Exhibit 1.1
EXECUTION COPY
ATRICURE, INC.
4,000,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
August 5, 2005
UNDERWRITING AGREEMENT
August 5, 2005
UBS Securities LLC
Piper Jaffray & Co.
Thomas Weisel Partners LLC
A.G. Edwards & Sons, Inc.
as Managing
Underwriters
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
and Piper Jaffray & Co.
800 Nicollet Mall
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
AtriCure, Inc., a Delaware
corporation (the “Company”), proposes to issue and sell
to the underwriters named in Schedule A annexed hereto (the
“Underwriters”), for whom you are acting as
representative(s), an aggregate of 4,000,000 shares (the
“Firm Shares”) of Common Stock, $0.001 par value (the
“Common Stock”), of the Company. In addition, solely
for the purpose of covering over-allotments, the Company and the
Selling Stockholders propose to grant to the Underwriters the
option to purchase up to an additional 600,000 shares of Common
Stock of which 150,000 shares are to be issued and sold by the
Company and an aggregate of 450,000 shares are to be sold by the
Selling Stockholders in the respective amounts set forth in
Schedule B annexed hereto (together, the “Additional
Shares”). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the
“Shares.” The Shares are described in the Prospectus,
which is referred to below.
The Company has filed, in accordance
with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the
“Act”), with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-l
(File No. 333-124197) including a prospectus, relating to the
Shares. The Company has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary
prospectuses (each such preliminary prospectus being herein called
a “Preliminary Prospectus”) relating to the Shares.
Except where the context otherwise requires, the registration
statement, as amended when it became effective, including all
documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to
Rule 430(A) under the Act and also including any registration
statement filed pursuant to Rule 462(b) under the Act, is herein
called the “Registration Statement,” and the
prospectus, in the form filed by the Company with the Commission
pursuant to Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be
required under the Act) or, if no such filing is required, the form
of final prospectus included in the Registration Statement at the
time it became effective, is herein called the
“Prospectus.” As used herein, “business
day” shall mean a day on which the New York Stock Exchange is
open for trading.
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The Company, the Selling
Stockholders and the Underwriters agree as follows:
1. Sale and Purchase . Upon
the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from
the Company the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule A attached hereto, subject to
adjustment in accordance with Section 10 hereof, in each case
at a purchase price of $11.16 per Share. The Company is advised by
you that the Underwriters intend (i) to make a public offering
of their respective portions of the Firm Shares as soon after the
effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Company and the
Selling Stockholders listed on Schedule B hereto hereby grant to
the several Underwriters the option to purchase, and upon the basis
of the representations and warranties and subject to the terms and
conditions herein set forth, the Underwriters shall have the right
to purchase, severally and not jointly, from the Company and the
Selling Stockholders listed on Schedule B hereto, ratably in
accordance with the number of Firm Shares to be purchased by each
of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the
offering of the Firm Shares, at the same purchase price per share
to be paid by the Underwriters to the Company for the Firm Shares.
This option may be exercised by UBS Securities LLC and Piper
Jaffray & Co. (together, the “Book-Runners”)
on behalf of the several Underwriters at any time and from time to
time on or before the thirtieth day following the date hereof, by
written notice to the Company and the Selling Stockholders listed
on Schedule B hereto. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to
be delivered (such date and time being herein referred to as the
“additional time of purchase”); provided ,
however , that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier
than the second business day after the date on which the option
shall have been exercised nor later than the tenth business day
after the date on which the option shall have been exercised. The
number of Additional Shares to be sold by each of the Company and
the Selling Stockholders shall be, as nearly as practicable, in the
same proportion as the maximum number of Additional Shares to be
sold by each of the Company and the Selling Stockholders to maximum
aggregate number of Additional Shares to be sold; provided,
however, to the extent that the Underwriters exercise their option
in the aggregate for less than the maximum number of Additional
Shares, then such Additional Shares shall first be purchased from
each of the Selling Stockholders up to, and in the same proportion
as, the maximum number of Additional Shares to be sold by each of
the Selling Stockholders as set forth on Schedule B hereto,
thereafter, any Additional Shares shall be purchased from the
Company up to the maximum number of Additional Shares to be sold by
the Company. The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same proportion to
the aggregate number of Additional Shares being purchased as the
number of
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Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm
Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in
accordance with Section 10 hereof.
Pursuant to powers of attorney
granted by each Selling Stockholder, David Drachman or Thomas
Etergino will act as representative of the Selling Stockholders.
The foregoing representative (the “Representative of the
Selling Stockholders”) is authorized, on behalf of each
Selling Stockholder, to execute any documents necessary or
desirable in connection with the sale of the Shares to be sold
hereunder by each Selling Stockholder, to make delivery of the
certificates of such Shares, to receive the proceeds of the sale of
such Shares, to give receipts for such proceeds, to pay therefrom
the expenses to be borne by each Selling Stockholder in connection
with the sale and public offering of the Shares, to distribute the
balance of such proceeds to each Selling Stockholder in proportion
to the number of Shares sold by each Selling Stockholder, to
receive notices on behalf of each Selling Stockholder and to take
such other action as may be necessary or desirable in connection
with the transactions contemplated by this Agreement.
2. Payment and Delivery .
Payment of the purchase price for the Firm Shares shall be made to
the Company and each of the Selling Stockholders by Federal Funds
wire transfer, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust
Company (“DTC”) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on August 10, 2005 (unless another
time shall be agreed to by you and the Company and the
Representative of the Selling Stockholders or unless postponed in
accordance with the provisions of Section 10 hereof). The time
at which such payment and delivery are to be made is hereinafter
sometimes called “the time of purchase.” Electronic
transfer of the Firm Shares shall be made to you at the time of
purchase in such names and in such denominations as you shall
specify.
Payment of the purchase price for
the Additional Shares shall be made at the additional time of
purchase in the same manner and at the same office as the payment
for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such
names and in such denominations as you shall specify.
Deliveries of the documents
described in Section 8 hereof with respect to the purchase of
the Shares shall be made at the offices of Simpson
Thacher & Bartlett LLP, 425 Lexington Avenue, New York,
New York 10017, at 9:00 A.M., New York City time, on the date of
the closing of the purchase of the Firm Shares or the Additional
Shares, as the case may be.
3. Representations and Warranties
of the Company . The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) The Registration Statement has
been declared effective under the Act; no stop order of the
Commission preventing or suspending the use of any Preliminary
Prospectus or the effectiveness of the Registration Statement has
been issued and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated
by the Commission; each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects with
the
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requirements of the Act and the last Preliminary
Prospectus distributed in connection with the offering of the
Shares did not, as of its date, and does not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; the Registration Statement complied when it became
effective, complies and will comply, at the time of purchase and
any additional time of purchase, in all material respects with the
requirements of the Act, and the Prospectus will comply, as of its
date and at the time of purchase and any additional times of
purchase, in all material respects with the requirements of the Act
and any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the
use of Form S-1 have been satisfied; the Registration Statement did
not when it became effective, does not and will not, at the time of
purchase and any additional time of purchase, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and the Prospectus will not, as of its date
and at the time of purchase and any additional time of purchase,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; provided ,
however , that the Company makes no warranty or
representation with respect to any statement contained in the
Preliminary Prospectus, the Registration Statement or the
Prospectus in reliance upon and in conformity with information
concerning an Underwriter and furnished in writing by or on behalf
of such Underwriter through you to the Company expressly for use in
the Preliminary Prospectus, the Registration Statement or the
Prospectus; and the Company has not distributed and will not
distribute any offering material in connection with the offering or
sale of the Shares other than the Registration Statement, the
Preliminary Prospectus and the Prospectus;
(b) as of March 31, 2005, the
Company has an authorized and outstanding capitalization as set
forth in the sections of the Registration Statement and the
Prospectus entitled “Capitalization” and
“Description of Capital Stock”; as of March 31,
2005, after giving effect to (i) the conversion of all
outstanding shares of the Company’s preferred stock into
shares of Common Stock, which will become effective at the closing
of this offering; (ii) the filing of an amended and restated
certificate of incorporation to provide for an authorized capital
stock of 10,000,000 shares of preferred stock and 90,000,000 shares
of Common Stock; (iii) a 1-for-3.8 reverse stock split of the
Common Stock; and (iv) the acquisition of Enable, the Company
shall have an authorized and outstanding capitalization as set
forth in the sections of the Registration Statement and the
Prospectus entitled “Capitalization” and
“Description of Capital Stock” and, as of the time of
purchase and the additional time of purchase, as the case may be,
the Company shall have an authorized and outstanding capitalization
as set forth in the sections of the Registration Statement and the
Prospectus entitled “Capitalization” and
“Description of Capital Stock”; all of the issued and
outstanding shares of capital stock, including the Common Stock, of
the Company have been duly authorized and validly issued and are
fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first
refusal or similar right; simultaneously with the time of purchase,
all outstanding shares of the Company’s Series A Preferred
Stock, $0.0001 par value per share, and Series B Preferred Stock,
$0.0001 par value per
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share, shall convert into the number of shares
of Common Stock set forth in the Registration Statement and the
Prospectus in the manner set forth therein and no holder of any
shares of capital stock of the Company or securities convertible
into or exercisable or exchangeable for capital stock of the
Company or options, warrants other securities of the Company shall
have any existing or future right to acquire shares of preferred
stock of the Company; and, as of the date of this Agreement, the
Company has effected and completed a 1-for-3.8 reverse stock split
of the Common Stock in the manner set forth in the Registration
Statement and the Prospectus;
(c) the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver
this Agreement and to issue, sell and deliver the Shares as
contemplated herein;
(d) the Company is duly qualified to
do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing would
not, individually or in the aggregate, have a material adverse
effect on the business, properties, financial condition, results of
operation or prospects of the Company and Enable Medical
Corporation, a Delaware corporation (“Enable”), taken
as a whole (a “Material Adverse Effect”);
(e) the Company has no subsidiaries
(as defined under the Act); the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in
any firm, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation
and the by-laws of the Company and Enable and all amendments
thereto have been delivered to you, and except as set forth in the
exhibits to the Registration Statement no changes therein will be
made on or after the date hereof and prior to the time of purchase
or, if later, the additional time of purchase;
(f) the Company has entered into an
Agreement and Plan of Merger dated as of February 14, 2005
(the “Merger Agreement”) among the Company, Enable
Medical Corporation and Raymond W. Ogle, as stockholder
representative, relating to the acquisition of Enable in the form
that has been previously provided to you; Enable has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus; Enable is duly qualified
to do business as a foreign corporation and is in good standing in
each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing would
not, individually or in the aggregate, have a Material Adverse
Effect;
(g) the Shares have been duly and
validly authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued, fully
paid and non-assessable and free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and
similar rights;
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(h) the capital stock of the
Company, including the Shares, conforms in all material respects to
the description thereof contained in the Registration Statement and
the Prospectus and the certificates for the Shares are in due and
proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(i) this Agreement has been duly
authorized, executed and delivered by the Company;
(j) neither the Company nor Enable
is in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time or both would result in
any breach or violation of, constitute a default under or give the
holder of any indebtedness (or a person acting on such
holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness
under) (i) its respective charter or by-laws, or (ii) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which the Company or Enable is
a party or by which any of them or any of their properties may be
bound or affected, except, in the case of clause (ii) above,
where any such breach, violation or default would not, individually
or in the aggregate, have a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the issuance
and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any
event which with notice, lapse of time or both would result in any
breach or violation of or constitute a default under) (x) the
charter or by-laws of the Company or Enable, or (y) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which the Company or Enable is
a party or by which any of them or any of their respective
properties may be bound or affected, or (z) any federal,
state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or Enable, except, in
the case of clause (y) above, where any such breach, violation
or default would not, individually or in the aggregate, have a
Material Adverse Effect;
(k) no approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the
transactions contemplated hereby other than registration of the
Shares under the Act, which has been effected, any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD and
qualification of the Shares for quotation on NASDAQ;
(l) except as set forth in the
Registration Statement and the Prospectus, (i) no person has
the right, contractual or otherwise, to cause the Company to issue
or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company,
(ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or
other
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equity interests of the Company, and
(iii) no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and
sale of the Shares, in the case of each of the foregoing clauses
(i), (ii) and (iii), whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Company to register
under the Act any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, or to
include any such shares or interests in the Registration Statement
or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise;
(m) each of the Company and Enable
has all necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and has obtained
all necessary licenses, permits, authorizations, consents and
approvals from other persons, in order to conduct its respective
business, except where the failure to have any such licenses,
authorizations, consents or approvals or to have made any such
filings would not, individually or in the aggregate, have a
Material Adverse Effect; and neither the Company nor Enable is in
violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such
license, permit, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or Enable, except where
such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse
Effect;
(n) all legal or governmental
proceedings, affiliate transactions, off-balance sheet
transactions, statutes, regulations, contracts, licenses,
agreements, leases or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so
described or filed as required;
(o) there are no actions, suits,
claims, investigations or proceedings pending or threatened or, to
the Company’s knowledge, contemplated to which the Company or
Enable or any of their respective directors or officers is a party
or of which any of their respective properties is subject at law or
in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency, except any such action, suit, claim, investigation or
proceeding which would not result in a judgment, decree or order
having, individually or in the aggregate, a Material Adverse Effect
or preventing consummation of the transactions contemplated
hereby;
(p) Deloitte & Touche LLP,
whose report on the financial statements of each of the Company and
Enable is filed with the Commission as part of the Registration
Statement and the Prospectus, is an independent registered public
accounting firm with respect to each of the Company and Enable as
required by the Act and the rules of the Public Company Accounting
Oversight Board;
(q) the audited financial statements
of the Company included in the Registration Statement and the
Prospectus, together with the related notes and schedules, present
fairly the financial position of the Company as of the dates
indicated and the results of operations and cash
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flows of the Company for the periods specified
and have been prepared in compliance with the requirements of the
Act and in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved; the
audited financial statements of Enable included in the Registration
Statement and the Prospectus, together with the related notes and
schedules, present fairly the financial position of Enable as of
the dates indicated and the results of operations and cash flows of
Enable for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent
basis during the periods involved; the pro forma financial
statements and data included in the Registration Statement and the
Prospectus comply with the requirements of Regulation S-X of the
Act and the assumptions used in the preparation of such pro forma
financial statements and data are reasonable, the pro forma
adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma
adjustments have been properly applied to the historical amounts in
the compilation of those statements and data; the Company has not
entered into any transaction that would be required to be presented
in the pro forma financial statements pursuant to Article 11 of
Regulation S-X and the rules and regulations thereunder that has
not been included as required in the Registration Statement and the
Prospectus; the other financial and statistical data set forth in
the Registration Statement and the Prospectus are accurately
presented and prepared on a basis consistent with the financial
statements and books and records of the Company or Enable (as the
case may be); there are no financial statements (historical or pro
forma) that are required to be included in the Registration
Statement and the Prospectus that are not included as required; the
Company and Enable do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement and the
Prospectus; and all disclosures contained in the Registration
Statement or the Prospectus regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the “Exchange
Act”) and Item 10 of Regulation S-K under the Act, to
the extent applicable;
(r) subsequent to the respective
dates as of which information is given in the Registration
Statement and the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management,
financial condition or results of operations of the Company and
Enable taken as a whole, (ii) any transaction which is
material to the Company and Enable taken as a whole, (iii) any
liability or obligation, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or Enable,
which is material to the Company and Enable taken as a whole
(iv) any change in the capital stock or outstanding
indebtedness of the Company or Enable or (v) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company;
(s) the Company has obtained for the
benefit of the Underwriters the agreement (a “Lock-Up
Agreement”), in the form set forth as Exhibit A
hereto, from each of its directors and officers and holders of an
aggregate of at least 98% of the Company’s Common Stock
(including all shares of Common Stock issuable pursuant to any
security convertible into or exercisable or exchangeable for Common
Stock, or any warrant or other right to purchase Common Stock or
any such security;
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(t) the Company is not and, after
giving effect to the offering and sale of the Shares, will not be
an “investment company” or an entity
“controlled” by an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”);
(u) the Company and Enable have good
and marketable title to all property (real and personal) described
the Registration Statement and in the Prospectus as being owned by
each of them, free and clear of all liens, claims, security
interests or other encumbrances; all the property described in the
Registration Statement and the Prospectus as being held under lease
by the Company or Enable is held thereby under valid, subsisting
and enforceable leases;
(v) the Company and Enable own, or
have obtained valid and enforceable licenses for, or other rights
to use, the inventions, patent applications, patents, trademarks
(both registered and unregistered), trade names, service names,
copyrights, trade secrets and other proprietary information
described in the Registration Statement and the Prospectus as being
owned or licensed by them or which are necessary for the conduct of
their respective businesses, except where the failure to own,
license or have such rights would not, individually or in the
aggregate, have a Material Adverse Effect (collectively,
“Intellectual Property”); (i) there are no third
parties who have or, to the Company’s knowledge, will be able
to establish rights to any Intellectual Property, except for the
ownership rights of the owners of the Intellectual Property which
is licensed to the Company; (ii) to the Company’s
knowledge, there is no infringement by third parties of any
Intellectual Property, with the exception of the potentially
infringing apparatuses or methods developed or being developed by
two third parties that have been made known to the Underwriters;
(iii) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company’s or
Enable’s rights in or to any Intellectual Property, and the
Company is unaware of any facts which could form a reasonable basis
for any such action, suit, proceeding or claim; (iv) there is
no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or
scope of any Intellectual Property, and the Company is unaware of
any facts which could form a reasonable basis for any such claim;
(v) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
Company or Enable infringes or otherwise violates any patent,
trademark, trade name, service name, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of
any facts which could form a reasonable basis for any such claim;
(vi) to the Company’s knowledge, there is no patent or
patent application that contains claims that interfere with the
issued or pending claims of any of the Intellectual Property; and
(vii) to the Company’s knowledge, there is no material
prior art that may render any patent application owned by the
Company or Enable of the Intellectual Property unpatentable that
has not been disclosed to the U.S. Patent and Trademark
Office;
(w) neither the Company nor Enable
is engaged in any unfair labor practice; except for matters which
would not, individually or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair labor practice
complaint pending or, to the Company’s knowledge, threatened
against the Company or Enable before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or
under collective bargaining agreements is pending or threatened,
(B) no strike, labor dispute, slowdown or stoppage pending or,
to the Company’s knowledge, threatened against the Company or
Enable and (C) no union
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representation dispute currently existing
concerning the employees of the Company or Enable, and (ii) to
the Company’s knowledge, (A) no union organizing
activities are currently taking place concerning the employees of
the Company or Enable and (B) there has been no violation of
any federal, state, local or foreign law relating to discrimination
in the hiring, promotion or pay of employees, any applicable wage
or hour laws or any provision of the Employee Retirement Income
Security Act of 1974 (“ERISA”) or the rules and
regulations promulgated thereunder concerning the employees of the
Company or Enable;
(x) the Company and Enable and their
properties, assets and operations are, and during the term of all
applicable statutes of limitation have been, in compliance with,
and hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that
failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a
Material Adverse Effect; there are no past, present or, to the
Company’s knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise
to any material costs or liabilities to the Company or Enable
under, or to interfere with or prevent compliance by the Company or
Enable with, Environmental Laws; except as would not, individually
or in the aggregate, have a Material Adverse Effect, neither the
Company nor Enable (i) is the subject of any investigation,
(ii) has received any notice or claim, (iii) is a party
to or affected by any pending or, to its knowledge, threatened
action, suit or proceeding, (iv) is bound by any judgment,
decree or order or (v) has entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or
any actual or alleged release or threatened release or cleanup at
any location of any Hazardous Materials (as defined below); except
as described in the Registration Statement and the Prospectus,
neither the Company nor Enable is a party to any proceeding under
any Environmental Law in which a governmental authority is also a
party, other than such proceedings regarding which it is believed
that no monetary penalties of $100,000 or more will be imposed;
except as described in the Registration Statement and the
Prospectus, neither the Company nor Enable anticipates material
capital expenditures relating to any Environmental Law (as used
herein, “Environmental Law” means any federal, state,
local or foreign law, statute, ordinance, rule, regulation, order,
decree, judgment, injunction, permit, license, authorization or
other binding requirement, or common law, relating to health,
safety or the protection, cleanup or restoration of the environment
or natural resources, including without limitation those relating
to the distribution, processing, generation, treatment, storage,
disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “Hazardous
Materials” means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic substances or wastes)
that is regulated by or may give rise to liability under any
Environmental Law);
(y) in the ordinary course of its
business, the Company and Enable each conduct, to the extent
necessary to conduct its business, a periodic review of the effect
of the Environmental Laws on its business, operations and
properties, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for cleanup, closure
of properties or compliance with the Environmental Laws or any
permit, license or approval, any related constraints on operating
activities and any potential liabilities to third
parties);
11
(z) all federal, state, local and
foreign income and franchise tax returns required to be filed by
the Company and Enable have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or
penalties applicable thereto due or claimed to be due from such
entities have been paid, other than those that are immaterial in
amount or that are being contested in good faith and for which
adequate reserves have been provided;
(aa) the Company and Enable maintain
insurance covering its properties, operations, personnel and
businesses as the Company deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in
accordance with customary industry practice to protect the Company
and Enable and their businesses; all such insurance is fully in
force on the date hereof and will be fully in force at the time of
purchase and any additional time of purchase;
(bb) neither the Company nor Enable
has sustained since the date of the last audited financial
statements included in the Registration Statement and the
Prospectus any loss or interference with its respective business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree;
(cc) the Company has not sent or
received any communication regarding termination of, or intent not
to renew, any of the contracts or agreements referred to or
described in, or filed as an exhibit to, the Registration
Statement, and no such termination or non-renewal has been
threatened by the Company or, to the Company’s knowledge, any
other party to any such contract or agreement;
(dd) each of the Company and Enable
maintain a system of internal accounting controls sufficient to
provide reasonable assurance 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;
(ee) the Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) and
internal control over financial reporting (as such term is defined
in Rule 13a-15(f) and 15d-15(f) under the Exchange Act); such
disclosure controls and procedures have been designed to ensure
that material information relating to the Company is made known to
the Company’s Chief Executive Officer and its Chief Financial
Officer by others within those entities and to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles; and such
disclosure controls and procedures have been evaluated and are
effective to perform the functions for which they were established;
the Company’s auditors and the Audit Committee of the Board
of Directors have been advised of: (i) all significant
deficiencies and
12
material weaknesses in the design or operation
of internal controls over financial reporting which are reasonably
likely to adversely affect the Company’s ability to record,
process, summarize, and report financial information; and
(ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal controls over financial
reporting;
(ff) the Company has provided you
true, correct, and complete copies of all documentation pertaining
to any extension of credit in the form of a personal loan made,
directly or indirectly, by the Company or Enable to any director or
executive officer of the Company, or to any family member or
affiliate of any director or executive officer of the Company; and
on or after July 30, 2002, neither the Company nor Enable
have, directly or indirectly: (i) extended credit, arranged to
extend credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or executive officer of the
Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any
material modification, including any renewal thereof, to any term
of any personal loan to any director or executive officer of the
Company, or any family member or affiliate of any director or
executive officer, which loan was outstanding on July 30,
2002;
(gg) the Company has taken all
necessary actions to ensure that, upon and at all times after the
effectiveness of the Registration Statement, the Company and Enable
and any of the officers and directors of the Company and Enable, in
their capacities as such, will be in compliance in all material
respects with the provisions of the Sarbanes-Oxley Act of 2002 and
the rules and regulations promulgated thereunder;
(hh) any statistical or
market-related data included in the Registration Statement and the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources to
the extent required;
(ii) neither the Company nor Enable
nor, to the Company’s knowledge, any employee or agent of the
Company or Enable has made any payment of funds of the Company or
Enable or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is
of a character required to be disclosed in the Registration
Statement or the Prospectus;
(jj) any preclinical tests and
clinical trials and other studies and tests conducted by or on
behalf of the Company that are described in, or the results of
which are referred to in, the Registration Statement and the
Prospectus were and, if still pending, are being conducted in
accordance with standard medical and scientific research
procedures, with applicable current good clinical practice and good
laboratory practice requirements, and with protocols filed with the
appropriate regulatory authorities for each such test, trial or
study, as the case may be; the description of the results of such
tests, trials and studies contained in the Registration Statement
and the Prospectus are accurate and complete and fairly present the
data derived from such tests, trials and studies, and the Company
has no knowledge of any other tests, trials or studies the results
of which are inconsistent with, or otherwise call into question,
the results described or referred to in the Registration Statement
and the Prospectus; the Company has not received any
13
notices or other correspondence from the U.S.
Food and Drug Administration of the U.S. Department of Health and
Human Services (the “FDA”) or any committee thereof or
from any other governmental agency or entity requiring the
termination, suspension or modification of any tests, trials or
studies that are described or referred to in the Registration
Statement or the Prospectus; except to the extent disclosed in the
Registration Statement;
(kk) the Company has complied with,
is not in violation of, and has not received any written notices of
violation with respect to, any foreign, federal, state or local
statute, law or regulation, including without limitation all
statutes, rules, or regulations applicable to the ownership,
testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale,
reimbursement, storage, import, export or disposal of any product
manufactured or distributed by the Company and applicable to the
Company’s interactions with physicians and other healthcare
professionals and customers, including the Federal Food, Drug, and
Cosmetic Act, the False Claims Act, the anti-kickback provisions of
the Social Security Act, state anti-kickback laws, and state
consumer protection and business practice laws, each as amended and
in force from time to time (“Applicable Laws”), or any
license, certificate, approval, clearance, authorization, permit,
supplement or amendment required by any Applicable Laws
(“Authorizations”), except where such non-compliance or
violation would not, individually or in the aggregate, have a
Material Adverse Effect; the Company possesses all Authorizations
and such Authorizations are in full force and effect, except where
such failure to possess Authorizations would not, individually or
in the aggregate, have a Material Adverse Effect; the Company is,
and its products are, in compliance in all respects with all
Authorizations and Applicable Laws, including, but not limited to,
all laws, statutes, rules, regulations, or orders administered,
issued or enforced by the FDA or any other federal or foreign
governmental authority having authority over the Company or any of
its products (“Governmental Authority”), except where
such non-compliance would not, individually or in the aggregate,
have a Material Adverse Effect;
(ll) except as described in the
Registration Statement and the Prospectus, the Company has not
received from the FDA or any other Governmental Authority any
notice of adverse findings, regulatory letters, notices of
violations, Warning Letters, criminal proceeding notices under
Section 305 of the Federal Food, Drag, and Cosmetic Act, as
amended, or other similar communication from the FDA or other
Governmental Authority alleging or asserting material noncompliance
with Applicable Laws or any Authorizations, and there have been no
seizures conducted or threatened by the FDA or other Governmental
Authority, and no recalls, market withdrawals, field notifications,
notifications of misbranding or adulteration, safety alerts or
similar actions relating to the safety or efficacy of the
Company’s products conducted, requested or threatened by the
FDA or other Governmental Authority relating to the products sold
by or activities of the Company; except as described in the
Registration Statement and the Prospectus, the Company has not,
either voluntarily or involuntarily, initiated, conducted, or
issued or caused to be initiated, conducted or issued, any recall,
market withdrawal, safety alert, “dear doctor” letter,
or other similar notice or action relating to the alleged lack of
safety or efficacy of any of the Company’s products or any
alleged product defect or violation, and the Company has no
knowledge that any Governmental Authority has initiated, conducted
or intends to initiate any such notice or action; the Company has
not received notice of any claim, action, suit, proceeding,
hearing, enforcement, investigation, arbitration or other similar
action from any
14
Governmental Authority alleging that any product
operation or other activity is in material violation of any
Applicable Laws or Authorizations and has no knowledge that any
such Governmental Authority is considering any such claim,
litigation, arbitration, action, suit, investigation or proceeding;
each regulatory submission for the Company’s products has
been filed, cleared and maintained in compliance in all material
respects with all Applicable Laws and Authorizations, including,
without limitation, applicable federal statutes, rules, regulations
or orders administered or promulgated by the FDA or other
Governmental Authority, and all laboratory and clinical studies,
and tests, conducted by or on behalf of the Company, that support
clearance of its products have been conducted in all material
respects in compliance with accepted professional scientific
standards and all Applicable Laws and Authorizations in all
material respects; no filing or submission to the FDA or any other
Governmental Authority, intended to be the basis for any
Authorization, contains any material omission or material false
information, and the Company has not received any notices or
correspondence from any Governmental Authority (including, but not
limited to, the FDA) requiring suspension of any studies, tests, or
clinical trials conducted by or on behalf of the Company; except as
described in the Registration Statement and the Prospectus, there
currently are not any clinical trials being conducted by or on
behalf of the Company where the underlying data will or is intended
to be submitted to the FDA, nor are there any applications for
premarket approval or clearance pending with the FDA; the Company
is not aware of any facts which are reasonably likely to cause
(A) the withdrawal, or recall of any products sold or intended
to be sold by the Company, or (B) a change in the marketing
classification or labeling of any such products, except as would
not reasonably be expected to result in a Material Adverse Effect,
(C) a termination or suspension of marketing clearance of any
such products, or (D) a suspension or revocation of any of the
Company’s Authorizations; the Company has not received notice
(whether complete or pending) of any proceeding seeking recall,
suspension or seizure of any products sold or intended to be sold
by the Company; neither the Company nor any Stockholder nor any of
Company’s current or former employees has (i) been
disbarred or received notice of action or threat of action with
respect to debarment under the provisions of 21 U.S.C. Sections
335a, 335b, or 335c; (ii) been subject to any other FDA
enforcement action or proceeding, including without limitation any
suspension, consent decree, notice of criminal investigation,
indictment, sentencing memorandum, plea agreement, court order or
target or no-target letter; or (iii) used in any capacity the
services of any person that has been subject to debarment or any
other FDA enforcement action or proceeding, including without
limitation those actions or proceedings expressly described in
clauses (i) and (ii).
(mm) neither the Company nor, to the
knowledge of the Company, any director, officer, agent, employee or
other Person (as defined below) acting on behalf of the Company,
has (i) used any Company funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from
Company funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or
(iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment on behalf of or for the benefit
of the Company. “Person” shall mean an individual,
partnership, limited liability company, corporation, association
joint stock company, trust, joint venture or unincorporated
organization.
15
(nn) except pursuant to this
Agreement, neither the Company nor Enable has 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 or by the Prospectus;
(oo) neither the Company nor Enable
nor any of their respective directors, officers, affiliates or
controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, the
unlawful stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares,
except as contemplated by this Agreement;
(pp) to the Company’s
knowledge after due inquiry, there are no affiliations or
associations between any member of the NASD and any of the
Company’s officers, directors or 5% or greater
securityholders, except as set forth in the Registration Statement
and the Prospectus.
In addition, any certificate signed
by any officer of the Company or Enable and delivered to the
Underwriters or counsel for the Underwriters in connection with the
offering of the Shares shall be deemed to be a representation and
warranty by the Company or Enable, as the case may be, as to
matters covered thereby, to each Underwriter.
4. Representations and Warranties
of the Selling Stockholders . Each Selling Stockholder,
severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder at the
time of delivery of such Shares will be, the lawful owner of the
number of Shares to be sold by such Selling Stockholder pursuant to
this Agreement and, at the time of delivery thereof, will have
valid and marketable title to such Shares, and upon delivery of and
payment for such Shares, the Underwriters will acquire valid and
marketable title to such Shares free and clear of any claim, lien,
encumbrance, security interest, community property right,
restriction on transfer or other defect in title;
(b) such Selling Stockholder will be
the sole registered owner of the Shares to be sold by such Selling
Stockholder; such Selling Stockholder will have full legal right
and power to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder in the manner provided in this
Agreement; and upon payment for and delivery of the Shares in
accordance with the Underwriting Agreement, the Underwriters will
acquire all of the rights of such Selling Stockholder in the Shares
and will also acquire their interest in such Shares free of any
adverse claim;
(c) no approval, authorization,
consent or order of or filing with any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency is required in connection with the sale of the
Shares by such Selling Stockholder or the consummation by such
Selling Stockholder of the transactions contemplated hereby other
than registration of the Shares under the Act, any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD and
qualification of the Shares for quotation on NASDAQ;
16
(d) the execution, delivery and
performance of this Agreement, by such Selling Stockholder, the
sale of the Shares to be sold by such Selling Stockholder, and the
consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or
constitute a default under) the charter or by-laws of such Selling
Stockholder, or any indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which
such Selling Stockholder is a party or by which it or any of its
properties may be bound or affected, or any federal, state, local
or foreign law, regulation or rule or any decree, judgment or order
applicable to such Selling Stockholder;
(e) this Agreement; the Custody
Agreement between American Stock Transfer & Trust Company,
as custodian, and each Selling Stockholder (the “Custody
Agreement”); the Irrevocable Power of Attorney of Selling
Stockholder (the “Power of Attorney”); and the Lock-Up
Agreement (in the form set forth as Exhibit A hereto) have
been duly authorized, executed and delivered by such Selling
Stockholder and each is a legal, valid and binding agreement of
such Selling Stockholder enforceable in accordance with its terms,
except as enforceablility might have been limited by general
equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights
generally and subject to general equity principles and to
limitations on availability of equitable relief, and except as to
those provisions relating to indemnity or contribution;
(f) when the Registration Statement
became effective and at all times subsequent thereto through the
later of the additional time of purchase or the termination of the
offering of the Shares, the information concerning such Selling
Stockholder furnished in writing by or on behalf of such Selling
Stockholder to the Company for use in the Registration Statement
and Prospectus, and any supplements or amendments thereto as relate
to such Selling Stockholder will not contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(g) such Selling Stockholder has
duly and irrevocably authorized the Representative of the Selling
Stockholders, on behalf of such Selling Stockholder, to execute and
deliver this Agreement and any other document necessary or
desirable in connection with the transactions contemplated thereby
and to deliver the Shares to be sold by such Selling Stockholder
and receive payment therefor pursuant hereto;
(h) the sale of such Selling
Stockholder’s Shares pursuant to this Agreement is not
prompted by any material information concerning the Company which
is not set forth in the Prospectus; and
(i) neither such Selling Stockholder
nor, to such Selling Stockholder’s knowledge, any of its
directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to
17
cause or result in, under the Exchange Act or
otherwise, the unlawful stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of
the Shares, except as contemplated by this Agreement.
In addition, any certificate signed
by a Selling Stockholder, if applicable, officer of such Selling
Stockholder or the Representative of the Selling Stockholders on
behalf of such Selling Stockholder and delivered to the
Underwriters or counsel for the Underwriters in connection with the
offering of the Shares shall be deemed to be a representation and
warranty by such Selling Stockholder as to matters covered thereby,
to each Underwriter.
5. Certain Covenants of the
Company . The Company hereby agrees:
(a) to furnish such information as
may be required and otherwise to cooperate in qualifying the Shares
for offering and sale under the securities or blue sky laws of such
states or other jurisdictions as you may designate and to maintain
such qualifications in effect so long as you may request for the
distribution of the Shares; provided that the Company shall
not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such jurisdiction
(except service of process with respect to the offering and sale of
the Shares); and to promptly advise you of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for offer or sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose;
(b) to make available to the
Underwriters in New York City, as soon as practicable after the
Registration Statement becomes effective, and thereafter from time
to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after
the effective date of the Registration Statement) as the
Underwriters may request for the purposes contemplated by the Act;
in case any Underwriter is required to deliver a prospectus after
the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will
prepare, at its expense, promptly upon request such amendment or
amendments to the Registration Statement and the Prospectus as may
be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) if, at the time this Agreement
is executed and delivered, it is necessary for the Registration
Statement or any post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such
post-effective amendment to become effective as soon as possible
and the Company will advise you promptly and, if requested by you,
will confirm such advice in writing, (i) when the Registration
Statement and any such post-effective amendment thereto has become
effective, and (ii) if Rule 430A under the Act is used, when
the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you promptly,
confirming such advice in writing, of any request by the Commission
for amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or
18
the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration
Statement or the Prospectus and to provide you and
Underwriters’ counsel copies of any such documents for review
and comment a reasonable amount of time prior to any proposed
filing and to file no such amendment or supplement to which you
shall reasonably object in writing;
(e) subject to Section 5(d)
hereof, to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Shares; to provide you with a copy of such reports and
statements and other documents to be filed by the Company pursuant
to Section 13, 14 or 15(d) of the Exchange Act during such
period a reasonable amount of time prior to any proposed filing,
and
