Exhibit 1.01
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CANCERVAX CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
___________, 2003
Xxxxxx Brothers Inc.
Citigroup Global Markets Inc.
Xxxxxx Xxxxxx Partners LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.,
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CancerVax Corporation, a Delaware corporation (the "Company"), proposes to
sell ____________ shares (the "Firm Stock") of the Company's common stock, par
value $0.00004 per share (the "Common Stock). In addition, the Company proposes
to grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional _______ shares of the Common Stock on the
terms and for the purposes set forth in Section 2 (the "Option Stock"). The Firm
Stock and the Option Stock, if purchased, are hereinafter collectively called
the "Stock." This is to confirm the agreement concerning the purchase of the
Stock from the Company by the Underwriters named in Schedule 1 hereto (the
"Underwriters").
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments thereto,
with respect to the Stock has (i) been prepared by the Company in
conformity in all material respects with the requirements of the United
States Securities Act of 1933, as amended (the "Securities Act") and the
rules and regulations (the "Rule and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such registration statement
and the amendments thereto have been delivered by the Company to you as
the representatives (the "Representatives") of the Underwriters. As used
in this Agreement, "Effective Time"
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means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included in
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statement, as amended at the Effective Time,
including all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 5(a) hereof and deemed to be a part of the
registration statement as of the Effective Time pursuant to paragraph (b)
of Rule 430A of the Rules and Regulations; and "Prospectus" means such
final prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission has
not issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or warranty is
made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein.
(c) The Company and its subsidiary, Cell-Matrix, Inc. (the
"Subsidiary") have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and the Subsidiary is
not a "significant subsidiary", as such term is defined in Rule 405 of the
Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus and all of the issued shares of capital stock of the Subsidiary
have been duly and validly authorized and issued and are fully
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paid and non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(e) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the description thereof
contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered
by the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby 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 or its Subsidiary is a party or by which the Company or its
Subsidiary is bound or to which any of the property or assets of the
Company or its Subsidiary is subject (except where such conflict, breach,
violation or default would not reasonably be expected to have a material
adverse effect on the financial condition, stockholders' equity or results
of operations of the Company and its Subsidiary taken as a whole), nor
will such actions result in any violation of the provisions of the charter
or by-laws of the Company or its Subsidiary or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or its Subsidiary or any of its properties
or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state and foreign
securities laws in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such 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
contemplated hereby.
(h) There are no contracts, agreements or understandings between the
Company and any person granting such person the right (other than rights
which have been waived or satisfied) to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being currently registered pursuant to any other registration statement
filed by the Company under the Securities Act.
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(i) Except as described in the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A
under, or Regulations D or S of, the Securities Act, other than shares
issued pursuant to employee benefit plans, qualified stock options plans
or other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(j) Neither the Company nor its Subsidiary has sustained, since the
date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus;
and, except for the grant of options in the ordinary course of the
Company's business pursuant to its stock incentive plan and as otherwise
described in the Prospectus, since such date, there has not been any
change in the capital stock or long-term debt of the Company or its
Subsidiary or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the consolidated
financial position, stockholders' equity or results of operations of the
Company or its Subsidiary, otherwise than as set forth or contemplated in
the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly in all material respects the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who
have delivered the initial letter referred to in Section 9(g) hereof, are
independent public accountants as required by the Securities Act and the
Rules and Regulations.
(m) The Company and its Subsidiary have good and marketable title in
fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its Subsidiary; and all real property and
buildings held under lease by the Company and its Subsidiary are held by
them under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company.
(n) The Company and its Subsidiary carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective
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businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries.
(o) To the best of the Company's knowledge, (a) neither the Company
nor its Subsidiary is currently infringing or has infringed any valid
patent, valid trademark or valid copyright rights of others, in each case,
in any material respect, (b) all trade secrets, know how, technical
processes and procedures developed and belonging to the Company (or its
Subsidiary) which are material to the business of the Company (or its
Subsidiary) as presently conducted and which have not been patented have
been kept confidential, and (c) except as set forth in the Prospectus, the
Company and its Subsidiary own or possess the right to use, free and clear
of claims or rights of others, all patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service
xxxx registrations, copyrights, licenses, trade secrets, processes, and
owned computer software required for their respective businesses as
presently conducted or believe that they can acquire the same on
reasonable terms. Except as set forth or contemplated in the Prospectus,
neither the Company nor its Subsidiary has received any notice of any
claim of conflict with any such rights of others. To the best of the
Company's knowledge, neither the Company nor its Subsidiary is using or
has used any confidential information, trade secrets, or computer software
(not licensed to the Company) of any former employer of any of its past or
present employees.
(p) Except as set forth in the Prospectus, including, but not
limited to, the matters set forth under the captions "Risk Factors -- We
are subject to extensive government regulation that increases the cost and
uncertainty associated with gaining regulatory approval of Canvaxin and
our other product candidates," "Risk Factors -- We have limited experience
in manufacturing and testing biological products and may encounter
problems or delays that could result in delayed development of Canvaxin
and our other product candidates as well as lost revenue" and "Business
-- Government Regulation and Product Approval," the Company and its
Subsidiary have or believe that they can obtain in the ordinary course
when required all material licenses, certificates, permits, consents,
orders, approvals and authorizations from U.S. and foreign government
authorities, including, without limitation, the United States Food and
Drug Administration (the "FDA") and any agency of any foreign government
and any other foreign regulatory authority exercising authority comparable
to that of the FDA (including any non-governmental entity whose approval
or authorization is required under foreign law comparable to that
administered by the FDA), in each jurisdiction where the Company's or its
Subsidiary's current product is, or, as described in the Prospectus, is
proposed to be sold (each a "Permit") that are necessary to the ownership
of the Company's or its Subsidiary's property or to the conduct of its
business in the manner and to the extent now conducted, with no material
restrictions or qualifications. Each issued Permit is currently in full
force and effect, and no proceeding has been instituted or is pending or,
to the best of the Company's knowledge, is contemplated or threatened,
which in any manner affects or draws into question the validity or
effectiveness thereof or relates in any way to the revocation or
modification thereof.
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(q) There are no legal or governmental proceedings pending to which
the Company or its Subsidiary is a party or of which any property or
assets of the Company or its Subsidiary is the subject which, if
determined adversely to the Company or its Subsidiary, would reasonably be
expected to have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations or business of the
Company; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened
by others.
(r) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted
by the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(t) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which might be expected to
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the Company.
(u) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any material liability; the
Company has not incurred and does not expect to incur material liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which
the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification.
(v) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or its Subsidiary which has had, nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or its Subsidiary might have, a
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material adverse effect on the consolidated financial position,
stockholders' equity, results of operations or business of the Company.
(w) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted any
securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business, (iii) entered into any transaction not in
the ordinary course of business or (iv) declared or paid any dividend on
its capital stock.
(x) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(y) Neither the Company nor its Subsidiary (i) is in violation of
its charter or by-laws, (ii) is in default in any material respect, and,
to the best of the Company's knowledge, no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject or (iii) is
in violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business.
(z) Neither the Company nor its Subsidiary, nor any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or its Subsidiary, has used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(aa) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or its
Subsidiary (or, to the knowledge of the Company, any of their predecessors
in interest) at, upon or from any of the property now or previously owned
or leased by the Company or its Subsidiary in
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violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singularly or in the
aggregate with all such violations and remedial actions, a material
adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or its
Subsidiary or with respect to which the Company or its Subsidiary have
knowledge, except for any such spill, discharge, leak, emission,
injection, escape, dumping or release which would not have or would not be
reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company;
and the terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
(bb) Neither the Company nor its Subsidiary is an "investment
company" within the meaning of such term under the Investment Company Act
of 1940 and the rules and regulations of the Commission thereunder.
(cc) To the best of the Company's knowledge, the Company's current
business operations do not violate in any material respect any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject to any guidelines promulgated by the
American Medical Association.
2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell _______ shares of the
Firm Stock to the several Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase the number of shares of the Firm Stock set
opposite that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to purchase
up to _______ shares of Option Stock. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set opposite the name of such Underwriters in Schedule 1
hereto. The respective purchase obligations of each Underwriter with respect to
the Option
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Stock shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Stock other than in 100 share amounts. The price of
both the Firm Stock and any Option Stock shall be $_____ per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), as the case may be,
except upon payment for all the Stock to be purchased on such Delivery Date as
provided herein.
3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
It is understood that _______ shares of the Firm Stock will initially be
reserved by the several Underwriters for offer and sale 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, Inc. to employees
and persons having business relationships with the Company who have heretofore
delivered to the Representatives offers or indications of interest to purchase
shares of Firm Stock in form satisfactory to the Representatives, and that any
allocation of such Firm Stock among such persons will be made in accordance with
timely directions received by the Representatives from the Company; provided,
that under no circumstances will the Representatives or any Underwriter be
liable to the Company or to any such person for any action taken or omitted in
good faith in connection with such offering to employees and persons having
business relationships with the Company. It is further understood that any
shares of such Firm Stock which are not purchased by such persons will be
offered by the Underwriters to the public upon the terms and conditions set
forth in the Prospectus.
4. Delivery of and Payment for the Stock. Delivery of and payment for the
Firm Stock shall be made at the office of Xxxxxx & Xxxxxxx LLP, 00000 Xxxx Xxxxx
Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000 at 10:00 A.M., Pacific time, on the third
full business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the "First Delivery
Date." On the First Delivery Date, the Company shall deliver or cause to be
delivered certificates representing the Firm Stock to the Representatives for
the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such
names and in such denominations as the Representatives shall request in writing
not less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Stock, the Company shall make the certificates representing the Firm Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
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The option granted in Section 2 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., Pacific time, on such Second Delivery Date. On
such Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to such Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement
to the Registration Statement or to the Prospectus except as permitted
herein; to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request
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by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement
as originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the Stock or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify the
Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
reasonable judgment of the Representatives, be required by the Securities
Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Representatives an earnings statement of the Company (which need not
be audited) complying with Section
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11(a) of the Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158);
(g) At the request of the Representatives, for a period of five
years following the Effective Date, to furnish to the Representatives
copies of all materials furnished by the Company to its shareholders and
all public reports and all reports and financial statements furnished by
the Company to the principal national securities exchange upon which the
Common Stock may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than
(i) the shares of Common Stock or securities convertible into Common Stock
issued pursuant to employee benefit plans, incentive stock plans or other
employee compensation plans existing on the date hereof, (ii) pursuant to
currently outstanding options, warrants or rights, or (iii) shares of
Common Stock or securities convertible into or exchangeable for Common
Stock issued by the Company in connection with a strategic partnership,
joint venture, collaboration, lending or similar arrangement, or in
connection with the acquisition or license by the Company of any business,
products or technologies), or sell or grant options, rights or warrants
with respect to any shares of Common Stock or securities convertible into
or exchangeable for Common Stock (other than (i) the grant of options,
rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock issued
pursuant to employee benefit plans, incentive stock plans or other
employee compensation plans existing on the date hereof, (ii) pursuant to
currently outstanding options, warrants or rights or (iii) options, rights
or warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock issued in connection
with a strategic partnership, joint venture, collaboration, lending or
similar arrangement, or in connection with the acquisition or license by
the Company of any business, products or technologies), or (2) enter into
any swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (1) or (2)
12
above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise, in each case without the prior written consent of
Xxxxxx Brothers Inc.; and to cause each officer and director of the
Company to furnish to the Representatives, prior to the First Delivery
Date, a letter or letters, in form and substance satisfactory to counsel
for the Underwriters, pursuant to which each such person shall agree not
to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (2) enter into any
swap or other derivatives transaction that transfers to another, in whole
or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 180 days
from the date of the Prospectus, without the prior written consent of
Xxxxxx Brothers Inc.;
(j) Prior to the Effective Date, to apply for the quotation of the
Stock on the Nasdaq National Market System and to use its best efforts to
effect that quotation, subject only to official notice of issuance and
evidence of satisfactory distribution, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock being sold
by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that the
Company and its Subsidiary shall not become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of distributing this Agreement and any other
related documents in connection with the offering, purchase, sale and delivery
of the stock; (e) the filing fees incident to securing any required review by
the National Association of Securities Dealers, Inc. of the terms of sale of the
Stock; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 5 (h); (h) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, incident
to the offer and sale of shares of the Stock by the Underwriters to employees
and persons having business relationships with the Company, as
13
described in Section 3; and (i) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11 the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Stock which they may sell and the
expenses of advertising any offering of the Stock made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated
or threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of Xxxxxxx XxXxxxxxx LLP,
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Xxxxxx & Xxxxxxx LLP shall have furnished to the Representatives
(i) its written opinion, as counsel to the Company, addressed to the
Underwriters and dated as of such Delivery Date, substantially in the form
attached hereto as Exhibit 1-A and (ii) a written statement, as counsel to
the Company, addressed to the Underwriters and dated as of such Delivery
Date, substantially in the form attached hereto as Exhibit 1-B.
(e) Pillsbury Winthrop LLP shall have furnished to the
Representatives its written opinion, as intellectual property counsel to
the Company, addressed to the
14
Underwriters and dated as of such Delivery Date, substantially in the form
attached hereto as Exhibit 2.
(f) The Representatives shall have received from Xxxxxxx XxXxxxxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date hereof (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 hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
(h) With respect to the letter of Ernst & Young LLP referred to in
the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letter"), the Company
shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the
date of the bring-down 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 the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chief Executive Officer, its
President or a Vice President and its Chief Financial Officer stating
that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date;
the Company
15
has complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(m) have been fulfilled;
and
(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective
Date, the Registration Statement and Prospectus did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (B) since the Effective Date
no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the
Prospectus.
(j) Neither the Company nor its Subsidiary (i) shall have sustained
since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus or
(ii) since such date there shall have been any change in the capital stock
or long-term debt of the Company or its Subsidiary or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results
of operations of the Company and its Subsidiary, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such
case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction, (ii)
a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in new
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions, including without limitation as a result of terrorist
activities after the date hereof, (or the effect of international
conditions on the financial markets in the United States shall be such) as
to make it, in the judgment of a majority in interest of the several
Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on
the terms and in the manner contemplated in the Prospectus.
16
(l) The Nasdaq National Market System shall have approved the Stock
for listing, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) or in any Preliminary Prospectus, the Registration Statement
or the Prospectus or in any amendment or supplement thereto, or (B) 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
Stock ("Marketing Materials"), including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
in any amendment or supplement thereto, or in any Marketing Materials any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection with,
or relating in any manner to, the Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not
be liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action 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), and shall reimburse
each Underwriter and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that (1) 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, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with written
information concerning such Underwriter furnished to the
17
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of
the information specified in Section 8(e), and (2) the Company shall not
be liable to any Underwriter under the indemnity agreement in this Section
8(a) to the extent, but only to the extent, that (A) such loss, claim,
damage, or liability of such Underwriter results from an untrue statement
of a material fact or an omission of a material fact contained in the
Preliminary Prospectus, which untrue statement or omission was corrected
in the Prospectus dated the Effective Date (the "Final Prospectus"), (B)
the Company sustains the burden of proving that such Underwriter sold
shares of Stock to the person alleging such loss, claim, liability,
expense or damage without sending or giving, at or prior to written
confirmation of such sale, a copy of the Final Prospectus, (C) the Company
had previously furnished sufficient quantities of the Final Prospectus to
the Underwriters within a reasonable amount of time prior to such sale or
such confirmation, and (D) such Underwriter failed to deliver the Final
Prospectus, if required by law to have so delivered it, and such delivery
would have been a complete defense against the person asserting such loss,
claim, liability, expense or damage. The foregoing indemnity agreement is
in addition to any liability that the Company may otherwise have to any
Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
Marketing Materials or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or in any Marketing Materials
any material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person for any legal or other expenses reasonably
incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Company or
any such director, officer, employee or controlling person.
18
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure and, provided further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 8. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the
Representatives shall have the right to employ counsel to represent
jointly the Representatives and those other Underwriters and their
respective officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Underwriters against the Company under this Section 8 if, in
the reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and in
that event the reasonable fees and expenses of such separate counsel shall
be paid by the Company. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
19
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be 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 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 with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action 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
with respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Stock purchased under
this Agreement (before deducting expenses) received by the Company on the
one hand and the total underwriting discounts and commissions received by
the Underwriters with respect to the shares of the Stock purchased under
this Agreement on the other hand bear to the total gross proceeds from the
offering of the shares of the Stock under this Agreement, 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 whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8 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 into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8 shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any 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 Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 8(d) are several in proportion to
their respective underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by
the Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption
20
"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.
9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "Underwriter" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in
21
Sections 7(j) or 7(k), shall have occurred or if the Underwriters shall decline
to purchase the Stock for any reason permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company shall fail to
tender the Stock for delivery to the Underwriters 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 Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by reason
of the default of one or more Underwriters, the Company shall not be obligated
to reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department (Fax:
000-000-0000), with a copy, in the case of any notice pursuant to Section
7(c), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxx X. Xxxx, Esq., Senior Vice
President, General Counsel and Secretary (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 8(b) of this
22
Agreement shall be deemed to be for the benefit of directors of the Company,
officers of the Company who have signed the Registration Statement and any
person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 13, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
15. Definition of the Term "Business Day". For purposes of this Agreement,
"business day" means each Monday, Tuesday, Wednesday, Thursday or Friday which
is not a day on which banking institutions in New York are generally authorized
or obligated by law or executive order to close.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
17. 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 but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
CANCERVAX CORPORATION
By:
------------------------------------
23
Accepted:
Xxxxxx Brothers Inc.
Citigroup Global Markets Inc.
Xxxxxx Xxxxxx Partners LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: Xxxxxx Brothers Inc.
By:
Authorized Representative
By: Citigroup Global Markets Inc.
By:
Authorized Representative
By: Xxxxxx Xxxxxx Partners LLC
By:
Authorized Representative
By: U.S. Bancorp Xxxxx Xxxxxxx Inc.
By:
-----------------------------
Authorized Representative
24
SCHEDULE 1
Underwriters Number of
------------ Shares
---------
Xxxxxx Brothers Inc. ..........................................
Citigroup Global Markets Inc. .................................
Xxxxxx Xxxxxx Partners LLC.....................................
U. S. Bancorp Xxxxx Xxxxxxx Inc................................
Total...........................................
25
EXHIBIT 1-A
FORM OF OPINION OF XXXXXX & XXXXXXX LLP
COUNSEL TO THE COMPANY
__________________, 2003
Xxxxxx Brothers Inc.
Citigroup Global Markets Inc.
Xxxxxx Xxxxxx Partners LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.,
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CancerVax Corporation
Ladies and Gentlemen:
We have acted as counsel to CancerVax Corporation, a Delaware
corporation (the "Company"), in connection with the sale to you and the several
underwriters for whom you are acting as representatives (the "Underwriters") on
the date hereof by the Company, of ________ shares (the "Shares") of common
stock of the Company, par value $0.00004 per share (the "Common Stock"),
pursuant to a registration statement on Form S-1 under the Securities Act of
1933, as amended (the "Act"), filed with the Securities and Exchange Commission
(the "Commission") on __________________, 2003 (File No. 333-107993), as amended
to date (the "Registration Statement"), a Prospectus dated __________, 2003
filed with the Commission pursuant to Rule 424(b) under the Act (the
"Prospectus") and an underwriting agreement dated _____________, 2003 between
you, as representatives of the several Underwriters named in the underwriting
agreement, and the Company (the "Underwriting Agreement"). This letter is being
furnished to you pursuant to Section 7(d) of the Underwriting Agreement.
As such counsel, we have examined such matters of fact and questions
of law as we have considered appropriate for purposes of this letter, except
where a specific fact confirmation procedure is stated to have been performed
(in which case we have with your consent performed the stated procedure), and
except where a statement is qualified as to knowledge or awareness (in which
case we have with your consent made no or limited inquiry as specified below).
We have examined, among other things, the following:
(a) The Underwriting Agreement, the Registration Statement and Prospectus;
26
(b) The indenture(s), note(s), loan agreement(s), mortgage(s), deed(s) of
trust, security agreement(s) and other written agreement(s) and
instrument(s) creating, evidencing or securing indebtedness of the Company
for borrowed money identified to us by an officer of the Company as
material to the Company and listed in Exhibit A (the "Material
Agreements");
(c) The Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws of the Company (the "Governing Documents") and certain
resolutions of the Board of Directors of the Company; and
(d) The court or administrative orders, writs, judgments or decrees
specifically directed to the Company that were identified to us by an
officer of the Company as material to the Company and listed in Exhibit B
(the "Court Orders").
As to facts material to the opinions, statements and assumptions expressed
herein, we have, with your consent, relied upon oral or written statements and
representations of officers and other representatives of the Company and others,
including representations and warranties of the Company in the Underwriting
Agreement. We have not independently verified such factual matters.
Whenever a statement herein is qualified as to knowledge, awareness, or a
similar phrase, it is intended to indicate that those attorneys in the firm who
have rendered legal services in connection with the transaction referenced above
do not have current actual knowledge of the inaccuracy of such statement.
However, except as otherwise expressly indicated, we have not undertaken any
independent investigation to determine the accuracy of any such statement.
We are opining herein as to the effect on the subject transaction only of
the federal laws of the United States, the internal laws of the State of
California and, in numbered paragraphs 1, 2, 3, 5 and 6 of this letter, the
Delaware General Corporation Law (the "DGCL"), and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or, in the case of Delaware, any other laws, or as to any
matters of municipal law or the laws of any local agencies within any state. We
have informed you that we have not been retained by the Company to represent the
Company in connection with, and we are not experts regarding, matters arising
under the Hatch/Waxman Patent Term Extension Act and the other patent laws of
the United States or the rules and regulations of the U.S. Patent and Trademark
Office, the Federal Food, Drug and Cosmetic Act, the Public Health Service Act,
the Food and Drug Administration Modernization Act, the Orphan Drug Act or the
rules and regulations of the Federal Food and Drug Administration, or any other
federal or California laws pertaining to the regulation of the research,
development, testing, manufacture or sale of drugs.
Our opinions and confirmations herein are based upon our consideration of
only those statutes, rules and regulations which, in our experience, are
normally applicable to underwritten public offerings of common equity
securities, provided that no opinion or confirmation is expressed herein or in
our separate letter of even date with respect to federal or state securities
27
laws (except to the extent stated in paragraphs 7, 8, 9 and 10 herein and in our
separate negative assurance letter), tax laws, antitrust or trade regulation
laws, insolvency or fraudulent transfer laws, antifraud laws, margin
regulations, NASD rules, pension or employee benefit laws, compliance with
fiduciary duty requirements, usury laws, the Hatch/Waxman Patent Term Extension
Act and the other patent laws of the United States or the rules and regulations
of the U.S. Patent and Trademark Office, the Federal Food, Drug and Cosmetic
Act, the Public Health Service Act, the Food and Drug Administration
Modernization Act, the Orphan Drug Act or the rules and regulations of the
Federal Food and Drug Administration, or any other federal or California laws
pertaining to the regulation of the research, development, testing, manufacture
or sale of drugs or other laws excluded by customary practice. We express no
opinion as to any state or federal laws or regulations applicable to the subject
transaction because of the nature or extent of the business of any parties to
the Underwriting Agreement. Various issues concerning the Company's intellectual
property are addressed in the opinion of Pillsbury Winthrop LLP, which has been
separately provided to you, and we express no opinion with respect to those
matters.
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:
1. The Company is a corporation under the DGCL with corporate power and
authority to own its properties and to conduct its business as described
in the Registration Statement and the Prospectus. Based on certificates
from public officials, we confirm that the Company is validly existing and
in good standing under the laws of the State of Delaware and is qualified
to do business in the following States:
--------------------,---------------------
and .
------------------- -------------------
2. With your consent, based solely upon a review on _____________, 2003 of
certificates representing outstanding capital stock of, and stock transfer
records for, Cell-Matrix, Inc., all of the outstanding shares of capital
stock of Cell-Matrix, Inc. were owned of record on that date by the
Company.
3. The Shares to be issued and sold by the Company pursuant to the
Underwriting Agreement have been duly authorized by all necessary
corporate action of the Company and, when issued to and paid for by you
and the other Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable and free of preemptive rights arising from the Governing
Documents.
4. To the best of our knowledge, based solely on oral or written
statements and representations of officers and other representatives of
the Company, including the representations and warranties of the Company
in the Underwriting Agreement, and docket searches in the jurisdictions
set forth on Exhibit C hereto, there are no actions,
28
suits, proceedings or investigations pending against the Company before
any court, governmental agency or arbitrator which (i) are required to be
disclosed in the Prospectus pursuant to Item 103 of Regulation S-K under
the Act, other than those disclosed therein, or (ii) which seek to
restrain or enjoin the sale of the Shares by the Company.
5. The execution, delivery and performance of the Underwriting Agreement
have been duly authorized by all necessary corporate action of the
Company, and the Underwriting Agreement has been duly executed and
delivered by the Company.
6. The execution and delivery of the Underwriting Agreement and the
issuance and sale of the Shares by the Company to you and to the other
Underwriters pursuant to the Underwriting Agreement on the date hereof do
not:
(i) violate the Company's Governing Documents;
(ii) result in the breach of or a default under any of the
Material Agreements; or
(iii) violate any federal or California statute, rule or
regulation or Court Order applicable to the Company or the DGCL; or
(iv) require any consents, approvals, or authorizations to be
obtained by the Company, or any registrations, declarations or
filings to be made by the Company, in each case, under any federal
or California statute, rule or regulation applicable to the Company
that have not been obtained or made and such that may be required
under state securities laws in connection with the purchase and
distribution of such Shares by the Underwriters.
7. The Registration Statement has become effective under the Act. With
your consent, based solely on a telephonic confirmation by a member of the
Staff of the Commission on ______________, 2003, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
Act and no proceedings therefor have been initiated by the Commission. Any
required filing of the Prospectus pursuant to Rule 424 under the Act has
been made in accordance with Rule 424 and 430A under the Act.
8. The Registration Statement, as of the date it was declared effective,
and the Prospectus, as of its date, complied as to form in all material
respects with the requirements for registration statements on Form S-1
under the Act and the rules and regulations of the Commission thereunder;
it being understood, however, that we express no opinion with respect to
Regulation S-T or the financial statements, schedules, or other financial
data, included in, or omitted from, the Registration Statement or the
Prospectus. In passing upon the compliance as to form of the Registration
Statement and the Prospectus, we have assumed that the statements made
therein are correct and complete.
29
9. The statements in the Prospectus under the caption "Description of
Capital Stock," insofar as they purport to constitute a summary of the
terms of the Common Stock, are accurate descriptions or summaries in all
material respects.
10. To the best of our knowledge, there are no contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed.
11. With your consent based solely on a certificate of an officer of the
Company as to factual matters and a review of the Material Agreements, the
Company is not a party to any agreement that would require the inclusion
in the Registration Statement of shares owned by any person or entity
other than the Company.
12. With your consent, based solely on a review of the Governing Documents
and the Material Agreements, none of the Governing Documents or Material
Agreements contains any restriction on voting or limitation on transfer
affecting the Shares to be issued and sold to you, when so issued, which
are not described or referred to in the Prospectus, other than the
requirements of the DGCL and customary restrictions on transfer under
state and federal securities laws.
In rendering the opinions in clause (ii) of paragraph 6 above, insofar as
they require interpretation of the Material Agreements, with your consent, (i)
we have assumed that courts of competent jurisdiction would enforce such
agreements in accordance with their plain meaning, (ii) to the extent that any
questions of legality or legal construction have arisen in connection with our
review, we have applied the laws of the State of California in resolving such
questions, (iii) we express no opinion with respect to the effect of any
discretionary action or inaction by the Company under the Material Agreements
that may result in a breach or default under any Material Agreement, and (iv) we
express no opinion with respect to any matters which would require us to perform
a mathematical calculation or make a financial or accounting determination.
Because certain of the Material Agreements may be governed by other than
California law, this opinion may not be relied upon as to whether a breach or
default would occur under the law actually governing such Material Agreements.
We bring your attention to the fact that Xxxxxx & Xxxxxxx LLP attorneys
rendering services in connection with the offering own certain securities of the
Company.
This letter is furnished only to you in your capacity as Representatives
of the several Underwriters in their capacity as underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transactions covered hereby. This letter may not be relied
upon by you or them for any other purpose, or furnished to, assigned to, quoted
to, or relied upon by any other person, firm or other entity for any purpose
(including any person, firm or other entity that acquires Shares from you or the
other Underwriters) without our prior written consent, which may be granted or
withheld in our sole discretion.
30
EXHIBIT 1-B
FORM OF NEGATIVE ASSURANCES STATEMENT OF XXXXXX & XXXXXXX LLP
COUNSEL TO THE COMPANY
__________________, 2003
Xxxxxx Brothers Inc.
Citigroup Global Markets Inc.
Xxxxxx Xxxxxx Partners LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.,
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CancerVax Corporation
Ladies and Gentlemen:
We have acted as counsel to CancerVax Corporation, a Delaware corporation
(the "Company"), in connection with the sale to you and the several underwriters
for whom you are acting as representatives (the "Underwriters") on the date
hereof by the Company, of ___________ shares (the "Shares") of common stock of
the Company, par value $0.00004 per share (the "Common Stock"), pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as amended
(the "Act"), filed with the Securities and Exchange Commission (the
"Commission") on __________________, 2003 (File No. 333-107993), as amended to
date (the "Registration Statement"), a Prospectus dated __________, 2003 filed
with the Commission pursuant to Rule 424(b) under the Act (the "Prospectus") and
an underwriting agreement dated _____________, 2003 between you, as
representatives of the several Underwriters named in the underwriting agreement,
and the Company (the "Underwriting Agreement"). This letter is being delivered
to you pursuant to Section 7(d) of the Underwriting Agreement.
The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information. Therefore, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent expressly set forth in the
numbered paragraph 10 of our opinion letter to you of even date and as provided
below), and have not made an independent check or verification thereof (except
as aforesaid). However,
31
in the course of acting as counsel to the Company in connection with the
preparation by the Company of the Registration Statement and Prospectus, we
reviewed the Registration Statement, and the Prospectus, and participated in
conferences and telephone conversations with officers and other representatives
of the Company, the independent public accountants for the Company, your
representatives, and your counsel, during which conferences and conversations
the contents of the Registration Statement and the Prospectus and related
matters were discussed. We also reviewed and relied upon certain corporate
records and documents, letters from counsel and oral and written statements of
officers and other representatives of the Company and others as to the existence
and consequence of certain factual and other matters.
Based on our participation, review and reliance as described above, we
advise you that no facts came to our attention that caused us to believe that
the Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; it being understood that we express no belief with respect to the
financial statements, schedules, or other financial data included in, or omitted
from, the Registration Statement or the Prospectus.
We bring your attention to the fact that Xxxxxx & Xxxxxxx LLP attorneys
rendering services in connection with the offering own certain securities of the
Company.
This letter is delivered only to you in your capacity as representatives
of the several Underwriters in their capacity as underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transactions covered hereby. This letter may not be relied
upon by you or them for any other purpose, or furnished to, assigned to, quoted
to, or relied upon by any other person, firm or other entity for any purpose
(including any person, firm or other entity that acquires Shares from you or the
other Underwriters) without our prior written consent, which may be granted or
withheld in our sole discretion.
32
EXHIBIT 2
FORM OF OPINION OF PILLSBURY WINTHROP LLP
INTELLECTUAL PROPERTY COUNSEL TO THE COMPANY
__________________, 2003
Xxxxxx Brothers Inc.
Citigroup Global Markets Inc.
Xxxxxx Xxxxxx Partners LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.,
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CancerVax Corporation
Ladies and Gentlemen:
This opinion is delivered in connection with the Underwriting
Agreement, dated ______________, 2003 (the "Underwriting Agreement") relating to
the offering of Common Stock, par value $0.00004 each, of the Company, pursuant
to the registration statement on Form S-1 filed under the Securities Act of
1933, as amended (the "Act"), filed with the Securities and Exchange Commission
(the "Commission") on ______________, 2003 (File No. 333-107993), as amended to
date (the "Registration Statement"), and a Prospectus dated _____________, 2003
filed with the Commission pursuant to Rule 424(b) under the Act (the
"Prospectus"). Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to them in the Underwriting Agreement.
Whenever our opinions herein are qualified by the phrase, "to the
best of our knowledge," such language means that based upon the actual knowledge
of attorneys presently within our firm and all knowledge that would have been
gained upon the reasonable investigation of our files.
We have read the Registration Statement and the Prospectus,
including particularly the portions of the Registration Statement and the
Prospectus referring to the patents, patent applications, designs and design
applications as set forth in Appendix A, attached hereto (the patents, patent
applications, designs and design applications described in Appendix A shall be
collectively referred to as the "Patent IP Rights")
33
Based on the foregoing, we are of the opinion that:
1. As to the statements in the Registration Statement and any
further amendment thereto made by the Company prior to the Delivery Date and in
the Prospectus or any further amendment or supplement thereto made by the
Company prior to the Delivery Date under the captions "Risk Factors - Risks
Related to Our Intellectual Property and Litigation" and "Business - Patents and
Proprietary Technology" insofar as such statements constitute matters of U.S.
patent, copyright or design laws or legal conclusions with respect thereto, are
accurate in all material respects and complete statements or summaries of the
matters set forth therein.
2. To the best of our knowledge, (i) the Registration Statement and
any further amendment thereto, and any information incorporated therein by
reference, made by the Company prior to the Delivery Date, at the time such
Registration Statement or amendment became effective, did not contain an untrue
statement of a material fact with respect to the Patent IP Rights or omit to
state a material fact relating to the Patent IP Rights required to be stated
therein or necessary to make the statements therein not misleading, (ii) the
Prospectus and any further amendment or supplement thereto made by the Company
prior to the Delivery Date, as of its date, did not contain an untrue statement
of a material fact with respect to the Patent IP Rights or omit to state a
material fact relating to the Patent IP Rights required to be stated therein or
necessary to make the statements therein not misleading, and (iii) at the
Delivery Date, the Registration Statement, the Prospectus and any further
amendment or supplement thereto made by the Company prior to the Delivery Date
did not contain an untrue statement of a material fact with respect to the
Patent IP Rights or omit to state a material fact relating to the Patent IP
Rights required to be stated therein or necessary to make the statements therein
not misleading.
3. To the best of our knowledge, except to the extent described in
the Prospectus or in Appendix A, the Company is listed in the records of the
United State Patent and Trademark Office and in the records of the appropriate
foreign offices as the holder of record of the Patent IP Rights. To the best of
our knowledge, except to the extent described in the Prospectus, the Company is
an owner of the Patent IP Rights. To the best of our knowledge, except as
described in the Registration Statement, there is no pending or threatened
action, suit proceeding or claim challenging the validity or scope of any of the
Patent IP Rights.
4. To the best of our knowledge, the Company has taken such steps as
are required, including the payment of all necessary maintenance fees, to
maintain the enforceability of the Patent IP Rights and to maintain the pendency
of the Patent Applications and Design Applications, specified in Appendix A,
attached hereto.
34
