EMISPHERE TECHNOLOGIES, INC.
2,500,000 Shares/1/
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 2000
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
WARBURG DILLON READ LLC
XXXXX, XXXXXXXX & XXXX, INC.
c/o CHASE SECURITIES INC.
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Emisphere Technologies, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as hereinafter defined),
on the terms and subject to the conditions set forth herein, 2,500,000 shares
(the "Underwritten Stock") of its authorized but unissued Common Stock, $0.01
par value per share (the "Common Stock"). The Company proposes to grant to the
Underwriters an option to purchase up to 375,000 additional shares of Common
Stock (the "Option Stock" and, together with the Underwritten Stock, the
"Stock"). The Common Stock is more fully described in the Registration
Statement and the Prospectus (each, as hereinafter defined).
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several Underwriters, for whom you are acting,
named in Schedule I hereto (the "Underwriters", which term shall also include
any underwriter purchasing Stock pursuant to Section 3(b) hereof). You
represent and warrant that you have been authorized by each of the other
Underwriters to enter into this Agreement on its behalf and to act for it in the
manner herein provided.
1. Registration Statement. The Company filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333- ) for the registration under the Securities Act of 1933, as amended
(the "Securities Act") of the Stock, and has filed with the Commission such
amendments thereof as may have been required to the date of this Agreement.
Copies of such registration statement and of each amendment thereof, if any,
including the
___________________
1 Plus an option to purchase from the Company up to 375,000 additional
shares to cover over-allotments.
related Preliminary Prospectus (as hereinafter defined) have heretofore been
delivered by the Company to you.
The term "Preliminary Prospectus" as used in this Agreement means each
prospectus subject to completion filed in connection with the sale of the Stock
or any amendment or supplement thereto and any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 as of the date of such
preliminary prospectus).
The term " Registration Statement" as used in this Agreement means the
registration statement on Form S-3 (No. 333- ) (including all documents,
exhibits, financial schedules and information deemed to be a part thereof
through incorporation by reference of otherwise), in the form in which it became
effective, including the information, if any, deemed to be a part thereof at the
time and on the date of effectiveness (the "Effective Time" and the "Effective
Date", respectively) and contained in the Prospectus pursuant to Rule 430A under
the Securities Act, and any registration statement filed pursuant to Rule 462(b)
of the rules and regulations of the Commission with respect to the Stock (a
"Rule 462(b) registration statement"), and, in the event of any amendment
thereto after the Effective Date, also means (from and after the effectiveness
of such amendment) such registration statement as so amended (including any Rule
462(b) registration statement).
The term "Prospectus" as used in this Agreement means the prospectus,
including the documents incorporated by reference therein, relating to the
Stock first filed with the Commission pursuant to Rule 424(b) and Rule 430A (or
if no such filing is required, as included in the Registration Statement at the
time of effectiveness) and, in the event of any supplement or amendment to such
prospectus after the Effective Date, also means (from and after the filing with
the Commission of such supplement or the effectiveness of such amendment) such
prospectus as so supplemented or amended.
The term "Incorporated Documents" means the documents which at the time are
incorporated by reference in the Registration Statement, any Preliminary
Prospectus, Prospectus or any amendment or supplement thereto.
The Registration Statement, in the form heretofore delivered to the
Underwriters, including all documents incorporated by reference in the
prospectus included therein, have been declared effective by the Commission, and
no post-effective amendment to the Registration Statement or other document with
respect to a document incorporated by reference therein has been filed or
transmitted for filing with the Commission. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants as follows:
(a) The Company is eligible to use Form S-3 under the Securities Act for
registration of the Stock. On its effective date, the Registration Statement
complied, and on the date of the Prospectus, the date on which any post-
effective amendment to the Registration Statement becomes effective, the date on
which any supplement or amendment to the Prospectus is filed with the
Commission, the Closing Date (as hereinafter defined) and any later date on
which Option Stock is to be purchased, the Registration Statement and Prospectus
(and any amendment thereof or supplement thereto) will comply, in all material
respects, with the provisions of the Securities Act and the Securities Exchange
Act of
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1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder. On the Effective Date, the Registration Statement did
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date and on the
other dates referred to above, neither the Registration Statement nor the
Prospectus (nor any amendment thereof or supplement thereto) contained or will
contain (as applicable) any 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, not misleading; provided,
however, that none of the representations and warranties in this subparagraph
(a) shall apply to statements in, or omissions from, the Registration Statement
or the Prospectus made in reliance upon and in conformity with information
herein or otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus. When any
Preliminary Prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) under the Securities Act) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus as
amended or supplemented complied in all material respects with the applicable
provisions of the Securities Act and the rules thereunder and did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(b) The Registration Statement is effective under the Securities Act and
no stop order preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus or any
Preliminary Prospectus has been issued and no proceedings for that purpose have
been instituted or are threatened under the Securities Act. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the
Securities Act has been or will be made in the manner and within the time period
required by such Rule.
(c) The Incorporated Documents, at the time they were filed with the
Commission or became effective, as the case may be, complied in all material
respects with the requirements of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations thereunder, and any further
Incorporated Documents filed will, when they are filed or become effective, as
the case may be, conform with the requirements of the Exchange Act or the
Securities Act, as applicable, and the rules and regulations thereunder. No
such document when it was filed or became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and no such further document, when it is filed or becomes effective,
will contain an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has full
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement and Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good standing
in all jurisdictions in which the character of the property owned or leased or
the nature of the business transacted by it makes qualification necessary
(except where the failure to be so qualified would not have a material adverse
effect on the business, properties, operations, financial condition,
stockholders' equity or results of operations of the Company (a "Material
Adverse Effect")).
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(e) The Company does not have any direct or indirect equity interest in
any other corporation, partnership, joint venture, limited liability company or
other entity or any commitment to acquire any such equity interest. The Company
has purchased the interest of Elan Corporation plc in Ebbisham, Ltd., an Irish
corporation, and Ebbisham, Ltd. has since been liquidated by the Company.
(f) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any change in the
capital stock of the Company or any materially adverse change in, or development
known to the Company involving a prospective material adverse change in, or
affecting the business, management, properties, financial condition,
stockholders' equity or results of operations of the Company, whether or not
arising from transactions in the ordinary course of business, other than as set
forth in the Prospectus, and since such dates, except in the ordinary course of
business, the Company has not entered into any material transaction not
described in the Prospectus. Since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, the Company
has not sustained 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, proceeding, order or decree,
otherwise than as set forth or contemplated in the Prospectus.
(g) The Company has good and marketable title in fee simple to all
material real property and good and marketable title to all material personal
property owned by it, in each case free and clear of all liens, encumbrances and
defects of any kind or such as do not materially affect the value or
marketability of such property and do not interfere with the use made and
proposed to be made of such property by the Company. Any material real property
and buildings held under lease by the Company 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.
(h) 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 in accordance with all applicable
federal and state securities laws, rules and regulations, are fully paid and
non-assessable, are free of and were not issued in violation of any preemptive
or similar rights, and conform to the description thereof contained in the
Prospectus or incorporated therein by reference. The Prospectus accurately sets
forth and describes, as of its date, all outstanding options, warrants and other
rights calling for the issuance of, and there are no commitments to issue any
shares of, capital stock of the Company and any security convertible into or
exchangeable or exercisable for capital stock of the Company. Except as
described in the Prospectus, there is no holder of any securities of the Company
or any other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to him, her or it or permit him, her or it to
underwrite the sale of, any of the Stock.
(i) Each holder of a security of the Company that has any right to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement has been notified of the Company's
intent to file the Registration Statement with the Commission and has agreed in
writing to waive such holder's registration rights with respect to the public
offering contemplated thereby and hereby.
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(j) The Stock has been duly and validly authorized and, when issued and
sold to the Underwriters as provided herein, will be duly and validly issued,
fully paid and non-assessable, will be free of and will not have been issued in
violation of any preemptive or other similar rights, and will conform to the
description thereof contained in the Prospectus or incorporated therein by
reference. No further approval or authority of any stockholder or the Board of
Directors of the Company will be required for the issuance and sale of the Stock
as provided herein.
(k) The Stock to be sold by the Company has been approved for quotation by
the Nasdaq National Market upon official notice of issuance.
(l) The issuance and sale of the Stock by the Company and the compliance
by the Company with all of the provisions of this Agreement and the consummation
of the transactions contemplated hereby (i) have been duly authorized and
approved by all requisite corporate action on the part of the Company, (ii) do
not and will not as of the Closing Date and any later date on which Option Stock
is to be purchased, conflict with, or result in a breach or violation of,
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company pursuant to,
any of the terms and provisions of any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties or assets are bound or affected
(each, a "Conflict"), (iii) do not and will not as of the Closing Date and any
later date on which Option Stock is to be purchased, result in the violation of
any provision of the Certificate of Incorporation or By-laws of the Company,
(iv) will not result in the violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction of
the Company or any of its properties or assets (each, a "Violation"), and (v) do
not and will not as of the Closing Date and any later date on which Option Stock
is to be purchased require the consent, approval, authorization or other order
of, or registration, filing or qualification with, any such court or
governmental agency or body or other third party (each, a "Consent") except, (A)
in the case of clause (v) as may be required for the registration of the Stock
under the Securities Act and the Exchange Act and compliance with state
securities or Blue Sky laws, all of which have been or will be effected in
accordance with this Agreement and (B) in the case of clause (ii), any such
Conflict that would not, individually or in the aggregate, result in a Material
Adverse Effect or impair or delay the Company's ability to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and constitutes the valid and binding agreement of the
Company, enforceable against it in accordance with its terms.
(m) (i) The Company is not in violation of its Certificate of
Incorporation or By-laws, or of any statute, law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any judgment,
injunction, order or decree of any court or governmental agency or body having
jurisdiction over the Company, and (ii) the Company is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound, including, without limitation,
the Lilly Agreement and the Novartis Agreement, each as hereinafter defined,
which default could have a Material Adverse Effect.
(n) The statements set forth in the Registration Statement and Prospectus
(including in the Incorporated Documents), insofar as they are descriptions of
agreements or other legal instruments or documents, or refer to statements of
law or legal conclusions, including without limitation the statements set forth
under the captions "Risk Factors -- Our strategic alliances with Novartis and
Lilly may not
5
result in commercializable products, " - If we cannot adequately protect our
patent and proprietary rights, our business will suffer", and "-Commercialized
products are subject to continuing regulation" and "Business -Collaboration
Agreements," " -- Patents" and " -- Government Regulation," and in the third
paragraph under "Business - Lead Product Candidates - Salmon Calcitonin" are
accurate summaries thereof and present fairly the information required to be
shown in all material respects.
(o) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or to which any
property of the Company is the subject which, if determined adversely to the
Company, would individually or in the aggregate have a Material Adverse Effect;
and, to the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(p) The Company is not and, after giving effect to the sale of the Stock
and the application of the proceeds therefrom as described in the Prospectus,
will not be an "investment company", as such term is defined in the Investment
Company Act of 1940, as amended.
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and delivered their reports with respect to the
audited financial statements and schedules contained or incorporated by
reference in the Registration Statement and the Prospectus, are independent
public accountants as required by the Securities Act and Exchange Act and the
rules and regulations of the Commission thereunder.
(r) The financial statements and schedules of the Company and the related
notes thereto, included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the respective dates of such financial statements and schedules,
and the results of operations and changes in financial position of the Company
for the respective periods covered thereby. Such statements, schedules and
related notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis and (where audited) as
certified by the independent accountants named in Section 2 (q). No other
financial statements or schedules are required to be included in the
Registration Statement or the Prospectus. The summary and selected financial
data set forth in the Prospectus under the captions "Capitalization" and
"Summary Financial Data" present accurately and fairly the information shown on
the basis stated in Registration Statement.
(s) There are no contracts or other documents required to be described in
the Registration Statement or in any Incorporated Document or the Prospectus or
to be filed as an exhibit to the Registration Statement or to any Incorporated
Document that have not been described or filed as required by the Securities
Act, the Exchange Act or the rules and regulations of the Commission thereunder.
The contracts so described in the Prospectus are in full force and effect on the
date hereof, and neither the Company nor, to the Company's knowledge, any other
party is in breach of or default under any of such contracts where such breach
or default, individually or in the aggregate, would be material to the Company.
Except as described in the Prospectus, the descriptions of such contracts in the
Registration Statement are accurate summaries thereof and fairly present the
information required to be shown in all material respects.
(t) Except as disclosed in the Prospectus, the Company has sufficient and
requisite trademarks, trade names, patent rights, copyrights and licenses and
approvals ("Intellectual Property Rights") to conduct its business as now
conducted (as described in the Prospectus). Without limiting the generality of
the foregoing, the Company is unaware of any limitations with respect to its
Intellectual
6
Property Rights not described in the Prospectus that would prevent it from (a)
performing its obligations under the Novartis Agreement or Lilly Agreement
(each, as hereinafter defined), and (b) engaging in its contemplated activities,
as described in the Prospectus. The Company does not have any Intellectual
Property Rights material to the operations of the Company's business except as
described in the Prospectus and such Intellectual Property Rights will not
expire earlier than as disclosed in the Prospectus. The Company has no
knowledge of any material infringement by it of Intellectual Property Rights of
others and, to its knowledge, there are no outstanding claims against the
Company regarding Intellectual Property Rights or other infringement which, if
adversely determined, could have a Material Adverse Effect. The Company has no
knowledge of any material infringement by others of its Intellectual Property
Rights.
(u) The Company has taken usual and customary measures for a company of
its size and resources and in its line of business to protect the secrecy,
confidentiality and value of all of its intellectual property (including the
Intellectual Property Rights and any trade secrets necessary or useful in the
conduct of its business) in all material respects.
(v) Except as otherwise disclosed in the Prospectus, the Company now
holds, and at the Closing Date and any later date on which Option Stock is to be
purchased, will hold, all licenses, certificates, approvals and permits from all
state, United States foreign and other regulatory authorities, including but not
limited to the United States Food and Drug Administration (the "FDA") and any
foreign regulatory authorities performing functions similar to those performed
by the FDA (together, "FDA Permits"), that are material to the conduct of the
business of the Company (as such business is currently conducted), except for
such licenses, certificates, approvals and permits the failure of which to hold
would not have a Material Adverse Effect, all of which are valid and in full
force and effect (and there is no proceeding pending or, to the knowledge of the
Company, threatened which may cause any such license, certificate, approval or
permit to be withdrawn, canceled, suspended or not renewed). The Company is
unaware of any reason not described in the Prospectus why it will not be granted
all such FDA Permits as may be necessary in order for it to engage in the
commercialization of the oral heparin products within a reasonable time period.
The Company is not in violation of any law, order, rule, regulation, writ,
injunction or decree of any court or governmental agency or body, applicable to
the investigation of new drugs in animals and humans, including, but not limited
to, those promulgated by the FDA. All of the descriptions in or incorporated by
reference in the Registration Statement and Prospectus of the legal and
governmental proceedings by or before the FDA or any foreign, state or local
government body exercising comparable authority are accurate, complete and fair.
(w) The clinical studies and tests (including, but without limitation, the
animal studies and human clinical trials) conducted by the Company or in which
the Company has participated that are described in the Registration Statement
and Prospectus or the results of which are referred to in the Registration
Statement and Prospectus (and, to the Company's knowledge, such studies and
tests that were conducted on behalf of the Company) were and, if still pending,
are being conducted in all material respects (i) in accordance with the
protocols, procedures and controls for such studies and tests of new medical
devices or drug or biologic products, as the case may be, and (ii) in accordance
with all applicable laws, rules and regulations. The descriptions of the
results of such studies and tests contained or incorporated by reference in the
Registration Statement and Prospectus are accurate, complete and fair, and the
Company has no knowledge of any other studies or tests, the results of which
call into question the results described or referred to in the Registration
Statement and Prospectus. The Company has not received any notices or
correspondence from the FDA, any other governmental agency or
7
Institutional Review Board requiring the termination, suspension or modification
of any studies or tests conducted by, or on behalf of, the Company or in which
the Company has participated that are described in the Registration Statement
and Prospectus or the results of which are referred to in the Registration
Statement and Prospectus that would cause the Company to change the descriptions
in the Registration Statement or Prospectus.
(x) The Company is in material compliance with, and has received no notice
or other communication alleging non-compliance with, all applicable foreign,
United States, state and local laws, rules, regulations, treaties, statutes and
codes of any and all governmental authorities.
(y) Without limiting the generality of (x) above, the Company: (i) is in
material compliance with any and all applicable foreign, United States, state
and local laws, rules, regulations, treaties, statutes and codes promulgated by
any and all governmental authorities relating to the protection of human health
and safety, the environment or toxic substances or wastes, pollutants or
contaminates ("Environmental Laws"); (ii) is in material compliance with any and
all applicable foreign, United States, state and local laws, rules, regulations,
treaties, statutes and codes promulgated by any and all governmental authorities
(including pursuant to the Occupational Health and Safety Act) relating to the
protection of human health and safety in the workplace ("Occupational Laws" and,
together with Environmental Laws, "Environmental and Occupational Laws"); (iii)
has received all material permits, licenses or other approvals required of it
under applicable Environmental and Occupational Laws to conduct its business as
currently conducted; and (iv) is in compliance with all terms and conditions of
such permit, license or approval, except with respect to all such cases where
such noncompliance with the applicable Environmental and Occupational Laws or
failure to receive or act in compliance with the required permit, license or
other approval would not, individually or in the aggregate, have a Material
Adverse Effect. No action, proceeding, revocation proceeding, writ, injunction
or claim is pending or, to the Company's knowledge, threatened against the
Company relating to Environmental and Occupational Laws or to the Company's
activities involving Hazardous Materials. The term "Hazardous Materials" as
used in this Agreement means any material or substance that: (A) is prohibited
or regulated by any environmental law, rule, regulation, order, treaty, statute
or code promulgated by any governmental authority, or any amendment or
modification thereto; or (B) has been designated or regulated by any
governmental authority as radioactive, toxic, hazardous or otherwise a danger to
health, reproduction or the environment.
(z) The Company is not or was not engaged in the generation, use,
manufacture, transportation or storage of any Hazardous Materials on any of the
Company's properties or former properties, except where such use, manufacture,
transportation or storage is or was in material compliance with Environmental
Laws. No Hazardous Materials have been treated or disposed of by the Company on
any of the Company's properties or on properties formerly owned or leased by the
Company during the time of such ownership or lease, except in compliance with
Environmental Laws. No spills, discharges, releases, deposits, emplacements,
leaks or disposal of any Hazardous Materials have occurred on or under, or have
emanated from, any of the Company's properties or former properties for which
the cost of remediation would have a material adverse effect on the Company's
business.
(aa) The Company has filed on a timely basis all necessary tax returns
required to be filed with any taxing authority, which returns are complete and
correct and, to the Company's knowledge, are not the subject of any audit
proceedings, and the Company is not in default in the payment of any taxes
8
which were payable pursuant to said returns or any assessments with respect
thereto, except for such taxes as are being contested in good faith and as to
which adequate reserves have been provided.
(bb) The Company maintains insurance with insurers of recognized financial
responsibility of the types and in the amounts which are customary in the
businesses in which it is engaged, all of which insurance is in full force and
effect, and there are no claims by the Company under any such policy or
instrument as to which any insurer is denying liability or defending under a
reservation of rights clause.
(cc) Neither the Company nor any agent or employee of the Company has, at
any time during the last five years, (a) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (b) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(dd) Neither the Company nor, to its knowledge, any of its officers,
directors or affiliates has taken, and at the Closing Date and such later date
on which Option Stock is to be purchased, neither the Company, nor, to its
knowledge, any of its officers, directors or affiliates will have taken,
directly or indirectly, any action that has constituted, or might reasonably be
expected to constitute, the stabilization or manipulation of the price of sale
or resale of the Stock.
(ee) The Company has not distributed and, prior to the later to occur of
the Closing Date and completion of the distribution of the Stock, will not
distribute any offering material in connection with the offering and sale of the
Stock other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or other materials, if any, permitted by the Securities Act.
(ff) The execution, delivery and performance by the Company of each of (i)
the Research Collaboration and Option Agreement, dated December 3, 1997, between
the Company and Novartis Pharma AG (the "Novartis Agreement"), (ii) the Research
Collaboration and Option Agreement, dated February 26, 1997, between the Company
and Xxx Xxxxx (the ("Lilly Agreement") and (iii) the Termination Agreement,
dated July 2, 1999, between the Company and Elan plc (the "Elan Termination")
were duly authorized and approved by all requisite corporate and other action on
the part of the Company, and will not constitute or give rise to a Conflict or
Violation or require a Consent, except where any such Conflict or Violation, or
failure to obtain a Consent, would not, individually or in the aggregate, have a
Material Adverse Effect, or impair or delay the Company's ability to consummate
the transactions contemplated thereby.
(gg) The Company has not violated any Federal, state or local law relating
to discrimination in the hiring, promotion or pay of employees nor any
applicable wage or hour laws, nor any provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations promulgated
thereunder. There is (i) no significant unfair labor practice complaint pending
against the Company or threatened against it before the National Labor Relations
Board or any state or local labor relations board, and no significant grievance
or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or threatened against it,
(ii) no labor dispute in which the Company is involved nor is any labor dispute
imminent, other than routine disciplinary and grievance matters, and (iii) no
union representation question existing with respect to the employees of the
Company and no union organizing activities are taking place, except, in each
case singly or in the aggregate, such as would not have a Material Adverse
Effect.
9
(hh) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assents is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ii) The Company has reviewed its operations to evaluate the extent to
which its business or operations will be affected by any residual Year 2000
Problem (that is, any significant risk that computer hardware or software
applications used by the Company will not, in the case of dates or time periods
occurring after December 31, 1999 (including February 29, 2000), function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000). As a result of such review, the Company has no reason to
believe, and does not believe, that (i) there are any issues related to the
Company's preparedness to address any residual Year 2000 Problem that are of a
character required to be described in the Registration Statement or Prospectus
which have not been accurately described therein and (ii) any residual Year 2000
Problem will have a Material Adverse Effect. The Company reasonably believes
that it and material third parties used, served by or collaborating with it,
satisfactorily have addressed or are addressing the Year 2000 Problem and will
address any Residual Year 2000 Problem in a timely manner.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
the Underwriters, and each of the Underwriters agrees to purchase from the
Company, the number of shares of Underwritten Stock set forth opposite each
Underwriter's name in Schedule I. The price at which such shares of
Underwritten Stock shall be sold by the Company and purchased by the several
Underwriters shall be $__ per share. The obligation of each Underwriter to the
Company shall be to purchase from the Company that number of shares of
Underwritten Stock which represents the same proportion of the total number of
shares of Underwritten Stock to be sold by the Company pursuant to this
Agreement as the number of shares of Underwritten Stock set forth opposite the
name of such Underwriter in Schedule I hereto represents of the total number of
shares of Underwritten Stock to be purchased by all Underwriters pursuant to
this Agreement, as adjusted by you in such manner as you deem advisable to avoid
fractional shares. In making this Agreement, each Underwriter is contracting
severally and not jointly; except as provided in paragraphs (b) and (c) of this
Section 3, the agreement of each Underwriter is to purchase only the respective
number of shares of Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 8 or 9 hereof) to purchase and pay for
the number of shares of Stock agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to you, and the
non-defaulting Underwriters shall have the right, within 24 hours after the
receipt by you of such notice, to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of the shares of Stock which such defaulting Underwriter
or Underwriters agreed to
10
purchase. If the non-defaulting Underwriters fail so to make such arrangements
with respect to all or part of such shares, the number of shares of Stock which
each non-defaulting Underwriter is otherwise obligated to purchase under this
Agreement shall be automatically increased on a pro rata basis to absorb the
remaining shares and portion which the defaulting Underwriter or Underwriters
agreed to purchase; provided, however, that the non-defaulting Underwriters
shall not be obligated to purchase the shares and portion which the defaulting
Underwriter or Underwriters agreed to purchase if the aggregate number of such
shares of Stock exceeds 10% of the total number of shares of Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
above referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of Stock which the defaulting Underwriter or Underwriters agreed
to purchase hereunder, this Agreement shall be terminated without further act or
deed and without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph (b), and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants herein
contained, and subject to the terms and conditions herein set forth, the Company
hereby grants to the several Underwriters an option to purchase, severally and
not jointly, up to all of the Option Stock from the Company at the same price
per share as the Underwriters shall pay for the Underwritten Stock. Said option
may be exercised only to cover over-allotments in the sale of the Underwritten
Stock by the Underwriters and may be exercised in whole or in part at any time
(but not more than once) on or before the thirtieth day after the date of this
Agreement upon written or telegraphic notice by you to the Company setting forth
the aggregate number of shares of Option Stock as to which the several
Underwriters are exercising the option. Delivery of certificates for the shares
of Option Stock, and payment therefor, shall be made as provided in Section 5
hereof. The number of shares of Option Stock to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Stock to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Stock, as adjusted by you in such manner as you
deem advisable to avoid fractional shares.
4. Offering by the Underwriters.
(a) The terms of the public offering by the Underwriters of Stock to be
purchased by them shall be as set forth in the Prospectus. The Underwriters may
from time to time change the public offering price after the closing of the
public offering and increase or decrease the concessions and discounts to
dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the
11
only information furnished by the Underwriters to the Company for inclusion or
incorporation by reference in the Registration Statement, any Preliminary
Prospectus, and the Prospectus, and the Underwriters represent and warrant to
the Company that the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten Stock and
the Option Stock (if the option granted by Section 3(b) hereof shall have been
exercised not later than 5:00 p.m., New York time, on the date two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
a.m., New York time, on the third business day after the date of this Agreement,
or at such time on such other day, not later than seven full business days after
such third business day, as shall be agreed upon in writing by the Company and
you. The date and hour of such delivery and payment are herein called the
"Closing Date".
(b) If the option granted by Section 3(b) hereof shall be exercised after
10:00 a.m., New York time, on the date two business days preceding the Closing
Date, delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made at the office of Xxxxxx, Xxxxx & Bockius LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., New York time, on the third business
day after the exercise of such option.
(c) Payment for Stock purchased from the Company shall be made to the
Company or its order by wire transfer in same day funds. Such payment shall be
made upon delivery of certificates for the Stock to you for the respective
accounts of the several Underwriters against receipt therefor signed by you.
Certificates for the Stock to be delivered to you shall be registered in such
name or names and shall be in such denominations as you may request at least one
business day before the Closing Date, in the case of Underwritten Stock, and at
least one business day prior to the purchase thereof, in the case of the Option
Stock. Such certificates will be made available to the Underwriters for
inspection, checking and packaging at the offices of Lewco Securities
Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business day prior to
the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New York
time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall
not relieve such Underwriter from any of its obligations hereunder.
6. Further Agreements of the Company. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare a Prospectus, in a form approved by Chase
Securities Inc., and file the same pursuant to Rule 424(b) under the Securities
Act not later than the 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,
containing information previously ommitted at the Effective Time in reliance on
Rule 430A and (ii) not file any amendment of the Registration Statement or
supplement to the Prospectus of which you shall not
12
previously have been advised and furnished with a copy or to which you shall
have reasonably objected in writing or which is not in compliance with the
Securities Act or the rules and regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the event of (i)
the request by the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceeding for that purpose, (iv) the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or (v) the receipt by it of notice of the
initiation or threatening of any proceeding for such purpose. The Company will
make every reasonable effort to prevent the issuance of such a stop order and,
if such an order shall at any time be issued, to obtain the withdrawal thereof
at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date, deliver to you and
counsel to the Underwriters signed copies of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
furnished to you and all Incorporated Documents), (ii) as promptly as possible
deliver to you, at such office or offices as you may designate, as many copies
of the Prospectus as you may reasonably request, and (iii) thereafter from time
to time during the period in which a prospectus is required by law to be
delivered by the Underwriters or dealer, likewise send to the Underwriters as
many additional copies of the Prospectus and as many copies of any supplement to
the Prospectus and of any amended prospectus, filed by the Company with the
Commission, as you may reasonably request for the purposes contemplated by the
Securities Act.
(d) If at any time during the period in which a prospectus is required by
law to be delivered by you or a dealer any event relating to or affecting the
Company, or of which the Company shall be advised in writing by you, shall occur
as a result of which it is necessary, in the opinion of counsel for the Company
or of your counsel, to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser of the Stock, the Company will forthwith prepare
and file with the Commission a supplement to the Prospectus or an amended
prospectus so that the Prospectus as so supplemented or amended will not contain
any 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 existing at the time such Prospectus is delivered to such
purchaser, not misleading. If, after the public offering of the Stock by the
Underwriters and during such period, the Underwriters shall propose to vary the
terms of offering thereof by reason of changes in general market conditions or
otherwise, you will advise the Company in writing of the proposed variation,
and, if in the opinion either of counsel for the Company or of your counsel such
proposed variation requires that the Prospectus be supplemented or amended, the
Company will forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
13
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your information, a copy of any post-effective amendment to
the Registration Statement and any supplement to the Prospectus or any amended
prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by you or any dealer, in keeping
such qualifications in good standing under said securities or blue sky laws;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof, the
Company will furnish to you, copies of all periodic and special reports
furnished to stockholders of the Company and of all information, documents and
reports filed with the Commission.
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the Effective Date, the Company
will make generally available to its security holders and to you an earning
statement in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, including all costs and
expenses incident to (i) the preparation, printing and filing with the
Commission and the National Association of Securities Dealers, Inc. ("NASD") of
the Registration Statement, any Preliminary Prospectus and the Prospectus, (ii)
the furnishing to you of copies of any Preliminary Prospectus and of the several
documents required by paragraph (c) of this Section 6 to be so furnished, (iii)
the printing of this Agreement and related documents delivered to you , (iv) the
preparation, printing and filing of all supplements and amendments to the
Prospectus referred to in paragraph (d) of this Section 6, (v) the furnishing to
you of the reports and information referred to in paragraph (g) of this Section
6 and (vi) the printing and issuance of stock certificates, including the
transfer agent's fees.
(j) The Company agrees to reimburse you, for blue sky fees and related
disbursements (including counsel fees and disbursements) paid by you or for your
account or by your counsel in qualifying the Stock under state securities or
blue sky laws and in the review of the offering by the NASD.
(k) The provisions of paragraphs (i) and (j) of this Section are intended
to relieve the Underwriters from the payment of the expenses and costs which the
Company hereby agrees to pay.
(l) The Company hereby agrees that, without the prior written consent of
Chase Securities Inc., the Company will not for a period of 90 days following
the commencement of the public offering of the Stock by the Underwriter,
directly or indirectly, (i) sell, offer, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any
14
securities convertible into or exchangeable or exercisable for or any rights to
purchase or acquire Common Stock or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the Stock to be sold to the Underwriters pursuant to this Agreement or (b) any
shares of Common Stock and securities convertible into or exchangeable for or
rights to purchase Common Stock issued pursuant to employee benefit plans,
qualified stock plans or other employee compensation plans existing on the date
hereof or pursuant to options, warrants or rights outstanding on the date
hereof.
(m) The Company will apply the net proceeds from the offering of the Stock
in the manner set forth under "Use of Proceeds" in the Prospectus.
(n) The Company is familiar with the Investment Company Act of 1940, as
amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, the common law or
otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus as part
thereof and any Rule 462(b) registration statement) or any post-effective
amendment thereto (including any Rule 462(b) registration statement), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented, if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (1) the indemnity agreements of the Company contained in
this paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated in writing to the
Company by or on behalf of any Underwriter for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto, and (2) the indemnity
15
agreement contained in this paragraph (a) with respect to any Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any person controlling any Underwriter) from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the Stock which
is the subject thereof if at or prior to the written confirmation of the sale of
such Stock a copy of the Prospectus (or the Prospectus as amended or
supplemented) was not sent or delivered to such person (excluding the documents
incorporated therein by reference) and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented), unless the failure is
the result of noncompliance by the Company with paragraph (c) of Section 6
hereof. The indemnity agreements of the Company contained in this paragraph (a)
and the representations and warranties of the Company contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter agrees to indemnify and hold harmless the Company,
each of its officers who signs the Registration Statement on his own behalf or
pursuant to a power of attorney, each of its directors, each other Underwriter
and each person (including each partner or officer thereof) who controls the
Company or any such other Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, the common law or otherwise and to reimburse each of them for
any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented, if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated in writing to the
Company by or on behalf of such indemnifying Underwriter for use in the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The indemnity agreement of each Underwriter contained in
this paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and (b)
of this Section 7 agrees that, upon the service of a summons or other initial
legal process upon it in any action or suit instituted against it or upon its
receipt of written notification of the commencement of any investigation or
inquiry of, or proceeding against, it in respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs, it
will promptly give written notice (the "Notice") of such service or notification
to the party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in such paragraphs shall be available to any party
who shall fail so to
16
give the Notice if the party to whom such Notice was not given was unaware of
the action, suit, investigation, inquiry or proceeding to which the Notice would
have related and was prejudiced by the failure to give the Notice, but the
omission so to notify such indemnifying party or parties of any such service or
notification shall not relieve such indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of such indemnity agreement. Any indemnifying party
shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties which shall be
reasonably satisfactory to the indemnified party or parties; provided, however,
that (i) if the indemnified party or parties reasonably determine that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under paragraph (a) or (b) of
this Section 7 for any legal or other expenses subsequently incurred by the
indemnified party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding, except that (A) the indemnifying party or
parties shall bear the legal and other expenses incurred in connection with the
conduct of the defense as referred to in clause (i) of the proviso to the
preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under paragraph (a) or (b)
of this Section 7, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in paragraph (a) or (b) of this Section 7 (i) in such proportion as
is appropriate to reflect the relative benefits received by each indemnifying
party 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 each indemnifying party in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Stock
received by the Company and the total underwriting discount received by the
Underwriters, as set forth in the table on
17
the cover page of the Prospectus, bear to the aggregate public offering price of
the Stock. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by each indemnifying party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation or
by any other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), the Underwriters shall not be required to contribute any amount in excess
of the underwriting discount applicable to the Stock purchased by it. 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.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) The Company shall not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
8. Termination. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended, or
if there shall have occurred (i) the engagement in hostilities or an escalation
of major hostilities by the United States or the declaration of war or a
national emergency by the United States on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the Underwriters' reasonable judgment,
make the offering or delivery of the Stock impracticable, (iii) suspension of
trading in securities generally or a material adverse decline in value of
securities generally on the New York Stock Exchange, the American Stock
Exchange, or The Nasdaq Stock Market, or limitations on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any
18
proceeding or investigation by, any court, legislative body, agency or other
governmental authority which in the Underwriters' reasonable opinion materially
and adversely affects or will materially or adversely affect the business or
operations of the Company, (v) the declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all of its obligations to be performed hereunder
at or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective, and no
stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceedings therefor shall
be pending or threatened by the Commission. The Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable
time period prescribed by the rules and regulations under the Securities
Act.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing,
and the form of the Registration Statement and of the Prospectus (except as
to the financial statements contained therein), shall have been approved at
or prior to the Closing Date by Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for
the Underwriters.
(c) You shall have received from Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, counsel for the Company, and from Xxxxx & Xxxxx, patent counsel
for the Company, opinions, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A and Annex B hereto,
respectively, and if Option Stock is purchased at any date after the
Closing Date, additional opinions from each such counsel, addressed to the
Underwriters and dated such later date, confirming that the statements
expressed as of the Closing Date in such opinions remain valid as of such
later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true
and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, respectively, not
misleading, (ii) since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment to the Prospectus
which has not been set forth in such a supplement or amendment, (iii) since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock of the Company or any material adverse change or any development
involving a prospective material adverse change in or affecting the
business, management, properties, financial condition, stockholders' equity
or
19
results of operations of the Company, whether or not arising from
transactions in the ordinary course of business, and, since such dates,
except in the ordinary course of business, the Company does not have nor
has it entered into any material transaction not described in the
Prospectus, (iv) since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, the Company has
not sustained 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,
(v) the Company does not have any material contingent obligations which are
not disclosed in the Registration Statement and the Prospectus, (vi) there
are not any pending or known threatened legal proceedings to which the
Company is a party or of which property of the Company is the subject which
are material and which are not disclosed in the Registration Statement and
the Prospectus, (vii) there are not any franchises, contracts, leases or
other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (viii) the
representations and warranties of the Company herein are true and correct
in all material respects as of the Closing Date or any later date on which
Option Stock is to be purchased, as the case may be, and (ix) there has not
been any material change in the market for securities in general or in
political, financial or economic conditions from those reasonably
foreseeable as to render it impracticable in your reasonable judgment to
make a public offering of the Stock, or a material adverse change in market
levels for securities in general (or those of companies in particular) or
financial or economic conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later date
on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the Chief Executive
Officer and the Chief Financial Officer of the Company, stating that the
respective signers of said certificate have carefully examined the
Registration Statement in the form in which it originally became effective
and the Prospectus contained therein and any supplements or amendments
thereto, and that the statements included in clauses (i) through (viii) of
paragraph (d) of this Section 9 are true and correct.
(f) You shall have received from PricewaterhouseCoopers LLP, a letter
or letters, addressed to the Underwriters and dated the Closing Date and
any later date on which Option Stock is purchased, confirming that they are
independent public accountants with respect to the Company within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder and based upon the procedures described in their
letter delivered to you concurrently with the execution of this Agreement
(the "Original Letter"), but carried out to a date not more than three
business days prior to the Closing Date or such later date on which Option
Stock is purchased (i) confirming, to the extent true, that the statements
and conclusions set forth in the Original Letter are accurate as of the
Closing Date or such later date, as the case may be, and (ii) setting forth
any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of the Original Letter or
to reflect the availability of more recent financial statements, data or
information. The letters shall not disclose any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public offering of the Stock or the
purchase of the Option Stock as contemplated by the Prospectus.
20
(g) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the qualification
referred to in paragraph (f) of Section 6 hereof.
(h) Prior to the Closing Date, the Stock to be issued and sold by the
Company shall have been duly approved for quotation by the Nasdaq National
Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from all
directors and executive officers of the Company agreements, in form
reasonably satisfactory to Chase Securities Inc., stating that without the
prior written consent of Chase Securities Inc., such person will not, for a
period of 90 days following the commencement of the public offering of the
Stock by the Underwriters, directly or indirectly, sell, offer, contract to
sell, transfer the economic risk of ownership in, make any short sale,
pledge, or otherwise dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any other
rights to purchase or acquire Common Stock, subject to such exceptions as
Chase Securities Inc. shall agree.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of you default, the Company will reimburse
the Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
it in connection with the transactions contemplated hereby.
10. Conditions of the Obligation of the Company. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of
21
the Company under this Agreement, including all costs and expenses referred to
in paragraphs (i) and (j) of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to their other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 7 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from the Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, XX 00000; and if to the Company, shall be mailed, telegraphed or
delivered to it at its office, 000 Xxx Xxx Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx
00000, Attention: President. All notices given by telegraph shall be promptly
confirmed by letter.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers, and (c) delivery and payment for the
Stock under this Agreement; provided, however, that if this Agreement is
terminated prior to the Closing Date, the provisions of paragraphs (1) of
Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
22
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company
and the Underwriters in accordance with its terms.
Very truly yours,
EMISPHERE TECHNOLOGIES, INC.
By:__________________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written on behalf
of themselves and the other several
Underwriters named in Schedule I
hereto.
CHASE SECURITIES INC.
DEUTSCHE BANK SECURITIES INC.
WARBURG DILLON READ LLC
XXXXX, XXXXXXXX & XXXX, INC.
As representatives of the several
Underwriters
By: CHASE SECURITIES INC.
By:_________________________________
Name:
Title:
23
SCHEDULE I
EMISPHERE TECHNOLOGIES, INC.
Shares of
Underwriter Underwritten Stock
----------- ------------------
Chase Securities Inc........................
Deutsche Bank Securities Inc................
Warburg Dillon Read LLC.....................
Xxxxx, Xxxxxxxx & Xxxx, Inc.................
-----------
Total........................ 2,500,000
-----------
24
