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EXHIBIT 1.1
3,000,000 Shares
Aurora Biosciences Corporation
Common Stock
($.001 Par Value)
UNDERWRITING AGREEMENT
_______________, 1997
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
Xxxxxxxxx, Xxxxxxxx & Company
As Representatives of the
Several Underwriters
c/o Alex. Xxxxx & Sons Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Aurora Biosciences Corporation, a Delaware corporation (the
"Company"), proposes to sell to the several underwriters (the "Underwriters")
named in Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of 3,000,000 shares of the Company's Common
Stock, $.001 par value (the "Firm Shares"). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to 450,000 additional shares of the
Company's Common Stock (the "Option Shares") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option
Shares if you elect to exercise the over- allotment option in whole or in part
for the
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accounts of the several Underwriters. The Firm Shares and the Option Shares
(to the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the
Underwriters as follows:
(a) A registration statement on Form S-1 (File No.
333-23407) with respect to the Shares has been carefully prepared by
the Company in conformity with the requirements of the Securities Act
of 1933, as amended (the "Act"), and the Rules and Regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder and has been filed with the Commission.
Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the
Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to you. Such registration
statement, together with any registration statement filed by the
Company pursuant to Rule 462(b) of the Act, herein referred to as the
"Registration Statement," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and contained
in the Prospectus referred to below, has become effective under the
Act and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. "Prospectus" means (i)
the form of prospectus first filed with the Commission pursuant to
Rule 424(b) or (ii) the last preliminary prospectus included in the
Registration Statement filed prior to the time it becomes effective or
filed pursuant to Rule 424(a) under the Act that is delivered by the
Company to the Underwriters for delivery to purchasers of the Shares,
together with the term sheet or abbreviated term sheet filed with the
Commission pursuant to Rule 424(b)(7) under the Act. Each
preliminary prospectus included in the Registration Statement prior to
the time it becomes effective is herein referred to as a "Preliminary
Prospectus."
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement. There are no subsidiaries, direct or indirect, of the
Company. The Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires such
qualification.
(c) The outstanding shares of Common Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for
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as contemplated herein will be validly issued, fully paid and
non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Shares or the issue and sale thereof. Neither
the filing of the Registration Statement nor the offering or sale of
the Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating
to the registration of any shares of Common Stock.
(d) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct in all material
respects. All of the Shares conform to the description thereof
contained in the Registration Statement. The form of certificates
for the Shares conforms to the corporate law of the jurisdiction of
the Company's incorporation.
(e) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments
or supplements thereto will contain, all statements which are required
to be stated therein by, and will conform, to the requirements of the
Act and the Rules and Regulations. The Registration Statement and any
amendment thereto do not contain, and will not contain, any untrue
statement of a material fact and do not omit, and will not omit, to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading. The Prospectus and any
amendments and supplements thereto do not contain, and will not
contain, any untrue statement of material fact; and do not omit, and
will not omit, to state any 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 representations or
warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives, specifically for use in the
preparation thereof.
(f) The financial statements of the Company, together with
related notes and schedules as set forth in the Registration
Statement, present fairly the financial position and the results of
operations and cash flows of the Company, at the indicated dates and
for the indicated periods. Such financial statements and related
schedules have been prepared in accordance with generally accepted
principles of accounting, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and selected
financial information included in the Registration Statement presents
fairly the information shown therein and such information has been
compiled on a basis consistent with the financial statements presented
therein and the books and records of the Company.
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(g) Ernst & Young, LLP, who have certified certain of the
financial statements filed with the Commission as part of the
Registration Statement, are independent public accountants as required
by the Act and the Rules and Regulations.
(h) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, threatened against the Company
before any court or administrative agency or otherwise which if
determined adversely to the Company might result in any material
adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company or to prevent the consummation of the
transactions contemplated hereby, except as set forth in the
Registration Statement.
(i) The Company has good and marketable title to all of the
properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described,
subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as
described in the Registration Statement) or which are not material in
amount. The Company occupies its leased properties under valid and
binding leases.
(j) The Company has filed all Federal, State, local and
foreign income tax returns which have been required to be filed and
have paid all taxes indicated by said returns and all assessments
received by them or any of them to the extent that such taxes have
become due. All tax liabilities have been adequately provided for in
the financial statements of the Company.
(k) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or
materially and adversely affecting the earnings, business,
management, properties, assets, rights, operations, condition
(financial or otherwise), or prospects of the Company, whether or not
occurring in the ordinary course of business, and there has not been
any material transaction entered into or any material transaction that
is probable of being entered into by the Company, other than
transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be
amended or supplemented. For purposes of the foregoing, entering into
and performing under agreements with syndicate members relating to the
Company's ultra-high throughput screening system shall be deemed
transactions in the ordinary course of business. The Company has no
material contingent obligations which are not disclosed in the
Company's financial statements which are included in the Registration
Statement.
(l) The Company is not, with or without the giving of notice
or lapse of time or both, in violation of or in default under its
Certificate of Incorporation ("Charter") or By-
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Laws or under any agreement, lease, contract, indenture or other
instrument or obligation to which it is a party or by which it, or any
of its properties, is bound and which default is of material
significance in respect of the condition, financial or otherwise of
the Company or the business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party, or of the Charter or
by-laws of the Company or any order, rule or regulation applicable to
the Company of any court or of any regulatory body or administrative
agency or other governmental body having jurisdiction, except any such
conflict, breach or default which would not have a material adverse
effect on the Company's business, management, properties, assets,
rights, operations, conditions (financial or otherwise) or prospects
of the Company (a "Material Adverse Effect").
(m) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky laws)
has been obtained or made and is in full force and effect.
(n) The Company holds all material licenses, certificates
and permits from governmental authorities which are necessary to the
conduct of its business; the Company owns or possesses the right to
use all patents, patent rights, trademarks, trade names, service
marks, service names, copyrights, license rights, know how (including
trade secrets and other unpatented and unprotected proprietary or
confidential information, systems or procedures) and other
intellectual property rights necessary to carry on its business in all
material respects; and the Company has not infringed, and the Company
has not received notice of conflict with, any patents, patent rights,
trade names, trademarks or copyrights, which infringement or conflict
is material to the business of the Company. The Company knows of no
material infringement by others of patents, patent rights, trade
names, trademarks or copyrights owned by or licensed to the Company.
(o) Neither the Company nor, to the Company's best
knowledge, any of its affiliates, has taken or may take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares.
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(p) The Company is not an "investment company" within the
meaning of such term under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the
Commission thereunder.
(q) 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.
(r) The Company carries, or is covered by, insurance in such
amounts and covering such risks as it believes is adequate for the
conduct of its business and the value of its properties and as is
customary for companies engaged in similar businesses.
(s) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); no "reportable event"
(as defined in ERISA) has occurred with respect to any "pension plan"
(as defined in ERISA) for which the Company would have any liability;
the Company has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which would cause the loss of
such qualification.
(t) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of doing Business with
Cuba, and the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date
is later, or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or
affiliate located in Cuba changes in any material way, the Company
will provide the Department notice of such business or change, as
appropriate, in a form acceptable to the Department.
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(u) To the best of the Company's knowledge, no relationship,
direct or indirect, exists between or among the Company, on the one
hand, and the directors, officers, stockholders, customers or
suppliers of the Company, on the other hand, which is required to be
described in the Prospectus that is not so described.
(v) Neither the Company nor to the best of the Company's
knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company, has used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation
of any provision of the Foreign Corrupt Practices Act of 1972; or made
any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(w) Prior to the Closing Date, the Shares will be authorized
for listing by The Nasdaq National Market upon official notice of
issuance.
(x) The Company has not been advised, and has no reason to
believe, that it is not conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which
it is conducting business, except where failure to be so in compliance
would not have a Material Adverse Effect.
(y) The business, operations and facilities of the Company
have been and are being conducted in compliance with all applicable
laws, ordinances, rules, regulations, licenses, permits, approvals,
plans, authorizations or requirements relating to occupational safety
and health, pollution, protection of health or the environment
(including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic substances, materials or wastes
into ambient air, surface water, groundwater or land, or relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes,
whether solid, gaseous or liquid in nature) or otherwise relating to
remediating real property in which the Company has or had any
interest, whether owned or leased, of any governmental department,
commission, board, bureau, agency or instrumentality of the United
States, any state or political subdivision thereof and all applicable
judicial or administrative agency or regulatory decrees, awards,
judgments and orders relating thereto, except for such failures to so
comply as would not, individually or in the aggregate, have a Material
Adverse Effect; and the Company has not received any notice from a
governmental instrumentality or any third party alleging any violation
thereof or liability thereunder (including, without limitation,
liability for costs of investigating or remediating sites containing
hazardous substances or damage to
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natural resources), except for such violations or liabilities which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(z) Each of the collaborations, licenses and other
agreements referred to in the Registration Statement to which the
Company is a party (the "Agreements") is a valid and binding
obligation of the parties, in full force and effect, and enforceable
against the parties in accordance with its terms, except as any rights
to indemnify may be limited by applicable laws and except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws
affecting creditors' rights and subject to general equity principles
and limitations on the availability of equitable relief, including
specific performance. There are no existing defaults of the Company
or of any other party to the Agreements, and, to the best of the
Company's knowledge, no event, condition or occurrence exists that
(whether with or without notice, lapse of time, the declaration of
default or other similar event) would constitute a default by a party
to the Agreements. The Company has no reason to believe that any
party to the Agreements intends to terminate the applicable Agreement.
(aa) No holder of any securities of the Company or any other
person has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of,
any of the Shares or the right to have any Common Shares or other
securities of the Company included in the Registration Statement or
the right, as a result of the filing of the Registration Statement, to
require registration under the Act of any shares of Common Stock or
other securities of the Company.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set
forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a price
of $_____ per share, the number of Firm Shares set forth opposite the
name of each Underwriter in Schedule I hereof, subject to adjustments
in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to
be made in New York Clearing House funds by certified or bank
cashier's checks drawn to the order of the Company against delivery of
certificates therefor to the Representatives for the several accounts
of the Underwriters. Such payment and delivery are to be made at the
offices of Alex. Xxxxx & Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx, at 10:00 a.m., Baltimore time, on the third
business day after the date of this Agreement or at such other time
and date not later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein referred to
as the "Closing Date." (As used herein, "business day" means a day on
which the New York Stock
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Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be
closed.) The certificates for the Firm Shares will be delivered in
such denominations and in such registrations as the Representatives
request in writing not later than the second full business day prior
to the Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date.
(c) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company hereby grants an option to the several
Underwriters to purchase the Option Shares at the price per share as
set forth in the first paragraph of this Section 2. The option
granted hereby may be exercised in whole or in part by giving written
notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting
forth the number of Option Shares as to which the several Underwriters
are exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined
by the Representatives but shall not be earlier than three nor later
than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of
the option is three or more days before the Closing Date, the notice
of exercise shall set the Closing Date as the Option Closing Date.
The number of Option Shares to be purchased by each Underwriter shall
be in the same proportion to the total number of Option Shares being
purchased as the number of Firm Shares being purchased by such
Underwriter bears to 3,000,000, adjusted by you in such manner as to
avoid fractional shares. The option with respect to the Option Shares
granted hereunder may be exercised only to cover over-allotments in
the sale of the Firm Shares by the Underwriters. You, as
Representatives of the several Underwriters, may cancel such option at
any time prior to its expiration by giving written notice of such
cancellation to the Company. To the extent, if any, that the option
is exercised, payment for the Option Shares shall be made on the
Option Closing Date in New York Clearing House funds by certified or
bank cashier's check drawn to the order of the Company against
delivery of certificates therefor at the offices of Alex. Xxxxx & Sons
Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a
public offering of the Firm Shares as soon as the Representatives deem
it advisable to do so. The Firm Shares are to be initially offered to
the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time thereafter
change the public offering price and other selling terms. To the
extent, if at all, that any Option Shares are
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purchased pursuant to Section 2 hereof, the Underwriters will offer
them to the public on the foregoing terms.
It is further understood that you will act as the
Representatives for the Underwriters in the offering and sale of the
Shares in accordance with a Master Agreement Among Underwriters
entered into by you and the several other Underwriters.
4. COVENANTS OF THE COMPANY.
The Company covenants and agrees with the several Underwriters
that:
(a) The Company will (i) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in
Rule 430A of the Rules and Regulations is followed, to prepare and
timely file with the Commission under Rule 424(b) of the Rules and
Regulations a Prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on Rule 430A of the Rules
and Regulations, and (ii) not file any amendment to the Registration
Statement or supplement to the Prospectus of which the Representatives
shall not previously have been advised and furnished with a copy or to
which the Representatives shall have reasonably objected in writing or
which is not in compliance with the Rules and Regulations.
(b) The Company will advise the Representatives promptly (i)
when the Registration Statement or any post-effective amendment
thereto shall have become effective, (ii) of receipt of any comments
from the Commission, (iii) of any request of the Commission for
amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose. The Company will use
its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws
of such U.S. and foreign jurisdictions as the Representatives may
reasonably have requested and will make such applications, file such
documents, and furnish such information as may be reasonably required
for that purpose, provided the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports, and other
documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
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(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as
many copies of the Prospectus in final form, or as thereafter amended
or supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives at or before the Closing
Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will
deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), and of all
amendments thereto, as the Representatives may reasonably request.
(e) The Company will comply with the Act and the Rules and
Regulations, and the Securities Exchange Act of 1934 (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, so
as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in
the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances existing at the time the Prospectus is delivered to
a purchaser, not misleading, or, if it is necessary at any time to
amend or supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will
not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(f) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any
event not later than 15 months after the effective date of the
Registration Statement, an earning statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has
been so made available.
(g) The Company will, for a period of five years from the
Closing Date, deliver to the Representatives copies of annual reports
and copies of all other documents, reports and information furnished
by the Company to its stockholders or filed with any securities
exchange pursuant to the requirements of such exchange or with the
Commission pursuant to the Act or the Securities Exchange Act of 1934,
as amended. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries,
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as that term is defined in the Rules and Regulations, which are not
consolidated in the Company's financial statements.
(h) No offering, sale, short sale or other disposition of
any shares of Common Stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of Common
Stock or derivative of Common Stock (or agreement for such) will be
made by the Company for a period of 180 days after the date of this
Agreement, directly or indirectly, otherwise than (i) hereunder, (ii)
pursuant to options outstanding as of the date hereof under the
Company's 1996 Stock Plan, Non-Employee Director Stock Option Plan and
any Warrants described in the Registration Statement, (iii) stock
issued pursuant to the Employee Stock Purchase Plan or pursuant to the
Founders Pool, (iv) up to an aggregate of 2,000,000 shares of Common
Stock in connection with corporate collaborations, strategic alliances
or technology licensing transactions and acquisitions of third party
companies or businesses, or the technologies or assets thereof,
whether by way of acquisition of stock or assets, merger or otherwise;
provided that the party acquiring such shares pursuant to this clause
(iv) shall agree not to sell such shares for a period of 180 days
after the date of this Agreement without the prior written consent of
Alex. Xxxxx & Sons Incorporated.
(i) The Company will use its best efforts to list, subject
to notice of issuance, the Shares on the Nasdaq National Market.
(j) The Company has caused each officer and director and
each stockholder beneficially holding 10,000 or more shares of Common
Stock of the Company (including options which will be vested within
180 days after the date hereof) to furnish to you, on or prior to the
date of this agreement, a letter or letters, in form and substance
satisfactory to the Underwriters, pursuant to which each such person
shall agree not to, directly or indirectly, offer, sell, pledge,
contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of any shares of Common Stock of the
Company (including, without limitation, shares of Common Stock of the
Company which may be deemed to be beneficially owned by such person in
accordance with the rules and regulations of the Commission, shares of
Common Stock which may be issued upon exercise of a stock option or
warrant, or shares convertible into or derivative of Common Stock) or
enter into any hedging transaction relating to the Common Stock for a
period of 180 days after the date of this Agreement, except with the
prior written consent of Alex. Xxxxx & Sons Incorporated ("Lockup
Agreements"). Notwithstanding the foregoing, such person may transfer
any or all shares by (i) gift or other transfer for no consideration,
(ii) will or intestacy or (iii) if such person is a partnership, by a
distribution to its partners.
(k) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus and shall file such reports
with the Commission with respect to the
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sale of the Shares and the application of the proceeds therefrom as
may be required in accordance with Rule 463 under the Act.
(l) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or any of the Subsidiaries to
register as an investment company under the 1940 Act.
(m) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Company's Common Stock.
(n) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Company under this
Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees
and disbursements of counsel for the Company; the cost of printing and
delivering to, or as requested by, the Underwriters copies of the
Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Invitation Letter, the Listing
Application, the Blue Sky Survey and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements of counsel to the
Underwriters) incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Shares; Nasdaq National Market fees; and the expenses,
including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Shares under
securities or Blue Sky laws of those U.S. and foreign jurisdictions
requested by the Representatives pursuant to Section 4(c). The
Company agrees to pay all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters,
incident to the offer and sale of any directed shares of the Common
Stock by the Underwriters to employees and persons having business
relationships with the Company and its Subsidiaries. The Company
shall not, however, be required to pay for any of the Underwriters
expenses (other than those related to qualification under NASD
regulation and securities or Blue Sky laws of U.S. and foreign
jurisdictions requested by the Representatives pursuant to Section
4(c)) except that, if this Agreement shall not be consummated because
the conditions in Section 6 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Section 11
hereof, or by reason of any failure, refusal or inability on the part
of the Company to perform any undertaking or satisfy any condition of
this Agreement or to comply with any of the terms hereof on its part
to be performed,
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unless such failure to satisfy said condition or to comply with said
terms be due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters for reasonable
out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company shall not in any event be
liable to any of the several Underwriters for damages on account of
loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the
Firm Shares on the Closing Date and the Option Shares, if any, on the
Option Closing Date are subject to the accuracy, as of the Closing
Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company contained herein, and to
the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made, and any request of the Commission for additional
information (to be included in the Registration Statement or
otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission and no injunction, restraining
order, or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, the opinion of
Xxxxxx Godward LLP, counsel for the Company, dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the
Underwriters to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement; to the
best of such counsel's knowledge, the Company is duly
qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification and in
which the failure to qualify would have a materially adverse
effect upon the business of the Company taken as a whole.
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(ii) The Company has authorized and outstanding
capital stock as set forth in the Prospectus; the authorized
shares of the Company's Common Stock have been duly
authorized; the outstanding shares of the Company's Common
Stock have been duly authorized and validly issued and are
fully paid and non-assessable; all of the Shares conform to
the description thereof contained in the Prospectus; the
certificates for the Shares, assuming they are in the form
filed with the Commission, are in due and proper form; the
shares of Common Stock, including the Option Shares, if any,
to be sold by the Company pursuant to this Agreement have been
duly authorized and will be validly issued, fully paid and
non-assessable when issued and paid for as contemplated by
this Agreement; and no preemptive rights of stockholders exist
with respect to any of the Shares or the issue or sale
thereof.
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as
described in the Prospectus, to the knowledge of such counsel,
no holder of any securities of the Company or any other person
has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell
or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Shares or the right to have any Common
Shares or other securities of the Company included in the
Registration Statement or the right, as a result of the filing
of the Registration Statement, to require registration under
the Act of any shares of Common Stock or other securities of
the Company.
(iv) The Registration Statement has become
effective under the Act and, to the best of the knowledge of
such counsel, no stop order proceedings with respect thereto
have been instituted or are pending or threatened under the
Act.
(v) The Registration Statement, the Prospectus
and each amendment or supplement thereto comply as to form in
all material respects with the requirements of the Act and the
applicable rules and regulations thereunder (except that such
counsel need express no opinion as to the financial statements
and schedules, related notes and other financial and
statistical information included therein).
(vi) The statements under the captions
"____________," "___________," "Description of Capital Stock"
and "Shares Eligible for Future Sale" in the Prospectus,
insofar as such statements constitute a summary of
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matters of law, fairly summarize in all material respects the
information called for with respect to such matters.
(vii) Such counsel does not know of any contracts
or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus which are not so filed or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus are
fairly summarized in all material respects.
(viii) Such counsel knows of no material legal or
governmental proceedings pending or threatened against the
Company.
(ix) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
do not and will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
the Charter or By-Laws of the Company, or any material
agreement or instrument known to such counsel to which the
Company is a party or by which the Company may be bound.
(x) This Agreement has been duly authorized,
executed and delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by
securities and Blue Sky laws of the various states and other
jurisdictions as to which such counsel need express no
opinion) except such as have been obtained or made, specifying
the same.
In rendering such opinion Xxxxxx Godward LLP may rely as to
matters governed by the laws of states other than California, the
General Corporations Law of Delaware ("DGCL") or Federal laws on local
counsel in such jurisdictions, provided that in each case Xxxxxx
Godward LLP shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In
addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act
(but after giving effect to any modifications incorporated therein
pursuant to Rule 430A under the Act) and as of the Closing Date
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or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no
view as to financial statements, schedules, related notes and other
financial and statistical information therein). With respect to such
statement, Xxxxxx Godward LLP may state that their belief is based
upon the procedures set forth therein, but is without independent
check and verification.
It is understood that such opinion shall contain such
qualifications and limitations as are customary for similar opinions
rendered in similar transactions.
(c) The Representatives shall have received from Xxxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, an opinion dated the
Closing Date or the Option Closing Date, as the case may be,
substantially to the effect specified in subparagraphs (ii), (iv) and
(ix) of Paragraph (b) of this Section 6, and that the Company is a
duly organized and validly existing corporation under the laws of the
State of Delaware. In rendering such opinion Xxxxxxxx & Xxxxxxxx LLP
may rely as to all matters governed other than by the laws of the
State of California, the DGCL or Federal laws on the opinion of
counsel referred to in Paragraph (b) of this Section 6. In addition
to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration
Statement, or any amendment thereto, as of the time it became
effective under the Act (but after giving effect to any modifications
incorporated therein pursuant to Rule 430A under the Act) as of the
Closing Date or the Option Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and (ii) the Prospectus, or any supplement
thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as
the case may be, contained an untrue statement of a material fact or
omitted to state a material fact, necessary in order to make the
statements therein, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no
view as to financial statements, schedules and statistical information
therein). With respect to such statement, Xxxxxxxx & Xxxxxxxx LLP may
state that their belief is based upon the procedures set forth
therein, but is without independent check and verification.
(d) The Representatives shall have received at or prior to
the Closing Date from Xxxxxxxx & Xxxxxxxx LLP a memorandum or summary,
in form and substance satisfactory to the Representatives, with
respect to the qualification for offering and sale by the Underwriters
of the Shares under the securities or Blue Sky laws of such
jurisdictions as the Representatives may reasonably have requested.
(e) You shall have received, on each of the date hereof, the
Closing Date and the Option Closing Date, as the case may be, a letter
dated the date hereof, the Closing
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Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, of Ernst & Young LLP confirming that
they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and
stating that in their opinion the financial statements and schedules
examined by them and included in the Registration Statement comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations; and containing such other statements and information as
is ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial and statistical information contained in the Registration
Statement and Prospectus.
(f) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Senior Director of
Finance and Administration of the Company executed on behalf of the
Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally represents to
the best of his or her knowledge as follows:
(i) The Registration Statement has become
effective under the Act and no stop order suspending the
effectiveness of the Registration Statement has been issued,
and no proceedings for such purpose have been taken or are, to
his or her knowledge, contemplated by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as the case
may be;
(iii) All filings required to have been made
pursuant to Rules 424 or 430A under the Act have been made;
(iv) He or she has carefully examined the
Registration Statement and the Prospectus and, in his or her
opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration
Statement were true and correct, and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not misleading, and since the effective
date of the Registration Statement, no event has occurred
which is required under the Act to be set forth in a
supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and
Prospectus, there has not been any material adverse change or
any development involving a prospective material adverse
change in or
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materially and adversely affecting the condition, financial or
otherwise, of the Company or the earnings, business,
management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company, whether
or not arising in the ordinary course of business.
(g) The Company shall have furnished to the Representatives
such further certificates and documents confirming the representations
and warranties, covenants and conditions contained herein and related
matters as the Representatives may reasonably have requested.
(h) The Firm Shares and Option Shares, if any, shall have
been approved for listing upon notice of issuance on the Nasdaq
National Market.
(i) The Lockup Agreements described in Section 4 (j) shall
have been executed and delivered to the Representatives and shall be
in full force and effect.
(j) Fish & Xxxxxxxxxx shall have furnished to the
Representatives their written opinion on the Closing Date or the
Option Closing Date, as the case may be, as patent counsel to the
Company, addressed to the Underwriters and dated such Closing Date or
Option Closing Date, as the case may be, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has received from or filed with
the Patent and Trademark Office the patents and patent
applications set forth in a schedule to such opinion
(hereafter called "the Company's patents" and "the Company's
patent applications," respectively). Such counsel knows of no
claims of third parties to any ownership interest or lien with
respect to any of such patents or patent applications.
(ii) The statements in the Prospectus under the
caption "Risk Factors Dependence on Patents and Propriety
Rights" and "Business -- Patents and Proprietary Rights" (the
"Intellectual Property Portion"), to such counsel's knowledge,
insofar as such statements constitute a summary of the
Company's patents and patent applications are in all material
respects accurate summaries and fairly summarize in all
material respects the legal matters, documents and proceedings
relating to the Company's patents and the Company's patent
applications. To such counsel's knowledge, the Company owns
not less than _____ issued U.S. patents, ______ issued
foreign patents, and ______ pending patent applications.
(iii) Such counsel is not aware that any of the
Company's patents is invalid or unenforceable or that any of
the Company's patent applications will issue with invalid or
unenforceable claims.
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(iv) Such counsel is not aware of any valid patent
held by others that such counsel believes is infringed by the
activities of the Company.
(v) Such counsel is not aware of any material
defects or errors in the preparation, filing or prosecution of
the Company's patents and the Company's patent applications.
The Company's patents and the Company's patent applications
have been diligently pursued by the Company.
(vi) Such counsel knows of no pending or
threatened action, suit, proceeding or claim by others that
the Company is infringing or otherwise violating any patents,
trademarks or trade secrets except as described in the
Registration Statement.
(vii) Such counsel is not aware of any pending or
threatened action, suit, proceeding, or claim by others
challenging the validity or scope of the patent applications
or the patents held by or licensed to the Company except as
described in the Registration Statement.
Such counsel shall also state that it has since June 1996
represented the Company in the prosecution of its patents and has
participated in conferences with employees of the Company at which the
Company's patents and the Company's patent applications were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement (except to the
extent stated in subparagraph (ii)), on the basis of such conferences
and such representation of the Company, nothing has come to the
attention of such counsel which leads them to believe that the
Intellectual Property Portion of the Registration Statement, as of the
time the Registration Statement became effective under the Act, and
such portion of the Prospectus or any amendment or supplement thereto,
on the date such Prospectus, amendment or supplement thereto was filed
pursuant to Rule 424(b), and such portion of the Registration
Statement and the Prospectus, or any amendment or supplement thereto,
as of the Closing Date or the Option Closing Date, as the case may be,
contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Fish & Xxxxxxxxxx may state that
their belief is based upon such conferences and such representation,
but is without independent check and verification.
(k) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter
stating that their review of the Company's internal accounting
controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's financial statements as of
December 31,
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1996, did not disclose any weakness in internal controls that they
considered to be material weaknesses.
(l) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Secretary of the Company to the effect that, as of
the Closing Date or the Option Closing Date, as the case may be, the
Secretary certifies as to the accuracy of the Company's Charter and
Bylaws, the resolutions of the Board of Directors relating to the
offering contemplated hereby, the form of stock certificate
representing the Shares, and copies of all communications with the
Commission; as to the execution and delivery of this Agreement; as to
the incumbency and signature of persons signing this Agreement, the
Registration Statement and other related documents; as to the approval
of the Shares for listing on the Nasdaq National Market; as to the
Company's compliance with all agreements and performance or
satisfaction of all conditions required hereunder; as to the
consideration received for all outstanding shares of the Company's
Common Stock; and as to such other matters as Underwriters' counsel
may reasonably request.
(m) The Representatives shall have received on the Closing
Date or the Option Closing Date, as the case may be, a certificate or
certificates of the Company's transfer agent certifying such matters
as Underwriters' counsel may reasonably request.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if
they are in all material respects satisfactory to the Representatives
and to Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this
Agreement to be fulfilled, the obligations of the Underwriters
hereunder may be terminated by the Representatives notifying the
Company of such termination in writing or by telegram at or prior to
the Closing Date or the Option Closing Date, as the case may be.
In such event, the Company and the Underwriters shall not be
under any obligation to each other (except to the extent provided in
Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
The obligations of the Company to sell and deliver the Shares
required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option
Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
in effect or proceedings therefor initiated or threatened.
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8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities to which such Underwriter or any such controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, (ii) 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
(iii) any act or failure to act or any alleged act or failure to act
by any Underwriter in connection with, or relating in any manner to,
the Shares or the offering contemplated hereby, and which is included
as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or
(ii) above, provided that the Company shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment
by a court of competent jurisdiction that such loss, claim, damage,
liability or action relates to or arose directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its negligence or willful misconduct; and will reimburse each
Underwriter and each such controlling person upon demand for any legal
or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any
such loss, claim, damage or liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the
offering of the Shares, whether or not such Underwriter or controlling
person is a party to any action or proceeding; provided, however, that
the Company will not be liable in any such case to the extent that any
such loss, claim, damage or liability 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 such amendment or supplement, in
reliance upon and in conformity with written information furnished to
the Company by or through the Representatives specifically for use in
the preparation thereof. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly will
indemnify and hold harmless the Company, each of its directors, each
of its officers who have signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the
Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer, or controlling person may
become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission
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or the alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made; and will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, or controlling
person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding; provided, however,
that each Underwriter will be liable in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in
writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in
this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and
was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party
or parties from any liability which it or they may have to the
indemnified party for contribution or otherwise than on account of the
provisions of Section 8(a) or (b). In case any such proceeding 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 therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30
days of presentation) the fees and expenses of the counsel retained by
the indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed expressly in writing to
the retention of such counsel and the payment of such fees and
expenses, (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel reasonably acceptable
to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in
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the same jurisdiction, be liable for the reasonable fees and expenses
of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of
which indemnification may be sought hereunder (whether or not any
indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if
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the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 8(d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter, and (ii) 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 Section 8(d) to contribute are
several in proportion to their respective underwriting obligations and
not joint.
(e) In any proceeding relating to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any
supplement or amendment thereto, each party against whom contribution
may be sought under this Section 8 hereby consents to the jurisdiction
of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him or
it by any other contributing party and consents to the service of such
process and agrees that any other contributing party may join him or
it as an additional defendant in any such proceeding in which such
other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 8 and the representations and
warranties of the Company set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, its officers or employees, any person
controlling any Underwriter, the Company, its directors or officers or
any persons controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, its officers, or
employees, or to the Company, its directors or officers, or any person
controlling the Company or any Underwriter, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case
may be, any Underwriter shall fail to purchase and pay for the portion
of the Shares which such
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Underwriter has agreed to purchase and pay for on such date (otherwise
than by reason of any default on the part of the Company), you, as
Representatives of the Underwriters, shall use your reasonable efforts
to procure within 36 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts
as may be agreed upon and upon the terms set forth herein, the Firm
Shares or Option Shares, as the case may be, which the defaulting
Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option
Shares, as the case may be, agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of
shares with respect to which such default shall occur does not exceed
10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in
proportion to the respective numbers of Firm Shares or Option Shares,
as the case may be, which they are obligated to purchase hereunder, to
purchase the Firm Shares or Option Shares, as the case may be, which
such defaulting Underwriter or Underwriters failed to purchase, or
(b) if the aggregate number of shares of Firm Shares or Option Shares,
as the case may be, with respect to which such default shall occur
exceeds 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the Company or you as the Representatives of the
Underwriters will have the right, by written notice given within the
next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company except to the extent provided in
Section 8 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or
Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may
determine in order that the required changes in the Registration
Statement or in the Prospectus or in any other documents or
arrangements may be effected. The term "Underwriter" includes any
person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriters, to
Alex. Xxxxx & Sons Incorporated, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, with a copy to Alex. Xxxxx &
Sons Incorporated, 000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000. Attention: General Counsel; if to the Company, to 00000 Xxxxx
Xxxxxx Xxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000, Attention: Chief
Executive Officer.
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11. TERMINATION.
This Agreement may be terminated by you by notice to the
Company as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters, or
(ii) 11:30 a.m. on the first business day following the date of this
Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company or the earnings, business, management,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or not arising in the
ordinary course of business, (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other
national or international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in your reasonable judgment, make
it impracticable to market the Shares or to enforce contracts for the
sale of the Shares, or (iii) suspension of trading in securities
generally on the New York Stock Exchange or the American Stock Exchange
or limitation on prices (other than limitations on hours or numbers of
days of trading) for securities on either such Exchange, (iv) the
enactment, publication, decree or other promulgation of any statute,
regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by United States or
New York State authorities, (vi) the suspension of trading of the
Company's Common Stock on the Nasdaq National Market or (vii) the
taking of any action by any governmental body or agency in respect of
its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United States;
or
(c) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Company and their respective successors,
executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or
assign merely because of such purchase.
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13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that
the only information furnished or to be furnished by any Underwriter
to the Company for inclusion in any Prospectus or the Registration
Statement consists of the information set forth in the last paragraph
on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K under
the Act and the information under the caption "Underwriting" in the
Prospectus.
14. CONSENT TO JURISDICTION.
The Company hereby irrevocably and unconditionally agrees that
service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Company
at the address of the Principal Officer set forth in the Registration
Statement.
15. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter, its officers or
employees, or controlling person thereof, or by or on behalf of the
Company or its directors or officers and (c) delivery of and payment
for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
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If the foregoing Agreement is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
AURORA BIOSCIENCES CORPORATION
By: ____________________________________________________
Xxxxxxx X. Xxxx, M.D., ScD., Chief Executive Officer
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX & XXXXX LLC
XXXXXXXXX, XXXXXXXX & COMPANY
As Representatives of the several
Underwriters listed on Schedule I
By: Alex. Xxxxx & Sons Incorporated
By: _______________________________________________
Authorized Officer
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ------------------------
Alex. Xxxxx & Sons Incorporated
Xxxxxxxxx & Xxxxx LLC
Xxxxxxxxx, Xxxxxxxx & Company
_________
Total 3,000,000
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