2,500,000 Shares
TRIMERIS, INC.
Common Stock
UNDERWRITING AGREEMENT
_________ __, 1997
UBS Securities LLC
NationsBanc Xxxxxxxxxx Securities, Inc.
As Representatives of the Several Underwriters named in Schedule A
hereto c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Trimeris, Inc., a Delaware corporation (the "Company), proposes
to issue and sell 2,500,000 shares (the "Firm Shares") of its authorized but
unissued Common Stock, $.001 par value per share (the "Common Stock"), to the
several underwriters listed on Schedule A to this Agreement (collectively, the
"Underwriters"). The Company also proposes to grant to the Underwriters an
option to purchase up to 375,000 additional shares (the "Option Shares") of
Common Stock on the terms and for the purposes set forth in Section 2(c). The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company wishes to confirm as follows its agreements with you
(the "Representatives") and the other Underwriters on whose behalf you are
acting in connection with the several purchases by the Underwriters of the
Shares.
1. Representations and Warranties of the Company. The Company hereby
represents and warrants as follows:
(a) A registration statement on Form S-1 (File No. 333-31109)
including a prospectus relating to the Shares, and each amendment thereto, has
been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. There have been delivered to you three copies of
such registration statement and amendments, together with three copies of each
exhibit filed therewith. Copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each of
the Underwriters. If such registration statement has not become effective, a
further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such registration
statement has become effective, a final prospectus containing all Rule 430A
Information (as hereinafter defined) will be filed by the Company with the
Commission in accordance with Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean
such registration statement (including all exhibits and financial statements at
the time such registration statement becomes or became effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall include all
Rule 430A Information deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the Rules and Regulations and shall also mean any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations with respect to the
Shares. The term "Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus included
in the Registration Statement at the time it becomes effective that omits Rule
430A Information. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares in the form in which it is first filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no
filing pursuant to Rule 424(b) of the Rules and Regulations is required, shall
mean the form of final prospectus included in the Registration Statement at the
time such registration statement becomes effective. The term "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations. The term "Offering
Memorandum" as used in this Agreement shall mean the Offering Memorandum
consisting of the Prospectus and a Canadian wrap-around used in connection with
the offering of the Shares in Canada.
(b) The Commission has not issued any stop order suspending the
effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus, or instituted proceedings for
that purpose, and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and the Rules
and Regulations and, as of its date, did not include any 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. When the Registration Statement
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became or becomes, as the case may be, effective (the "Effective Date") and at
all times subsequent thereto up to and at the Closing Date, any later date on
which Option Shares are to be purchased (the "Option Closing Date") and when any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the Commission, (i) the
Registration Statement and Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by, and will comply with the requirements of, the Act and the
Rules and Regulations, and (ii) neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading. The
foregoing representations and warranties in this section 1(b) do not apply to
any statements or omissions made in reliance on and in conformity with the
information contained in the first (including the table), third, fifth and
eighth paragraphs of the section of the Prospectus entitled "Underwriting". The
Company has not distributed any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus, the Offering Memorandum or any other
materials, if any, permitted by the Act and applicable Canadian securities laws.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
so qualify would not have a material adverse effect on the business, properties,
financial condition or results of operations of the Company (a "Material Adverse
Effect"). The Company has no subsidiaries (as defined in the Rules and
Regulations) and does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity. Complete and correct copies of the certificate of incorporation and of
the bylaws of the Company and all amendments thereto have been delivered to the
Representatives, and except as set forth in the exhibits to the Registration
Statement no changes therein will be made subsequent to the date hereof and
prior to the Closing Date or, if later, the Option Closing Date.
(d) The Company has full corporate power and authority to enter into
this Agreement and to perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement on the part of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by applicable laws or equitable principles
and except as enforcement hereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles. The performance
of this Agreement by the Company and the consummation by the Company of the
transactions herein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, (i) any
indenture, mortgage, deed
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of trust, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to which
the Company is a party or by which it or its properties are bound, which breach,
violation or default would have a Material Adverse Effect, (ii) the certificate
of incorporation or bylaws of the Company, or (iii) any law, order, rule,
regulation, writ, injunction, judgment or decree of any court or governmental
agency or body to which the Company is subject. The Company is not required to
obtain or make (as the case may be) any consent, approval, authorization, order,
designation or declaration of or filing by or with any court or regulatory,
administrative or other governmental agency or body as a requirement for the
consummation by the Company of the transactions herein contemplated, except such
as may be required under the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or under state securities or blue sky ("Blue Sky")
laws or under the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD") or under applicable Canadian securities
law.
(e) The Company is not (i) in violation of its certificate of
incorporation or bylaws, (ii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness, which default would have a Material
Adverse Effect, (iii) in default in the performance or observance of any
contract, indenture, mortgage, loan agreement, joint venture or other agreement
or instrument to which it is a party or by which it or any of its properties are
bound, which default would have a Material Adverse Effect, (iv) in violation
of any law, order, rule or regulation of any court or governmental agency or
body to which the Company is subject, including, but not limited to, the United
States Food and Drug Administration (the "FDA"), which violation would have a
Material Adverse Effect, or (v) in violation of any writ, injunction, judgment
or decree of any court or governmental agency or body to which the Company is
subject, including, but not limited to, the FDA.
(f) Except as disclosed in the Prospectus, there is not pending or, to
the Company's knowledge, threatened, any action, suit, claim, proceeding or
investigation against the Company or any of its officers or any of its
properties, assets or rights before any court or governmental agency or body or
otherwise which might result in a Material Adverse Effect or prevent
consummation of the transactions contemplated hereby. There are no statutes,
rules, regulations, agreements, contracts, leases or documents that are required
to be described in the Prospectus, or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have not
been accurately described in all material respects in the Prospectus or filed as
exhibits to the Registration Statement.
(g) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, and were
not issued in violation of any preemptive right, resale right, right of first
refusal or similar right. The authorized and outstanding capital stock of the
Company conforms in all material respects to the description thereof contained
in the Registration Statement, the Offering Memorandum and the Prospectus (and
such description correctly states the substance of the provisions of the
instruments defining the capital stock of the Company). The Shares have been
duly authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company against payment
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therefor in accordance with the terms of this Agreement, will be duly and
validly issued and fully paid and nonassessable and will be sold free and clear
of any pledge, lien, security interest, charge, encumbrance, claim, equitable
interest, or restriction. Except as set forth in the Prospectus, no preemptive
right, co-sale right, right of first refusal or other similar rights of
securityholders exists with respect to any of the Shares or the issue and sale
thereof other than those that have been expressly waived prior to the date
hereof. No holder of securities of the Company has the right to cause the
Company to include such holder's securities in the Registration Statement. No
further approval or authorization of any securityholder, the Board of Directors
or any duly appointed committee thereof or others is required for the issuance
and sale or transfer of the Shares, except as may be required under the Act, the
Exchange Act, under Blue Sky laws or under applicable Canadian securities laws.
Except as disclosed in or contemplated by the Prospectus, the Offering
Memorandum and the financial statements of the Company, and the related notes
thereto, included in the Prospectus and the Offering Memorandum, the Company
does not have outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations. The description of the Company's stock option and other plans or
arrangements, and the options or other rights granted and exercised thereunder,
set forth in the Prospectus and the Offering Memorandum accurately and fairly
presents, in all material respects, the information required to be shown with
respect to such plans, arrangements, options and rights.
(h) KPMG Peat Marwick LLP, independent public accountants (the
"Accountants"), who have examined the financial statements, together with the
related schedules and notes, of the Company filed with the Commission as a part
of the Registration Statement, which are included in the Prospectus, are
independent public accountants within the meaning of the Act and the Rules and
Regulations. The financial statements of the Company, together with the related
schedules and notes, forming part of the Registration Statement, the Offering
Memorandum and the Prospectus, fairly present the financial position and the
results of operations of the Company at the respective dates and for the
respective periods to which they apply. All financial statements, together with
the related schedules and notes, filed with the Commission as part of the
Registration Statement have been prepared in accordance with generally accepted
accounting principles as in effect in the United States consistently applied
throughout the periods involved ("GAAP") except as may be otherwise stated in
the Registration Statement. The selected and summary financial data included in
the Registration Statement, the Offering Memorandum and the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein. No other financial
statements or schedules are required by the Act or the Rules and Regulations to
be included in the Registration Statement. The statistical data included in the
Registration Statement and the Offering Memorandum is accurate in all material
respects and presents fairly the information shown therein.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement, the Offering Memorandum and the Prospectus,
there has not been (i) any
5
material adverse change in the business, properties or assets described or
referred to in the Registration Statement, or the results of operations,
condition (financial or otherwise), business, business prospects or operations
of the Company (a "Material Adverse Change"), or any development which is likely
to cause a Material Adverse Change, (ii) any transaction which is material to
the Company, except transactions in the ordinary course of business, (iii) any
obligation, direct or contingent, which is material to the Company, incurred by
the Company, except obligations incurred in the ordinary course of business,
(iv) any change in the capital stock or outstanding indebtedness of the Company
other than shares of Common Stock that may be issued upon the exercise of
outstanding stock options and warrants in amounts not to exceed those which are
disclosed in the Prospectus, (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company, or (vi) any loss or
damage (whether or not insured) to the property of the Company which has been
sustained, or will be sustained, which resulted in, or will result in, a
Material Adverse Change. The Company has no material contingent obligation which
is not disclosed in the Registration Statement. Except as set forth in the
Registration Statement, the Offering Memorandum and Prospectus, the Company owns
or leases all such properties as are necessary to its operations as now
conducted or as proposed to be conducted in the foreseeable future.
(j) Except as set forth in the Prospectus and the Offering Memorandum,
(i) the Company has good and marketable title to all material properties and
assets described in the Prospectus and the Offering Memorandum as owned by it,
free and clear of any pledge, lien, security interest, charge, encumbrance,
claim, equitable interest, or restriction, (ii) the agreements to which the
Company is a party are valid agreements, enforceable by and against the Company
in accordance with their terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles, and, to the best of the Company's knowledge, the other
contracting party or parties thereto are not in material breach or default under
any of such agreements and (iii) the Company has valid and enforceable leases
for the properties described in the Prospectus and the Offering Memorandum as
leased by it, and such leases conform in all material respects to the
description thereof, if any, set forth in the Registration Statement.
(k) The Company now holds and at the Closing Date and any later Option
Closing Date, as the case may be, will hold, all licenses, consents,
certificates, orders, approvals and permits from all state, United States,
foreign and other governmental or regulatory authorities, including, but not
limited to, the FDA and any foreign governmental or regulatory authorities
performing functions similar to those performed by the FDA, that are required
for the conduct of the business of the Company as such business is currently
conducted and as proposed to be conducted as described in the Prospectus, except
for such licenses, certificates approvals and permits the failure of which to
maintain 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 best
knowledge of the Company, threatened which may cause any such license, consent,
certificate, order, approval or permit to be withdrawn, cancelled, suspended or
not renewed). All of the descriptions in the Registration Statement and
Prospectus of the legal and governmental
6
proceedings by or before the FDA or any foreign, state or local government body
exercising comparable authority are true, complete and accurate in all material
respects. The Company is in compliance in all material respects with all
applicable FDA, state and local rules, regulations, guidelines and policies,
including, without limitation, applicable FDA, state and local rules,
regulations and policies relating to good laboratory practice, and good
manufacturing practices.
(l) The Company has filed on a timely basis all necessary federal,
state and foreign income, franchise and other tax returns and has paid all taxes
shown thereon as due, and the Company has no knowledge of any tax deficiency
which has been or might be asserted against the Company which might have a
Material Adverse Effect. All tax liabilities are adequately provided for within
the financial statements of the Company.
(m) The Company maintains insurance with insurers of recognized
financial responsibility of the types and in the amounts adequate for its
business and consistent with insurance coverage maintained by similar companies
in similar businesses, including, but not limited to, insurance covering
clinical trial liability, and real and personal property owned or leased against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.
(n) The Company is not involved in any labor dispute or disturbance
nor, to the best knowledge of the Company, is any such dispute or disturbance
threatened. No collective bargaining agreement exists with any of the Company's
employees and, to the best knowledge of the Company, no such agreement is
imminent.
(o) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(p) Except as set forth in the Prospectus and the Offering Memorandum
under the captions "Risk Factors--Uncertainties Regarding Patents and
Proprietary Rights" and "Business--Patents, Proprietary Technology and Trade
Secrets," (i) the Company owns or possesses valid and enforceable licenses or
other rights to use all inventions, patents, patent applications, patent rights,
trademarks (registered or unregistered), trademark applications, tradenames,
service marks, service xxxx applications, copyrights, manufacturing processes,
formulae, trade secrets, know-how, franchises and other intangible property and
assets (collectively, "Intellectual Property") necessary to the conduct of its
business as currently conducted or proposed to be conducted as described in the
Prospectus and the Offering Memorandum; (ii) the Company has no knowledge that
it lacks or will be unable to obtain or retain any rights or licenses to use any
of the Intellectual Property necessary to conduct the
7
business now conducted or proposed to be conducted by it as described in the
Prospectus and the Offering Memorandum; (iii) the Company has no knowledge of
any third parties who have or will be able to establish rights to any of the
Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to the Company; (iv) to the Company's
knowledge, there is no infringement by third parties of any of the Intellectual
Property; (v) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the Company's rights of
title or other interest in or to any Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(vi) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; (vii) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others that
the Company or its products or processes infringe or otherwise violate any
patent, trademark, copyright, trade secret or other proprietary right of others,
and the Company is unaware of any facts which would form a reasonable basis for
any such claim; (viii) to the Company's knowledge, there is no patent or patent
application which contains claims that interfere with the issued or pending
claims of any of the Intellectual Property; (ix) to the Company's knowledge,
there are no facts which would bar the grant of a patent from each of the patent
applications within the Intellectual Property; (x) other than the patents and
patent applications identified on Schedule 1(p) attached hereto, there are no
patents or patent applications owned or licensed by the Company which are
material to its business as now conducted or proposed to be conducted as
described in the Prospectus and the Offering Memorandum; (xi) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by any current or former employee, consultant or agent of the Company
seeking either ownership rights to any invention or compensation from the
Company for any invention made by such employee, consultant or agent in the
course of his/her employment with the Company, nor, to the Company's knowledge,
can any such action, suit, proceeding or claim, if instituted, be sustained; and
(xii) to the knowledge of the Company, none of the patents owned or licensed by
the Company are unenforceable or invalid and there is no act or omission of
which the Company is aware that may render any patent or patent application
within the Intellectual Property unpatentable, unenforceable or invalid. The
Company has clear title to its patents and patent applications described or
referred to in the Prospectus and the Offering Memorandum, free and clear of any
pledges, liens, security interests, charges, encumbrances, claims, equitable
interests or restrictions. The Prospectus and the Offering Memorandum fairly and
accurately describe the Company's rights with respect to the Intellectual
Property. The Company has duly and properly filed or caused to be filed with the
United States Patent and Trademark Office (the "PTO") and applicable foreign and
international patent authorities all patent applications described or referred
to in the Prospectus and the Offering Memorandum, and believes it has complied
with the PTO's duty of candor and disclosure for each of the United States
patent applications described or referred to in the Prospectus or the Offering
Memorandum.
(q) The Company is conducting its business in compliance with all of
the laws, rules and regulations of the jurisdictions in which it is conducting
business, including, but not limited to, (i) the laws, rules and regulations
administered or promulgated by the FDA or any
8
foreign, state or local governmental or regulatory authorities, performing
functions similar to those performed by the FDA body exercising comparable
authority and (ii) all laws, rules and regulations applicable to the import and
export of the Company's products, except where any such failure to be in
compliance would not have a Material Adverse Effect.
(r) The Company is not, and, upon the issuance and sale of the Shares
and application of the net proceeds from such issuance and sale as described in
the Prospectus under the caption "Use of Proceeds" will not be, an "investment
company," or a "promoter" or "principal underwriter" for a registered investment
company, as such terms are defined in the Investment Company Act of 1940, as
amended.
(s) The Company has not incurred any liability for a fee, commission,
or other compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by this Agreement other than the
underwriting discounts and commissions contemplated hereby.
(t) The Company (i) is in compliance with any and all applicable
United States, foreign, state and local environmental 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 contaminants ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business as currently conducted,
and (iii) is in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permit licenses or other approvals 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 best knowledge of the Company, threatened relating to the Environmental Laws
or to the Company's activities involving Hazardous Materials. "Hazardous
Materials" means any material or substance (i) that 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 (ii) that has been designated or regulated by any governmental
authority as radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment. No Hazardous Materials have been treated or
disposed of 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
during the time of the Company's ownership or lease thereof and the Company is
not aware of any spills, discharges, releases, deposits, emplacements, leaks or
disposal of any Hazardous Materials that have occurred on or under or have
emanated from any of the Company's properties or former properties prior to the
Company's ownership or lease thereof.
(u) The Company has not engaged in the generation, use, manufacture,
transportation or storage of any Hazardous Materials on any of the Company's
properties or
9
former properties, except where such use, manufacture, transportation or storage
has been in compliance with Environmental Laws.
(v) The Company has not at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign office, or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any foreign, United States 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.
(w) The Company has obtained agreements from each beneficial owner of
the Company's Common Stock listed on Schedule B to this Agreement, in form and
substance identical to the agreement attached as Appendix B. Furthermore, such
person or entity has also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of shares of
Common Stock held by such person or entity, except in compliance with the
foregoing restriction. The Company has provided to counsel for the Underwriters
a complete and accurate list of all securityholders of the Company and the
number and type of securities held by each securityholder. The Company has
provided to counsel for the Underwriters true, accurate and complete copies of
all of the agreements pursuant to which its officers, directors and stockholders
have agreed to such or similar restrictions (the "Lock-up Agreements") presently
in effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or other stockholders from any
Lock-up Agreements currently existing or hereafter effected without the prior
written consent of UBS Securities LLC.
(x) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act. The Shares have been duly authorized for quotation on The Nasdaq
Stock Market, Inc. Automated Quotation National Market System (the "Nasdaq
National Market"). The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or delisting the Common Stock from the Nasdaq National Market, nor
has the Company received any notification that the Commission or the Nasdaq
National Market is contemplating terminating such registration or listing.
(y) Neither the Company nor, to its best knowledge, any of its
officers, directors or affiliates has taken, and at the Closing Date and at any
later Option Closing Date, neither the Company nor, to its best knowledge, any
of its officers, directors or affiliates will have taken, directly or
indirectly, any action which has constituted, or might reasonably be expected to
constitute, the stabilization or manipulation of the price of sale or resale of
the Shares.
(z) The Company has timely and properly filed with the Commission all
reports and other documents required to have been filed by it with the
Commission pursuant to the Act and the Rules and Regulations. True and complete
copies of all such reports and other documents have been delivered to you.
10
(aa) The Company is in compliance with all provisions of Florida
Statutes SS. 517.075 and the regulations thereunder, relating to issuers doing
business with Cuba.
(bb) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them
that are required to be disclosed in the Registration Statement, the Offering
Memorandum and the Prospectus that are not so disclosed. Except as disclosed in
Prospectus, there are no business relationships or related party transactions
required to be disclosed therein by Item 404 of Regulation S-K of the
Commission.
2. Purchase of the Shares 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
the Firm Shares to the several Underwriters, and each of the Underwriters agrees
to purchase from the Company the respective aggregate number of Firm Shares set
forth opposite its name on Schedule A, plus such additional number of Firm
Shares which such Underwriter may become obligated to purchase pursuant to
Section 2(b) hereof. The price at which such Firm Shares shall be sold by the
Company and purchased by the several Underwriters shall be $_____ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 2, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares specified on Schedule A.
(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 9 hereof) to purchase and pay for
the number of Shares agreed to be purchased by such Underwriter or Underwriters,
the non-defaulting Underwriters shall have the right within twenty-four (24)
hours after such default 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 which such defaulting Underwriter or Underwriters
agreed to purchase. If the non-defaulting Underwriters fail so to make such
arrangements with respect to all such Shares and portion, the number of Shares
which each non-defaulting Underwriter is otherwise obligated to purchase under
this Agreement shall be automatically increased on a pro rata basis (as adjusted
by you in such manner as you deem advisable to avoid fractional shares) 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 exceeds 10% of the total number of Shares which all
Underwriters agreed to purchase hereunder. If the total number of Shares 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 twenty-four (24)
11
hours next succeeding the twenty-four (24) hour period referred to above, to
make arrangements with other underwriters or purchasers reasonably 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 4 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant to
said Section 4 in order that any necessary changes in the Registration
Statement, the Offering Memorandum, the Prospectus or any other documents or
arrangements may be made. If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the twenty-four (24) hour periods stated above for the purchase of all the
Shares 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 grants an option to the several Underwriters to purchase all or any
portion of the Option Shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. Said option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement upon written or telecopied
notice by you to the Company setting forth the aggregate number of shares of the
Option Shares as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Shares, and payment therefor,
shall be made as provided in Section 4 hereof. Each Underwriter will purchase
such percentage of the Option Shares as is equal to the percentage of Firm
Shares that such Underwriter is purchasing, the exact number of shares to be
adjusted by you in such manner as you deem advisable to avoid fractional shares.
3. Offering by Underwriters.
(a) The terms of the initial public offering of the Shares in the
United States by the Underwriters shall be as set forth in the Prospectus. The
terms of the private placement of the Shares in Canada by the Underwriters shall
be as set forth in the Offering Memorandum. The Underwriters may from time to
time change the public offering and private placement prices after the closing
of the initial public offering and the private placement in Canada,
respectively, and increase or decrease the concessions and discounts to dealers
as they may determine.
(b) You, on behalf of the Underwriters, represent and warrant that (i)
the information set forth in the last paragraph on the front cover page and the
information contained in the first (including the table), third, fifth and
eighth paragraphs of the section of the Prospectus entitled
12
"Underwriting" contained in the Registration Statement, the Offering Memorandum,
any Preliminary Prospectus and the Prospectus relating to the Shares (insofar as
such information relates to the Underwriters) constitutes the only information
furnished by the Underwriters to the Company for inclusion in the Registration
Statement, the Offering Memorandum, any Preliminary Prospectus, and the
Prospectus, and that the statements made therein are correct and do not omit to
state any material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were made
not misleading, and (ii) the Underwriters have not distributed and will not
distribute prior to the Closing Date or on any Option Closing Date, as the case
may be, any of offering material in connection with the offering and sale of the
shares other than the Preliminary Prospectus, the Prospectus, the Registration
Statement, the Offering Memorandum and other materials permitted by the Act and
applicable Canadian securities law.
4. Delivery of and Payment for the Shares.
(a) Delivery of certificates for the Firm Shares and the Option Shares
(if the option granted pursuant to Section 2(c) hereof shall have been exercised
not later than 1:00 p.m., New York time, on the date at least two business days
preceding the Closing Date), and payment therefor, shall be made at the office
of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at
10:00 a.m., New York time, on the third or fourth business day after the date of
this Agreement, or, subject to applicable law, at such time on such other day,
not later than seven full business days after such fourth business day, as shall
be agreed upon in writing by the Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 2(c) hereof shall be
exercised after 1:00 p.m., New York time, on the date two business days
preceding the Closing Date, and on or before the 30th day after the date of this
Agreement, delivery of certificates for the Option Shares, and payment therefor,
shall be made at the office of Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., New York time, on the third business day
after the exercise of such option.
(c) Payment for the Shares purchased from the Company shall be made to
the Company or its order, by wire transfer of federal funds to the account
specified by the Company or by one or more certified or official bank check or
checks in same day funds. Such payment shall be made upon delivery of
certificates for the Shares to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. Certificates for the Shares
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 three business days before the
Closing Date, in the case of Firm Shares, and at least two business days prior
to the Option Closing Date, in the case of the Option Shares. Such certificates
will be made available to the Underwriters for inspection, checking and
packaging at a location in New York, New York, designated by the Underwriters
not less than one full business day prior to the Closing Date or, in the case of
the Option Shares, by 3:00 p.m., New York time, on the business day preceding
the Option Closing Date.
13
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 Option Closing Date. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
14
5. Further Agreements of the Company. The Company covenants and agrees as
follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; it will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed. If the Company omitted information
from the Registration Statement at the time it was originally declared effective
in reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission. If for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed with the Commission within the time period prescribed. The
Company will notify you promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information. Promptly upon your request, it will prepare and file
with the Commission any amendments or supplements to the Registration Statement
or Prospectus which, in the reasonable opinion of counsel to the several
Underwriters (the "Underwriters' Counsel"), may be necessary or advisable in
connection with the distribution of the Shares by the Underwriters. The Company
will promptly prepare and file with the Commission, and promptly notify you of
the filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. In case any Underwriter is required to
deliver a prospectus within the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the Company will
prepare promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act. The Company will file no amendment or supplement to
the Registration Statement or Prospectus that shall not previously have been
submitted to you a reasonable time prior to the proposed filing thereof or to
which you shall reasonably object in writing or which is not in compliance with
the Act and Rules and Regulations or the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or the use
of the Prospectus or of the initiation or
15
threat of any proceeding for that purpose; and it will promptly use its best
efforts to prevent the issuance of any such stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to qualify the
Shares for offering and sale under the securities laws of such jurisdictions as
you may designate and to continue such qualifications in effect for so long as
may be required for purposes of the distribution of the Shares, except that the
Company shall not be required in connection therewith or as a condition thereof
to qualify as a foreign corporation, or to execute a general consent to service
of process in any jurisdiction, or to make any undertaking with respect to the
conduct of its business. In each jurisdiction in which the Shares shall have
been qualified, the Company will make and file such statements, reports and
other documents in each year as are or may be reasonably required by the laws of
such jurisdictions so as to continue such qualifications in effect for so long a
period as you may reasonably request for distribution of the Shares, or as
otherwise may be required by law.
(d) The Company will furnish to you, as soon as available, copies of
the Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus, the Offering
Memorandum and any amendments or supplements to such documents, including any
prospectus prepared to permit compliance with Section 10(a)(3) of the Act, all
in such quantities as you may from time to time reasonably request.
(e) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than the forty-fifth (45th) day
following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited) complying
with the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and covering a twelve (12) month period beginning after the
effective date of the Registration Statement, and will advise you in writing
when such statement has been made available.
(f) During a period of five years after the date hereof, the Company,
as soon as practicable after the end of each respective period, will furnish to
its stockholders annual reports (including financial statements audited by
independent certified public accountants) and will furnish to its stockholders
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will furnish to you and the other several Underwriters
hereunder (i) concurrently with making such reports available to its
stockholders, statements of operations of the Company for each of the first
three quarters in the form made available to the Company's stockholders; (ii)
concurrently with the furnishing thereof to its stockholders, a balance sheet of
the Company as of the end of such fiscal year, together with statements of
operations, of stockholders' equity and of cash flow of the Company for such
fiscal year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants; (iii)
concurrently with the furnishing of such reports to its stockholders, copies of
all
16
reports (financial or other) mailed to stockholders; (iv) as soon as they are
available, copies of all reports and financial statements furnished to or filed
with the Commission, any securities exchange or the Nasdaq National Market by
the Company (except for documents for which confidential treatment is
requested); and (v) every material press release and every material news item or
article in respect of the Company or its affairs which was generally released to
stockholders or prepared for general release by the Company. During such
five-year period, if the Company shall have any active subsidiaries, the
foregoing financial statements shall be on a consolidated basis to the extent
that the accounts of the Company are consolidated with any subsidiaries, and
shall be accompanied by similar financial statements for any significant
subsidiary that is not so consolidated.
(g) The Company shall not, during the 180 days following the effective
date of the Registration Statement, except with the prior written consent of UBS
Securities LLC, file a registration statement covering any of its shares of
capital stock, except that one or more registration statements on Form S-8 may
be filed at any time following the effective date of the Registration Statement.
(h) The Company shall not, during the 180 days following the effective
date of the Registration Statement, except with the prior written consent of UBS
Securities LLC, issue, sell, offer or agree to sell, grant, distribute or
otherwise dispose of, directly or indirectly, any shares of Common Stock, or any
options, rights or warrants with respect to shares of Common Stock, or any
securities convertible into or exchangeable for Common Stock, other than (i) the
sale of Shares hereunder, (ii) the grant of options or the issuance of shares of
Common Stock under the Company's stock incentive plans or stock purchase plan,
as the case may be, existing on the date hereof, and (iii) the issuance of
shares of Common Stock upon exercise of the currently outstanding options or
warrants described in the Registration Statement or upon conversion of the
Company's outstanding preferred stock, $.001 par value per share, described in
the Registration Statement, the Offering Memorandum and the Prospectus.
(i) The Company will apply the net proceeds from the sale of the
Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(j) The Company will maintain a Transfer Agent and, if necessary under
the jurisdiction of incorporation of the Company, a Registrar (which may be the
same entity as the Transfer Agent) for its Common Stock.
(k) The Company will use its best efforts to maintain listing of its
shares of Common Stock on the Nasdaq National Market.
(l) The Company will file Form SR in conformity with the requirements
of the Act and the Rules and Regulations.
(m) The Company is familiar with the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and
17
will in the future conduct its affairs, in such a manner so as to ensure that
the Company was not and will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, and the rules and regulations
thereunder.
(n) If at any time during the 180-day period after the Registration
Statement becomes effective, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your reasonable
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company will,
after written notice from you advising the Company to the effect set forth
above, consult with you in good faith regarding the necessity of disseminating a
press release or other public statement responding to or commenting on such
rumor, publication or event and, if the Company in its reasonable judgment
determines that such a press release or other public statement is appropriate,
the substance of any press release or other public statement.
6. Expenses.
The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and expenses in
connection with the preparation, printing and filing of the Registration
Statement (including financial statements, schedules and exhibits), the Offering
Memorandum (including fees relating to the filing of reports in Canada),
Preliminary Prospectuses and the Prospectus and any amendments or supplements
thereto; the reproduction of this Agreement, the Agreement Among Underwriters,
the Selected Dealer Agreement, the Preliminary Blue Sky Memoranda and any
Supplemental Blue Sky Memoranda and any instruments related to any of the
foregoing; the issuance and delivery of the Shares hereunder to the several
Underwriters, including transfer taxes, if any; the cost of all stock
certificates representing the Shares and Transfer Agents' and Registrars' fees;
the fees and disbursements of corporate, patent and regulatory counsel for the
Company; all fees and other charges of the Company's independent public
accountants; the cost of furnishing to the several Underwriters copies of the
Registration Statement (including appropriate exhibits), the Offering
Memorandum, Preliminary Prospectuses and the Prospectus, and any amendments or
supplements to any of the foregoing; NASD filing fees and expenses incident to
securing any required review and the cost of qualifying the Shares under the
laws of such jurisdictions within the United States as you may designate
(including filing fees and fees and disbursements of Underwriters' Counsel in
connection with such NASD filings and Blue Sky qualifications); listing
application fees of the Nasdaq National Market; and all other expenses directly
incurred by the Company in connection with the performance of its obligations
hereunder.
(b) If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed hereunder or to fulfill any
condition of the Underwriters' obligations hereunder, the Company will, in
addition to paying the expenses described in clause (a) above, reimburse the
several Underwriters for all out-of-pocket expenses (including reasonable fees
and disbursements
18
of Underwriters' Counsel) incurred by the Underwriters in reviewing the
Registration Statement and the Prospectus and in preparing the Offering
Memorandum and in otherwise investigating, preparing to market or marketing the
Shares. The Company will in no event be liable to any of the several
Underwriters for any loss of anticipated profits from the sale by them of the
Shares.
7. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters to purchase and pay for the
Shares, as provided herein, shall be subject to the accuracy, as of the date
hereof and the Closing Date and any later Option Closing Date, as the case may
be, of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not later
than 9:00 a.m., New York time, on the date following the date of this Agreement,
or such later time or date as shall be consented to in writing by you. If the
filing of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b) and Rule 430A of the Rules and Regulations, the Prospectus shall
have been filed in the manner and within the time period required by Rule 424(b)
and Rule 430A of the Rules and Regulations. No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or, to the knowledge of
the Company or any Underwriter, threatened by the Commission, and any request of
the Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement, the Offering Memorandum
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such documents and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this subsection.
(c) You shall have received, at no cost to you, on the Closing Date
and on any later Option Closing Date, as the case may be, the opinions of (i)
Xxxxxxxxx & Xxxxx PLLC corporate counsel to the Company, (ii) Xxxxxx, Xxxxxx &
Xxxxxxxxx, special securities counsel to the Company, and (iii) Xxxxxx &
Xxxxxxx, special patent counsel to the Company, dated the Closing Date or such
later Option Closing Date, in the forms attached hereto on Appendix A, addressed
to the Underwriters and with reproduced copies of signed counterparts thereof
for each of the Representatives.
(d) You shall have received from Xxxxxxx, Phleger & Xxxxxxxx LLP,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on any
later Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, with respect to the sufficiency of all corporate
proceedings undertaken by the Company and other legal
19
matters relating to this Agreement and the transactions contemplated hereby as
you may reasonably require, and the Company shall have furnished to such counsel
such documents as it may have reasonably requested for the purpose of enabling
it to pass upon such matters.
(e) You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a letter from the Accountants addressed
to the Company and the Underwriters, dated the Closing Date or such later Option
Closing Date, as the case may be, confirming that they are independent certified
public accountants with respect to the Company within the meaning of the Act and
the Rules and Regulations thereunder and based upon the procedures described in
its letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
three days prior to the Closing Date or any such later Option Closing Date, as
the case may be, (i) confirming that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later Option
Closing 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
that are necessary to reflect any changes in the facts described in the Original
Letter since the date of such letter, or to reflect the availability of more
recent financial statements, data or information. The letter 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 reasonable judgment,
makes it impracticable or inadvisable to proceed with the public offering of the
Shares as contemplated by the Prospectus. In addition, you shall have received
from the Accountants a letter addressed to the Company and made available to you
for the use of the Underwriters stating that its review of the Company's system
of internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of the Company's financial
statements, did not disclose any weaknesses in internal controls that it
considered to be material weaknesses. All such letters shall be in a form
reasonably satisfactory to the Representatives and their counsel.
(f) You shall have received on the Closing Date and on any later
Option Closing Date, as the case may be, a certificate of the President and the
Chief Financial Officer of the Company, dated the Closing Date or such later
date, to the effect that as of such date (and you shall be satisfied that as of
such date):
(i) The representations and warranties of the Company in this
Agreement are true and correct, on and as of the Closing Date or any
later Option Closing Date, as the case may be, as if made on such
date; and the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied at or prior to the Closing Date or any later Option Closing
Date, as the case may be;
(ii) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Prospectus has
been issued, and no proceedings for that purpose have been instituted
or are pending or, to the best of their knowledge, threatened under
the Act;
20
(iii) They have carefully reviewed the Registration Statement,
the Offering Memorandum and the Prospectus; and, when the Registration
Statement became effective and at all times subsequent thereto up to
the delivery of such certificate, the Registration Statement and the
Prospectus and any amendments or supplements thereto contained all
statements and information required to be included therein or
necessary to make the statements therein not misleading; and when the
Registration Statement became effective, and at all times subsequent
thereto up to the delivery of such certificate, none of the
Registration Statement, the Prospectus or the Offering Memorandum or
any amendment or supplement thereto included any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented Prospectus or Offering Memorandum that has not
been so set forth; and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Offering Memorandum and
the Prospectus, there has not been (A) any Material Adverse Change in
the properties or assets described or referred to in the Registration
Statement, the Offering Memorandum and the Prospectus or in the
condition (financial or otherwise), operations, business or prospects
of the Company, (B) any transaction which is material to the Company,
except transactions entered into in the ordinary course of business,
(C) any obligation, direct or contingent, incurred by the Company
which is material to the Company, (D) any change in the capital stock
or outstanding indebtedness of the Company which is material to the
Company, (E) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company, or (F) any loss or damage
(whether or not insured) to the property of the Company which has been
sustained or will have been sustained which has a Material Adverse
Effect.
(g) The Company shall have furnished to you such further certificates
and documents as you shall reasonably request as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to the obligations of the Underwriters hereunder,
including, but not limited to, a certificate setting forth the material U.S. or
foreign patents and patent applications owned by, or licensed to, the Company.
(h) The Firm Shares and the Option Shares, if any, shall have been
approved for designation upon notice of issuance on the Nasdaq National Market.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company
21
will furnish you with such number of conformed copies of such opinions,
certificates, letters and documents as you shall reasonably request.
22
8. Indemnification and Contribution.
23
(a) Subject to the provisions of paragraph (f) below, 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 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 Act, the Exchange Act, or
the common law or otherwise, and the Company agrees to reimburse each such
Underwriter and controlling person for any legal or other out-of-pocket 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 462(b) registration statement)
or in the Offering Memorandum or any post-effective amendment thereto (including
any 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 in the
Offering Memorandum 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 is contained in the first (including the table),
third, fifth and eighth paragraphs of the section of the Prospectus entitled
"Underwriting" or the last paragraph of text on the cover page of the Prospectus
or in the [ ] paragraph of the section of the Offering Memorandum entitled
"Representation by Purchasers," and (2) the indemnity agreement contained in
this paragraph (a) with respect to any Preliminary Prospectus or Offering
Memorandum shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Shares which is the subject thereof (or to the benefit of any
person controlling such Underwriter) if at or prior to the written confirmation
of the sale of such Shares a copy of the Prospectus (or the Prospectus as
amended or supplemented or, in the case of purchasers resident in Ontario,
Canada, the revised Offering Memorandum) was not sent or delivered to such
person (excluding any 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 or, in the case of purchasers resident in Ontario, Canada, the
revised Offering Memorandum) unless the failure is the result of noncompliance
by the Company with paragraph (a) of Section 5 hereof. The indemnity agreements
of the Company contained in this paragraph (a) and the representations and
warranties of the Company contained in Section 1 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 Shares.
24
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its executive officers, 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 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 Act, the Exchange Act, or 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 breach of any representation,
warranty, agreement or covenant of such Underwriter contained in this Agreement,
(ii) 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 in the Offering
Memorandum or any post-effective amendment thereto (including any 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 (iii) 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 in the Offering Memorandum 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 in the cases of
clauses (i) and (ii) above, such statement or omission is contained in the first
(including the table), third, fifth and eighth paragraphs of the section of the
Prospectus entitled "Underwriting" or the last paragraph on the cover page of
the Prospectus or in the section of the Offering Memorandum entitled
"Representations by Purchasers." 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 Shares.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 8 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 (a "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 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
25
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 and 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, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but not
conduct, the defense. It is understood that the indemnifying parties shall not,
in respect of the legal defenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for (a)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all of the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
the Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the Act. 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
paragraphs (a) through (c) of this Section 8 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 second 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. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected without its or their written consent, provided such consent
has not been unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 8, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, 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 8 (i) in such
proportion as is
26
appropriate to reflect the relative benefits received by each indemnifying party
from the offering of the Shares 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 Shares
received by the Company and the total underwriting discount received by the
Underwriters, as set forth in the table on the cover page of the Prospectus,
bear to the aggregate public offering price of the Shares. 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 (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 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, preparation to defend or defense against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this paragraph (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
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 8).
(e) The Company will 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
27
the meaning of Section 15 of the 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.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 8 and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act or in the Offering Memorandum as required by Canadian securities law.
9. Termination. This Agreement may be terminated by you at any time on or
prior to the Closing Date or on or prior to any later Option Closing Date, as
the case may be, (i) if the Company shall have failed, refused or been unable,
at or prior to the Closing Date, or on or prior to any later Option Closing
Date, as the case may be, 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, or (ii) if trading on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, by such trading exchanges or by order of the Commission
or any other governmental authority having jurisdiction, or if a banking
moratorium shall have been declared by federal or New York authorities, or (iii)
if the Company shall have sustained a loss by strike, fire, flood, accident or
other calamity of such character as to have a Material Adverse Effect regardless
of whether or not such loss shall have been insured, or (iv) if there shall have
been a material adverse change in the general political or economic conditions
or financial markets in the United States as in the sole judgment of the
Representatives makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have occurred
an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or other national or international calamity, hostilities or crisis
or the declaration by the United States of a national emergency which, in the
judgment of the Representatives, adversely affects the marketability of the
Shares, or (vi) if since the respective dates as of which information is given
in the Registration Statement, the Offering Memorandum and the Prospectus, there
shall have occurred any Material Adverse Change or any development involving a
prospective material adverse change in or affecting the condition, financial or
otherwise, of the Company or the business affairs, management, or business
prospects of the Company, whether or not arising in the ordinary course of
business, or (vii) if any foreign, federal or state statute, regulation, rule or
order of any court or other governmental authority shall have been enacted,
published, decreed or otherwise promulgated which in the judgment of the
Representatives materially and adversely affects or will materially and
adversely affect the business or operations of the Company, or
28
trading in the Common Stock shall have been suspended, or (viii) there shall
have occurred a material adverse decline in the value of securities generally on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market or (ix) action shall be taken by any foreign, federal, state or local
government or agency in respect of its monetary or fiscal affairs which, in the
judgment of the Representatives, has a material adverse effect on the securities
markets in the United States. If this Agreement shall be terminated in
accordance with this Section 9, 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 Section 6.
If you elect to terminate this Agreement as provided in this Section 9, the
Company shall be notified promptly by you by telephone, telecopy or telegram,
confirmed by letter.
10. Reimbursement of Certain Expenses.
(a) In addition to their other obligations under Section 8 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 8 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 10 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.
(b) In addition to their other obligations under Section 8 of this
Agreement, the Underwriters hereby agree to reimburse on a quarterly basis the
Company 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 (b) of Section 8 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 10 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 Company shall promptly refund it and (ii) the Company shall
provide to the Underwriter, upon request, reasonable assurances of its ability
to effect any refund, when and if due.
11. 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 8 hereof, the several parties (in addition to the Company
and the several Underwriters)
29
indemnified under the provisions of said Section 8, 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 Shares from
any of the several Underwriters.
12. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telecopy and, if to the Underwriters, shall
be mailed, telecopied or delivered to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Xx. Xxxxxxx Xxxxxxx, with a copy to Xxxxxxx, Phleger
& Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, 00000, Xxxxxxxxx: Xxxxxxxxx X. Xxxxx,
Esq.; and if to the Company, shall be mailed, telecopied or delivered to it at
its office, Trimeris, Inc., 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: Dr. M. Xxxx Xxxxxxx, with a copy to each of Xxxxxxxxx
& Xxxxx PLLC, 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: Xxxx X. Xxxxxxxxx, Esq., and Xxxxxx, Xxxxxx & Xxxxxxxxx, 000
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq. All
notices given by telecopy shall be promptly confirmed by letter.
13. 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
(i) any investigation made by or on behalf of any Underwriter or controlling
person thereof, or by or on behalf of the Company or its respective directors of
officers, and (ii) delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
You will act as Representatives of the several Underwriters in all dealings
with the Company under this Agreement, and any action under or in respect of
this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
[INTENTIONALLY LEFT BLANK]
30
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 several Underwriters in accordance with its terms.
Very truly yours,
TRIMERIS, INC.
By:_____________________________________
M. Xxxx Xxxxxxx
President, Chief Executive Officer and
Chief Scientific Officer
The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.
UBS SECURITIES LLC
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By: UBS SECURITIES LLC
By: ______________________________
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
31
SCHEDULE A
UNDERWRITERS
Number of
Shares
to be
Underwriters Purchased
UBS Securities LLC
NationsBanc Xxxxxxxxxx Securities, Inc.
Total [ ]
SCHEDULE B
Lock-Up Agreements
APPENDIX A
B. Opinion of Counsel to the Company
Xxxxxxxxx & Xxxxx PLLC, counsel to the Company, shall opine to the
effect that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect;
2. The Company has full corporate power and authority to own, lease
and operate its properties and conduct its business as described in the
Registration Statement;
3. The Company has no subsidiaries and does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity;
4. The Company has full corporate power and authority to enter into
this Agreement and to perform the transactions contemplated hereby, including,
without limitation, the power and authority to issue, sell and deliver to the
Underwriters the Firm Shares or the Option Shares, as the case may be;
5. This Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and delivered by
the Company and is a valid and binding agreement on the part of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution hereunder may be limited by applicable laws or
equitable principles and except as enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or affecting creditors' rights generally or by general equitable principles;
6. The authorized capital stock of the Company consists of 10,000,000
shares of Preferred Stock, $.001 par value per share, of which there are no
outstanding shares, and 30,000,000 shares of Common Stock, $.001 par value per
share, of which there are outstanding [ ] shares (including the Firm Shares plus
the number of Option Shares issued on the date hereof); all outstanding shares
of capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar right known to
such counsel. The terms and provisions of the capital stock of the Company
conform to the description thereof contained in the Registration Statement and
the Prospectus, and the information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters of law
or legal conclusions, has been reviewed by
A-1
such counsel and is correct, and the form of certificate evidencing the Common
Stock complies with the applicable provisions of Delaware law;
7. The Shares to be issued by the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company against payment therefor in accordance with
the terms of this Agreement, will be duly and validly issued and fully paid and
nonassessable and will be sold free and clear of any pledge, lien, security
interest, charge, encumbrance, claim, equitable interest, or restriction, and,
to the best knowledge of such counsel, not in violation of any preemptive right,
co-sale right, registration right, right of first refusal or other similar
right, which rights have not previously been waived, in connection with the
purchase or sale of any of the Shares;
8. The statements under the captions "Risk Factors Dependence on
Collaborations and Licenses with Others" "Shares Eligible for Future Sale,"
"Anti-Takeover Effect of Certain Charter and Bylaw Provisions," "Management
Stock Option Plans," "Employment Agreements," "Compensation Committee
Interlocks and Insider Participation," "Certain Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale" in the Prospectus, and in
Items 14 or 15 of the Registration Statement, insofar as such statements
constitute a summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all material respects,
the information called for with respect to such documents and matters;
9. The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Delaware General
Corporation Law, and the description of the certificate of incorporation and
bylaws are accurate and fairly and correctly present the information required to
be presented by the Act or the Rules and Regulations in all material respects;
and such counsel does not know of any statutes, rules or regulations required to
be described in the Registration Statement or the Prospectus that are not
described or referred to therein as required;
10. To the best of such counsel's knowledge, there are no agreements,
contracts, leases or documents of a character required to be described in, or
filed as an exhibit to, the Registration Statement which are not described or
filed as required by the Act and the applicable Rules and Regulations;
11. The Company is not (i) in violation of its certificate of
incorporation or bylaws, or (ii) to the best of such counsel's knowledge, in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any bond, debenture, note or other evidence of
indebtedness, which default would have a Material Adverse Effect, or (iii) to
the best of such counsel's knowledge, in default in the performance or
observance of any contract, indenture, mortgage, loan agreement, joint venture
or other agreement or instrument to which it is a party or by which it or any of
its properties are bound, which default would have a Material Adverse Effect, or
(iv) in violation of any law, order, rule, regulation, writ, injunction,
judgment or decree of any court or governmental agency or body to which the
Company is
A-2
subject, including, but not limited to, the FDA, which violation would have a
Material Adverse Effect;
12. The execution, delivery and performance of this Agreement will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) to the best of such counsel's knowledge, any
indenture, mortgage, deed of trust, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company is a party or by which its
properties are bound, (ii) the certificate of incorporation or bylaws of the
Company, any agreement or document filed as an exhibit to the Registration
Statement, or (iii) any law, order, rule, regulation, writ, injunction, judgment
or decree of any court or governmental agency or body to which the Company is
subject;
13. The Company has the corporate power and authority to own or lease
all of the assets owned or leased by it and to conduct its business, in each
case as described in the Registration Statement and the Prospectus, except where
failure to have such power and authority would not have a Material Adverse
Effect, and has all licenses, consents, certificates, orders, approvals and
permits from all state, United States, foreign and other regulatory authorities,
including, but not limited to, the FDA and any foreign regulatory authorities
performing functions similar to those performed by the FDA, that are material to
the conduct of the business of the Company as described in the Registration
Statement and the Prospectus, all of which are valid and in full force and
effect (and there is no proceeding pending or, to the best knowledge of the such
counsel, threatened which may cause any such license, consent, certificate,
order, approval or permit to be withdrawn, cancelled, suspended or not renewed),
except where failure to have such licenses, consents, certificates, orders,
approvals and permits would not have a Material Adverse Effect;
14. To the best knowledge of such counsel, (i) the Company has good
and marketable title to all material properties and assets described in the
Prospectus as owned by it, free and clear of any pledge, lien, security
interest, charge, encumbrance, claim, equitable interest, or restriction, (ii)
the agreements to which the Company is a party are valid agreements, enforceable
by and against the Company in accordance with their terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or by
general equitable principles, and, to the best of such counsel's knowledge, the
other contracting party or parties thereto are not in material breach or default
under any of such agreements and (iii) the Company has valid and enforceable
leases for the properties described in the Prospectus as leased by it, and such
leases conform in all material respects to the description thereof, if any, set
forth in the Registration Statement;
15. There is not pending or, to the best of such counsel's knowledge,
threatened, any action, suit, claim, proceeding or investigation against the
Company or any of its officers or any of its properties, assets or rights before
any court or governmental agency or body or otherwise which might result in a
Material Adverse Effect or prevent consummation of the
A-3
transactions contemplated hereby, or would limit, revoke, cancel, suspend, or
cause not to be renewed any existing license, certificate, registration,
approval or permit, known to such counsel, from any state, federal, or
regulatory authority that is material to the conduct of the business of the
Company as presently conducted, or that is of a character otherwise required to
be disclosed in the Registration Statement or the Prospectus under the Act or
the applicable Rules and Regulations;
16. To the best of such counsel's knowledge, except as set forth in
the Registration Statement and Prospectus, no holders of shares of Common Stock
or other securities of the Company have registration rights with respect to
securities of the Company and, except as set forth in the Registration Statement
and Prospectus, all holders of securities of the Company have registration
rights with respect to shares of Common Stock or other securities have, with
respect to the offering contemplated hereby, waived such rights or such rights
have otherwise been waived or such rights have expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement.
17. No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Firm Shares or the Option Shares;
18. The Company is not, and, upon the issuance and sale of the Shares
and application of the net proceeds from such issuance and sale as described in
the Prospectus under the caption "Use of Proceeds" will not be, an "investment
company," or a "promoter" or "principal underwriter" for a registered investment
company, as such terms are defined in the Investment Company Act of 1940, as
amended; and
19. The information required to be set forth in the Registration
Statement in answer to Items 9, 10 (insofar as it relates to such counsel) and
11(c) of Form S-1 is to the best of such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is required
with respect to such Items; and
20. No authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary in connection with the execution and delivery of this Agreement by the
Company and the consummation of the transactions therein contemplated except
such as may have been obtained under the Act and the Rules and Regulations or
such as may be required under foreign or state securities or Blue Sky laws or by
the bylaws and rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters.
In addition, such counsel shall include a statement to the effect that
such counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent public accountants of the Company, at which conferences the
contents of the Registration Statement, the Prospectus and the Offering
Memorandum and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement, the
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Prospectus or the Offering Memorandum, nothing has come to the attention of such
counsel which caused them to believe that, at the time the Registration
Statement became effective the Registration Statement (except as to financial
statements, financial and statistical data and supporting schedules contained
therein, as to which such counsel need express no opinion) contained any 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 at
the Closing Date or any later Option Closing Date, as the case may be, the
Registration Statement, the Prospectus or the Offering Memorandum (except as
aforesaid) contained any 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, in light of the circumstances under,which they were made,
not misleading.
Counsel rendering the foregoing may rely as to questions of fact upon
representations or certificates of officers of the Company and of governmental
officials, as the case may be, in which case its opinion is to state that it is
so doing and that it has no actual knowledge of any material misstatement or
inaccuracy in such opinions, representations or certificates, and that they
believe that they and the Underwriters are justified in relying on such opinions
or certificates. Copies of any opinion, representation or certificate so relied
upon shall be delivered to you, as Representatives of the Underwriters, and to
Underwriters' Counsel.
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C. Opinion of Special Counsel to the Company.
Xxxxxx, Xxxxxx & Xxxxxxxxx, special counsel to the Company, shall
opine to the effect that:
1. The Registration Statement has become effective under the Act and,
to the best of such counsel's knowledge, the Commission has not issued any stop
order suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus and no proceedings for that purpose have
been instituted or are pending or threatened under the Act; any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules and Regulations has been made in the manner and within the time period
required by such Rule 424(b) and any required filing of an abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations has
been made in the manner and within the time period required by such Rule 462(b);
2. The Registration Statement, all Preliminary Prospectuses, the
Prospectus, and each amendment or supplement thereto (other than the financial
statements, financial data and supporting schedules included therein, as to
which such counsel need express no opinion), comply as to form in all material
respects with the requirements of the Act and the applicable Rules and
Regulations and to the best of such counsel's knowledge, there are no
agreements, contracts, leases or documents of a character required to be
described in, or filed as an exhibit to, the Registration Statement which are
not described or filed as required by the Act and the applicable Rules and
Regulations;
3. The terms and provisions of the capital stock of the Company
conform to the description thereof contained in the Registration Statement and
the Prospectus, and the information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes matters of law
or legal conclusions, has been reviewed by such counsel and is correct, and the
form of certificate evidencing the Common Stock complies with the applicable
provisions of Delaware law.
4. The statements under the captions "Risk Factors Dependence on
Collaborations and Licenses with Others" "Shares Eligible for Future Sale,"
"Anti- Takeover Effect of Certain Charter and Bylaw Provisions," "Management
Stock Option Plans," "Employment Agreements," "Compensation Committee
Interlocks and Insider Participation," "Certain Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale" in the Prospectus, and in
Items 14 or 15 of the Registration Statement, insofar as such statements
constitute a summary of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all material respects,
the information called for with respect to such documents and matters;
5. The statements in the Registration Statement and the Prospectus
summarizing statutes, rules and regulations, including the Delaware General
Corporation Law, and the description of the certificate of incorporation and
bylaws are accurate and fairly and
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correctly present the information required to be presented by the Act or the
Rules and Regulations in all material respects; and such counsel does not know
of any statutes, rules or regulations required to be described in the
Registration Statement or the Prospectus that are not described or referred to
therein as required;
6. The information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates to such counsel) of
Form S-1 is to the best of such counsel's knowledge accurately and adequately
set forth therein in all material respects or no response is required with
respect to such Items; and
7. No transfer taxes are required to be paid in connection with the
sale or delivery to the Underwriters of the Firm Shares or the Option Shares;
8. The Company is not, and, upon the issuance and sale of the Shares
and application of the net proceeds from such issuance and sale as described in
the Prospectus under the caption "Use of Proceeds" will not be, an "investment
company," or a "promoter" or "principal underwriter" for a registered investment
company, as such terms are defined in the Investment Company Act of 1940, as
amended; and
9. No authorization, approval, consent, order, designation or
declaration of or filing by or with any governmental authority or agency is
necessary in connection with the execution and delivery of this Agreement by the
Company and the consummation of the transactions therein contemplated except
such as may have been obtained under the Act and the Rules and Regulations or
such as may be required under foreign or state securities or Blue Sky laws or by
the bylaws and rules of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters.
In addition, such counsel shall include a statement to the effect that
such counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent public accountants of the Company, at which conferences the
contents of the Registration Statement, the Prospectus and the Offering
Memorandum and related matters were discussed, and although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement, the Prospectus or the Offering Memorandum, and such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of such statements, on the basis of the such counsel's review of
documents relating to the Company and on the basis of the foregoing (relying as
to materiality to a large extent upon discussions with, and representations and
opinions of, officers and other representatives of the Company), nothing has
come to the attention of such counsel which caused them to believe that, at the
time the Registration Statement became effective the Registration Statement
(except as to financial statements and the notes thereto, financial and
statistical data and supporting schedules contained therein, as to which such
counsel need express no opinion) contained any 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 at the Closing Date
or any later Option Closing Date, as the case may be, the Registration
Statement,
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the Prospectus or the Offering Memorandum (except as aforesaid) contained any
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, in light of
the circumstances under,which they were made, not misleading.
Counsel rendering the foregoing may rely as to questions of fact upon
representations or certificates of officers of the Company and of governmental
officials, as the case may be, in which case its opinion is to state that it is
so doing and that it has no actual knowledge of any material misstatement or
inaccuracy in such opinions, representations or certificates, and that they
believe that they and the Underwriters are justified in relying on such opinions
or certificates. Copies of any opinion, representation or certificate so relied
upon shall be delivered to you, as Representatives of the Underwriters, and to
Underwriters' Counsel.
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D. Opinion of Patent Counsel to the Company.
Xxxxxx & Xxxxxxx shall indicate that they served as special counsel to
the Company, with respect to patents and proprietary rights, and shall opine to
the effect that:
(A) To the best of such counsel's knowledge, the statements in the
Prospectus relating to United States patent and licensing matters under the
captions "Risk Factors Uncertainty Regarding Patents and Proprietary Rights" and
"Business Patents, Proprietary Technology and Trade Secrets," and other
references in the Prospectus to United States patent and licensing matters,
insofar as such statements constitute a summary of legal matters, documents, or
proceedings, are accurate and present fairly the information purported to be
shown; and
(B) To the best of such counsel's knowledge, the statements in the
Prospectus relating to United States patent and licensing matters under the
captions "Risk Factors Uncertainty Regarding Patents and Proprietary Rights" and
"Business Patents, Proprietary Technology and Trade Secrets," and other
references in the Prospectus to United States patent and licensing matters, do
not contain an untrue statement of material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
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