ARENA PHARMACEUTICALS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED JUNE 21, 2001
TABLE OF CONTENTS
Page
1. Representations and Warranties of the Company...........................2
1.1. Effective Registration Statement...................................2
1.2. Contents of Registration Statement.................................2
1.3. Due Incorporation..................................................2
1.4. Subsidiaries.......................................................2
1.5. Independent Public Accountants.....................................3
1.6. Capitalization of the Company......................................3
1.7. Validly Issued Shares..............................................3
1.8. Legal Proceedings..................................................3
1.9. Financial Statements...............................................4
0.00.Xx Material Adverse Effect.........................................4
1.11.Marketable Title...................................................4
1.12.Required Licenses and Permits......................................4
0.00.Xx Conflict........................................................5
1.14.Intellectual Property, General.....................................5
1.15.Intellectual Property; Patents.....................................6
1.16.Intellectual Property; Trademarks..................................6
0.00.Xxxxxxxx Licenses..................................................6
1.18.Taxes..............................................................6
0.00.Xxxxxxxxx..........................................................7
1.20.Labor Disputes.....................................................7
1.21.Environmental Compliance...........................................7
1.22.Political Contributions............................................7
1.23.ERISA Liabilities..................................................7
0.00.Xx Advances........................................................8
1.25.Securities Laws Compliance.........................................8
1.26.Corporate Authorization and Authority..............................8
1.27.Not an Investment Company..........................................8
0.00.Xx Price Stabilization or Manipulation.............................8
0.00.Xxxxxxx............................................................9
0.00.Xx Registration Rights.............................................9
1.31.Listing of Common Stock............................................9
0.00.Xx Sales...........................................................9
1.33.Forward-Looking Statements.........................................9
1.34.Lock-Up Agreements.................................................9
1.35.Accounting Controls................................................9
2. Representations and Warranties of the Selling Stockholders.............10
2.1. Due Authorization.................................................10
2.2. Selling Stockholder Documents.....................................10
2.3. No Conflict.......................................................10
2.4. Good Title to Shares..............................................10
2.5. Delivery of Common Shares.........................................10
2.6. No Registration Rights............................................10
2.7. No Price Stabilization or Manipulation............................11
2.8. Disclosure in the Registration Statement..........................11
3. Purchase and Sale Agreements...........................................11
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3.1. Firm Shares.......................................................11
3.2. Additional Shares.................................................11
3.3. Market Standoff Provision.........................................11
3.4. Terms of Public Offering..........................................12
4. Payment and Delivery...................................................12
4.1. Firm Shares.......................................................12
4.2. Additional Shares.................................................12
4.3. Delivery of Certificates..........................................12
5. Covenants of the Company...............................................12
5.1. Furnish Copies of Registration Statement and Prospectus...........12
5.2. Notification of Amendments or Supplements.........................12
5.3. Filings of Amendments or Supplements..............................12
5.4. Blue Sky Laws.....................................................13
5.5. Earnings Statement................................................13
5.6. Use of Proceeds...................................................13
5.7. Transfer Agent....................................................13
5.8. Periodic Reporting Obligations....................................13
5.9. Exchange Act Compliance...........................................13
6. Conditions to the Underwriters' Obligations............................13
6.1. Effective Registration Statement..................................13
6.2. Rule 462 Registration Statement...................................13
6.3. Prospectus Filed with Commission..................................13
6.4. No Stop Order.....................................................14
6.5. No NASD Objection.................................................14
6.6. No Material Adverse Change........................................14
6.7. Officer's Certificate.............................................14
6.8. Opinion of Company Counsel........................................14
6.9. Opinion of Selling Stockholder Counsel............................14
6.10.Opinion of Patent Counsel to the Company..........................14
6.11.Opinion of General Counsel........................................14
6.12.Opinion of Underwriters Counsel...................................14
0.00.Xxxxxxxxxxx' Comfort Letter.......................................14
6.14.Lock-Up Agreements................................................15
6.15.Selling Stockholders' Certificate.................................15
6.16.Selling Stockholder Documents.....................................15
6.17.Additional Documents..............................................15
7. Expenses...............................................................15
8. Indemnity and Contribution.............................................16
8.1. Indemnification of the Underwriters...............................16
8.2. Indemnification of Company by the Selling Stockholders............16
8.3. Indemnification by the Underwriters...............................16
8.4. Indemnification Procedures........................................17
8.5. Limitation of Selling Stockholder Liability.......................18
8.6. Contribution Agreement............................................18
8.7. Contribution Amounts..............................................18
8.8. Survival of Provisions............................................19
9. Effectiveness..........................................................19
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10. Termination............................................................19
11. Defaulting Underwriters................................................19
12. Counterparts...........................................................20
13. Headings; Table of Contents............................................20
14. Notices................................................................20
15. Successors.............................................................21
16. Partial Unenforceability...............................................21
17. Governing Law..........................................................21
18. Consent to Jurisdiction................................................21
19. Waiver of Immunity.....................................................21
20. Failure of the Selling Stockholders to Sell and Deliver Shares.........22
21. Entire Agreement.......................................................22
22. Amendments.............................................................22
23. Sophisticated Parties..................................................22
SCHEDULES
A List of Underwriters
B List of Selling Stockholders
EXHIBITS
A Form of Lock-Up Agreement
B Opinion of Company Counsel
C Opinion of Selling Stockholder Counsel
D Opinion of Company Patent Counsel
E Opinion of Company General Counsel
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June 21, 2001
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Incorporated
ABN AMRO Rothschild LLC
Lazard Freres & Co. LLC
As Representatives of the Several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTION. Arena Pharmaceuticals, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
SCHEDULE A attached hereto (the "UNDERWRITERS"), and certain stockholders of the
Company (the "SELLING STOCKHOLDERS") named in SCHEDULE B attached hereto
severally propose to sell to the several Underwriters, an aggregate of 5,000,000
shares of the Common Stock, par value $0.0001 per share, of the Company (the
"FIRM SHARES"), of which 4,000,000 shares are to be issued and sold by the
Company and 1,000,000 shares are to be sold by the Selling Stockholders, with
each Selling Stockholder selling the number of shares set forth opposite such
Selling Stockholder's name in SCHEDULE B attached hereto.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 750,000 shares of its Common Stock, par value
$0.0001 per share (the "ADDITIONAL SHARES"), if and to the extent that you shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3
below. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES." The shares of Common Stock, par value $0.0001 per
share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK." The
Company and the Selling Stockholders are hereinafter sometimes collectively
referred to as the "SELLERS." You have agreed to act as representatives of the
several Underwriters (in such capacity, the "REPRESENTATIVES") in connection
with the offering and sale of the Shares; PROVIDED, HOWEVER, that if the
Representatives are the same as the Underwriters, the term "Representatives" or
"you" shall mean the "Underwriters."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (file no. 333-62268),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first filed with the Commission pursuant to Rule
424(b) under the Securities Act or filed as part of the Registration Statement
at the time of effectiveness (as applicable) is hereinafter referred to as the
"PROSPECTUS." If the Company has filed a registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement. All references in this Agreement to the Registration
Statement, the Rule 462
Registration Statement, a preliminary prospectus, the Prospectus, or any
amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX").
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Underwriters that:
1.1. EFFECTIVE REGISTRATION STATEMENT. The Registration Statement has
become effective; no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for such purpose are pending before,
or to the best knowledge of the Company, threatened by the Commission.
1.2. CONTENTS OF REGISTRATION STATEMENT. (a) the Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (b) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (c) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representation and warranties
set forth in this Section 1.2 do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
1.3. DUE INCORPORATION. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, and has all power and authority necessary to own, lease and operate
its properties and engage in the business in which it is engaged as described in
the Registration Statement and the Prospectus. The Company is duly registered
and qualified to do business as a foreign corporation in good standing in each
jurisdiction where the character, location, ownership or leasing of its
properties or the conduct of its business requires such registration or
qualification.
1.4. SUBSIDIARIES. The Company owns (a) all of the outstanding
capital stock of BRL Screening, Inc. ("BRL SCREENING"), (b) approximately 83%
of the outstanding capital stock of Aressa Pharmaceuticals, Inc. ("ARESSA"
and, together with BRL Screening, the "CONTROLLED SUBSIDIARIES") and (c)
approximately 33% of the outstanding capital stock of XxxxXxxxxxxxx.xxx, Inc.
("CHEMNAVIGATOR" and, together with the Controlled Subsidiaries, the
"AFFILIATED COMPANIES"). The Company does not own or control, 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 other than the
Affiliated Companies (except that the Company has executed a binding letter
of intent to acquire shares of stock of Axiom Biotechnologies, Inc.). All the
outstanding shares of capital stock of the Controlled Subsidiaries have been
duly and validly authorized and issued and are fully paid and nonassessable,
and the outstanding shares owned by the Company are free and clear of any
security interest, pledge, claim (legal or equitable), lien, charge, equity,
mortgage, encumbrance or other restriction (each a "LIEN"), shareholders'
agreements, voting trusts or defects of title. Each of the Controlled
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
organization, with full power and authority to own, lease and operate its
properties and conduct the business in which it is engaged. Each of the
Controlled Subsidiaries is duly registered and qualified to do business as a
foreign corporation in good standing in each jurisdiction where the
character, location, ownership or leasing of its properties or the conduct of
its business requires such registration or qualification. Neither of the
Controlled Subsidiaries nor, to the knowledge of the Company, ChemNavigator,
is currently prohibited by any provision in any contract or other document or
instrument, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on its capital stock, from repaying to the
Company any loans or advances to it from the
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Company or from transferring any of its property or assets to the Company or any
other subsidiary of the Company.
1.5. INDEPENDENT PUBLIC ACCOUNTANTS. Ernst & Young LLP, the accountants
who have expressed their opinion with respect to the consolidated financial
statements (including the related notes and supporting schedules) of the Company
filed with the Commission as a part of the Registration Statement and the
Prospectus, are, with respect to the Company, independent public accountants as
required by the Securities Act, the Regulations and the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT").
1.6. CAPITALIZATION OF THE COMPANY. As of the date hereof, the Company
has an authorized capitalization as set forth in the Registration Statement and
the Prospectus and there has been no material change in its capitalization since
that date. 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 description of the authorized and outstanding
capital stock of the Company and of the Shares contained in the Registration
Statement and the Prospectus is accurate in all material respects. Except as
described in the Registration Statement and the Prospectus, there are no
authorized or outstanding rights (including, without limitation, preemptive
rights, co-sale rights, resale rights, rights of first refusal or similar
rights), warrants or options to acquire, or instruments convertible into or
exercisable or exchangeable for, any share of capital stock or other equity
interest or ownership interest in the Company or any of the Controlled
Subsidiaries or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock or other
equity interest or ownership interest in the Company or any of the Controlled
Subsidiaries, except for any such rights that have been effectively waived in
writing so as not to be exercisable in connection with the registration, offer
or sale of the Shares. The description of the Company's stock option, stock
bonus and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth in the Registration Statement and the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
1.7. VALIDLY ISSUED SHARES. The Shares have been duly authorized for
issuance and, when issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, good title to the Shares will be transferred to the Underwriters
free and clear of any Liens and the certificates representing the Shares will be
in valid and sufficient form. The Shares to be issued pursuant to this Agreement
will not be issued in violation of any preemptive right, co-sale right, resale
right, right of first refusal or similar right.
1.8. LEGAL PROCEEDINGS. Except as otherwise described in the
Prospectus, there is (a) no action, suit or proceeding or, to the knowledge of
the Company, investigation, before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, pending or, to the knowledge of
the Company, threatened or contemplated, as to which the Company or any
Affiliated Company is (or, to the extent threatened or contemplated, will be) a
party or as to which the business, assets or property of the Company or any
Affiliated Company is (or, to the extent threatened or contemplated, will be)
subject, (b) no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency, body or official, and (c) no
injunction, restraining order or order of any nature that has been issued by a
federal or state court or foreign court of competent jurisdiction to which the
Company or any Controlled Subsidiary is or will be subject or affecting the
business, assets or property of the Company or any Controlled Subsidiary, that
could (in the case of clauses (a), (b) and (c)), individually or in the
aggregate, whether or not arising from transactions in the ordinary course of
business, result in a material adverse effect on or affecting the business,
operations, assets, properties, condition (financial or other), stockholders'
equity, prospects or results of operations of the Company and its consolidated
subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT") or be required to be
disclosed in the Registration Statement or the Prospectus. There are no legal or
administrative proceedings, statutes, Contracts (as defined below) or documents
concerning the Company or
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any Affiliated Company required to be filed as an exhibit to the Registration
Statement or described in the Prospectus that have not been filed or described
as required.
1.9. FINANCIAL STATEMENTS. The consolidated financial statements of the
Company, together with the related notes thereto, which are filed as a part of
the Registration Statement and the Prospectus, present fairly the consolidated
financial position and the consolidated results of operations, changes in
stockholders' equity and changes in cash flows of the Company as of the
respective dates and for the respective periods specified therein. All of such
financial statements and related notes have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved and comply as to form with the applicable
accounting requirements included in Regulation S-X under the Securities Act. The
supporting schedules and tables, and the financial data set forth under the
headings "Prospectus Summary--Summary Financial Data" and "Selected Financial
Data," included in the Registration Statement and the Prospectus, fairly present
the information purported to be shown thereby at the respective dates thereof
and for the respective periods covered thereby and have been presented on a
basis consistent with that of the audited financial statements therein. No other
financial statements or supporting schedules are required by the Securities Act,
the Exchange Act or the Regulations (including Regulation S-X) to be included
therein.
1.10. NO MATERIAL ADVERSE EFFECT. Subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus,
there has not been, except as described in the Registration Statement and the
Prospectus (a) any Material Adverse Effect, (b) any transaction entered into by
the Company or any Controlled Subsidiary, except transactions in the ordinary
course of business, (c) any obligation, direct or contingent, incurred by the
Company or any Controlled Subsidiary which is material to the Company and the
Controlled Subsidiaries taken as a whole, (d) any change in the capital stock or
outstanding indebtedness of the Company or any Controlled Subsidiary, except for
shares issued upon exercise of stock options granted under the Company's stock
option, stock bonus or other similar plan or arrangement, or (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any Controlled Subsidiary.
1.11. MARKETABLE TITLE. The Company and the Controlled Subsidiaries
have good and marketable title to all properties and assets described in the
Registration Statement and the Prospectus as being owned by them, free and clear
of all Liens except (a) such as are described in the Registration Statement and
the Prospectus or (b) such as do not, singly or in the aggregate, materially
adversely affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Company or the Controlled
Subsidiaries. The Company and the Controlled Subsidiaries have valid and
enforceable leases for the properties leased by them; the Company and the
Controlled Subsidiaries enjoy peaceful and undisturbed possession under all such
leases with such exceptions as do not materially interfere with the use thereof
made by the Company and the Controlled Subsidiaries; and such leases conform in
all material respects to the descriptions thereof, if any, set forth in the
Registration Statement and the Prospectus. The Company and the Controlled
Subsidiaries own, lease or otherwise have rights to use all properties and
assets as are important to their respective operations as now conducted.
1.12. REQUIRED LICENSES AND PERMITS. The Company and the Controlled
Subsidiaries have all licenses, certificates, approvals, consents, concessions,
qualifications, orders, registrations, authorizations and permits from all
federal, state, foreign and other governmental and regulatory agencies, bodies
and authorities ("PERMITS") that are material to the conduct of the business of
the Company and the Controlled Subsidiaries as such businesses are currently
conducted. All such Permits 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 Permit to be withdrawn, canceled, suspended or not
renewed. The Company and the Controlled Subsidiaries are not in violation of, or
in default under, and have fulfilled and performed all their obligations with
respect to, such Permits. No event has occurred which allows or would allow
revocation or termination of any such Permit or result in any material
impairment of the rights of the holder of any such
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Permit. The Contracts to which the Company or any Controlled Subsidiary is a
party are valid and binding agreements, enforceable against the Company and such
Controlled Subsidiary in accordance with their terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws now or hereafter in effect relating to
or affecting creditors' rights generally, 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 Contracts.
1.13. NO CONFLICT. Neither the Company nor any Controlled Subsidiary is
(a) in violation of its' certificate of incorporation, as amended, or bylaws, as
amended or (b) in breach of or default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, franchise, joint venture, deed of trust,
bond, note, lease or other agreement or instrument to which the Company or such
Controlled Subsidiary is a party or by which the Company or such Controlled
Subsidiary may be bound or to which any of the property or assets of the Company
or such Controlled Subsidiary is subject (each a "CONTRACT"), or in violation of
any law, order, rule, regulation, writ, injunction or decree of any court or
governmental agency, except in the case of this clause (b) for such breaches,
defaults or violations that could not, individually or in the aggregate, have a
Material Adverse Effect. Neither the issuance, offer, sale or delivery of the
Shares, the execution, delivery and performance by the Company of this Agreement
nor the compliance by the Company with all the provisions hereof nor the
consummation of the transactions contemplated hereby (i) conflicts with or will
conflict with, or constitutes or will constitute a breach or violation of or a
default under (or an event that, with notice or lapse of time or both, would
constitute such a breach, violation or default), or results in or will result in
the imposition of a Lien upon any property or assets of the Company or any
Controlled Subsidiary under, any of the terms or provisions of the certificate
of incorporation or by-laws of the Company or such Controlled Subsidiary, or
(ii) conflicts with or will conflict with or constitutes or will constitute a
breach or violation of, or a default under (or an event that with notice or the
lapse of time or both would constitute a default) or the loss of any material
benefit under, or the termination of, or results in or will result in the
creation or imposition of any Lien upon any property or assets of the Company or
any Controlled Subsidiary pursuant to, any Contract, nor (iii) violates or
conflicts with or will violate or conflict with any law, statute, rule or
regulation applicable to the Company or any Controlled Subsidiary or any
judgment, decree or order applicable to the Company or any Controlled Subsidiary
of any court or supervisory, regulatory, administrative or governmental agency,
body or authority, or arbitrator having jurisdiction over the Company or any
Controlled Subsidiary or any of their respective properties or assets except, in
the case of clauses (ii) and (iii), for such conflicts, breaches, violations or
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect.
1.14. INTELLECTUAL PROPERTY, GENERAL. Each of the Company and the
Controlled Subsidiaries own, possess, license or have rights to use all patents,
patent applications, trademarks, trademark applications, service marks, service
xxxx applications, trade names, inventions, discoveries, concepts, ideas,
techniques, methods, source codes, object codes, copyrights, manufacturing
processes, formulae, computer software, databases, works of authorship,
technology, trade secrets, know-how, and other unpatented and/or unpatentable
proprietary or confidential information, collaborative research agreements,
systems or procedures and material intangible property and assets (collectively,
"INTELLECTUAL PROPERTY") necessary to the conduct of its business as currently
conducted. The Company reasonably believes it will be able to own or possess
adequate licenses or other rights to use all Intellectual Property necessary to
the conduct of its business as described in the Registration Statement and the
Prospectus. The descriptions of the Company's and each Controlled Subsidiary's
Intellectual Property in the Registration Statement and the Prospectus fairly
and accurately describe the Company's and each Controlled Subsidiary's rights
with respect to its Intellectual Property. There are no claims, actions, or
proceedings pending or, to the Company's best knowledge, threatened, challenging
the validity of any of its or any Controlled Subsidiary's claims in any of the
Intellectual Property, and the Company is unaware of any fact that the Company
believes could form a reasonable basis for any such claim, action or proceeding.
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1.15. INTELLECTUAL PROPERTY; PATENTS. The patents ("PATENTS") and
patent applications ("PATENT APPLICATIONS") of the Company and the Controlled
Subsidiaries listed on Schedule C attached hereto (collectively, "PATENT
RIGHTS") are all of the Patent Rights included in the Intellectual Property.
Other than the collaboration agreements set forth on SCHEDULE C attached hereto,
there are no outstanding licenses or other agreements that relate to or restrict
the Company's or any Controlled Subsidiary's use of the Patent Rights. No Patent
has been or is now involved in any interference, reissue, reexamination or
opposition proceeding in the United States Patent and Trademark Office. To the
knowledge of the Company, except as described in the Registration Statement and
the Prospectus, there is no patent or patent application of any person that
conflicts in any material respect with any Patent or invalidates any claim the
Company or any Controlled Subsidiary has in any Patent or Patent Application.
With regard to the Patent Rights, except as described in the Registration
Statement and the Prospectus, the Company has no knowledge of unpaid maintenance
fees, patents that have lapsed, or abandonment of applications, and is not aware
of any facts why any Patent Applications should not be allowed. The Company is
not aware of any prior art reference that could render any Patent Right invalid
or a Patent Application unpatentable.
1.16. INTELLECTUAL PROPERTY; TRADEMARKS. The Company or the Controlled
Subsidiaries are the sole and exclusive owner of all right, title and interest
in the registered trademarks and service marks listed on Schedule C attached
hereto (collectively, "REGISTERED MARKS"), which are all of the registered
trademarks and service marks included in the Intellectual Property. The Company
or the Controlled Subsidiaries have applied for the United States trademarks and
service marks listed on Schedule C attached hereto (collectively, "APPLIED
MARKS"). The Company has not allowed any Applied Marks or Registered Marks to be
abandoned, canceled, or to lapse. The Company has no knowledge of the existence
of trademarks or service marks, or trademark or service xxxx applications, owned
by third parties that may have, individually or in the aggregate, a Material
Adverse Effect. The Company and the Affiliated Companies have registered with
Network Solutions, Inc. the Internet domain names xxxxxxxxxx.xxx,
xxxxxxxxxxx.xxx, xxxxxxxxxxxxx.xxx, xxxxxxxxxx.xxx and xxxxxxxxxxxx.xxx
(collectively, the "DOMAIN NAMES"). The Company has no knowledge of a registered
trademark held by a third party that may be used to prevent the Company or an
Affiliated Company from using these domain names. The Company or an Affiliated
Company has taken all reasonable steps to secure, protect, and maintain the
Registered Marks and Applied Marks listed on Schedule C attached hereto and the
Domain Names.
1.17. SOFTWARE LICENSES. The Software owned, licensed or purported to
be owned or licensed by the Company or the Affiliated Companies was either (a)
developed by employees of the Company or the Affiliated Companies within the
scope of their employment; (b) developed by independent contractors who have
assigned their rights to the Company or the Affiliated Companies pursuant to
written agreements; or (c) otherwise lawfully acquired by the Company or the
Affiliated Companies from a third party pursuant to a contract. To the knowledge
of the Company, the Software does not contain any programming code,
documentation or other materials or development environments that embody
Intellectual Property rights of any person other than the Company except for
such materials or development environments obtained by the Company or the
Affiliated Companies from other persons who make such materials or development
environments generally available on non-discriminatory commercial terms.
"SOFTWARE" means any and all (i) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code, (ii) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise, (iii)
descriptions, schematics, flow-charts and other work product used to design,
plan, organize and develop any of the foregoing, and (iv) all documentation,
including user manuals and training materials, relating to any of the foregoing.
1.18. TAXES. The Company and the Controlled Subsidiaries have filed on
a timely basis with the appropriate taxing authorities (or have received an
extension for filing with respect to) all necessary federal, state and foreign
income and franchise tax returns, reports and other information required to be
filed by them. Each such tax return, report or other information was, when
filed, accurate and complete. The Company and the Controlled Subsidiaries have
duly paid, or have made adequate charges, accruals and
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reserves in the financial statements for, all such taxes required to be paid by
them and any other assessment, fine or penalty levied against them, for all
periods as to which the tax liability of the Company or any Controlled
Subsidiary has not been finally determined. No tax deficiency has been or, to
the best of the Company's knowledge, might be, asserted or contemplated against
the Company or the Controlled Subsidiaries.
1.19. INSURANCE. Each of the Company and the Controlled Subsidiaries
carries, or is covered by, insurance in such amounts and covering such risks as
are adequate for the conduct of its business and the value of its properties and
as is customary for companies engaged in similar businesses.
1.20. LABOR DISPUTES. Neither the Company nor BRL Screening is involved
in any labor dispute, disturbance, lockout, slowdown or stoppage of employees,
and, to the best knowledge of the Company, no such dispute or disturbance is
threatened or imminent.
1.21. ENVIRONMENTAL COMPLIANCE. The Company and the Controlled
Subsidiaries (a) are in compliance with all applicable foreign, United States
federal, state and local environmental laws, rules, regulations, treaties,
statutes and codes relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), except for such noncompliance as could not
have a Material Adverse Effect, and (b) have not received notice of any actual
or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants.
No action, proceeding, revocation proceeding, writ, injunction or claim is
pending or, to the knowledge of the Company, threatened, relating to the
Environmental Laws or to the Company's or any Controlled Subsidiary's activities
involving Hazardous Materials. "HAZARDOUS MATERIALS" means any material or
substance (i) that is prohibited or regulated by any Environmental Law or (ii)
that has been designated or regulated by any governmental body or authority as
radioactive, toxic, hazardous or otherwise a danger to health, reproduction or
the environment. Neither the Company nor any Controlled Subsidiary has engaged
in the generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or any Controlled Subsidiary's properties or
former properties, except in compliance with all applicable Environmental Laws.
No Hazardous Materials have been treated or disposed of on any of the Company's
or any Controlled Subsidiary's properties or on properties formerly owned or
leased by the Company or any Controlled Subsidiary during the time of such
ownership or lease, except in compliance with Environmental Laws.
1.22. POLITICAL CONTRIBUTIONS. No payments or inducements have been
made or given, directly or indirectly, to any federal or local official or
candidate for, any federal or state office in the United States or foreign
offices by the Company or any Controlled Subsidiary, by any of their officers,
directors, employees or agents or, to the knowledge of the Company, by any other
person in connection with any opportunity, Contract, Permit, certificate,
consent, order, approval, waiver or other authorization relating to the business
of the Company or any Controlled Subsidiary, except for such payments or
inducements as were lawful under applicable laws, rules and regulations. Neither
the Company nor any Controlled Subsidiary, nor, to the best knowledge of the
Company, any director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any Controlled Subsidiary, (a) has used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (b) made any direct or indirect
unlawful payment to any government official or employee from corporate funds;
(c) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (d) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment in connection with the business of
the Company or any Controlled Subsidiary.
1.23. ERISA LIABILITIES. Neither the Company nor any Controlled
Subsidiary has any liability for any prohibited transaction (within the meaning
of Section 4975(c) of the Internal Revenue Code of 1986, as amended (the
"CODE"), or Part 4 of Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (or an accumulated funding deficiency within the
meaning of Section 412 of
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the Code or Section 302 of ERISA) or any complete or partial withdrawal
liability (within the meaning of Section 4201 of ERISA), with respect to any
pension, profit sharing or other plan which is subject to ERISA, to which the
Company or any Controlled Subsidiary make or ever have made a contribution and
in which any employee of the Company or any Controlled Subsidiary is or has ever
been a participant. With respect to such plans, the Company and the Controlled
Subsidiaries are in compliance with all applicable provisions of ERISA.
1.24. NO ADVANCES. 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 or any Controlled Subsidiary to or for
the benefit of any of the officers or directors or stockholders of the Company
or any Controlled Subsidiary or any of the members of the families of any of
them, except as disclosed in the Registration Statement and the Prospectus.
1.25. SECURITIES LAWS COMPLIANCE. No consent, approval, registration,
authorization, filing, qualification, Permit or order of or with any court or
supervisory, regulatory, administrative or governmental agency, body or
authority, arbitrator or others (including security holders) is required in
connection with the execution and delivery of this Agreement, the issuance, sale
or delivery of the Shares to be issued, sold and delivered by the Company
hereunder, or the consummation of any other of the transactions contemplated
herein or the fulfillment of the terms hereof, except (a) the registration under
the Act of the Shares and such consents, approvals, registrations,
authorizations, filings, qualifications, Permits or orders, as may be required
under the state securities or "blue sky" laws or the bylaws and rules of the
National Association of Securities Dealers, Inc. (the "NASD"), (b) such as have
been obtained under the laws and regulations of jurisdictions outside the United
States in which the Shares are offered, or (c) as have been obtained and which
are in full force and effect in connection with the offer, purchase and
distribution by the Underwriters of the Shares.
1.26. CORPORATE AUTHORIZATION AND AUTHORITY. The execution, delivery
and performance by the Company of this Agreement and the issuance and sale of
the Shares and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action. This Agreement
constitutes the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as the enforceability
thereof may be limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium or other laws now or hereafter in effect relating to or affecting
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
except to the extent that the provisions of Section 8 below may be limited by
applicable federal or state securities laws or unenforceable as against public
policy.
1.27. NOT AN INVESTMENT COMPANY. The Company is not now, and as a
result of the offer and sale of the Shares in the manner contemplated in this
Agreement, the Registration Statement and the Prospectus and the application of
the net proceeds of such sale as described in the Registration Statement and the
Prospectus, will not be, an "investment company" or an "affiliated person" of,
or "promoter" or "principal underwriter" for, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "INVESTMENT
COMPANY ACT").
1.28. NO PRICE STABILIZATION OR MANIPULATION. Neither the Company nor
any Controlled Subsidiary nor, to the Company's best knowledge, any of its or
their officers, directors or affiliates (as defined in Rule 501(b) of Regulation
D ("REGULATION D") under the Securities Act) has taken or will take, directly or
indirectly, any action designed to cause or to result in or that has
constituted, or might reasonably be expected to cause or result in or
constitute, under the Exchange Act, or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares.
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1.29. WEBSITE. The Company has not distributed and will not distribute
prior to the later of (a) the Closing Date or the Option Closing Date, if any,
and (b) the completion of the distribution of the Shares by the Underwriters and
dealers, any offering material (including, without limitation, content on its
website, if any, that may be deemed to be offering material) in connection with
the offering and sale of the Shares other than the preliminary prospectus and
the Prospectus.
1.30. NO REGISTRATION RIGHTS. There are no holders of securities of the
Company which by reason of the filing of the Registration Statement or otherwise
in connection with the sale of the Shares contemplated hereby, have the right to
request or demand that the Company register under the Securities Act any of
their securities in connection with the Registration Statement, except for any
such rights that have been effectively waived in writing so as to not be
exercisable in connection with the registration, offer or sale of the Shares and
except for those held by International BM Biomedicine, Inc. Except as disclosed
in the Registration Statement, there is no holder of securities of the Company
that has the right to request or demand that the Company register under the
Securities Act the sale of any of such holder's securities in the Company.
1.31. LISTING OF COMMON STOCK. The Common Stock (including the Shares)
is registered pursuant to Section 12(g) of the Exchange Act and is quoted on the
Nasdaq National Market, and the Company has taken no action designed to
terminate, 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 NASD is contemplating such termination of registration or
delisting.
1.32. NO SALES. Except as described in the Registration Statement and
the Prospectus, and except in connection with exercises of outstanding options
to acquire not more than 750,000 shares of Common Stock, the Company has not
sold or issued any shares of capital stock within the six (6) month period
preceding the date of the Prospectus, all of which sales and issuances were made
in compliance with the Securities Act and the Regulations.
1.33. FORWARD-LOOKING STATEMENTS. The information contained in the
Registration Statement and the Prospectus regarding the Company's expectations,
plans and intentions, and any other information that constitutes
"forward-looking" information within the meaning of the Securities Act and the
Exchange Act were made by the Company on a reasonable basis and reflect the
Company's good faith estimate of the matters described therein.
1.34. LOCK-UP AGREEMENTS. Each of the officers and directors of the
Company and the Selling Stockholders has agreed to sign an agreement
substantially in the form attached hereto as Exhibit A or such other form as has
been approved by Xxxxxx Xxxxxx Partners LLC (the "LOCK-UP AGREEMENTS"). The
Company has provided to counsel for the Underwriters a complete and accurate
list of all security holders of the Company and the number and type of
securities held by each security holder. The Company also has provided to
counsel for the Underwriters true, accurate and complete copies of all of the
Lock-Up Agreements presently in effect or effected hereby. The Company has given
"no transfer" instructions to its transfer agent and registrar with respect to
such securities.
1.35. ACCOUNTING CONTROLS. The Company and each of the Controlled
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (a) transactions are executed in accordance
with management's general or specific authorizations; (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (c) access to assets is permitted only in accordance with
management's general or specific authorizations; and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
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Any certificate signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each of
the Selling Stockholders severally and not jointly represents and warrants to
and agrees with each of the Underwriters that:
2.1. DUE AUTHORIZATION. This Agreement has been duly authorized,
executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable against
such Selling Stockholder in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and public policy
considerations and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
2.2. SELLING STOCKHOLDER DOCUMENTS. The Custody Agreement signed by
such Selling Stockholder and Computershare Trust Company, Inc. as Custodian,
relating to the deposit of the Shares to be sold by such Selling Stockholder
(the "CUSTODY AGREEMENT") and the Power of Attorney appointing certain
individuals as such Selling Stockholder's attorneys-in-fact to the extent set
forth therein, relating to the transactions contemplated hereby and by the
Registration Statement (the "POWER OF ATTORNEY") have been duly authorized,
executed and delivered by such Selling Stockholder and are valid and binding
agreements of such Selling Stockholder enforceable against such Selling
Stockholder in accordance with their respective terms, except as rights to
indemnification thereunder may be limited by applicable law and public policy
considerations and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
2.3. NO CONFLICT. The execution and delivery by such Selling
Stockholder of, and the performance by such Selling Stockholder of its
obligations under, this Agreement, the Custody Agreement and the Power of
Attorney will not contravene any provision of applicable law, or the certificate
of incorporation or by-laws of such Selling Stockholder (if such Selling
Stockholder is a corporation), or any material agreement or other instrument
binding upon such Selling Stockholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Stockholder, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Stockholder of its obligations under this Agreement
or the Custody Agreement or Power of Attorney of such Selling Stockholder,
except such as may be required by the Securities Act, NASD or the securities or
Blue Sky laws of the various states in connection with the offer and sale of the
Shares.
2.4. GOOD TITLE TO SHARES. Such Selling Stockholder has, and on the
Closing Date will have, valid title to the Shares to be sold by such Selling
Stockholder and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement and the
Power of Attorney and to sell, transfer and deliver the Shares to be sold by
such Selling Stockholder.
2.5. DELIVERY OF COMMON SHARES. Delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims, liens, equities and
other encumbrances.
2.6. NO REGISTRATION RIGHTS. Such Selling Stockholder does not have any
registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or included
in the offering contemplated by this Agreement, other than as described in the
Registration Statement and as have been waived in writing in connection with the
offering contemplated hereby.
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2.7. NO PRICE STABILIZATION OR MANIPULATION. Such Selling Stockholder
has not taken and will not take, directly or indirectly, any action designed
that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.
2.8. DISCLOSURE IN THE REGISTRATION STATEMENT. Such parts of the
Registration Statement comprised of the table and the notes thereto under the
caption "Principal and Selling Stockholder" in the form supplied to the Selling
Stockholder which specifically relate to the Selling Stockholder do not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
3. PURCHASE AND SALE AGREEMENTS.
3.1. FIRM SHARES. Each Seller, severally and not jointly, hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from such
Seller at $______ a share (the "PURCHASE PRICE") the number of Firm Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the number of Firm Shares to be
sold by such Seller as the number of Firm Shares set forth in SCHEDULE A
attached hereto opposite the name of such Underwriter bears to the total number
of Firm Shares.
3.2. ADDITIONAL SHARES. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to 750,000 Additional Shares at the Purchase Price. If Xxxxxx Xxxxxx Partners
LLC, on behalf of the Underwriters, elects to exercise such option, Xxxxxx
Xxxxxx Partners LLC shall so notify the Company in writing not later than THIRTY
(30) days after the date of this Agreement, which notice shall specify the
number of Additional Shares to be purchased by the Underwriters and the date on
which such shares are to be purchased. Such date may be the same as the Closing
Date (as defined below) but not earlier than the Closing Date nor later than ten
(10) business days after the date of such notice. Additional Shares may be
purchased as provided in Section 4 below solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in SCHEDULE A hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
3.3. MARKET STANDOFF PROVISION. Except as otherwise agreed to in a
Lock-Up, each Seller hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxx Partners, it will not, during the period ending 90 days after
the date of the Prospectus, (a) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or (b) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of such Seller's ownership
of the Common Stock, whether any such transaction described in clause (a) or
(b) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(i) the Shares to be sold hereunder or (ii) the issuance by the Company of
shares of Common Stock upon the exercise of options or warrants outstanding
on the date hereof of which the Underwriters have been advised in writing and
that are described in the Prospectus or under the Company's 2001 Arena
Employee Stock Purchase Plan. In addition, each Selling Stockholder, agrees
that, without the prior written consent of Xxxxxx Xxxxxx Partners, it will
not, during the period ending 90 days after the date of the Prospectus, make
any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
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3.4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
$_____ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that represents a concession not in excess of $______ a share
under the Public Offering Price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY.
4.1. FIRM SHARES. Payment for the Firm Shares to be sold by each Seller
shall be made to such Seller in immediately available funds (i.e., wire
transfer) against delivery of such Firm Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on June __, 2001, or
at such other time on the same or such other date, not later than _____ __,
2001, as shall be designated in writing by Xxxxxx Xxxxxx Partners LLC. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE."
4.2. ADDITIONAL SHARES. Payment for any Additional Shares shall be made
to the Company in immediately available funds in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3.2 above or at such other time on the same or on
such other date, in any event not later than _______, 2001, as shall be
designated in writing by Xxxxxx Xxxxxx Partners LLC. The time and date of such
payment are hereinafter referred to as the "OPTION CLOSING DATE."
4.3. DELIVERY OF CERTIFICATES. Certificates for the Firm Shares and
Additional Shares shall be in definitive form and registered in such names and
in such denominations as you shall request in writing not later than one (1)
full business day prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. COVENANTS OF THE COMPANY. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
5.1. FURNISH COPIES OF REGISTRATION STATEMENT AND PROSPECTUS. To
furnish to you, without charge, three (3) signed copies of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to you in New York City, without charge, prior to 10:00
a.m., New York City time, on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 5.3 below, as many copies
of the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
5.2. NOTIFICATION OF AMENDMENTS OR SUPPLEMENTS. Before amending or
supplementing the Registration Statement or the Prospectus, to furnish to you a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such rule.
5.3. FILINGS OF AMENDMENTS OR SUPPLEMENTS. If, during such period after
the first date of the public offering of the Shares as in the opinion of counsel
for the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer (the "PROSPECTUS DELIVERY
PERIOD"), any event shall occur or condition exist as a result of which it is
necessary to amend or supplement
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the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish to
the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
5.4. BLUE SKY LAWS. To endeavor to qualify the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
5.5. EARNINGS STATEMENT. To make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
(18) months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Securities Act), an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158).
5.6. USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
5.7. TRANSFER AGENT. The Company shall maintain, at its expense, a
registrar and transfer agent for the Common Stock.
5.8. PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period, the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under the
Exchange Act.
5.9. EXCHANGE ACT COMPLIANCE. During the Prospectus Delivery Period,
the Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Age in the manner and within
the time periods required by the Exchange Act.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Sellers to sell the Shares to the several Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the following conditions:
6.1. EFFECTIVE REGISTRATION STATEMENT. The Registration Statement shall
have become effective not later than ____ p.m., New York City time, on the date
hereof.
6.2. RULE 462 REGISTRATION STATEMENT. If the Company elects to rely
upon Rule 462(b), the Company shall file a Rule 462 Registration Statement with
the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462 Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Securities Act.
6.3. PROSPECTUS FILED WITH COMMISSION. The Company shall have filed the
Prospectus with the Commission (including the information required by Rule 430A
under the Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment shall
have become effective.
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6.4. NO STOP ORDER. No stop order suspending the effectiveness of the
Registration Statement, any Rule 462 Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission.
6.5. NO NASD OBJECTION. The NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements.
6.6. NO MATERIAL ADVERSE CHANGE. There shall not have occurred any
change, or any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
6.7. OFFICER'S CERTIFICATE. The Underwriters shall have received on the
Closing Date a certificate, dated the Closing Date and signed by the Chief
Executive Officer or President of the Company, to the effect set forth in
Sections 6.4 and 6.6 above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and that the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
6.8. OPINION OF COMPANY COUNSEL. The Underwriters shall have received
on the Closing Date an opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the
Company, dated the Closing Date, the form of which is attached hereto as EXHIBIT
B. The opinion shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
6.9. OPINION OF SELLING STOCKHOLDER COUNSEL. The Underwriters shall
have received on the Closing Date opinions of counsel for the Selling
Stockholders, dated the Closing Date, in substantially the form attached hereto
as EXHIBIT C. The opinion shall be rendered to the Underwriters at the request
of the Selling Stockholders and shall so state therein.
6.10. OPINION OF PATENT COUNSEL TO THE COMPANY. The Underwriters shall
have received on the Closing Date an opinion of Xxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxxx & Xxxxxx LLP, patent counsel for the Company, dated the Closing Date,
the form of which is attached hereto as EXHIBIT D. The opinion shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
6.11. OPINION OF GENERAL COUNSEL. The Underwriters shall have received
on the Closing Date an opinion of Xxxxxxx X. Xxxxxxx, Xx., Senior Vice
President, Operations and General Counsel for the Company, dated the Closing
Date, the form of which is attached hereto as EXHIBIT E. The opinion shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
6.12. OPINION OF UNDERWRITERS COUNSEL. The Underwriters shall have
received on the Closing Date an opinion of Pillsbury Winthrop LLP, counsel for
the Underwriters, in form and substance reasonably satisfactory to the
Underwriters, as the Underwriters reasonably require.
6.13. INDEPENDENT AUDITORS' COMFORT LETTER. The Underwriters shall have
received, on each of the date hereof and the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, independent auditors,
containing statements and information of the type ordinarily included in an
independent auditors' "comfort letters" to underwriters with respect to the
consolidated financial statements and certain financial information contained in
the Registration Statement and the Prospectus; PROVIDED; HOWEVER, that the
letter delivered on the Closing Date shall use a "cut-off date" not earlier than
two (2) days prior to the date hereof.
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6.14. LOCK-UP AGREEMENTS. The Lock-Up Agreements shall be in full force
and effect on the Closing Date.
6.15. SELLING STOCKHOLDERS' CERTIFICATE. The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date and signed by
the Attorney-in-Fact of each Selling Stockholder, to the effect that the
representations and warranties of the Selling Stockholders contained in this
Agreement are true and correct as of the Closing Date and that the Selling
Stockholders have complied with all of the agreements and satisfied all of the
conditions on their part to be performed or satisfied hereunder on or before the
Closing Date.
6.16. SELLING STOCKHOLDER DOCUMENTS. On the date hereof, the Company
and the Selling Stockholders shall have furnished for review by the
Representatives copies of the Powers of Attorney and Custody Agreements executed
by each of the Selling Stockholders and such further information, certificates
and documents as the Representatives may reasonably request.
6.17. ADDITIONAL DOCUMENTS. On the Closing Date, the Representatives
and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction of each of the above conditions on or
prior to the Option Closing Date and to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. EXPENSES. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, including: (a) the fees, disbursements and
expenses of the Company's counsel, the Company's accountants and counsel for the
Selling Stockholders in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities herein above specified; (b) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon; (c) the cost of printing or producing any Blue
Sky or legal investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
contemplated by Section 5.4 above, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters (not to exceed $5,000) in
connection with such qualification and in connection with the Blue Sky or legal
investment memorandum; (d) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Shares by the NASD; (e) all fees
and expenses incident to listing the Shares on the Nasdaq National Market; (f)
the cost of printing certificates representing the Shares; (g) the costs and
charges of any transfer agent, registrar or depositary; (h) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show; (i) all expenses in connection with any offer and
sale of the Shares outside of the United
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States, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with offers and sales outside of the
United States, and (j) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not otherwise
made in this Section 7. It is understood, however, that except as provided in
this Section 7, Section 8 below and the last paragraph of Section 11 below, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel and any advertising expenses connected with any
offers they may make.
The provisions of this Section 7 shall not supersede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
8. INDEMNITY AND CONTRIBUTION.
8.1. INDEMNIFICATION OF THE UNDERWRITERS. Each of the Selling
Stockholders and the Company, severally and not jointly, agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except (a) insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein and (b) that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting any loss, claim, damage or liability purchased
Shares, or any person controlling such Underwriter, if copies of the Prospectus
were timely delivered to the Underwriter pursuant to Section 5.1 above and a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense.
8.2. INDEMNIFICATION OF COMPANY BY THE SELLING STOCKHOLDERS. Each
Selling Stockholder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the directors of the Company, the officers of the Company
who sign the Registration Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Stockholder
furnished in writing by or on behalf of such Selling Stockholder expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
8.3. INDEMNIFICATION BY THE UNDERWRITERS. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
Selling Stockholders, the directors of the Company, the officers of the Company
who sign the Registration Statement and each person, if any, who controls the
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Company or any Selling Stockholder within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
8.4. INDEMNIFICATION PROCEDURES. In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 8, such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (a) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act; (ii) 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 either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Stockholders and all persons, if any, who control
any Selling Stockholder within the meaning of either such Section, and that all
such fees and expenses shall be reimbursed as they are incurred. In the case of
any such separate firm for the Underwriters and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxx Xxxxxx
Partners. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Stockholders and such control persons of any Selling Stockholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Stockholders under the Powers of Attorney. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (x) such settlement is entered into more than
thirty (30) days after receipt by such indemnifying party of the aforesaid
request and (y) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an
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unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
8.5. LIMITATION OF SELLING STOCKHOLDER LIABILITY. The liability of each
Selling Stockholder under the indemnity and contribution provisions of this
Section 8 or under any other cause of action under this Agreement and that
certain Power of Attorney executed by such Selling Stockholder in connection
with the offering of the Shares hereunder, shall be limited to an amount equal
to the aggregate Public Offering Price of the Shares sold by such Selling
Stockholder, less the underwriting discount, as set forth on the front cover
page of the Prospectus. The Company and the Selling Stockholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.
8.6. CONTRIBUTION AGREEMENT. To the extent the indemnification provided
for in this Section 8 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such section, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (a) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (b) if the allocation provided by Section 8.6(a) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 8.6(a) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Seller and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Sellers on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Sellers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
8.7. CONTRIBUTION AMOUNTS. The Sellers and the Underwriters agree that
it would not be just or equitable if contribution pursuant to this Section 8
were determined by PRO RATA allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8.6. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
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8.8. SURVIVAL OF PROVISIONS. The indemnity and contribution provisions
contained in this Section 8 and the representations, warranties and other
statements of the Company and the Selling Stockholders contained in this
Agreement shall remain operative and in full force and effect regardless of (a)
any termination of this Agreement; (b) any investigation made by or on behalf of
any Underwriter or any person controlling any Underwriter, any Selling
Stockholder or any person controlling any Selling Stockholder, or the Company,
its officers or directors or any person controlling the Company and (c)
acceptance of and payment for any of the Shares.
9. EFFECTIVENESS. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
10. TERMINATION. This Agreement shall be subject to termination by
notice given by Xxxxxx Xxxxxx Partners LLC to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York, Delaware or California
shall have been declared by either federal or New York, Delaware or California
state authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse, or (v) in the judgment of the
Representatives, there shall have occurred any material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, taken as a
whole; and (b) in the case of any of the events specified in Sections 10(a)(i)
through 10(a)(v) above, such event, individually or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
11. DEFAULTING UNDERWRITERS. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth (1/10) of the aggregate number of the Shares to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their respective
names in SCHEDULE A bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 11 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the
aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth (1/10) of the aggregate number of Firm Shares to be
purchased, and arrangements satisfactory to you, the Company and the Selling
Stockholders for the purchase of such Firm Shares are not made within thirty-six
(36) hours after such default, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter, the Company or the Selling
Stockholders. In any such case either you or the relevant Sellers shall have the
right to postpone the Closing Date, but in no event for longer than seven (7)
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
If, on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth (1/10)
of the aggregate number of Additional Shares to be purchased, the non-defaulting
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Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
If this Agreement shall be terminated by reason of the default of one
or more of the Underwriters, the Company shall not be obligated to reimburse any
expense of the Underwriters, but will be obligated to pay its own expenses
pursuant to Section 7 above.
12. COUNTERPARTS. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
13. HEADINGS; TABLE OF CONTENTS. The headings of the sections of this
Agreement and the table of contents have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
14. NOTICES. All communications hereunder shall be in writing and shall
be mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
Xxxxxx Xxxxxx Partners LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: H. Xxxx Xxxxxxx
with a copy to:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Arena Pharmaceuticals, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxx, President and CEO
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If to the Selling Stockholders:
Computershare Trust Company, Inc.
00000 X Xxxxxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Facsimile Fax: 000 000 0000
Attention: Xx Xxxxxxxx
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
15. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 11 above, and to the benefit of the officers and directors and
controlling persons referred to in Section 8 above, and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term "SUCCESSORS" shall not include any purchaser of the Shares
as such from any of the Underwriters merely by reason of such purchase.
16. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof. If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("RELATED PROCEEDINGS") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California in each case located in the City and County of
San Francisco (collectively, the "SPECIFIED COURTS"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "RELATED
JUDGMENT"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in the
United States irrevocably appoints CT Corporation System, which currently
maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service of
process or other legal summons for purposes of any such suit, action or
proceeding that may be instituted in any state or federal court in the City and
County of San Francisco.
19. WAIVER OF IMMUNITY. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgement, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
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20. FAILURE OF THE SELLING STOCKHOLDERS TO SELL AND DELIVER SHARES. If
one or more of the Selling Stockholders shall fail to sell and deliver to the
Underwriters the Shares to be sold and delivered by such Selling Stockholders at
the Closing Date pursuant to this Agreement, then the Underwriters may at their
option, by written notice from the Representatives to the Company and the
Selling Stockholders, either (a) terminate this Agreement without any liability
on the part of any Underwriter or, except as provided in Sections 7 and 8 above,
the Company or the Selling Stockholders; or (b) purchase the shares which the
Company and other Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof. If one or more of the Selling Stockholders
shall fail to sell and deliver to the Underwriters the Shares to be sold and
delivered by such Selling Stockholders pursuant to this Agreement at the Closing
Date, then the Underwriters shall have the right, by written notice from the
Representatives to the Company and the Selling Stockholders, to postpone the
Closing Date, but in no event for longer than seven (7) days in order that the
required changes, if any, to the Registration Statement and the Prospectus or
any other documents or arrangements may be effected.
21. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
22. AMENDMENTS. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
23. SOPHISTICATED PARTIES. Each of the parties hereto acknowledges that
it is a sophisticated business person who was adequately represented by counsel
during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 8 above,
and is fully informed regarding said provisions. Each of the parties hereto
further acknowledges that the provisions of Section 8 above fairly allocate the
risks in light of the ability of the parties to investigate the Company, its
affairs and its business in order to assure that adequate disclosure has been
made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
[Remainder of page intentionally left blank]
-22-
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
ARENA PHARMACEUTICALS, INC.
By:
--------------------------------
Name:
Title:
The Selling Stockholders
named in SCHEDULE B attached hereto,
acting severally
By:
--------------------------------
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Incorporated
ABN AMRO Rothschild LLC
Lazard Freres & Co. LLC
Acting severally on behalf of themselves and the several Underwriters named in
SCHEDULE A attached hereto.
By: Xxxxxx Xxxxxx Partners LLC
By:
-------------------------------------
Name:
Title:
[Signature Page to Underwriting Agreement]
-23-
SCHEDULE A
NUMBER OF FIRM
SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxx Partners LLC
Xxxx Xxxxxxxx Incorporated
ABN AMRO Rothschild LLC
Lazard Freres & Co. LLC
Total: 4,000,000
=========
SCHEDULE B
NUMBER OF FIRM
SHARES
SELLING STOCKHOLDER TO BE SOLD
BB BioVentures L.P. 779,084
MPM BioVentures Parallel Fund, L.P. 111,556
MPM Asset Management Investors 1999 LLC 9,360
--------
Tripos, Inc. 100,000
Total: 1,000,000
=========
SCHEDULE C
INTELLECTUAL PROPERTY
PATENTS AND PATENT APPLICATIONS
REGISTERED MARKS AND APPLIED MARKS
CART
Arena
Aressa
ChemNavigator
BRL Screening
COLLABORATION AGREEMENTS
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
____________, 2001
Xxxxxx Xxxxxx Partners LLC
[Other Representatives]
As Representatives of the several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
RE: LOCK-UP AGREEMENT (THE "AGREEMENT")
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares
of Common Stock, par value $0.0001 per share (the "COMMON STOCK"), of Arena
Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"), or securities
convertible into or exchangeable or exercisable for Common Stock. The
undersigned understands that you, as representatives (the "REPRESENTATIVES"),
propose to enter into an Underwriting Agreement on behalf of the several
Underwriters named in SCHEDULE A to such agreement (collectively, the
"UNDERWRITERS"), with the Company providing for a public offering of the Common
Stock of the Company pursuant to a Registration Statement on form S-1 to be
filed with the Securities and Exchange Commission (the "PUBLIC OFFERING"). The
undersigned recognizes that the Public Offering will be of benefit to the
undersigned and will benefit the Company by, among other things, raising
additional capital for its operations. The undersigned acknowledges that you and
the other Underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Public Offering and in
entering into underwriting arrangements with the Company with respect to the
Public Offering.
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxx Partners (which consent may be withheld in its sole discretion), it will
not, during the period commencing on the date hereof and ending 90 days after
the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxx
Partners (which consent may be withheld in its sole discretion), it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock. With respect to the Public
Offering, the undersigned waives any registration rights relating to
registration under the Securities Act of any Common Stock owned either of record
or beneficially by the undersigned, including any rights to receive notice of
the Public Offering.
A-1
The foregoing restrictions are expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or reasonably expected to lead to or result in a sale or disposition of the
Common Stock even if such Common Stock would be disposed of by someone other
than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put option or put equivalent position or
call option or call equivalent position) with respect to any of the Common Stock
or with respect to any security that includes, relates to, or derives any
significant part of its value from such Common Stock.
Notwithstanding the foregoing, the undersigned may transfer shares of
Common Stock (i) as a BONA FIDE gift or gifts, provided that the donee or donees
thereof agree to be bound by the restrictions set forth herein, (ii) to any
trust for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided that the trustee of the trust agrees to be
bound by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value, or (iii) to the Underwriters
pursuant to the Underwriting Agreement. For purposes of this Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin. In addition, notwithstanding the foregoing,
if the undersigned is a corporation, the corporation may transfer the capital
stock of the Company to any wholly-owned subsidiary of such corporation;
PROVIDED, HOWEVER, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value.
The undersigned understands that whether or not the Public Offering
actually occurs depends on a number of factors, including stock market
conditions. The Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation among the Company and
the Underwriters.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives, and assigns of
the undersigned.
Very truly yours,
-------------------------------------
(Name)
-------------------------------------
(Address)
A-2
EXHIBIT B
OPINION OF COMPANY COUNSEL
B-1
EXHIBIT C
OPINION OF SELLING STOCKHOLDER COUNSEL
C-1
EXHIBIT D
OPINION OF COMPANY PATENT COUNSEL
D-1
EXHIBIT E
OPINION OF COMPANY GENERAL COUNSEL
E-1
