will pay all taxes, if any, on the transfer and sale,
respectively, of the Securities being sold by Warburg Pincus, and the fees
of counsel to Warburg Pincus provided, however, that Warburg Pincus
severally will reimburse the Company for any reimbursement made by the
Company to the Underwriters pursuant to Section 4(a)(viii) hereof to the
extent such reimbursement resulted from the willful failure or refusal on
the part of Warburg Pincus to comply under the terms or fulfill any of the
conditions of this Agreement.
(ii) If this Agreement is terminated by the Underwriters because of
any willful failure, refusal or inability on the part of Warburg Pincus to
perform any agreement to be performed by Warburg Pincus, or because any
other condition of the Underwriters' obligations hereunder required to be
fulfilled by Warburg Pincus is not fulfilled, Warburg Pincus will reimburse
the several Underwriters for all out-of-pocket disbursements (including
fees and disbursements of counsel for the Underwriters) incurred by the
Underwriters in connection with their investigation, preparing to market
and marketing the Securities or in contemplation of performing their
obligations hereunder. Warburg Pincus will not in any event be liable to
any of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement.
(iii) The Securities to be sold by Warburg Pincus are subject to the
interest of the several Underwriters, and the obligations of Warburg Pincus
hereunder are irrevocable and shall not be terminated, except as provided
in this Agreement, by any act of Warburg Pincus, by operation of law,
whether by the liquidation, dissolution or merger of Warburg Pincus, or by
the occurrence of any other event. If Warburg Pincus should liquidate,
dissolve, be a party to a merger or if any other such event should occur
before the delivery of the Securities hereunder, certificates for the
Securities will be delivered in accordance with the terms and conditions of
this Agreement as if such liquidation, dissolution, merger, death or other
event had not occurred.
(iv) Warburg Pincus or any of its affiliates has not taken and will
not take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Securities, and has not effected any sales of Common Stock or
Non-Voting Common Stock which, if effected by the Company, would be
required to be disclosed in response to Item 701 of Regulation S-K.
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<PAGE> 16
(v) Warburg Pincus will immediately notify you if any event occurs, or
of any change in information relating to Warburg Pincus, which results in
the Prospectus (as supplemented) including an untrue statement of a
material fact or omitting to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy, as of the date hereof and at
each of the First Closing Date and the Second Closing Date (as if made at such
Closing Date), of and compliance with all representations, warranties and
agreements of the Company and Warburg Pincus contained herein, to the
performance by the Company and Warburg Pincus of their respective obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective not later than
5:00 p.m., Central time, on the date of this Agreement, or such later time and
date as you shall approve and all filings required by Rules 424, 430A and 434 of
the Rules and Regulations shall have been timely made; no stop order suspending
the effectiveness of the Registration Statement or any amendment thereof shall
have been issued; no proceedings for the issuance of such an order shall have
been initiated or threatened; and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the Registration
Statement or the Prospectus, or any amendment thereof or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as otherwise stated in the Registration Statement and the
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, neither the Company nor any of
its subsidiaries shall have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock; and, except as contemplated in the Prospectus, there shall not
have been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock or Non-Voting Common Stock due to the
issuance of shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt of the Company, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock of the Company or any of its subsidiaries, which
would constitute a Material Adverse Change that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you the
opinion of Oppenheimer Wolf & Donnelly LLP, counsel for the Company, dated such
Closing Date and addressed to you, to the effect that:
(i) Each of the Company and its material subsidiaries has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
material subsidiaries has full corporate power and authority to own its
properties and conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is duly
qualified to
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<PAGE> 17
do business as a foreign corporation in good standing in each jurisdiction
set forth in a schedule to the opinion.
(ii) The capital stock of the Company conforms as to legal matters to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding shares of
the capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and the holders thereof are
not subject to personal liability by reason of being such holders. The
Securities to be issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in accordance with the
terms of this Agreement, will have been validly issued and will be fully
paid and nonassessable, and the holders thereof will not be subject to
personal liability by reason of being such holders. Except as otherwise
stated in the Registration Statement and Prospectus and except for the
preemptive rights provided for in the Stockholders Agreement, which rights
terminate upon, and do not apply to the Securities issued in, the offering,
there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock or Non-Voting Common Stock pursuant to the Company's charter,
by-laws or any agreement or other instrument known to such counsel to which
the Company is a party or by which the Company is bound (other than in the
case of the Non-Voting Common Stock as described in the Prospectus with
regard to the voting thereof). To such counsel's knowledge, neither the
filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights for
or relating to the registration of any shares of Common Stock or other
securities of the Company, which have not been fully satisfied or validly
waived.
(iii) All of the issued and outstanding shares of capital stock of
each of the Company's material subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and, the
Company or its material subsidiaries owns of record, free and clear of any
perfected security interests, claims, liens, proxies, equities or other
encumbrances, all of the issued and outstanding shares of capital stock of
each material subsidiary of the Company. To such counsel's knowledge,
except as described in the Registration Statement and Prospectus, there are
no options, warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary any shares of the
capital stock of the Company or any subsidiary of the Company.
(iv) The Registration Statement has become effective under the Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission.
(v) The statements made in the Registration Statement and Prospectus
under the captions "Business--Government Regulation,"
"Business--Third-Party Reimbursement," "Business--Legal Proceedings,"
"Management--Employment Agreements," "Certain Transactions," "Description
of Capital Stock" and "Shares Eligible for Future Sale" insofar as such
statements constitute a summary of statutes, regulations, rules, legal
matters, documents or proceedings referred to therein, are accurate in all
material respects and present fairly the information required to be shown;
and such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or
included as exhibits to the Registration Statement that are not described
or included as required.
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<PAGE> 18
(vi) The Company has full corporate power and authority to enter into
this Agreement, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid, legal and binding
obligation of the Company enforceable in accordance with its terms (except
as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity); the
execution, delivery and performance of this Agreement and the consummation
of the transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, rule or regulation, any material agreement or
instrument set forth in a schedule to the opinion, the Company's or any
subsidiary's charter or by-laws, or any order or decree known to such
counsel of any court or governmental agency or body having jurisdiction
over the Company, any subsidiary or any of its respective properties; and
no consent, approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities by
the Company, except such as may be required under the Act or state
securities laws.
(vii) To such counsel's knowledge, neither the Company is in violation
of its respective charter or by-laws or other organizational documents.
(viii) Neither the Company nor any of its material subsidiaries is
and, after giving effect to the offering and sale of the Securities and the
application of the proceeds thereof as described in the Registration
Statement and the Prospectus, the Company will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(ix) The statements made in the Registration Statement and the
Prospectus under the captions "Business--Intellectual Property" and
"--Legal Proceedings" (collectively, the "Patent Sections") insofar as such
statements constitute a summary of statutes, regulations, rules, legal
matters, documents or proceedings referred to therein, present fairly the
information set forth therein with respect to such statutes, regulations,
rules, legal matters, documents or proceedings.
(x) Except as otherwise stated in the Registration Statement and the
Prospectus and except for patent application proceedings, there are no
pending legal or governmental proceedings to which the Company is a party
which challenge the patent rights of the Company, and to such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others.
(xi) To such counsel's knowledge, the Company is not infringing or
otherwise violating any Intellectual Property Rights of others, and, to
such counsel's knowledge, there are no infringements by others of the
Company's Intellectual Property Rights.
(xii) The Registration Statement and the Prospectus, and any amendment
thereof or supplement thereto (including any term sheet within the meaning
of Rule 434 of the Rules and Regulations), comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; (except for the financial statements, schedules and other
financial data, as to which counsel need express no opinion). On the basis
of conferences with officers of the Company, examination of documents
referred to in the Registration Statement and Prospectus and such other
procedures as such counsel deemed appropriate, nothing has come to
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<PAGE> 19
the attention of such counsel that causes such counsel to believe that the
Registration Statement or any amendment thereof, at the time the
Registration Statement became effective and as of such Closing Date
(including any Registration Statement filed under Rule 462(b) of the Rules
and Regulations), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (as of its date and as of such Closing Date), as amended or
supplemented, includes any untrue statement of material fact or omits to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; it being
understood that the foregoing statement may be contained in a separate
letter addressed to the Underwriters and that such counsel need express no
statement as to the financial statements, schedules or other financial data
included in any of the documents mentioned in this clause.
(e) On each Closing Date there shall have been furnished to you the
officer's certificate of Lawrence W. Getlin, Vice President, Regulatory Medical
Affairs Assurance and Quality Systems and Compliance for the Company, dated such
Closing Date and addressed to you to the effect that:
(i) The statements made in the Registration Statement and the
Prospectus under the captions "Risk Factors--Risks Related to Our
Business--If we cannot obtain adequate levels of reimbursement from
third-party payors for our products, physicians and patients may be
reluctant to use our products and sales may decline; --If we supply
products to the market that we must recall, our business could suffer from
negative publicity and our sales could decline; --If we fail to obtain
regulatory approval to commercially manufacture or sell any of our
products, or if approval is delayed, we will be unable to generate revenue
from the sale of those products; --If the current regulations governing the
use of human tissue change, sales of our sling procedure kits may decline"
and "Business -- Government Regulation" and "-- Third-Party Reimbursement"
(collectively, the "Regulatory Sections") insofar as such statements
constitute a summary of statutes, regulations, rules, legal matters,
documents or proceedings referred to therein, present fairly the
information set forth therein with respect to such statutes, regulations,
rules, legal matters, documents or proceedings.
(ii) To such officer's knowledge, the Company's business, as currently
conducted and as described in the Registration Statement and Prospectus,
does not violate the Federal Food, Drug and Cosmetic Act or any Food and
Drug Administration ("FDA") rule or regulation, and, to such officer's
knowledge, there are no FDA or judicial administration proceedings pending
or threatened against the Company.
(iii) Nothing has come to the attention of such officer that causes
such officer to believe that the Regulatory Sections in (A) the
Registration Statement or any amendment thereof, at the time the
Registration Statement became effective and as of such Closing Date
(including the Registration Statement filed under Rule 462(b) of the Rules
and Regulations), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein necessary
to make the statements therein not misleading or (B) the Prospectus as of
its date and as of such Closing Date) as amended and supplemented, included
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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<PAGE> 20
(f) On each Closing Date, there shall have been furnished to you the
opinion of Oppenheimer Wolf & Donnelly LLP, counsel for Warburg Pincus, dated
such Closing Date and addressed to you, to the effect that:
(i) Warburg Pincus is to such counsel's knowledge, the sole record
owner of the Securities to be sold by Warburg Pincus and delivery of the
certificates for the Securities to be sold by Warburg Pincus pursuant to
this Agreement, upon payment therefor by the Underwriters, will pass good
and valid title to such Securities to the Underwriters and the Underwriters
will acquire all the rights of Warburg Pincus in the Securities (assuming
the Underwriters have no knowledge of an adverse claim), free and clear of
any security interests, claims, liens or other encumbrances and assuming
that each Underwriter is otherwise a protected purchaser for purposes of
the Uniform Commercial Code.
(ii) Warburg Pincus has the power and authority to enter into this
Agreement and to perform and discharge Warburg Pincus' obligations
hereunder; and this Agreement has been duly and validly authorized,
executed and delivered by Warburg Pincus and is a valid and binding
agreement of Warburg Pincus, enforceable in accordance with its terms
(except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and subject to general principles of equity).
(iii) The execution and delivery of this Agreement and the performance
of the terms hereof and the consummation of the transactions herein
contemplated will not to its knowledge, result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, rule or regulation, or any agreement or instrument set forth on a
schedule to the opinion, the organizational documents of Warburg Pincus, or
any order or decree known to such counsel of any court or government agency
or body having jurisdiction over Warburg Pincus or any of its respective
properties; and no consent, approval, authorization or order of, or filing
with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby and thereby, including
the sale of the Securities being sold by Warburg Pincus, except in each
case those which, if not made or obtained, would not have a material
adverse effect on the ability of Warburg Pincus to perform its obligation
hereunder such as may be required under the Act or state securities laws or
blue sky laws.
(g) On each Closing Date, there shall have been furnished to you such
opinion or opinions from Willkie Farr & Gallagher, counsel for the several
Underwriters, dated such Closing Date and addressed to you, with respect to the
formation of the Company, the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(h) On each Closing Date you shall have received a letter from each of
Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP, dated such Closing
Date and addressed to you, confirming that they are independent public
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered
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<PAGE> 21
by its letter delivered to you concurrently with the execution of this
Agreement, and the effect of the letter so to be delivered on such Closing Date
shall be to confirm the conclusions and findings set forth in such prior letter.
(i) On such Closing Date, there shall have been furnished to you a
certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and the chief financial officer of the Company, to the effect
that:
(i) The representations and warranties of the Company in this
Agreement are true and correct as if made at and as of such Closing Date,
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such
Closing Date;
(ii) No stop order or other order suspending the effectiveness of the
Registration Statement or any amendment thereof or the qualification of the
Securities for offering or sale has been issued, and no proceeding for that
purpose has been instituted or, to their knowledge, is contemplated by the
Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto (including any term sheet within the meaning of Rule
434 of the Rules and Regulations), and (A) the Registration Statement, or
any amendment thereof, does 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 not misleading, and the
Prospectus, as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as otherwise stated
in the Registration Statement or the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or paid
any dividends or made any distribution of any kind with respect to its
capital stock, and except as disclosed in the Prospectus, there has not
been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock or Non-Voting Common Stock due to the
issuance of shares upon the exercise of outstanding options or warrants),
or any material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company, or any of its subsidiaries, or any event
or development which would constitute a Material Adverse Change, and (D)
except as stated in the Registration Statement and the Prospectus, there is
not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or any of
its subsidiaries is a party before or by any court or governmental agency,
authority or body, or any arbitrator, which could reasonably be expected to
result in a Material Adverse Effect.
(j) On each Closing Date, there shall have been furnished to you a
certificate or certificates, dated such Closing Date and addressed to you,
signed by Warburg Pincus to the effect that the representations and warranties
of Warburg Pincus contained in this Agreement are true and correct as if made at
and as of such Closing Date, and that Warburg Pincus has complied with all the
agreements
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<PAGE> 22
and satisfied all the conditions on Warburg Pincus' part to be performed or
satisfied at or prior to such Closing Date.
(k) The Nasdaq National Market shall have approved the Securities for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(l) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between you and the directors, officers and the shareholders and option
holders of the Company listed on Schedule II relating to sales and certain other
dispositions of Common Stock, Non-Voting Common Stock or certain other
securities, delivered to you, shall be in full force and effect.
(m) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or they
may have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Underwriters. The Company will furnish you
with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
Warburg Pincus against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness
pursuant to Rules 430A and 434(d) of the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434
of the Rules and Regulations), 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; and
(ii) (A) the violation of any applicable laws or regulations of
foreign jurisdictions where Directed Shares have been offered and (B) any
untrue statement or alleged untrue statement of a material fact included in
the supplement or prospectus wrapper material distributed in any
jurisdiction outside the United States to Participants or the omission
therefrom of a material fact necessary to make the statements therein, when
considered in conjunction with the Prospectus, or any supplement or
amendment thereto, not misleading;
and will reimburse each Underwriter and Warburg Pincus for any legal or other
expenses reasonably incurred by it in connection with investigating or defending
against such loss, claim, damage, liability or action; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by you, by any Underwriter through
you (or, in the case of the
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<PAGE> 23
Company's indemnification obligation in favor or Warburg Pincus, by Warburg
Pincus), specifically for use in the preparation thereof. The foregoing
indemnity obligation of the Company with respect to any Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages or liabilities purchased Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendment or
supplement thereto) was not sent or given by or on behalf of such Underwriter to
such person, if required by law to have been so delivered, at or prior to the
written confirmation of the sale of the Securities sold by the Company to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities
In addition to their other obligations under this Section 6(a), the Company
agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, described in this
Section 6(a) or in connection with any violation of the nature referred to in
Section 6(a)(ii)(A), it will reimburse each Underwriter and Warburg Pincus on a
monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters and Warburg Pincus for such expenses
and the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter or
Warburg Pincus that received such payment shall promptly return it to the party
or parties that made such payment, together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by U.S.
Bank (the "Prime Rate"). Any such interim reimbursement payments which are not
made to an Underwriter or Warburg Pincus within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Company may otherwise have.
(b) In addition to and without limitation of the Company's obligation to
indemnify Chase Securities Inc. as an Underwriter, the Company also agrees to
indemnify and hold harmless the Independent Underwriter and each person, if any,
who controls the Independent Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages or liabilities incurred as a result of the Independent
Underwriter's participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the Conduct Rules of the NASD in connection with the
offering of the Securities.
(c) Warburg Pincus agrees to indemnify and hold harmless each Underwriter
and the Company against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or the Company may become subject, under the
Act or otherwise (including in settlement of any litigation if such settlement
is effected with the written consent of Warburg Pincus), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rules 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), 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, and will reimburse each Underwriter
and the Company for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided however that Warburg Pincus shall be obligated to
indemnify the Underwriters and the Company under this Section 6(c) only if such
loss, claim, damage, liability or action
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<PAGE> 24
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company or any Underwriter by Warburg Pincus specifically for use in the
preparation thereof; provided further that such indemnity obligation shall not
exceed the net proceeds received by Warburg Pincus from the sale of Common Stock
hereunder. The foregoing indemnity obligation of Warburg Pincus with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendment or supplement thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law to have been so
delivered, at or prior to the written confirmation of the sale of the Securities
sold by the Company to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities.
(d) Each Underwriter will indemnify and hold harmless the Company and
Warburg Pincus against any losses, claims, damages or liabilities to which the
Company and Warburg Pincus may become subject, under the Act or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), 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; or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact included in the supplement or prospectus
wrapper material distributed in any jurisdiction outside the United States to
Participants or the omission therefrom of a material fact necessary to make the
statements therein, when considered in conjunction with the Prospectus, or any
supplement or amendment thereto, not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you, by such Underwriter through you, specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company or Warburg Pincus in connection with
investigating or defending against any such loss, claim, damage, liability or
action.
(e) Promptly after receipt by an indemnified party under subsection (a),
(b), (c) or (d) above of notice of 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 the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party to the extent it is not materially
prejudiced as a result of such omission and in any event shall not relieve it
from any liability that it may have otherwise than under this Agreement. In case
any such action shall be brought against any indemnified party, and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
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<PAGE> 25
investigation; provided, however, that if the defendants in any such action
include both the indemnified party or parties and the indemnifying party, and
the indemnified party or parties shall have concluded that there may be legal
defenses or claims available to it or them which are different from or
additional to those available to the indemnifying party, or if there is a
conflict of interest which would prevent counsel for the indemnifying party or
parties from also representing the indemnified party or parties, and that it is
advisable for the indemnified party or parties to be represented by separate
counsel, then the indemnified party or parties shall have the right to employ a
single counsel (in addition to any local counsel) to represent the indemnified
party or the indemnified parties as a group, in which event the reasonable fees
and expenses of the separate counsel shall be borne by the indemnifying party or
parties; provided, that, if indemnity is sought pursuant to Section 6(b), then
in addition to the fees and expenses of such counsel for the indemnified
parties, the indemnifying party shall be liable for the reasonable expenses of
not more than one counsel (in addition to any local counsel) separate from its
own counsel and that of the other indemnified parties for the Independent
Underwriter in its capacity as a "qualified independent underwriter" and all
persons, if any, who control the Independent Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, if, in the
reasonable judgment of the Independent Underwriter, there may exist a conflict
of interest between the Independent Underwriter and the other indemnified
parties. Any such separate counsel for the Independent Underwriter and such
control persons of the Independent Underwriter shall be designated in writing by
the Independent Underwriter. An indemnifying party shall not be obligated under
any settlement agreement relating to any action under this Section 6 to which it
has not agreed in writing.
(f) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b),
(c) or (d) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a), (b), (c) or (d)) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and Warburg Pincus on the one hand and the Underwriters
on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and Warburg
Pincus on the one hand and the Underwriters on the other in connection with the
statements or omissions or in connection with any violation of the nature
referred to in Section 6(a)(ii)(A) that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and Warburg Pincus on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company and Warburg Pincus bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth on the cover
page of the Prospectus. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and Warburg Pincus or the Underwriters and
the parties' relevant intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission, or any violation of the
nature referred to in Section 6(a)(ii)(A). The Company and Warburg Pincus and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (f) were to be 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 in the first sentence of this subsection (f). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (f) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
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<PAGE> 26
action or claim which is the subject of this subsection (f). Notwithstanding the
provisions of this subsection (f), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) Warburg Pincus' contribution obligation
hereunder shall not exceed the net proceeds received by Warburg Pincus from the
sale of Common Stock hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (f) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) The obligations of the Company and Warburg Pincus under this Section 6
shall be in addition to any liability which the Company and Warburg Pincus may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 6 shall be in addition to
any liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company
(including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any,
who controls the Company and Warburg Pincus within the meaning of the Act.
(h) In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless the Underwriters from and against any and all losses, claims, damages
or liabilities incurred by them as a result of the failure of Participants to
pay for and accept delivery of the Directed Shares which, by the end of the
first business day following the date of this Agreement, were subject to a
properly confirmed agreement to purchase.
7. Representations and Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company and Warburg Pincus contained herein or
in certificates delivered pursuant hereto, and the agreements of the several
Underwriters, the Company and Warburg Pincus contained in Section 6 hereof,
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, or the Company or any of its officers, directors, or controlling
persons, or Warburg Pincus or any controlling person thereof, and shall survive
delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares
not purchased does not aggregate more than 10% of the total aggregate amount of
Firm Shares set forth in Schedule I hereto, the remaining Underwriters shall be
obligated to take up and pay for (in proportion to their respective underwriting
obligations hereunder as set forth in Schedule I hereto, as applicable, except
as may otherwise be determined by you) the Firm Shares that the withdrawing or
defaulting Underwriter agreed but failed to purchase.
(b) If any Underwriter shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter to be purchased hereunder, upon tender of such
Firm Shares in accordance
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<PAGE> 27
with the terms hereof, and the amount of Firm Shares not purchased aggregates
more than 10% of the total aggregate amount of Firm Shares set forth in Schedule
I hereto, and arrangements satisfactory to you for the purchase of such Firm
Shares, as applicable by other persons are not made within 36 hours thereafter,
this Agreement shall terminate. In the event of any such termination, neither
the Company nor Warburg Pincus shall be under any liability to any Underwriter
(except to the extent provided in Section 4(a)(viii), Section 4(b)(ii) and
Section 6 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of Firm Shares agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company or Warburg Pincus (except to
the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, you or the Company
shall have the right to postpone the First Closing Date for not more than seven
business days in order that the necessary changes in the Registration Statement,
Prospectus and any other documents, as well as any other arrangements, may be
effected. As used herein, the term "Underwriter" includes any person substituted
for an Underwriter under this Section 8.
9. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at 10:00 a.m., Central time, on
the first full business day following the effective date of the Registration
Statement, or at such earlier time after the effective time of the Registration
Statement as you in your discretion shall first release the Securities for sale
to the public; provided, that if the Registration Statement is effective at the
time this Agreement is executed, this Agreement shall become effective at such
time as you in your discretion shall first release the Securities for sale to
the public. For the purpose of this Section, the Securities shall be deemed to
have been released for sale to the public upon release by you of the publication
of a newspaper advertisement relating thereto or upon release by you of telexes
offering the Securities for sale to securities dealers, whichever shall first
occur. By giving notice as hereinafter specified before the time this Agreement
becomes effective, you or the Company may prevent this Agreement from becoming
effective without liability of any party to any other party, except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
(b) You shall have the right to terminate this Agreement by giving notice
as hereinafter specified at any time at or prior to the First Closing Date, and
the option referred to in Section 3(b), if exercised, may be cancelled at any
time prior to the Second Closing Date, if (i) the Company shall have failed,
refused or been unable, at or prior to such Closing Date, to perform any
agreement on its part to be performed hereunder, (ii) any other condition of the
Underwriters' obligations hereunder is not fulfilled, (iii) trading on the New
York Stock Exchange, the Nasdaq National Market or the American Stock Exchange
shall have been wholly suspended, (iv) 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, the Nasdaq National Market or the
American Stock Exchange, by such Exchange or by order of the Commission or any
other governmental authority having jurisdiction, (v) a banking moratorium shall
have been declared by Federal or New York authorities, or (vi) there has
occurred any material adverse change in the financial markets in the United
States or an outbreak of major hostilities (or an escalation thereof) in which
the United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii), Section 4(b)(ii) and Section 6 hereof shall at
all times be effective.
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<PAGE> 28
(c) If you elect to prevent this Agreement from becoming effective or to
terminate this Agreement as provided in this Section, the Company and Warburg
Pincus shall be notified promptly by you by telephone, confirmed by letter. If
the Company elects to prevent this Agreement from becoming effective, you and
Warburg Pincus shall be notified by the Company by telephone, confirmed by
letter.
10. Default by the Company. If the Company shall fail at the First Closing
Date to sell and deliver the number of Securities which it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party.
No action taken pursuant to this Section 10 shall relieve the Company from
liability, if any, in respect of such default.
11. Information Furnished by Underwriters. The statements set forth in (i)
the second, seventh and eighth paragraphs of text under the caption
"Underwriting" concerning the terms of the offering by the Underwriters and (ii)
the fifteenth paragraph of text under the caption "Underwriting" concerning
stabilization and over-allotment in the Prospectus constitute the written
information furnished by or on behalf of the Underwriters referred to in Section
2 and Section 6 hereof.
12. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Underwriters, shall be delivered by
mail, hand delivery or facsimile transmission c/o U.S. Bancorp Piper Jaffray
Inc., 800 Nicollet Mall, Suite 800, Minneapolis, Minnesota 55402, except that
notices given to an Underwriter pursuant to Section 6 hereof shall be sent to
such Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such Underwriter in connection with this offering; if to the
Company, shall be delivered by mail, hand delivery or facsimile transmission to
it at 10700 Bren Road, Minnetonka, Minnesota 55343 Attention: Douglas W. Kohrs;
if for Warburg Pincus, 466 Lexington Avenue, New York, New York 10017 Attention:
Scott A. Arenare, Esq. All notices given by facsimile shall be promptly
confirmed by letter. Any party to this Agreement may change such address for
notices by sending to the parties to this Agreement written notice of a new
address for such purpose.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
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<PAGE> 29
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
By ____________________________________________
Name:
Title:
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By Warburg, Pincus & Co.,
General Partner
By ____________________________________________
Name:
Title:
Confirmed as of the date first above mentioned, on behalf of themselves and the
other several Underwriters named in Schedule I hereto.
U.S. BANCORP PIPER JAFFRAY INC.
By ____________________________________________
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By ____________________________________________
Name:
Title:
CHASE SECURITIES INC.
By ____________________________________________
Name:
Title:
<PAGE> 30
SCHEDULE I
<TABLE>
<CAPTION>
Underwriter Number of Firm Shares (1)
----------- -------------------------
<S> <C>
U.S. Bancorp Piper Jaffray Inc..........................
-------------
Banc of America Securities LLC..........................
-------------
Chase Securities Inc....................................
-------------
Total................................................... 6,250,000
=============
</TABLE>
----------
(1) The Underwriters may purchase up to an additional 937,500 Option Shares, to
the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the Agreement.
<PAGE> 31
SCHEDULE II
(List of Persons Subject to Lock-up)
AMS Investors
AMS Investors II
Shelley Anderson
John Berdahl
Crane Island Ventures LLC
Janet Dick
Richard Faleschini
Laurence Getlin
Charles Harlan
Daniel Johnson
Douglas Kohrs
Gregory Melsen
Brian Millberg
Christopher Porter
J. Daan Ruys
Eva Snitkin
Sharon Spindler
Standby Fund 1998
James Treace
Upper Lake Growth Capital LLC
U.S. Bancorp Piper Jaffray Inc.
Vertical Fund Associates, L.P.
Warburg, Pincus Equity Partners, L.P.
John Westrum, Jr.
<PAGE> 32
EXHIBIT A
LOCK-UP AGREEMENT
__________, 2000
U.S. Bancorp Piper Jaffray Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402
Re: American Medical Systems Holdings, Inc.
Ladies and Gentlemen:
The undersigned understands that you will act as representatives for a
group of underwriters (the "Underwriters") who propose to enter into a Purchase
Agreement (the "Purchase Agreement") with American Medical Systems Holdings,
Inc. (the "Company") providing for the public offering (the "Offering") by the
Underwriters of Common Stock of the Company (the "Common Stock") pursuant to the
Company's Registration Statement on Form S-1 to be filed with the Securities and
Exchange Commission.
In consideration of the Underwriters' agreement to purchase and make the
Offering of the Common Stock, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the undersigned hereby agrees, for a
period of 180 days after the date of the Purchase Agreement, not to, without the
prior written consent of U.S. Bancorp Piper Jaffray Inc. (which consent may be
withheld in its sole discretion), directly or indirectly, offer for sale, sell,
contract to sell, grant any option for the sale of (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock or any security or
instrument related to such Common Stock, options or warrants, or publicly
announce the undersigned's intention to do any of the foregoing. Notwithstanding
the foregoing, the undersigned may sell or otherwise transfer shares of Common
Stock (i) as a bona fide gift or gifts to a member of the undersigned's
"immediate family" within the meaning of Rule 16a-1(e), provided that the
undersigned provides prior written notice of such gift or gifts to you and the
donee or donees thereof agree to be bound by the restrictions set forth herein,
or (ii) acquired in the public market on or after the date of the Purchase
Agreement.
Furthermore, the undersigned hereby agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent against the
transfer of securities of the Company held by the undersigned except in
compliance with this Lock-Up Agreement.
The undersigned recognizes that the Offering will be of benefit to the
undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that the
Underwriters are relying on the representations and agreements of the
undersigned contained in this Lock-Up Agreement in carrying out the Offering and
in entering into underwriting arrangements with respect to the Offering. This
Lock-Up Agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives and assigns of the
undersigned. If the Offering does not close by December 31, 2000, this Lock-Up
Agreement shall terminate immediately upon such date and you will release us
from our obligations under this Agreement.
<PAGE> 33
Very truly yours,
Signature:
Printed Name:_______________________________
Address: ________________________________
(Indicate capacity of person signing if
signing as custodian or trustee or on behalf
of an entity)
Address: ________________________________
________________________________
________________________________
Accepted as of the date
first set forth above:
U.S. BANCORP PIPER JAFFRAY INC.
By:________________________________
Managing Director
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