Exhibit 1.1
________________ SHARES(1)
INHIBITEX, INC.
COMMON STOCK
PURCHASE AGREEMENT
_____________________, 2004
U. S. BANCORP XXXXX XXXXXXX INC.
XXXXXX FRERES & CO. LLC
XXXXXX XXXXXX PARTNERS LLC
As Representatives of the several
Underwriters named in Schedule I hereto
c/o U.S. Bancorp Xxxxx Xxxxxxx Inc.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Inhibitex, Inc., a Delaware corporation (the "Company") proposes to
sell to the several Underwriters named in Schedule I hereto (the "Underwriters")
an aggregate of _____ shares (the "Firm Shares") of Common Stock, $0.001 par
value per share (the "Common Stock"), of the Company. The Company has also
granted to the several Underwriters an option to purchase up to ______
additional shares of Common Stock on the terms and for the purposes set forth in
Section 3 hereof (the "Option Shares"). The Firm Shares and any Option Shares
purchased pursuant to this Purchase Agreement are herein collectively called the
"Securities."
The Company hereby confirms its agreement with respect to the sale of
the Securities to the several Underwriters, for whom you are acting as
representatives (the "Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration
statement on Form S-1 (File No. 333-___________ ) with respect to the
Securities, including a preliminary form of prospectus, has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations ("Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and has
been filed with the Commission; one or more amendments to such registration
statement have also been so prepared and have been, or will be, so filed; and,
if the Company has elected
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(1) Plus an option to purchase up to _______ additional shares to cover
over-allotments.
to rely upon Rule 462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will prepare and file with
the Commission a registration statement with respect to such increase pursuant
to Rule 462(b). Copies of such registration statement(s) and amendments and each
related preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term "Prospectus" shall refer to such differing prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees
with, the several Underwriters as follows:
(i) No order preventing or suspending the use of
any Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing thereof, did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; except that the foregoing shall not apply to statements
in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by
you, or by any Underwriter through you, specifically for use in the
preparation thereof.
(ii) As of the time the Registration Statement
(or any post-effective amendment thereto, including a registration
statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the
Act) is or was declared effective by the Commission, upon the filing or
first delivery to the Underwriters of the Prospectus (or any supplement
to the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to the
requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented) did
not or will not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they are or were made, not misleading; except that the foregoing shall
not apply to statements in or omissions from any such document in
reliance upon, and in conformity with, written information furnished to
the Company by you, or by any Underwriter through you, specifically for
use in the preparation thereof. If the Registration Statement has been
declared effective by the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued, and no
proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
(iii) The financial statements of the Company,
together with the related notes, set forth in the Registration
Statement and Prospectus comply in all material respects with the
requirements of the Act and fairly present the financial condition of
the Company as of the dates indicated and the results of operations and
changes in cash flows for the periods therein specified in conformity
with generally
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accepted accounting principles consistently applied throughout the
periods involved; and the supporting schedules included in the
Registration Statement present fairly the information required to be
stated therein. No other financial statements or schedules are required
to be included in the Registration Statement or Prospectus. To the
Company's knowledge, Ernst & Young, LLP, which has expressed its
opinion with respect to the financial statements and schedules filed as
a part of the Registration Statement and included in the Registration
Statement and Prospectus, is an independent public accounting firm
within the meaning of the Act and the Rules and Regulations and such
accountants are not in violation of the auditor independence
requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx
Act").
(iv) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon the business, prospects,
properties, operations, condition (financial or otherwise) or results
of operations of the Company and its subsidiaries, taken as a whole
("Material Adverse Effect").
(v) Except as contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and there
has not been any change in the capital stock (other than a change in
the number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company or any of its subsidiaries, or any
material adverse change in the general affairs, condition (financial or
otherwise), business, prospects, property, operations or results of
operations of the Company and its subsidiaries, taken as a whole
("Material Adverse Change") or any development involving a prospective
Material Adverse Change.
(vi) Except as set forth in the Prospectus, there
is not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party or of which any property or assets
of the Company is the subject before or by any court or governmental
agency, authority or body, or any arbitrator, which, individually or in
the aggregate, might result in any Material Adverse Change.
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(vii) There are no statutes, regulations,
contracts or documents that are required to be described in the
Registration Statement and Prospectus or be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that
have not been so described or filed.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal
and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, any
agreement or instrument to which the Company is a party or by which it
is bound or to which any of its property is subject, the Company's
charter or by-laws, or any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to authorize, issue and sell
the Securities as contemplated by this Agreement.
(ix) All of the issued and outstanding shares of
capital stock of the Company, including the outstanding shares of
Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities that have not been waived in writing (a copy of which has
been delivered to counsel to the Representative), and the holders
thereof are not subject to personal liability by reason of being such
holders; the Securities which may be sold hereunder by the Company have
been duly authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been validly
issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being
such holders; and the capital stock of the Company, including the
Common Stock, conforms to the description thereof in the Registration
Statement and Prospectus. Except as otherwise stated in the
Registration Statement and Prospectus, there are no preemptive rights
or other rights to subscribe for or to purchase, or any restriction
upon the voting or transfer of, any shares of Common Stock pursuant to
the Company's charter, by-laws or any agreement or other instrument to
which the Company is a party or by which the Company is bound. Neither
the filing of the Registration Statement nor the offering or sale of
the Securities as contemplated by this Agreement gives rise to any
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rights for or relating to the registration of any shares of Common
Stock or other securities of the Company. All of the issued and
outstanding shares of capital stock of each of the Company's
subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise described in the
Registration Statement and Prospectus, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens,
proxies, equities or other encumbrances, all of the issued and
outstanding shares of such stock. Except as described in the
Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any subsidiary of the Company
any shares of the capital stock of the Company or any subsidiary of the
Company. The Company has an authorized and outstanding capitalization
as set forth in the Registration Statement and the Prospectus.
(x) The Company and each of its subsidiaries
holds, and is operating in compliance in all material respects with,
all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business and all
such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect; and the Company and each of its subsidiaries is in compliance
in all material respects with all applicable federal, state, local and
foreign laws, regulations, orders and decrees.
(xi) The Company and its subsidiaries have good
and marketable title to all property (whether real or personal)
described in the Registration Statement and Prospectus as being owned
by them, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects except such as are described
in the Registration Statement and the Prospectus. The property held
under lease by the Company and its subsidiaries is held by them under
valid, subsisting and enforceable leases with only such exceptions with
respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company or its
subsidiaries.
(xii) The Company and each of its subsidiaries
owns or possesses adequate rights to use all patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of the
business of the Company and its subsidiaries as currently carried on
and as described in the Registration Statement and Prospectus; except
as stated in the Registration Statement and Prospectus, no name which
the Company or any of its subsidiaries uses and no other aspect of the
business of the Company or any of its subsidiaries will involve or give
rise to any infringement of, or license or similar fees for, any
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights,
licenses, inventions, trade secrets or other similar rights of others
material to the business or prospects of the Company and neither the
Company
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nor any of its subsidiaries has received any notice alleging any such
infringement or fee. Except as disclosed in the Prospectus, there is no
claim being made against the Company regarding patents, patent rights
or licenses, inventions, trade secrets, know-how, trademarks, service
marks, trade names or copyrights. Except as disclosed in the
Prospectus, the Company and its subsidiaries do not in the conduct of
their business as now or proposed to be conducted as described in the
Prospectus infringe or conflict with any right or patent of any third
party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the
Company or any of its subsidiaries, which such infringement or conflict
is reasonably likely to result in a Material Adverse Change.
(xiii) Neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws or in
breach of or otherwise in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default
in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or
any other material contract, lease or other instrument to which it is
subject or by which any of them may be bound, or to which any of the
material property or assets of the Company or any of its subsidiaries
is subject.
(xiv) The Company and its subsidiaries have timely
filed all federal, state, local and foreign income and franchise tax
returns required to be filed and are not in default in the payment of
any taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any which the Company or
any of its subsidiaries is contesting in good faith. The Company has
made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 2(iii) above in respect of
all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its
consolidated subsidiaries has not been finally determined. The Company
is not aware of any tax deficiency that has been or might be asserted
or threatened against the Company that could result in a Material
Adverse Change.
(xv) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act to
be distributed by the Company.
(xvi) The Securities have been approved for
listing on the Nasdaq National Market upon official notice of issuance
and, on the date the Registration Statement became or becomes
effective, the Company's Registration Statement on Form 8-A or other
applicable form under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), became or will become effective.
(xvii) Other than the subsidiaries of the Company
listed in Exhibit 21 to the Registration Statement, the Company,
directly or indirectly, owns no capital stock or
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other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xviii) 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.
(xix) Other than as contemplated by this
Agreement, the Company has not incurred any liability for any finder's
or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(xx) Neither the Company nor any of its
affiliates is presently doing business with the government of Cuba or
with any person or affiliate located in Cuba.
(xxi) The Company and its subsidiaries are insured
by recognized, financially sound and reputable institutions with
general liability and property damage policies in such amounts and with
such deductibles and covering such risks as are generally deemed
adequate and customary for companies engaged in similar businesses in
similar industries including, but not limited to, policies covering
real and personal property owned or leased by the Company and its
subsidiaries against theft, damage, destruction, acts of vandalism,
general liability and Directors and Officers liability. The Company has
no reason to believe that it or any subsidiary will not be able (i) to
renew its existing insurance coverage as and when such policies expire
or (ii) to obtain comparable coverage from similar institutions as may
be necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse Change.
Neither of the Company nor any subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(xxii) Except with notice to the Representatives
and compliance with applicable laws, none of the Directed Stock (as
defined below) distributed in connection with the Directed Stock
Program (as defined below) will be offered or sold outside of the
United States. No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
obtained, is required in connection with the offering of the Directed
Stock in any jurisdiction where the Directed Stock is being offered.
The Company has not offered, or caused the Representatives to offer,
Securities to any person pursuant to the Directed Stock Program with
the specific intent to unlawfully influence (i) a vendor, manufacturer
or
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supplier of the Company to alter the vendor's, manufacturer's or
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information
about the Company or its products.
(xxiii) The Company has been advised of the rules
and requirements under the Investment Company Act of 1940, as amended
(the "Investment Company Act"). The Company is not and, after giving
effect to the offering and sale of the Securities, will not be an
"investment company," as such term is defined in the Investment Company
Act.
(xxiv) The Company is in compliance with all
applicable provisions of the Xxxxxxxx-Xxxxx Act and related rules and
regulations promulgated by the Commission or the Nasdaq National Market
that are effective.
(xxv) To the best of the Company's knowledge, no
labor disturbance by the employees of the Company or any of its
subsidiaries exists or is imminent; and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
principal suppliers, including without limitation, subcontractors and
third party manufacturers that might be expected to result in a
Material Adverse Change.
(xxvi) There are no transfer taxes or other similar
fees or charges under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with
the execution and delivery of this Agreement or the issuance and sale
by the Company of the Securities.
(xxvii) There are no business relationships or
related-party transactions involving the Company or any subsidiary or
any other person required to be described in the Prospectus which have
not been described as required.
(xxviii) Except as otherwise disclosed in the
Prospectus, neither the Company nor any of its subsidiaries nor, to the
best of the Company's knowledge, any employee or agent of the Company
or any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in
the Prospectus.
(xxix) Except as otherwise disclosed in the
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business, except
where the failure to comply would not result in a Material Adverse
Change, (ii) the Company has received no notice from any governmental
authority or third party of an asserted claim under Environmental Laws,
which claim is required to be disclosed in the Registration Statement
and the Prospectus, (iii) the Company is not currently
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aware that it will be required to make future material capital
expenditures to comply with Environmental Laws and (iv) no property
which is owned, leased or occupied by the Company has been designated
as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.), or otherwise designated as a contaminated site under
applicable state or local law.
(xxx) Except as otherwise disclosed in the
Prospectus, the Company and its subsidiaries and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations
thereunder (collectively, "ERISA")) established or maintained by the
Company, its subsidiaries or their "ERISA Affiliates" (as defined
below) are in compliance in all material respects with ERISA. "ERISA
Affiliate" means, with respect to the Company or a subsidiary, any
member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the
"Code") of which the Company or such subsidiary is a member. No
"reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit
plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates. No "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined under ERISA).
Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from,
any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B
of the Code. Each "employee benefit plan" established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to
act, which would cause the loss of such qualification
(b) Any certificate signed by any officer of the Company
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to issue and sell the Firm Shares to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto. The purchase price for each Firm Share
shall
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be $___ per share. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in paragraph (c) of this Section 3
and in Section 8 hereof, the agreement of each Underwriter is to purchase only
the respective number of Firm Shares specified in Schedule I.
It is understood that _____ shares of the Firm Shares
("Directed Stock") will initially be reserved by the Underwriters for offer and
sale to employees and persons having relationships with the Company or its
employees ("Directed Stock Participants") upon the terms and conditions set
forth in the Prospectus and in accordance with the rules and regulations of the
National Association of Securities Dealers ("Directed Stock Program"). Under no
circumstance will the Representatives or any Underwriter be liable to the
Company or to any Directed Stock Participant for any action taken or omitted to
be taken in good faith in connection with such Directed Stock Program. To the
extent that any shares of Directed Stock are not affirmatively reconfirmed for
purchase by any Directed Stock Participant on or immediately after the date of
this Agreement, such Directed Stock may be offered to the public as part of the
public offering contemplated hereby. The Company agrees to pay all fees and
disbursements incurred by the Underwriters in connection with the Directed Stock
Program, including counsel fees and any stamp duties or other taxes incurred by
the Underwriters in connection with the Directed Stock Program.
The Firm Shares will be delivered by the Company to you for
the accounts of the several Underwriters against payment of the purchase price
therefor by wire transfer of same day funds payable to the account of the
Company at the offices of U. S. Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center,
000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable, at 9:00 a.m. Central time on the third (or if the
Securities are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act,
after 4:30 p.m. Eastern time, the fourth) full business day following the date
hereof, or at such other time and date as you and the Company determine pursuant
to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the "First Closing Date." If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company, will be made available for checking
and packaging not later than 10:30 a.m., Central time, on the business day next
preceding the First Closing Date at the offices of U. S. Bancorp Xxxxx Xxxxxxx
Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters an option to
purchase all or any portion of the Option Shares at the same purchase price as
the Firm Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised in whole or in part at any time (but not more than
once) within 30 days after
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the effective date of this Agreement upon notice (confirmed in writing) by the
Representatives to the Company setting forth the aggregate number of Option
Shares as to which the several Underwriters are exercising the option, the names
and denominations in which the certificates for the Option Shares are to be
registered and the date and time, as determined by you, when the Option Shares
are to be delivered, such time and date being herein referred to as the "Second
Closing" and "Second Closing Date," respectively; provided, however, that the
Second Closing Date shall not be earlier than the First Closing Date nor earlier
than the second business day after the date on which the option shall have been
exercised. If the option is exercised, the number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by the
Representatives in such manner as the Representatives deem advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for
the accounts of the several Underwriters against payment of the purchase price
therefor by wire transfer of same day funds payable to the account of the
Company at the offices of U.S. Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center,
000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be
mutually acceptable at 9:00 a.m., Central time, on the Second Closing Date. If
the Representatives so elect, delivery of the Option Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives. Certificates representing the Option
Shares in definitive form and in such denominations and registered in such names
as you have set forth in your notice of option exercise, will be made available
for checking and packaging not later than 10:30 a.m., Central time, on the
business day next preceding the Second Closing Date at the office of U.S.
Bancorp Xxxxx Xxxxxxx Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable.
(c) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company on behalf of any Underwriter for the Securities to
be purchased by such Underwriter. Any such payment by you shall not relieve any
such Underwriter of any of its obligations hereunder. Nothing herein contained
shall constitute any of the Underwriters an unincorporated association or
partner with the Company.
4. COVENANTS. The Company covenants and agrees with the several
Underwriters as follows:
(a) If the Registration Statement has not already been
declared effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments thereto to
become effective as promptly as possible; the Company will notify you promptly
of the time when the Registration Statement or any
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post-effective amendment to the Registration Statement has become effective or
any supplement to the Prospectus (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations) has been filed and of any request by the
Commission for any amendment or supplement to the Registration Statement or
Prospectus or additional information; if the Company has elected to rely on Rule
430A of the Rules and Regulations, the Company will prepare and file a
Prospectus (or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to Rule 430A
of the Rules and Regulations with the Commission within the time period required
by, and otherwise in accordance with the provisions of, Rules 424(b), 430A and
434, if applicable, of the Rules and Regulations; if the Company has elected to
rely upon Rule 462(b) of the Rules and Regulations to increase the size of the
offering registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the Commission within
the time period required by, and otherwise in accordance with the provisions of,
Rule 462(b); the Company will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) that, in your opinion, may be necessary or advisable in
connection with the distribution of the Securities by the Underwriters; and the
Company will not file any amendment or supplement to the Registration Statement
or Prospectus (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to the
filing.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement, of
the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceeding for any
such purpose; and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(c) Within the time during which a prospectus (including
any term sheet within the meaning of Rule 434 of the Rules and Regulations)
relating to the Securities is required to be delivered under the Act, the
Company will comply as far as it is able with all requirements imposed upon it
by the Act, as now and hereafter amended, and by the Rules and Regulations, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealings in the Securities as contemplated by the provisions hereof
and the Prospectus. If during such period any event occurs as a result of which
the Prospectus would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances then existing, not misleading, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus to
comply with the Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
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(d) The Company shall take or cause to be taken all
necessary action to qualify the Securities for sale under the securities laws of
such jurisdictions as you reasonably designate or as is necessary to effect the
distribution of the Directed Stock and to continue such qualifications in effect
so long as required for the distribution of the Securities, except that the
Company shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any state.
(e) The Company will furnish to the Underwriters and
counsel for the Underwriters copies of the Registration Statement (three of
which will be signed and will include all consents and exhibits filed
therewith), each Preliminary Prospectus, the Prospectus, and all amendments and
supplements (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to such documents, in each case as soon as available and
in such quantities as you may from time to time reasonably request.
(f) During a period of five years commencing with the
date hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and special
reports furnished to the stockholders of the Company and all information,
documents and reports filed with the Commission, the National Association of
Securities Dealers, Inc., the Nasdaq National Market or any securities exchange
(other than any such information, documents and reports that are filed with the
Commission electronically via XXXXX or any successor system).
(g) The Company will make generally available to its
security holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning after
the effective date of the Registration Statement that shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
(h) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is prevented from
becoming effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (i) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities, (ii) all expenses and fees
(including, without limitation, fees and expenses of the Company's accountants
and counsel but, except as otherwise provided below, not including fees of the
Underwriters' counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the financial
statements therein and all amendments, schedules, and exhibits thereto), the
Securities, each Preliminary Prospectus, the Prospectus, and any amendment
thereof or supplement thereto, and the printing, delivery, and shipping of this
Agreement and other underwriting documents, including Blue Sky Memoranda
(covering the states and other applicable jurisdictions), (iii) all filing fees
and fees and disbursements of the Underwriters' counsel incurred in connection
with the qualification of the Securities for offering and sale by the
Underwriters or by dealers under the securities or blue sky laws of the states
and other jurisdictions which you shall designate or are necessary to distribute
the Directed Stock, (iv) the fees and expenses of any transfer agent or
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registrar, (v) the filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities, (vi) listing fees, if any, and (vii) all other costs and expenses
incident to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Securities provided for
herein is not consummated by reason of action by the Company pursuant to Section
9(a) hereof which prevents this Agreement from becoming effective, or by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the several Underwriters for all
out-of-pocket disbursements (including fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation, preparing
to market and marketing the Securities or in contemplation of performing their
obligations hereunder. The Company shall not in any event be liable to any of
the Underwriters for loss of anticipated profits from the transactions covered
by this Agreement.
(i) The Company will apply the net proceeds from the sale
of the Securities to be sold by it hereunder for the purposes set forth in the
Prospectus and will file such reports with the Commission with respect to the
sale of the Securities and the application of the proceeds therefrom as may be
required in accordance with Rule 463 of the Rules and Regulations.
(j) The Company will not, without the prior written
consent of U.S. Bancorp Xxxxx Xxxxxxx Inc., from the date of execution of this
Agreement and continuing to and including the date 180 days after the date of
the Prospectus (the "Lock-Up Period") offer for sale; sell; contract to sell;
pledge; grant any option for the sale of; or otherwise issue or dispose of,
directly or indirectly (or publicly disclose the intention to make any such
offer, sale, pledge, grant, issuance or other disposition), any Common Stock or
any securities convertible into or exchangeable for, or any options or rights to
purchase or acquire, Common Stock, except to the Underwriters pursuant to this
Agreement and to directors, employees or consultants of the Company pursuant to
the Amended and Restated 2004 Stock Incentive Plan and the Amended and Restated
2004 Non-Employee Directors Stock Option Plan (the "Plans"), provided, however,
that any securities issued pursuant to such Plans shall be subject to a Lock-Up
Agreement. The Company agrees not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the
Lock-Up Period.
(k) The Company either has caused to be delivered to you
or will cause to be delivered to you prior to the effective date of the
Registration Statement a letter from each of the Company's directors, officers,
shareholders and optionholders stating that such person agrees that he or she
will not, without your prior written consent, offer for sale, sell, contract to
sell or otherwise dispose of, as set forth in such letter, any shares of Common
Stock or rights to purchase Common Stock, except to the Underwriters pursuant to
this Agreement, for a period of 180 days after commencement of the public
offering of the Securities by the Underwriters (the "Lock-Up Agreement"). The
Company will enforce the terms of each Lock-Up Agreement and issue stop-transfer
instructions to the transfer agent for the Common Stock
-15-
with respect to any transaction or contemplated transaction that would
constitute a breach of or default under the applicable Lock-Up Agreement.
(l) The Company has not taken and will not take, directly
or indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities, and has not effected any sales of Common Stock which are
required to be disclosed in response to Item 701 of Regulation S-K under the Act
which have not been so disclosed in the Registration Statement.
(m) The Company will not incur any liability for any
finder's or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
(n) The Company will comply with all applicable
securities and other applicable laws, rules and regulations in each foreign
jurisdiction in which Directed Stock is offered in connection with the Directed
Stock Program.
(o) In connection with the Directed Stock Program to
ensure that the Directed Stock will be restricted to the extent required by the
National Association of Securities Dealers or the rules of such association from
sale, transfer, assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement, the
Company will direct the transfer agent to place stop-transfer restrictions upon
such securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Directed Stock, the Company agrees to
reimburse the Underwriters for any reasonable expense (including, without
limitation, legal expenses) they incur with such release.
(p) The Company will file with the Commission such
periodic and special reports as required by the Rules and Regulations.
(q) The Company and its subsidiaries will maintain such
controls and other procedures, including without limitation those required by
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the applicable regulations
thereunder, that are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission's rules and forms, including without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its principal executive officer and its principal financial officer,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure, to ensure that material information
relating to Company, including its subsidiaries, is made known to them by others
within those entities.
-16-
(r) The Company and its subsidiaries will comply with all
effective applicable provisions of the Xxxxxxxx-Xxxxx Act and related rules and
regulations promulgated by the Commission or the Nasdaq National Market.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), of and compliance with all representations,
warranties and agreements of the Company contained herein, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) The Registration Statement shall have become
effective not later than 5:00 p.m., Central time, on the date of this Agreement,
or such later time and date as you, as Representatives of the several
Underwriters, shall approve and all filings required by Rules 424, 430A and 434
of the Rules and Regulations shall have been timely made; no stop order
suspending the effectiveness of the Registration Statement or any amendment
thereof shall have been issued; no proceedings for the issuance of such an order
shall have been initiated or threatened; and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that
the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), contains an untrue statement of fact which, in your
opinion, is material, or omits to state a fact which, in your opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent
to the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
shall have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than
a change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or any material
change in the short-term or long-term debt of the Company, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock of the Company or any of its subsidiaries, or any Material Adverse
Change or any development involving a prospective Material Adverse Change
(whether or not arising in the ordinary course of business), that, in your
judgment, makes it impractical or inadvisable to offer or deliver the Securities
on the terms and in the manner contemplated in the Prospectus.
-17-
(d) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities or preferred
stock by any "nationally recognized statistical organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(e) On each Closing Date, there shall have been furnished
to you, as Representatives of the several Underwriters, the opinion of Xxxxxxx
Berlin Shereff Xxxxxxxx, LLP, counsel for the Company, dated such Closing Date
and addressed to you, to the effect that:
(i) Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of
the Company and its subsidiaries has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which it
owns or leases real property or in which the conduct of its business
makes such qualification necessary and in which the failure to so
qualify would have a Material Adverse Effect.
(ii) The capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock." All of the issued and
outstanding shares of the capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, and
the holders thereof are not subject to personal liability by reason of
being such holders. The Securities to be issued and sold by the Company
hereunder have been duly authorized and, when issued, delivered and
paid for in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and the
holders thereof will not be subject to personal liability by reason of
being such holders. Except as otherwise stated in the Registration
Statement and Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the
voting or transfer of, any shares of Common Stock pursuant to the
Company's charter, by-laws or any agreement or other instrument known
to such counsel to which the Company is a party or by which the Company
is bound. To such counsel's knowledge, neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating
to the registration of any shares of Common Stock or other securities
of the Company.
(iii) All of the issued and outstanding shares of
capital stock of each of the Company's subsidiaries have been duly and
validly authorized and issued and are fully paid and nonassessable,
and, to such counsel's knowledge, except as otherwise
-18-
described in the Registration Statement and Prospectus, the Company
owns of record and beneficially, free and clear of any security
interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such stock. To such counsel's
knowledge, except as described in the Registration Statement and
Prospectus, there are no options, warrants, agreements, contracts or
other rights in existence to purchase or acquire from the Company or
any subsidiary any shares of the capital stock of the Company or any
subsidiary of the Company.
(iv) The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or, to
the knowledge of such counsel, threatened by the Commission.
(v) The descriptions in the Registration
Statement and Prospectus of statutes, regulations, legal and
governmental proceedings, contracts and other documents are accurate
and fairly present the information required to be shown; and such
counsel does not know of any statutes, regulations, legal or
governmental proceedings or contracts or other documents required to be
described in the Prospectus or included as exhibits to the Registration
Statement that are not described or included as required.
(vi) The Company has full corporate power and
authority to enter into this Agreement, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes
a valid, legal and binding obligation of the Company enforceable in
accordance with its terms (except as rights to indemnity hereunder may
be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject
to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, rule or regulation, any agreement or instrument known to such
counsel to which the Company is a party or by which it is bound or to
which any of its property is subject, the Company's charter or by-laws,
or any order or decree known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any
of its respective properties; and no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Securities by the
Company, except such as may be required under the Act or state
securities laws.
(vii) The Registration Statement and the
Prospectus, and any amendment thereof or supplement thereto (including
any term sheet within the meaning of Rule 434 of the Rules and
Regulations), comply as to form in all material respects
-19-
with the requirements of the Act and the Rules and Regulations; and on
the basis of conferences with officers of the Company, examination of
documents referred to in the Registration Statement and Prospectus and
such other procedures as such counsel deemed appropriate, nothing has
come to the attention of such counsel that causes such counsel to
believe that the Registration Statement or any amendment thereof, at
the time the Registration Statement became effective and as of such
Closing Date (including any Registration Statement filed under Rule
462(b) of the Rules and Regulations), contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus (as of its date and as of such
Closing Date), as amended or supplemented, includes any untrue
statement of material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data included in any of the documents mentioned in this
clause.
In rendering such opinion such counsel may rely (i) as to
matters of law other than New York and federal law and the Delaware General
Corporation Law, upon the opinion or opinions of local counsel provided that the
extent of such reliance is specified in such opinion and that such counsel shall
state that such opinion or opinions of local counsel are satisfactory to them
and that they believe they and you are justified in relying thereon and (ii) as
to matters of fact, to the extent such counsel deems reasonable upon
certificates of officers of the Company and its subsidiaries provided that the
extent of such reliance is specified in such opinion.
(f) On each Closing Date, there shall have been furnished
to you, as Representatives of the several Underwriters, such opinion or opinions
from Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the several Underwriters,
dated such Closing Date and addressed to you, with respect to the formation of
the Company, the validity of the Securities, the Registration Statement, the
Prospectus and other related matters as you reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(g) On each Closing Date you, as Representatives of the
several Underwriters, shall have received a letter of Ernst & Young, LLP, dated
such Closing Date and addressed to you, confirming that they are independent
public accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under Rule
2-01 of Regulation S-X of the Commission, and stating, as of the date of such
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to you
concurrently with the execution of this Agreement, and the effect of the letter
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so to be delivered on such Closing Date shall be to confirm the conclusions and
findings set forth in such prior letter.
(h) On each Closing Date, there shall have been furnished
to you, as Representatives of the Underwriters, a certificate, dated such
Closing Date and addressed to you, signed by the chief executive officer and by
the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the
Company in this Agreement are true and correct, in all material
respects, as if made at and as of such Closing Date, and the Company
has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to such Closing
Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or
the qualification of the Securities for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have
carefully examined the Registration Statement and the Prospectus, and
any amendments thereof or supplements thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), and (A)
such documents contain all statements and information required to be
included therein, the Registration Statement, or any amendment thereof,
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as
amended or supplemented, does not include any untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, neither the Company nor
any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material
transactions, not in the ordinary course of business, or declared or
paid any dividends or made any distribution of any kind with respect to
its capital stock, and except as disclosed in the Prospectus, there has
not been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company, or any of its subsidiaries, or any
Material Adverse Change or any development involving a prospective
Material Adverse Change (whether or not arising in the ordinary course
of business), and (D) except as stated in the Registration Statement
and the Prospectus,
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there is not pending, or, to the knowledge of the Company, threatened
or contemplated, any action, suit or proceeding to which the Company or
any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any Material Adverse Change.
(i) The Company shall have furnished to you and counsel
for the Underwriters such additional documents, certificates and evidence as you
or they may have reasonably requested.
(j) The Nasdaq National Market shall have approved the
Securities for listing, subject only to notice of issuance.
(k) On each Closing Date, there shall have been finished
to you, as Representatives of the several Underwriters, the opinions of Xxxxxx &
Xxxxxxxx PLLC outside market counsel to the Company and Xxxxx Xxxxx, in-house
patient counsel to the Company dated as of such Closing Date and addressed to
you, each in a form reasonably acceptable to the Representative.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are satisfactory
in form and substance to you and counsel for the Underwriters. The Company will
furnish you with such conformed copies of such opinions, certificates, letters
and other documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rules 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
offering of the Common Stock ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person or
electronically) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any such amendment or supplement,
or in any Marketing Materials, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
-22-
In addition to its other obligations under this Section 6(a),
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 6(a), it will reimburse each Underwriter on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it to
the party or parties that made such payment, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by ____________________ (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by you, or by such Underwriter through you,
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party except to the extent such indemnifying
party has been materially prejudiced by such failure. In case any such action
shall be brought against any indemnified
-23-
party, and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of the indemnifying party's election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that if, in the sole
judgment of the Representatives, it is advisable for the Underwriters to be
represented as a group by separate counsel, the Representatives shall have the
right to employ a single counsel to represent the Representatives and all
Underwriters who may be subject to liability arising from any claim in respect
of which indemnity may be sought by the Underwriters under subsection (a) of
this Section 6, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to
the Underwriters as incurred (in accordance with the provisions of the second
paragraph in subsection (a) above). An indemnifying party shall not be obligated
under any settlement agreement relating to any action under this Section 6 to
which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
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 Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company 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 or the Underwriters and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses
-24-
reasonably incurred by such indemnified party in connection with investigating
or defending against any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 6
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any liability that
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company (including any person who,
with his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
(f) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Securities by the Underwriters set forth on the cover page of, and the
concession and reallowance figures appearing under the caption "Underwriting"
in, the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
(g) In connection with the offer and sale of the Directed
Stock, the Company agrees, promptly upon a request in writing, to indemnify and
hold harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of the
Directed Stock Participants to affirmatively reconfirm the Directed Stock for
purchase as of the date of this Agreement or to pay for and accept delivery of
the Directed Stock by the end of the First Closing Date.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
-25-
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take
up and pay for the amount of Firm Shares agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Firm Shares in
accordance with the terms hereof, and the amount of Firm Shares not purchased
does not aggregate more than 10% of the total amount of Firm Shares set forth in
Schedule I hereto, the remaining Underwriters shall be obligated to take up and
pay for (in proportion to their respective underwriting obligations hereunder as
set forth in Schedule I hereto except as may otherwise be determined by you) the
Firm Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take
up and pay for the amount of Firm Shares agreed by such Underwriter or
Underwriters to be purchased hereunder, upon tender of such Firm Shares in
accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in
Schedule I hereto, and arrangements satisfactory to you for the purchase of such
Firm Shares by other persons are not made within 36 hours thereafter, this
Agreement shall terminate. In the event of any such termination the Company
shall not be under any liability to any Underwriter (except to the extent
provided in Section 4(h) and Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Firm Shares agreed by
such Underwriter to be purchased hereunder) be under any liability to the
Company (except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m.,
Central time, on the first full business day following the effective date of the
Registration Statement, or at such earlier time after the effective time of the
Registration Statement as you in your discretion shall first release the
Securities for sale to the public; provided, that if the Registration Statement
is effective at the time this Agreement is executed, this Agreement shall become
effective at such time as you in your discretion shall first release the
Securities for sale to the public. For the purpose of this Section, the
Securities shall be deemed to have been released for sale to the public upon
release by you of an electronic communication authorizing commencement of the
offering the Securities for sale by the Underwriters or other securities
dealers. By giving notice as hereinafter specified before the time this
Agreement becomes effective, you, as Representatives of the several
Underwriters, or the Company, may prevent this Agreement
-26-
from becoming effective without liability of any party to any other party,
except that the provisions of Section 4(h) and Section 6 hereof shall at all
times be effective.
(b) You, as Representatives of the several Underwriters,
shall have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the First Closing Date, and the option
referred to in Section 3(b), if exercised, may be cancelled at any time prior to
the Second Closing Date, if (i) the Company shall have failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its part
to be performed hereunder, (ii) any other condition of the Underwriters'
obligations hereunder is not fulfilled, (iii) trading on the Nasdaq National
Market, New York Stock Exchange or the American Stock Exchange shall have been
wholly suspended, (iv) minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on
the Nasdaq National Market, New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other
governmental authority having jurisdiction, (v) a banking moratorium shall have
been declared by federal or state authorities, or (vi) there shall have occurred
any outbreak or escalation of hostilities or any change in financial markets or
any calamity or crisis that, in your judgment, is material and adverse and makes
it impractical or inadvisable to proceed with the completion of the sale of and
payment for the Securities. Any such termination shall be without liability of
any party to any other party except that the provisions of Section 4(h) and
Section 6 hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by you by telephone, confirmed by letter. If
the Company elects to prevent this Agreement from becoming effective, you shall
be notified by the Company by telephone, confirmed by letter.
10. DEFAULT BY THE COMPANY. If the Company shall fail at the First
Closing Date to sell and deliver the number of Securities which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on
the part of any nondefaulting party.
No action taken pursuant to this Section shall relieve the
Company from liability, if any, in respect of such default.
11. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing and, if to the Underwriters, shall
be mailed or delivered to the Representatives c/o U. S. Bancorp Xxxxx Xxxxxxx
Inc., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
except that notices given to an Underwriter pursuant to Section 6 hereof shall
be sent to such Underwriter at the address stated in the Underwriters'
Questionnaire furnished by such Underwriter in connection with this offering; if
to the Company, shall be mailed or delivered to it at Inhibitex, Inc., 0000
Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 Attention: CEO. Any party to
this Agreement may change such
-27-
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
13. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.
[Signature Page Follows]
-28-
Please sign and return to the Company the enclosed duplicates
of this letter whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
Inhibitex, Inc.
By _____________________________________
Xxxxxxx X. Xxxxxxxx
President and Chief Financial Officer
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
U.S. BANCORP XXXXX XXXXXXX INC.
By_____________________________________
Managing Director
SCHEDULE I
Underwriter Number of Firm Shares (1)
----------- -------------------------
---------------
Total....................... ===============
-----------------
(1) The Underwriters may purchase up to an additional ______ Option Shares,
to the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the
Agreement.
