EXHIBIT 1
2,250,000 Shares
VIROPHARMA INCORPORATED
COMMON STOCK
UNDERWRITING AGREEMENT
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November __, 1996
XXXXX & COMPANY
X.X. XXXXXX SECURITIES INC.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
1. Introductory. ViroPharma Incorporated, a Delaware corporation (the
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"Company"), proposes to sell, pursuant to the terms of this
Agreement, to the several underwriters named in Schedule A hereto
(the "Underwriters" or, each, an "Underwriter"), an aggregate of
2,250,000 shares of Common Stock, par value $0.002 per share (the
"Common Stock"), of the Company. The aggregate of 2,250,000 shares
so proposed to be sold is hereinafter referred to as the "Firm
Stock." The Company also proposes to sell to the Underwriters, upon
the terms and conditions set forth in Section 3 hereof, up to an
additional 337,500 shares of Common Stock (the "Optional Stock").
The Firm Stock and the Optional Stock are hereinafter collectively
referred to as the "Stock." Xxxxx & Company ("Cowen") and X.X.
Xxxxxx Securities Inc. ("X.X. Xxxxxx") are acting as representatives
of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives."
2. Representations and Warranties of the Company. The Company
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represents and warrants to, and agrees with, the several
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-12407) in
the form in which it became or becomes effective and also in
such form as it may be when any post-effective amendment
thereto shall become effective with
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Two
respect to the Stock, including any preeffective prospectuses
included as part of the registration statement as originally
filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, copies
of which have heretofore been delivered to you, has been
prepared by the Company in conformity with the requirements of
the Securities Act and the Rules and Regulations and has been
filed with the Commission under the Securities Act; one or
more amendments to such registration statement, including in
each case an amended preeffective prospectus, copies of which
amendments have heretofore been delivered to you, have been so
prepared and filed. If it is contemplated, at the time this
Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared
effective before the offering of the Stock may commence, the
term "Registration Statement" as used in this Agreement means
the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this
Agreement shall also include any registration statement
relating to the Stock that is filed and declared effective
pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement or, (A) if the
prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Securities Act
and such information is included in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities
Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement
as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant
to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are
delivered pursuant to Rule 434 under the Securities Act, then
(i) the term "Prospectus" as used in this Agreement means the
"prospectus subject to completion" (as such term is defined in
Rule 434(g) under the Securities Act) as supplemented by (a)
the addition of Rule 430A information or other information
contained in the form of prospectus delivered pursuant to Rule
434(b)(2) under the Securities Act or (b) the information
contained in the term sheets described in Rule 434(b)(3) under
the Securities Act, and (ii) the date of such prospectuses
shall be deemed to be the date of the term sheets. The term
"Preeffective
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Three
Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the Registration
Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such
prospectus shall have been amended from time to time prior to
the date of the Prospectus.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective
Prospectus, and, at its date of issue, each Preeffective
Prospectus conformed in all material respects with the
requirements of the Securities Act and the Rules and
Regulations and did not include any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein,
not misleading, other than any such nonconformance or untrue
statement or omission in a Preeffective Prospectus which has
been corrected in the Prospectus; and, when the Registration
Statement becomes effective and at all times subsequent
thereto up to and including each of the Closing Dates (as
hereinafter defined), the Registration Statement and the
Prospectus and any amendments or supplements thereto contained
and will contain all material statements and information
required to be included therein by the Securities Act and the
Rules and Regulations and conformed and will conform in all
material respects to the requirements of the Securities Act
and the Rules and Regulations and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement
thereto, included or will include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading; provided, however, that the foregoing
representations, warranties and agreements shall not apply to
information contained in or omitted from any Preeffective
Prospectus or the Registration Statement or the Prospectus or
any such amendment or supplement thereto in reliance upon, and
in conformity with, written information furnished to the
Company by or on behalf of any Underwriter, directly or
through you, specifically for use in the preparation thereof;
there is no franchise, lease, contract, agreement or document
required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed therein as required;
and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the
Registration
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Four
Statement are accurate and complete descriptions of such
documents in all material respects.
(c) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except
as set forth or contemplated in the Prospectus, the Company
has not incurred any material liabilities or obligations,
direct or contingent, nor entered into any material
transactions not in the ordinary course of business, and there
has not been any material adverse change in the condition
(financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company
or any material change in the capital stock, short-term or
long-term debt of the Company.
(d) The financial statements, together with the related notes, set
forth in the Prospectus and elsewhere in the Registration
Statement present fairly, in all materials respects, the
financial position of the Company (a development stage
company) as of December 31, 1994 and 1995, and the results of
its operations and its cash flows for the period from December
5, 1994 (inception) to December 31, 1994 and the year ended
December 31, 1995, in conformity with generally accepted
accounting principles. The selected financial and statistical
data set forth in the Prospectus under the captions
"Prospectus Summary--Summary Financial Data" and "Selected
Financial Data" fairly present, on the basis stated in the
Registration Statement, the information set forth therein.
(e) To the Company's knowledge, KPMG Peat Marwick LLP, who have
expressed their opinions on the audited financial statements
included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Securities
Act and the Rules and Regulations.
(f) The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the
State of Delaware, with power and authority (corporate and
other) to own or lease its properties and to conduct its
business as described in the Prospectus; and the Company is
duly qualified to do business and in good standing as a
foreign corporation in all other jurisdictions where its
ownership or leasing of properties or the conduct of its
business requires such qualification, except where the failure
to comply would not have a material adverse
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Five
effect on the Company. The Company has all requisite power and
authority, and all necessary consents, approvals,
authorizations, orders, registrations, qualifications,
licenses and permits of and from all public regulatory or
governmental agencies and bodies to own, lease and operate its
properties and conduct its business as now being conducted,
and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a
materially burdensome restriction not disclosed in the
Registration Statement and the Prospectus. The Company does
not own or control, directly or indirectly, any corporation,
association or other entity.
(g) The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Date, as set forth
under the heading "Capitalization" in the Prospectus (except
for shares of common stock issued between the date hereof and
the Closing Date pursuant to the Company's employee stock
option plans or upon conversion of shares of the Company's
Preferred Stock); the outstanding shares of common stock of
the Company conform in all material respects to the
description thereof in the Prospectus and have been duly
authorized, validly issued, are fully paid and nonassessable
and have been issued in compliance with all federal and state
securities laws and were not issued in violation of or subject
to any preemptive rights or similar rights to subscribe for or
purchase securities and conform to the description thereof
contained in the Prospectus. Except as disclosed in and or
contemplated by the Prospectus and the financial statements of
the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options
or warrants to purchase, or any preemptive rights or other
rights to subscribe for or to purchase any securities or
obligations convertible into, or any contracts or commitments
to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations, except
for options granted subsequent to the date of information
provided in the Prospectus pursuant to the Company's employee
and stock option plans as disclosed in the Prospectus. The
description of the Company's stock option and other stock
plans or arrangements, and the options or other rights granted
or exercised thereunder, as set forth in the Prospectus,
accurately and fairly presents in all material respects the
information required to be shown with respect to such plans,
arrangements, options and rights.
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Six
(h) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized
and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid
and nonassessable and free of any preemptive or similar rights
and will conform in all material respects to the description
thereof in the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a
party or of which any property of the Company is subject,
which, if determined adversely to the Company, might
individually or in the aggregate (i) prevent or adversely
affect the transactions contemplated by this Agreement, (ii)
suspend the effectiveness of the Registration Statement, (iii)
prevent or suspend the use of the Preeffective Prospectus in
any jurisdiction or (iv) result in a material adverse change
in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of
operations of the Company and, to the Company's knowledge,
there is no valid basis for any such legal or governmental
proceeding; and to the Company's knowledge no such proceedings
are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party
nor subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body or
other governmental agency or body.
(j) The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated (A)
will not result in any violation of, or conflict with, the
provisions of the certificate of incorporation, by-laws or
other organizational documents of the Company, or any law,
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
properties or assets, (B) will not conflict with or result in
a breach or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company is a party or by which it or any of its
properties is or may be bound, or result in the creation of a
lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and
the consummation of the transactions
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Seven
contemplated hereby, except such as may be required by the
National Association of Securities Dealers, Inc. (the "NASD")
or under the Securities Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or the securities or
"Blue Sky" laws of any jurisdiction in connection with the
purchase and distribution of the Stock by the Underwriters.
(l) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations
hereunder (including to issue, sell and deliver the Stock),
and this Agreement has been duly and validly authorized,
executed and delivered by the Company and is a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent
that rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or the public
policy underlying such laws.
(m) The Company is in all material respects in compliance with,
and conducts its business in conformity with, all applicable
federal, state, local and foreign laws, and rules and
regulations of any applicable court or governmental agency or
body; to the knowledge of the Company, otherwise than as set
forth in the Registration Statement and the Prospectus, no
prospective change in any of such federal or state laws, rules
or regulations has been adopted which, when made effective,
would have a material adverse effect on the operations of the
Company.
(n) The Company has filed all necessary federal, state, local and
foreign income, payroll, franchise and other tax returns and
has paid all taxes shown as due thereon or with respect to any
of its properties, except in such cases where the failure to
file such returns or make such payments would not have a
material adverse effect on the financial position, business or
operations of the Company, and there is no tax deficiency that
has been, or to the knowledge of the Company is likely to be,
asserted against the Company or any of its properties or
assets that would have a material adverse effect on the
financial position, business or operations of the Company.
(o) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company
because of the filing or effectiveness of the Registration
Statement or otherwise, except for
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Eight
persons and entities who have expressly waived such right or
who have been given proper notice and have failed to exercise
such right within the time or times required under the terms
and conditions of such right.
(p) Neither the Company nor, to the Company's knowledge, any of
its officers, directors or affiliates has taken, directly or
indirectly, any action designed or intended to stabilize or
manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably
be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service
xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct
of its business, and the Company is not aware of any claim to
the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. To the
Company's knowledge, the Company's business as now conducted
does not in any material respect infringe or conflict with
patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or
franchise right of any person. Except as described in the
Prospectus, the Company is not aware of any claim against the
Company alleging the infringement by the Company of any
patent, trademark, service xxxx, trade name, copyright, trade
secret, license in or other intellectual property right or
franchise right of any person.
(r) The Company has performed all material obligations required to
be performed by it to date under all contracts filed as
exhibits to the Registration Statement, and neither the
Company nor to the Company's knowledge any other party to such
contract is in default under or in breach of any such
obligations. The Company has not received any notice of such
default or breach.
(s) The Company is not involved in any labor dispute nor is any
such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of
the Company plans to terminate employment with the Company or
(B) any such executive or key employee is subject to any
noncompete, nondisclosure, confidentiality,
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Nine
employment, consulting or similar agreement that would be
violated by the present or proposed business activities of the
Company and its subsidiaries. The Company does not have or
expect to have any liability for any prohibited transaction or
funding deficiency or any complete or partial withdrawal
liability with respect to any pension, profit sharing or other
plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the
Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant.
With respect to such plans, the Company is in compliance in
all material respects with all applicable provisions of ERISA.
(t) The Company has obtained the written agreement described in
Section 8(j) of this Agreement from each of its officers,
directors and holders of Common Stock listed on Schedule B
hereto.
(u) The Company does not own any real property. The Company has,
and the Company as of the Closing Date will have, good and
marketable title to all personal property owned by it which is
material to the business of the Company, free and clear of all
liens, encumbrances and defects except such as are described
the Prospectus or such as would not have a material adverse
effect on the Company; and any real property and buildings
held under lease by the Company, or will be as of each of the
Closing Dates, held by it under valid, subsisting and
enforceable leases with such exceptions as would not have a
material adverse effect on the Company, in each case except as
described in or contemplated by the Prospectus.
(v) Except as otherwise described in the Prospectus, the Company
is insured by insurers of recognized financial responsibility
against such property damage, losses and risks and in such
amounts as are customary in the businesses in which it is
engaged or proposes to engage after giving effect to the
transactions described in the Prospectus; and the Company does
not have any reason to believe that it will not be able to
renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a
cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business
or operations of the Company, except as described in or
contemplated by the Prospectus.
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Ten
(w) Other than as contemplated by this Agreement, there is no
broker, finder or other party that has been engaged by the
Company or any officer, director or agent of the Company and
is entitled to receive from the Company any brokerage or
finder's fee or other fee or commission as a result of any of
the transactions contemplated by this Agreement.
(x) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(y) 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 accounting for assets is compared with existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(z) To the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment of funds
of, or on behalf of, the Company or received or retained any
funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(aa) The Company is not, nor, after application of the net proceeds
of this offering as described under the caption "Use of
Proceeds" in the Prospectus, will it become an "investment
company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of
1940, as amended.
(bb) The Company has provided you with its financial statements for
the quarters ended March 31, 1996, June 30, 1996 and September
30, 1996.
(cc) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters
shall be deemed to be a representation and warranty by the
Company as to the matters covered thereby.
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November__, 1996
Page Eleven
3. Purchase by, and Sale and Delivery to, Underwriters; Closing Dates.
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(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions
herein set forth, the Company agrees to sell to the Underwriters the
Firm Stock, and the Underwriters agree, severally and not jointly,
to purchase the Firm Stock from the Company, the number of shares of
Firm Stock to be purchased by each Underwriter being set opposite
its name in Schedule A, subject to adjustment in accordance with
Section 13 hereof.
(b) The purchase price per share to be paid by the Underwriters to
the Company will be the price per share set forth in the table
on the cover page of the Prospectus under the heading
"Proceeds to Company" (the "Purchase Price").
(c) The Company will deliver the Firm Stock to the Representatives
for the respective accounts of the several Underwriters (in
the form of definitive certificates, issued in such names and
in such denominations as the Representatives may direct by
notice in writing to the Company given at or prior to 12:00
Noon, New York Time, on the second full business day preceding
the First Closing Date (as defined below) or, if no such
direction is received, in the names of the respective
Underwriters or in such other names as Cowen may designate
(solely for the purpose of administrative convenience) and in
such denominations as Cowen may determine, against payment of
the aggregate Purchase Price therefor by wire transfer in same
day funds to the account of the Company, at the offices of
Xxxxxxxx & Xxxxxxxx llp, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. The time and date of the delivery and
closing shall be at 10:00 A.M., New York Time, on
_______________, 1996, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery
are herein referred to as the "First Closing Date." The First
Closing Date and the location of delivery of, and the form of
payment for, the Firm Stock may be varied by agreement between
the Company and Cowen. The First Closing Date may be postponed
pursuant to the provisions of Section 13.
(d) The Company shall make the certificates for the Stock
available to the Representatives for examination on behalf of
the Underwriters not later than 10:00 A.M., New York Time, on
the business day preceding the First
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twelve
Closing Date at the offices of Cowen, Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
(e) It is understood that Cowen or X.X. Xxxxxx, 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 or Underwriters, for the Stock to be
purchased by such Underwriter or Underwriters. Any such
payment by Cowen or X.X. Xxxxxx shall not relieve such
Underwriter or Underwriters from any of its or their other
obligations hereunder.
(f) The several Underwriters agree to make an initial public
offering of the Firm Stock at the initial public offering
price as soon after the effectiveness of the Registration
Statement as in their judgment is advisable. The
Representatives shall promptly advise the Company of the
making of the initial public offering.
(g) Solely for the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Stock as
contemplated by the Prospectus, the Company hereby grants to
the Underwriters an option to purchase, severally and not
jointly, up to the aggregate of 337,500 shares of Optional
Stock. The price per share to be paid for the Optional Stock
shall be the Purchase Price. The option granted hereby may be
exercised as to all or any part of the Optional Stock at any
time, [and from time to time] not more than thirty (30) days
subsequent to the effective date of this Agreement. No
Optional Stock shall be sold and delivered unless the Firm
Stock previously has been, or simultaneously is, sold and
delivered. The right to purchase the Optional Stock or any
portion thereof may be surrendered and terminated at any time
upon notice by the Underwriters to the Company.
(h) The option granted hereby may be exercised by the Underwriters
by giving written notice from Cowen to the Company setting
forth the number of shares of the Optional Stock to be
purchased by them and the date and time for delivery of and
payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be
the First Closing Date, but not earlier) is herein called the
"Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than ten (10) business days
after written notice is given. (The
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Thirteen
Option Closing Date and the First Closing Date are herein called
the "Closing Dates.") All purchases of Optional Stock from the
Company shall be made on a pro rata basis. Optional Stock shall
be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Stock set forth
opposite such Underwriter's name in Schedule A hereto bears to
the total number of shares of Firm Stock (subject to adjustment
by the Underwriters to eliminate odd lots). Upon exercise of the
option by the Underwriters, the Company agrees to sell to the
Underwriters the number of shares of Optional Stock set forth in
the written notice of exercise and the Underwriters agree,
severally and not jointly and subject to the terms and conditions
herein set forth, to purchase the number of such shares
determined as aforesaid.
(i) The Company will deliver the Optional Stock to the Underwriters
(in the form of definitive certificates, issued in such names and
in such denominations as the Representatives may direct by notice
in writing to the Company given at or prior to 12:00 Noon, New
York Time, on the second full business day preceding the Option
Closing Date or, if no such direction is received, in the names
of the respective Underwriters or in such other names as Cowen
may designate (solely for the purpose of administrative
convenience) and in such denominations as Cowen may determine,
against payment of the aggregate Purchase Price therefor by wire
transfer in same day funds to the account of the Company, at the
offices of Xxxxxxxx & Xxxxxxxx llp, 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. The Company shall make the certificates
for the Optional Stock available to the Underwriters for
examination not later than 10:00 A.M., New York Time, on the
business day preceding the Option Closing Date at the offices of
Cowen, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option
Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement
between the Company and Cowen. The Option Closing Date may be
postponed pursuant to the provisions of Section 13.
4. Covenants and Agreements of the Company. The Company covenants and
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agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives
have determined not to proceed pursuant to Rule 430A of the Rules
and Regulations, use all commercially reasonable efforts to cause
the
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Fourteen
Registration Statement to become effective, (ii) if the
Company and the Representatives have determined to proceed
pursuant to Rule 430A of the Rules and Regulations, use all
commercially reasonable efforts to comply with the provisions of
and make all requisite filings with the Commission pursuant to
Rule 430A and Rule 424 of the Rules and Regulations and (iii) if
the Company and the Representatives have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations,
to use all commercially reasonable efforts to comply with all the
applicable provisions thereof. The Company will advise the
Representatives promptly as to the time at which the Registration
Statement becomes effective, will advise the Representatives
promptly of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of
the institution of any proceedings for that purpose, and will use
all commercially reasonable efforts to prevent the issuance of
any such stop order and to obtain as soon as possible the lifting
thereof, if issued. The Company will advise the Representatives
promptly of the receipt of any comments of the Commission or any
request by the Commission for any amendment of or supplement to
the Registration Statement or the Prospectus or for additional
information and will not at any time file any amendment to the
Registration Statement or supplement to the Prospectus which
shall not previously have been submitted to the Representatives a
reasonable time prior to the proposed filing thereof or to which
the Representatives shall reasonably object in writing or which
is not in compliance with the Securities Act and the Rules and
Regulations.
(b) The Company will prepare and file with the Commission, promptly
upon the request of the Representatives, any amendments or
supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may be necessary to enable
the several Underwriters to continue the distribution of the
Stock and will use all commercially reasonable efforts to cause
the same to become effective as promptly as possible; provided,
however, that the expense of the preparation and delivery of any
prospectus required for use nine (9) months or more after the
effective date of the Registration Statement shall be borne by
the Underwriters required to deliver such prospectus.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Stock is required to
be delivered under the Securities Act, any event relating to or
affecting the Company occurs as a
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Fifteen
result of which the Prospectus or any other prospectus as then in
effect would include an untrue statement of a material fact, or
omit to state any material fact necessary to make the statements
therein not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Securities Act, the
Company will promptly notify the Representatives thereof and will
prepare an amended or supplemented prospectus which will correct
such statement or omission; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine (9)
months or more after the effective date of the Registration
Statement, the Company upon the request of the Representatives
and at the expense of such Underwriter will prepare promptly such
prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the
Securities Act; provided, however, that the expense of the
preparation and delivery of any prospectus required for use nine
(9) months or more after the effective date of the Registration
Statement shall be borne by the Underwriters required to deliver
such prospectus.
(d) The Company will deliver to the Representatives, at or before
the Closing Dates, signed copies of the Registration Statement,
as originally filed with the Commission, and all amendments
thereto including all financial statements and exhibits thereto,
and will deliver to the Representatives such number of copies of
the Registration Statement, including such financial statements
but without exhibits, and all amendments thereto, as the
Representatives may reasonably request. The Company will deliver
or mail to or upon the order of the Representatives, from time to
time until the effective date of the Registration Statement, as
many copies of the Preeffective Prospectus as the Representatives
may reasonably request. The Company will deliver or mail to or
upon the order of the Representatives on the date of the initial
public offering, and thereafter from time to time during the
period when delivery of a prospectus relating to the Stock is
required under the Securities Act, as many copies of the
Prospectus, in final form or as thereafter amended or
supplemented as the Representatives may reasonably request;
provided, however, that the expense of the preparation and
delivery of any prospectus required for use nine (9) months or
more after the effective date of the Registration Statement shall
be borne by the Underwriters required to deliver such prospectus.
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Sixteen
(e) The Company will make generally available to its shareholders
as soon as practicable, but not later than fifteen (15) months
after the effective date of the Registration Statement, an
earning statement which will be in reasonable detail (but which
need not be audited) and which will comply with Section 11(a) of
the Securities Act, covering a period of at least twelve (12)
months beginning after the "effective date" (as defined in Rule
158 under the Securities Act) of the Registration Statement.
(f) The Company will cooperate with the Representatives to enable
the Stock to be registered or qualified for offering and sale by
the Underwriters and by dealers under the securities laws of such
U.S., Canadian and foreign jurisdictions as the Representatives
may designate and at the request of the Representatives will make
such applications and furnish such consents to service of process
or other documents as may be required of it as the issuer of the
Stock for that purpose; provided, however, that the Company shall
not be required to qualify to do business or to file a general
consent (other than that arising out of the offering or sale of
the Stock) to service of process in any such jurisdiction where
it is not now so subject. The Company will, from time to time,
prepare and file such statements and reports as are or may be
required of it as the issuer of the Stock to continue such
qualifications in effect for so long a period as the
Representatives may reasonably request for the distribution of
the Stock; provided, however, that the expense of the preparation
and delivery of any prospectus required for use nine (9) months
or more after the effective date of the Registration Statement
shall be borne by the Underwriters required to deliver such
prospectus. The Company will advise the Representatives promptly
after the Company becomes aware of the suspension of the
qualifications or registration of (or any such exception relating
to) the Common Stock of the Company for offering, sale or trading
in any jurisdiction or of any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance
of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the
Representatives use all commercially reasonable efforts to
obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public
accountants in reasonable detail which may be unaudited. During
the period of five (5) years from the date hereof, the Company
will deliver to the
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Seventeen
Representatives and, upon request, to each of the other
Underwriters, as soon as they are available, copies of each
annual report of the Company and each other report furnished by
the Company to its shareholders and will deliver to the
Representatives, (i) as soon as they are available, copies of any
other reports (financial or other) which the Company shall
publish or otherwise make available to any of its shareholders as
such, (ii) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from
time to time such other publicly available information concerning
the Company as you may request.
(h) The Company will use all commercially reasonable efforts to list
the Stock, subject to official notice of issuance, on the Nasdaq
National Market concurrently with the effectiveness of the
Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) The Company will not offer, sell, contract to sell or grant an
option to purchase any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, Common Stock of the Company which
may be deemed to be beneficially owned by the Company in
accordance with the Rules and Regulations) during the 180 days
following the date on which the price of the Common Stock to be
purchased by the Underwriters is set, other than [(I) the
Company's sale of Common Stock hereunder (ii) to employees,
directors, consultants and advisers of the Company, pursuant to
stock option plans, employee stock purchase plans or in
connection with other employee compensation arrangements
currently in effect, (iii) in connection with acquisitions,
research and development agreements or other agreements, in each
case with the written consent of Cowen] and (iv) the Company's
issuance of Common Stock upon the exercise of warrants and stock
options which are presently outstanding and described in the
Prospectus.
(k) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of Rules and Regulations, the Company will
furnish a copy thereof to the counsel for the Underwriters and
receive and consider its
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Eighteen
comments thereon, and will deliver promptly to the
Representatives a signed copy of each report on Form SR filed by
it with the Commission.
(l) The Company will apply the net proceeds from the sale of the
Stock as set forth in the description under "Use of Proceeds" in
the Prospectus.
(m) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the
Securities Act.
(n) Prior to each of the Closing Dates, the Company will issue no
press release or other communications directly or indirectly and
hold no press conference with respect to the Company, the
financial condition, results of operations, business, prospects,
assets or liabilities of the Company, or the offering of the
Stock, without your prior written consent.
(o) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the
Annual Report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of
income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public
accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or
other report filed by the Company with the Commission, or the
NASD or any securities exchange; and (iii) as soon as available,
copies of any report or communication of the Company mailed
generally to holders of its Common Stock.
5. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with
or incident to the performance of its obligations under this Agreement
and in connection with the transactions contemplated hereby, including
but not limited to: (i) all expenses and taxes incident to the issuance
and delivery of the Stock to the Representatives; (ii) all expenses
incident to the registration of the Stock under the Securities Act;
(iii) the costs of preparing stock certificates (including printing and
engraving costs); (iv) all fees and expenses of the registrar and
transfer agent of the Stock; (v) all necessary issue, transfer and
other stamp taxes in connection with the
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Nineteen
issuance and sale of the Stock to the Underwriters; (vi) fees and
expenses of the Company's counsel and the Company's independent
accountants; (vii) all costs and expenses incurred in connection with
the preparation, printing, filing, shipping and distribution of the
Registration Statement, each Preeffective Prospectus and the Prospectus
(including all exhibits and financial statements) and all amendments
and supplements provided for herein, the "Agreement Among Underwriters"
between the Representatives and the Underwriters, the Master Selected
Dealers' Agreement, the Underwriters' Questionnaire and the Blue Sky
memoranda (including related fees and expenses of counsel to the
Underwriters) and this Agreement; (viii) all filing fees, reasonable
attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with exemptions from the qualifying or
registering (or obtaining qualification or registration of) all or any
part of the Stock for offer and sale under the Blue Sky or other
securities laws of such U.S. states or territories, Canadian provinces
and other jurisdictions as the Representatives may designate; (ix)
reasonable fees and expenses of counsel to the Underwriters in
connection with filings made with the NASD; and (x) all other costs and
expenses incident to the performance of its obligations hereunder which
are not otherwise specifically provided for in this Section.
(b) In addition to its other obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding described in Section 6(a), it will reimburse each
Underwriter on a quarterly basis for all reasonable legal 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 each Underwriter 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, each Underwriter shall promptly
return it to the Company 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 Citibank N.A., New York,
New York (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter in a timely
manner as provided below shall bear interest at the Prime Rate
from the due date for such reimbursement. This expense
reimbursement agreement will be in addition to any other
liability which
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty
the Company may otherwise have. The request for reimbursement
will be sent to the Company.
(c) In addition to its other obligations under Section 6(b) hereof,
each Underwriter severally 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
Section 6(b) hereof which relates to information furnished to the
Company pursuant to Section 2(b) hereof, it will reimburse the
Company (and, to the extent applicable, each officer, director or
controlling person on a quarterly basis for all reasonable legal
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
Underwriters' obligation to reimburse the Company (and, to the
extent applicable, each officer, director or controlling person)
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 Company (and, to
the extent applicable, each officer, director or controlling
person) shall promptly return it to the Underwriters together
with interest, compounded daily, determined on the basis of the
Prime Rate. Any such interim reimbursement payments which are not
made to the Company within thirty (30) days of a request for
reimbursement shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement will be in addition to
any liability which such Underwriter may otherwise have.
(d) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in paragraph
(a) and/or (b) of this Section 5, including the amounts of any
requested reimbursement payments and the method of determining
such amounts, shall be settled by arbitration conducted under the
provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the
Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration
or written notice of intention to arbitrate, therein electing the
arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-One
party responding to said demand or notice is authorized to do so.
Such an arbitration would be limited to the operation of the
interim reimbursement provisions contained in paragraph (a)
and/or (b) of this Section 5 and would not resolve the ultimate
propriety or enforceability of the obligation to reimburse
expenses which is created by the provisions of Section 6.
6. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter and each person, if any,
who controls such Underwriter within the meaning of the Securities Act
and the respective officers, directors, partners, employees,
representatives and agents of such Underwriter (collectively, the
"Underwriter Indemnified Parties" and, each, an "Underwriter
Indemnified Party"), against any losses, claims, damages, liabilities
or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in
connection therewith), joint or several, which may be based upon the
Securities Act, or any other statute or at common law, (i) on the
ground or alleged ground that any Preeffective Prospectus, the
Registration Statement or the Prospectus (or any Preeffective
Prospectus, the Registration Statement or the Prospectus as from time
to time amended or supplemented) includes or allegedly includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission
was made in reliance upon, and in conformity with, written information
furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof, or
(ii) [for 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 Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or expense arising out of or based upon matters covered by
clause (i) above (provided that the Company shall not be liable under
this clause (ii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim,
damage or liability or expense resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter
through its gross negligence or willful misconduct]. The Company will
be entitled to participate at its own expense in the defense or, if it
so elects, to assume the defense of any suit brought to enforce any
such liability, but if the Company elects to assume the defense, such
defense shall be conducted by counsel chosen by it and reasonably
acceptable to the Underwriters. In the event the Company elects to
assume the defense of any such suit and retain such counsel, any
Underwriter Indemnified Parties, defendant or defendants in the suit,
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Two
may retain additional counsel but shall bear the fees and expenses of
such counsel unless (i) the Company shall have specifically authorized
the retaining of such counsel or (ii) the parties to such suit include
any such Underwriter Indemnified Parties, and the Company and such
Underwriter Indemnified Parties at law or in equity have been advised
by counsel to the Underwriters that a conflict of interest preventing
counsel selected by the Company from representing the Underwriters, in
which case the Company shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses
of such counsel. This indemnity agreement is not exclusive and will be
in addition to any liability which the Company might otherwise have and
shall not limit any rights or remedies which may otherwise be available
at law or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to 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 Securities Act (collectively, the "Company Indemnified
Parties") against any losses, claims, damages, liabilities or
expenses (including, unless the Underwriter or Underwriters elect
to assume the defense, the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred
in connection therewith), joint or several, which arise out of or
are based in whole or in part upon the Securities Act, the
Exchange Act or any other federal, state, local or foreign
statute or regulation, or at common law, on the ground or alleged
ground that any Preeffective Prospectus, the Registration
Statement or the Prospectus (or any Preeffective Prospectus, the
Registration Statement or the Prospectus, as from time to time
amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or
omission was made in reliance upon, and in conformity with,
written information furnished to the Company by such Underwriter,
directly or through the Representatives, specifically for use in
the preparation thereof. For all purposes of this Agreement, the
amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any
Underwriter furnished in writing to the Company by the
Representative specifically for inclusion in the preliminary
prospectus, the Registration Statement or the Prospectus. In no
case, however, is such Underwriter to be liable with
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Three
respect to any claims made against any Company Indemnified Party
against whom the action is brought unless such Company
Indemnified Party shall have notified such Underwriter in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have
been served upon the Company Indemnified Party, but failure to
notify such Underwriter of such claim shall not relieve it from
any liability which it may have to any Company Indemnified Party
otherwise than on account of its indemnity agreement contained in
this paragraph. Such Underwriter shall be entitled to participate
at its own expense in the defense or, if it so elects, to assume
the defense of any suit brought to enforce any such liability,
but, if such Underwriter elects to assume the defense, such
defense shall be conducted by counsel chosen by it. In the event
that any Underwriter elects to assume the defense of any such
suit and retain such counsel, the Company Indemnified Parties and
any other Underwriter or Underwriters or controlling person or
persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional counsel retained by them,
respectively. The Underwriter against whom indemnity may be
sought shall not be liable to indemnify any person for any
settlement of any such claim effected without such Underwriter's
consent. This indemnity agreement is not exclusive and will be in
addition to any liability which such Underwriter might otherwise
have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to any Company
Indemnified Party.
(c) If the indemnification provided for in this Section 6 is
applicable by its terms, but unavailable or insufficient to hold
harmless an indemnified party under subsection (a) or (b) above
in respect of any losses, claims, damages, liabilities or
expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions 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 Stock. 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
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Four
on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses (or actions 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 or the Underwriters 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 contribution were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of
the equitable considerations referred to above. The amount paid
or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) referred to above shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party
in connection with investigating, defending, settling or
compromising any such claim. Notwithstanding the provisions of
this subsection (c), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total
price at which the shares of the Stock underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The Underwriters'
obligations to contribute are several in proportion to their
respective underwriting obligations and not joint. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, covenants, agreements, representations,
warranties and other
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Five
statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter, the Company or
any of its officers or directors or any controlling person, and shall
survive delivery of and payment for the Stock.
8. Conditions of Underwriters' Obligations. Except as otherwise stated
---------------------------------------
herein, the respective obligations of the several Underwriters
hereunder shall be subject to the accuracy, at and as of the date
hereof and at and as of each of the Closing Dates, of the
representations and warranties made herein by the Company, to
compliance at and as of each of the Closing Dates by the Company with
its covenants and agreements herein contained and other provisions
hereof to be satisfied at or prior to each of the Closing Dates, and to
the following additional conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been
issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the Company or the
Representatives, shall be threatened by the Commission, and any
request for additional information on the part of the Commission
(to be included in the Registration Statement or the Prospectus
or otherwise) shall have been complied with to the reasonable
satisfaction of the Commission. Any filings of the Prospectus, or
any supplement thereto, required pursuant to Rule 424(b) or Rule
434 of the Rules and Regulations, shall have been made in the
manner and within the time period required by Rule 424(b) and
Rule 434 of the Rules and Regulations, as the case may be.
(b) The Representatives shall have been satisfied that there shall
not have occurred any material change prior to each of the
Closing Dates in the condition (financial or otherwise),
properties, business, management, prospects, net worth or results
of operations of the Company, or any change in the capital stock,
short-term or long-term debt of the Company, such that (i) the
Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which,
in the reasonable opinion of the Representatives, is material, or
omits to state a fact which, in the reasonable opinion of the
Representatives, is required to be stated therein or is necessary
to make the statements therein not misleading, or (ii) it is
unpracticable in the
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Six
reasonable judgment of the Representatives to proceed with the
public offering or purchase the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company
which is material and adverse to the Company or which affects or
may affect the Company's ability to perform its obligations under
this Agreement shall have been instituted or threatened and there
shall have occurred no material adverse development in any
existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from KPMG Peat Marwick llp, independent
certified public accountants, a letter, dated the date hereof, in
form and substance satisfactory to the Underwriters.
(e) The Representatives shall have received from KPMG Peat Marwick
llp, independent certified public accountants, letters, dated
each of the Closing Dates, to the effect that such accountants
reaffirm, as of each of the Closing Dates, and as though made on
each of the Closing Dates, the statements made in the letter
furnished by such accountants pursuant to paragraph (d) of this
Section 8.
(f) The Representatives shall have received from Xxxxxx, Xxxxx &
Bockius llp, counsel for the Company, and Dunn, Dorfman, Xxxxxxx
& Xxxxxxxx, patent counsel for the Company, opinions, dated each
of the Closing Dates, to the effect set forth in Exhibit I and
Exhibit II, respectively, hereto.
(g) The Representatives shall have received from Xxxxxxxx & Xxxxxxxx
llp, counsel for the Underwriters, opinions dated each of the
Closing Dates with respect to the incorporation of the Company,
the validity of the Stock, the Registration Statement and the
Prospectus and such other related matters as it may reasonably
request, and the Company shall have furnished to such counsel
such documents as they may request for the purpose of enabling
them to pass upon such matters.
(h) The Representatives shall have received certificates, dated
each of the Closing Dates, of the chief executive officer or the
President and the chief financial or accounting officer of the
Company to the effect that:
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Seven
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date, nor
the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such
certificate, included 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;
(iii) The representations and warranties of the Company in this
Agreement are true and correct in all material respects
at and as of each of the Closing Dates, and the Company
has complied in all material respects with all the
covenants and agreements and performed or satisfied all
the conditions on its part to be performed or satisfied
at or prior to the Closing Dates; and
(iv) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus,
and except as disclosed in or contemplated by the
Prospectus, (i) there has not been any material adverse
change or a development involving a material adverse
change in the condition (financial or otherwise),
properties, business, management, prospects, net worth or
results of operations of the Company and the Company has
not entered into any material transactions not in the
ordinary course of business; (ii) the business and
operations conducted by the Company and its subsidiaries
have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not insured) of
such a character as to interfere materially with the
conduct of the business and operations of the Company;
(iii) no legal or governmental action, suit or proceeding
is pending or threatened against the Company which is
material to the Company, whether or not arising from
transactions in the ordinary course of business, or which
may materially and adversely affect the transactions
contemplated by this Agreement; (iv) the Company has not
incurred any material liability or obligation, direct,
contingent or indirect, made any change in its capital
stock (except pursuant to its stock plans),
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Twenty-Eight
made any material change in its short-term or funded
debt or repurchased or otherwise acquired any of the
Company's capital stock; and (v) the Company has not
declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable
to stockholders of record on a date prior to the Closing
Date.
(i) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have
reasonably requested as to the accuracy, at and as of each of the
Closing Dates, of the representations and warranties made herein
by it and as to compliance at and as of each of the Closing Dates
by it with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to each of
the Closing Dates, and as to satisfaction of the other conditions
to the obligations of the Underwriters hereunder.
(j) Cowen shall have received the written agreements, substantially
in the form of Exhibit III hereto, of the officers, directors and
all other holders of Common Stock that each will not offer, sell,
assign, transfer, encumber, contract to sell, grant an option to
purchase or otherwise dispose of, other than by operation of law,
any shares of Common Stock or rights to acquire shares of Common
Stock (including, without limitation, Common Stock which may be
deemed to be beneficially owned by such officer, director or
holder in accordance with the Rules and Regulations) during the
180 days following the date of the final Prospectus (except (i)
pursuant to employee benefit or stock option plans (ii) or to a
transferee who agrees to be similarly bound).
(k) The Nasdaq National Market shall have approved the Stock for
listing, subject only to official notice of issuance.
(l) All opinions, certificates, letters and other documents will
be in compliance with the provisions hereunder only if they are
satisfactory in form and substance to the Representatives. The
Company will furnish to the Representatives conformed copies of
such opinions, certificates, letters and other documents as the
Representatives shall reasonably request. If any of the
conditions hereinabove provided for in this Section shall not
have been satisfied when and as required by this Agreement, this
Agreement may be terminated by the Representatives by notifying
the Company of such termination in writing or by telegram at or
prior to each
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November____, 1996
Page Twenty-Nine
of the Closing Dates, but Cowen, on behalf of the
Representatives, shall be entitled to waive any of such
conditions.
9. Conditions of Company's Obligations. The obligations of the Company
-----------------------------------
to deliver the Stock shall be subject to the conditions that the
Registration Statement shall have become effective and no stop order
suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, shall be threatened
by the Commission.
10. Effective Date. This Agreement shall become effective immediately
--------------
as to Sections 5, 6, 7,11, 12, 13, 15, 16, 17, 18 and 19 and, as to
all other provisions, at 11:00 a.m. New York City time on the first
full business day following the effectiveness of the Registration
Statement or at such earlier time after the Registration Statement
becomes effective as the Representatives may determine by notice to
the Company or by release of any of the Stock for sale to the public.
For the purposes of this Section 10, the Stock shall be deemed to have
been so released upon the release of any press release in respect of
commencement of the Offering relating to the Stock or upon the release
by you of telegrams (i) advising Underwriters that the shares of Stock
are released for public offering or (ii) offering the Stock for sale
to securities dealers, whichever may occur first.
11. Termination. (a) This Agreement (except for the provisions of
-----------
Section 5) may be terminated by the Company at any time before it
becomes effective in accordance with Section 10 by notice to the
Representatives and may be terminated by the Representatives at any
time before it becomes effective in accordance with Section 10 by
notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there
shall be no liability of any party to this Agreement to any other
party, other than as provided in Sections 5, 6 and 12 and other than
as provided in Section 13 as to the liability of defaulting
Underwriters.
(b) This Agreement may be terminated after it becomes effective by
the Representatives by notice to the Company if at or prior to
the First Closing Date (i) trading in securities on the New York
Stock Exchange shall have been suspended or minimum or maximum
prices shall have been established on such exchange, or a banking
moratorium shall have been declared by New York or United States
authorities; (ii) trading of any securities of the Company shall
have been suspended in any market;
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November __, 1996
Page Thirty
(iii) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United
States or (B) any change in financial markets or any calamity or
crisis which, in the judgment of the Representatives, makes it
impractical or inadvisable to offer or sell the Stock on the
terms contemplated by the Prospectus; (iv) there shall have been
any development or prospective development involving particularly
the business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the
judgment of the Representatives, makes it impracticable or
inadvisable to offer or deliver the Stock on the terms
contemplated by the Prospectus; (v) there shall be any litigation
or proceeding, pending or threatened, against the Company or
involving its property, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer
or deliver the Stock on the terms contemplated by the Prospectus;
or (vi) there shall have occurred any of the events specified in
the immediately preceding clauses (i) - (v) together with any
other such event that makes it, in the judgment of the
Representatives, impractical or inadvisable to offer or deliver
the Stock on the terms contemplated by the Prospectus.
12. Reimbursement of Underwriters. Notwithstanding any other provisions
-----------------------------
hereof, if this Agreement shall not become effective by reason of any
election of the Company pursuant to Section 11(a) or shall be
terminated by the Representatives under Section 8 or Section 11(b),
the Company will bear and pay the expenses specified in Section 5
hereof and, in addition to its obligations pursuant to Section 6
hereof, the Company will reimburse the reasonable out-of-pocket
expenses of the several Underwriters (including reasonable fees and
disbursements of counsel for the Underwriters) incurred in connection
with this Agreement and the proposed purchase of the Stock, and
promptly upon demand the Company will pay such amounts to you as
Representatives.
13. Substitution of Underwriters. (a) If any Underwriter or
----------------------------
Underwriters shall default in its or their obligations to purchase
shares of Stock hereunder and the aggregate number of shares which
such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of
shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase. If any Underwriter or Underwriters
shall so default and the aggregate
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November ___, 1996
Page Thirty-One
number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares
underwritten and arrangements satisfactory to the Representatives and
the Company for the purchase of such shares by other persons are not
made within forty-eight (48) hours after such default, this Agreement
shall terminate.
(b) If the remaining Underwriters or substituted Underwriters are
required hereby or agree to take up all or part of the shares of
Stock of a defaulting Underwriter or Underwriters as provided in
this Section 13, (i) the Company shall have the right to postpone
the Closing Dates for a period of not more than five (5) full
business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the
respective numbers of shares to be purchased by the remaining
Underwriters or substituted Underwriters shall be taken as the
basis of their underwriting obligation for all purposes of this
Agreement.
(c) Nothing herein contained shall relieve any defaulting
Underwriter of its liability to the Company or the other
Underwriters for damages
occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 13 shall be without liability
on the part of any non-defaulting Underwriter or the Company,
except for expenses to be paid or reimbursed pursuant to Section
5 and except for the provisions of Section 6.
14. Notices. All communications hereunder shall be in writing and, if
-------
sent to the Underwriters shall be mailed, delivered or telegraphed and
confirmed to you, as their Representatives, c/o Cowen & Company at
Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, except that notices given to an
Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address furnished by the Representatives or, if
sent to the Company, shall be mailed, delivered or telegraphed and
confirmed to ViroPharma Incorporated, 00 Xxxxx Xxxxxx Xxxxxxx,
Xxxxxxx, XX 00000, attention: President.
15. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the several Underwriters, the Company and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November ___, 1996
Page Thirty-Two
shall be construed to give any person other than the persons mentioned
in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof
being intended to be and being for the sole and exclusive benefit of
such persons and for the benefit of no other person; except that the
obligations of the Company under Section 6 shall also be for the
benefit of the person or persons, if any, who control any Underwriter
or Underwriters within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, and the indemnities of the several
Underwriters under Section 6 shall also be for the benefit of each
director of the Company, each of its officers who has signed the
Registration Statement and the person or persons, if any, who control
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act.
16. Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of New York.
17. Authority of the Representatives. In connection with this
--------------------------------
Agreement, you will act for and on behalf of the several Underwriters,
and any action taken under this Agreement by Cowen, as Representative,
will be binding on all the Underwriters.
18. Partial Unenforceability. The invalidity or unenforceability of any
------------------------
Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.
19. General. (a) This Agreement constitutes the entire agreement of
-------
the parties to this Agreement and supersedes all prior written or oral
and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
(b) In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The Section
headings in this Agreement are for the convenience of the parties
only and will not affect the construction or interpretation of
this Agreement. This Agreement may be amended or modified, and
the observance of any term of this
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November ___, 1996
Page Thirty-Three
Agreement may be waived, only by a writing signed by the Company
and the Representatives.
20. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
Xxxxx & Company
X.X. Xxxxxx Securities Inc.
November ___, 1996
Page Thirty-Four
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
VIROPHARMA INCORPORATED
By:
-------------------------------
Xxxxxx X. Xxxx
President
Accepted and delivered in New York
as of the date first above written.
XXXXX & COMPANY
X.X. XXXXXX SECURITIES INC.
Acting on their own behalf
and as Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated,
its general partner
By:
---------------------------------
Xxxx X. Xxxxxx
Managing Director - Syndicate
By: X.X. XXXXXX SECURITIES INC.
By:
---------------------------------
Name:
Title:
