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EXHIBIT 1.1
Gene Logic Inc.
3,500,000 Shares of Common Stock*
(par value $.01 per share)
UNDERWRITING AGREEMENT
New York, New York
January __, 2000
ING Barings LLC
Xxxxxxxxx & Xxxxx LLC
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxx Xxxxxxxx Incorporated
As Representatives of the Several Underwriters
c/o ING Barings LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Gene Logic Inc., a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the several
underwriters named in Schedule I hereto (the "Underwriters") for whom you are
acting as representatives an aggregate of 3,500,000 shares (the "Firm Shares")
of its common stock, par value $0.01 per share (the "Common Stock"), and for the
sole purpose of covering over-allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional 395,000 shares of
Common Stock (the "Company Option Shares"). Each selling stockholder named in
Schedule II hereto (each, a "Selling Stockholder" and together, the "Selling
Stockholders") proposes, subject to the terms and conditions stated herein, to
sell to the Underwriters, for the sole purpose of covering over-allotments in
connection with the sale of the Firm Shares, at the option of the Underwriters,
the number of shares of Common Stock which appears opposite the name of such
Selling Stockholder on Schedule II hereto (the "Selling Stockholder Option
Shares"). The aggregate amount of Selling Stockholder Option Shares is 130,000.
The Company Option Shares and the Selling Stockholder Option Shares are
collectively referred to as the "Option Shares." The Firm Shares and the Option
Shares are collectively referred to as the "Shares".
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-94559), for the registration of the Shares under the Securities Act of 1933,
as amended (the "Act"). Such registration statement, including the prospectus,
financial statements and schedules, exhibits and all other documents filed as a
part thereof, as amended through the time of
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* Plus an option to purchase from the Company up to an additional 395,000 shares
of Common Stock, and an option to purchase from certain selling
stockholders up to 130,000 shares of Common Stock, to cover over-allotments.
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effectiveness of the registration statement, including any information deemed to
be a part thereof as of the time of effectiveness pursuant to Rule 430A or Rule
434 of the Rules and Regulations of the Commission under the Act (the
"Regulations"), is herein called the "Registration Statement". Any registration
statement filed by the Company pursuant to Rule 462(b) under the Act is herein
called the "Rule 462(b) Registration Statement", and from and after the date and
time of filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The prospectus,
in the form first filed with the Commission pursuant to Rule 424(b) of the
Regulations or filed as part of the Registration Statement at the time of
effectiveness if no Rule 424(b) or Rule 434 filing is required, is herein called
the "Prospectus". The term "preliminary prospectus" as used herein means a
preliminary prospectus included in the Registration Statement at the time it is
declared effective as described in Rule 430A of the Regulations; provided,
however, if the Company has, with the consent of ING Barings LLC, elected to
rely upon Rule 434 under the Act, the term "Prospectus" shall mean the Company's
prospectus subject to completion dated January 18, 2000 (such preliminary
prospectus is herein called the "Rule 434 preliminary prospectus"), together
with the applicable term sheet (the "Term Sheet") prepared and filed by the
Company with the Commission under Rules 434 and 424(b) under the Act and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, 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").
(b) Each preliminary prospectus and the Prospectus, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares. At the time of the effectiveness of the Registration Statement or
the effectiveness of any Rule 462(b) Registration Statement and any
post-effective amendment thereto, when the Prospectus is first filed with the
Commission pursuant to Rule 424(b) or Rule 434 of the Regulations, when any
supplement to or amendment of the Prospectus is filed with the Commission and at
the Closing Date and the Additional Closing Date, if any (as defined in Section
3), the Registration Statement and the Prospectus and any amendments thereof and
supplements thereto complied (and, in the event of any of the aforementioned
filings that may occur in the future will, at the time of such filing(s),
comply) in all material respects with the applicable provisions of the Act and
the Regulations, did not and will not contain an untrue statement of a material
fact and did not and will not omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. When any related preliminary prospectus was first filed with the
Commission (whether filed as part of the Registration Statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Regulations) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus and any amendments
thereof and supplements thereto complied in all material respects with the
applicable provisions of the Act and the Regulations and did not contain an
untrue statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. No representation and warranty is made in this
subsection (b), however, with respect to the statements set forth in the first
(including the table), third, seventh and eighth paragraphs under the caption
"Underwriting" in, and the last paragraph on the cover page of, the Prospectus.
If Rule 434 is used, the Company will comply
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with the requirements of Rule 434. The Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of the Prospectus or any preliminary prospectus
or, to the knowledge of the Company, instituted proceedings for that purpose.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and
engage in the business in which it is engaged or in which it proposes to engage
as described in the Registration Statement, the preliminary prospectus 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 (owned, leased or licensed) or
the nature or conduct of its business requires such registration or
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, 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 subsidiaries taken as a whole (a "Material Adverse Effect").
(d) The Company has no subsidiaries (as defined in the Regulations),
other than Gene Logic Acquisition Corp. (the "Subsidiary"), which is a
wholly-owned subsidiary of the Company. 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
Subsidiary except for the Company's security holdings in Therapeutic Genomics,
Inc. All the outstanding shares of capital stock of the Subsidiary have been
duly and validly authorized and issued and are fully paid and nonassessable, are
owned solely by the Company and 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. The Subsidiary has been duly organized 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 or in which it
proposes to engage. The Subsidiary is duly registered and qualified as a foreign
corporation in good standing in each jurisdiction where the character, location,
ownership or leasing of its properties or the nature or conduct of its business
requires such registration or qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. The Subsidiary is not
currently prohibited, 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 Company or from transferring
any of its property or assets to the Company or any other subsidiary of the
Company.
(e) Xxxxxx Xxxxxxxx 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 and the Subsidiary filed
with the Commission as a part of the Registration Statement, the preliminary
prospectus and the Prospectus, are, with respect to the Company and the
Subsidiary, independent public accountants as required by the Act, the
Regulations and the Securities Exchange Act of 1934, as amended (the "1934
Act").
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(f) As of the date hereof, the Company has an authorized
capitalization as set forth in the Registration Statement, the preliminary
prospectus 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 authorized and outstanding
capital stock of the Company conforms to the description thereof contained in
the Registration Statement, the preliminary prospectus and the Prospectus (and
such description correctly states, in all material respects, the substance of
the provisions of the instruments defining the capital stock of the Company).
Except as described in the Registration Statement, the preliminary prospectus
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 the Subsidiary
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 the Subsidiary or any such convertible or
exercisable or exchangeable securities or instruments or any such rights,
warrants or options, 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 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. 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, the preliminary prospectus and the Prospectus accurately
and fairly presents, in all material respects, the information required to be
shown with respect to such plans, arrangements, options and rights. 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 nonassessable, 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.
(g) Other than the action filed by Incyte Pharmaceuticals, Inc. in
the United Stated District Court for the Northern District of California on
December 6, 1999 (the "Incyte Litigation") and the action filed on October 19,
1999 against Oncormed, Inc. and the Company in the Circuit Court of Xxxx County,
Illinois, there is (i) no action, suit or proceeding or, to the knowledge of the
Company, no 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 the
Subsidiary 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 the Subsidiary
(or, to the extent threatened or contemplated, will be) subject, (ii) no
statute, rule, regulation or order that has been enacted, adopted or issued by
any governmental agency, body or official, and (iii) 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 the Subsidiary
is or will be subject or affecting the business, assets or property of the
Company or the Subsidiary, that could reasonably be expected to (in the case of
clauses (i), (ii) and (iii)), individually or in the aggregate, whether or not
arising from transactions in the ordinary course of business, have a Material
Adverse Effect, be required to be disclosed in the
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Registration Statement, the preliminary prospectus or the Prospectus or
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement. There are no legal or administrative
proceedings, Contracts (as defined below) or documents concerning the Company or
the Subsidiary of a character that would be required to be described in or filed
as an exhibit to a registration statement on Form S-3 under the Act that are not
described or filed, as required, in the Registration Statement, the preliminary
prospectus and the Prospectus.
(h) The consolidated financial statements of the Company and the
Subsidiary, together with the related notes thereto, which are a part of the
Registration Statement, the preliminary prospectus 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 and the Subsidiary 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 in all material respects with the applicable accounting requirements
included in Regulation S-X under the Act. The supporting schedules, the "Summary
Consolidated Financial Data", the "Selected Consolidated Financial Data" and the
tables included in the Registration Statement, the preliminary prospectus 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 Act or Regulation S-X to be included therein.
(i) Subsequent to the respective dates as of which information is
given in the Registration Statement, the preliminary prospectus and the
Prospectus, there has not been (i) any loss or adverse change, or any
development which could reasonably be expected to result in a loss or adverse
change, in or affecting the business, properties, management, assets, prospects,
stockholders' equity, operations, condition (financial or other), or results of
operations of the Company and its subsidiaries taken as a whole, (ii) any
transaction entered into by the Company or the Subsidiary, except transactions
in the ordinary course of business; (iii) any obligation, direct or contingent,
incurred by the Company or the Subsidiary which is material to the Company and
the Subsidiary taken as a whole, except for liabilities or obligations which are
reflected in the Registration Statement, the preliminary prospectus and the
Prospectus, (iv) any change in the capital stock or outstanding indebtedness of
the Company, or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, which in any case described in clauses
(i), (ii), (iii), (iv) or (v) above, could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect on the Company
and its subsidiaries taken as a whole or materially and adversely affect the
ability of the Company to perform its obligations under this Agreement.
(j) The Company and the Subsidiary have good and marketable title to
all properties and assets described in the Registration Statement, the
preliminary prospectus and the Prospectus as being owned by them, free and clear
of all Liens except Liens for taxes not yet due and payable. The Company and the
Subsidiary have valid and enforceable leases for the properties leased by them,
the Company and the Subsidiary 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 Subsidiary, and such leases conform in all
material
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respects to the descriptions thereof, if any, set forth in the Registration
Statement, the preliminary prospectus and the Prospectus. The Company and the
Subsidiary own, lease or otherwise have rights to use all properties and assets
as are important to their respective operations as now conducted and as proposed
to be conducted.
(k) The Company and the Subsidiary have all requisite corporate
power and authority, and 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 and necessary for the
conduct of the business of the Company and the Subsidiary as such business is
currently conducted. The Company reasonably believes that it will be able to
obtain Permits that are material to and necessary for the conduct of the
business of the Company and the Subsidiary as such business is proposed to be
conducted as described in the Registration Statement, the preliminary prospectus
and the Prospectus. 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 could reasonably be expected to cause any such Permit to be
withdrawn, canceled, suspended or not renewed. The Company and the Subsidiary
are not in violation of, or in default under, and have fulfilled and performed
all their obligations with respect to, such Permits, except as would not have a
Material Adverse Effect. 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 Permit. The Contracts to
which the Company or the Subsidiary is a party are valid and binding agreements,
enforceable against the Company and the Subsidiary in accordance with their
terms and, to the best of the Company's knowledge, the other contracting party
or parties thereto are not in breach or default under any of such Contracts,
except in each case as would not have a Material Adverse Effect.
(l) The Company and the Subsidiary are not (i) in violation of their
respective certificates of incorporation, as amended, or bylaws, as amended or
(ii) 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,
Permit or other agreement or instrument to which the Company or the Subsidiary
is a party or by which the Company or the Subsidiary may be bound or to which
any of the property or assets of the Company or the 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, body or authority,
except in the case of this clause (ii) for such breaches, defaults or violations
that could not reasonably be expected to, individually or in the aggregate, have
a Material Adverse Effect on the Company and its subsidiaries taken as a whole
or materially and adversely affect the ability of the Company to perform its
obligations under this Agreement.
(m) The Company and the Subsidiary own, possess, license or have
rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, tradenames, 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 their
business as currently conducted and as proposed to
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be conducted. The Company reasonably believes that the Company and the
Subsidiary will be able to own or possess adequate licenses or other rights to
use all Intellectual Property necessary to the conduct of their business as
proposed to be conducted as described in the Registration Statement. The Company
has no knowledge that it lacks or will be unable to obtain any rights or
licenses to use any of such Intellectual Property. The Registration Statement,
the preliminary prospectus and the Prospectus fairly and accurately describe the
Company's rights with respect to Intellectual Property. Other than the Incyte
Litigation, neither the Company nor the Subsidiary have received any notice of,
and otherwise have no knowledge of, any infringement of or conflict with
asserted rights or claims of others with respect to any Intellectual Property
and the Company is unaware of any fact which could form a reasonable basis for
any such claim.
(n) Rights that any other party may have in the Patent Rights (as
defined in Schedule 1(n)) will not have a Material Adverse Effect on the Company
and the Subsidiary taken as a whole or materially and adversely affect the
ability of the Company to perform its obligations under this Agreement. There
are no outstanding licenses or other agreements that relate to or restrict the
Company's use of the Patent Rights in a manner that could reasonably be expected
to have a Material Adverse Effect. No Patent has been or is now involved in any
interference, reissue, reexamination or opposition proceeding in the United
States Patent and Trademark Office. Except for the Incyte Litigation, to the
knowledge of the Company, 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 has in any Patent or Patent application. With regard to the Patent
Rights, the Company has no knowledge of unpaid maintenance fees, patents that
have lapsed, or abandonment of applications, and knows of no reason why any
patent applications should not be allowed. Except for the Incyte litigation,
there are no claims, actions, or proceedings, pending or to the Company's best
knowledge, threatened, challenging the validity of any of its claims in any of
the Intellectual Property. To the knowledge of the Company, there is no prior
art that may render any Patent Right invalid or a Patent Application (as defined
in Schedule 1(n)) unpatentable.
(o) The Company is the sole and exclusive owner of all right, title
and interest in the registered trademarks and service marks listed on Schedule
1(n) (collectively, "Registered Marks"). The Company has applied for the United
States trademarks and service marks listed on Schedule 1(n) (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
any claims, actions, or proceedings, pending or threatened, challenging the
validity of any of the Registered Marks or the registration of any Applied
Marks. 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 on the
Company and its subsidiaries taken as a whole or materially and adversely affect
the ability of the Company to perform its obligations under this Agreement. The
Company has registered with Network Solutions, Inc. the Internet domain name
xxx.xxxxxxxxx.xxx. The Company has no knowledge of a registered trademark held
by a third party that may be used to prevent the Company from using this domain
name. The Company has taken all reasonable steps to secure, protect, and
maintain the Registered Marks and Applied Marks listed on Schedule 1(n) and the
Internet domain name xxx.xxxxxxxxx.xxx.
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(p) The Software owned or purported to be owned by the Company or
the Subsidiary, was either (i) developed by employees of the Company or the
Subsidiary within the scope of their employment; (ii) developed by independent
contractors who have assigned their rights to the Company or the Subsidiary
pursuant to written agreements; or (iii) otherwise acquired by the Company or
the Subsidiary from a third party. 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
Subsidiary 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.
(q) The Company and the Subsidiary 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 in all material respects. The Company and the Subsidiary have duly
paid, or have made adequate charges, accruals and 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 the 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 Subsidiary.
(r) The Company and the Subsidiary are insured by recognized,
financially sound and reputable institutions with policies in such amounts and
with such deductibles and covering such risks as are generally deemed adequate
and customary for their business including, but not limited to, policies
covering real and personal property owned or leased by the Company and the
Subsidiary against theft, damage, destruction, acts of vandalism and
earthquakes, general liability and directors and officers liability, all of
which insurance is in full force and effect. The Company has no reason to
believe that it or the Subsidiary will not be able to (i) renew its existing
insurance coverage as and when such policies expire or (ii) obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Effect on the Company and its subsidiaries taken as a whole or
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement. Neither of the Company nor the Subsidiary has
been denied any insurance coverage which it has sought or for which it has
applied.
(s) Neither the Company nor the Subsidiary 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. The Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers, subassemblers, value added
resellers, subcontractors, original equipment manufacturers,
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authorized dealers or international distributors that could reasonably be
expected to result in a Material Adverse Effect on the Company and its
subsidiaries taken as a whole or materially and adversely affect the ability of
the Company to perform its obligations under this Agreement.
(t) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws (as defined below) on the business,
operations and properties of the Company and the Subsidiary, in the course of
which it identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws, or any Permit, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that the Company and the Subsidiary (i) are in compliance in all
material respects 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"), (ii) have received all Permits required of them under
applicable Environmental Laws to conduct their business as currently conducted,
(iii) are in compliance in all material respects with all terms and conditions
of any such Permit and (iv) 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 the 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 the Subsidiary has been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended.
(u) Neither the Company nor the Subsidiary has engaged in the
generation, use, manufacture, transportation or storage of any Hazardous
Materials on any of the Company's or the Subsidiary's properties or former
properties, except in compliance in all material respects with all applicable
Environmental Laws. No Hazardous Materials have been treated or disposed of on
any of the Company's or the Subsidiary's properties or on properties formerly
owned or leased by the Company or the Subsidiary during the time of such
ownership or lease, except in compliance in all material respects with
Environmental Laws.
(v) 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 the
Subsidiary, by any of their officers, directors, employees or agents or, to the
best 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 the Subsidiary,
except for such payments or inducements as were lawful under applicable written
laws, rules and regulations. Neither the Company nor the Subsidiary, nor any
director, officer, agent, employee or, to the knowledge of the Company, other
person associated with or acting on behalf of the Company or the Subsidiary, (i)
has used any corporate funds for any unlawful contribution, gift, entertainment
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or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, unlawful rebate,
payoff, influence payment, kickback or other unlawful payment in connection with
the business of the Company or the Subsidiary.
(w) Neither the Company nor the 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 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 and the
Subsidiary make or ever have made a contribution and in which any employee of
the Company and Subsidiary is or has ever been a participant. With respect to
such plans, the Company and the Subsidiary are in compliance in all material
respects with all applicable provisions of ERISA.
(x) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization, (ii) transactions are appropriately recorded to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences and (v) assets are properly accounted for and
safeguarded against loss from unauthorized use. The Company has not received
from its independent public accountants a letter describing or been informed by
them of, a substantial or material deficiency in the Company's internal
accounting controls in connection with their audit of the Company's financial
statements incorporated by reference in the Registration Statement, the
preliminary prospectus and the Prospectus.
(y) 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 the Subsidiary to or for the benefit of any of
the officers or directors or shareholders of the Company or the Subsidiary or
any of the members of the families of any of them, except as disclosed in the
Registration Statement, the preliminary prospectus and the Prospectus.
(z) 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 securityholders) 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 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
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Dealers, Inc. (the "NASD") or 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.
(aa) 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 herein have been duly authorized by all necessary
corporate action. 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 the Subsidiary, under, any
of the terms or provisions of the certificate of incorporation or by-laws or
other organizational or constitutive documents of the Company or the Subsidiary,
nor (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 the 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 the Subsidiary or any judgment, decree
or order applicable to the Company or the Subsidiary of any court or
supervisory, regulatory, administrative or governmental agency, body or
authority, or arbitrator having jurisdiction over the Company or the Subsidiary
or any of their respective properties or assets.
(bb) The Company has full corporate power and authority to enter
into this Agreement and to perform the transactions contemplated hereby. This
Agreement and the transactions contemplated herein have been duly and validly
authorized, executed and delivered by the Company and 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 (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other laws now or hereafter in effect relating to or affecting creditors'
rights generally and (ii) 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 7 hereof may be limited by
applicable federal or state securities laws or unenforceable as against public
policy.
(cc) The Company has duly and validly authorized the issuance and
sale of the Shares. The description of the Shares in the Registration Statement,
the preliminary prospectus and the Prospectus is accurate in all material
respects.
(dd) 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, the preliminary prospectus and the Prospectus and the application of
the net proceeds of such sale as described in the section entitled "Use of
Proceeds" of the Registration Statement, the preliminary prospectus 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
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of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), without taking account of any exemption arising out of the number or type
of holders of the Company's securities.
(ee) The Company has not incurred any liability for a fee,
commission, or other compensation on account of the employment of a broker or
finder in connection with the transactions contemplated by this Agreement other
than the discount contemplated hereby.
(ff) Neither the Company nor the 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 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 Securities Exchange Act of 1934, as amended (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.
(gg) The Company has not distributed and will not distribute prior
to the later of (A) the Additional Closing Date 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.
(hh) 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 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 not to be exercisable in connection
with the registration, offer or sale of the Shares.
(ii) There is no tax, duty, levy, impost, deduction, charge or
withholding imposed by any political subdivision or taxing authority by virtue
of the execution, delivery, performance or enforcement, or to ensure the
legality, validity or admissibility into evidence, of this Agreement, and
neither is it necessary that the Shares be submitted to, or filed or recorded
with, any court or other authority to ensure such legality, validity,
enforceability or admissibility into evidence. There are no transfer taxes or
other similar fees or charges under federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Shares.
(jj) All necessary actions, authorizations, conditions and things
reasonably required to be taken, given, fulfilled and done by the Company and
the Subsidiary on or prior to the date of this Agreement, have been, or on the
Closing Date or the Additional Closing Date, if any, will have been taken,
given, fulfilled and done in connection with (i) the issue of the Prospectus,
(ii) the execution and delivery of this Agreement, (iii) the execution, delivery
and issuance of the Shares, (iv) the compliance with all provisions of this
Agreement to be performed or complied with by such date, and (v) the right of
any holders of securities of the Company to
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request or demand that the Company register under the Act any of their
securities in connection with the Registration Statement.
(kk) There are no issues related to the Company's or the
Subsidiary's preparedness for or reaction to the arrival of the Year 2000 that
(i) are of a character required to be described or referred to in the
Registration Statement, the preliminary prospectus or Prospectus which have not
been accurately described therein or (ii) could result in any Material Adverse
Effect on the Company and its subsidiaries taken as a whole or that might
materially affect their properties, assets or rights. The Company and the
Subsidiary have inquired of all their material vendors as to their preparedness
for the Year 2000 and the Company has disclosed in the Registration Statement,
the preliminary prospectus or Prospectus any issues that could result in a
Material Adverse Effect on the Company and its subsidiaries taken as a whole or
adversely affect the ability of the Company to perform its obligations under
this Agreement or be otherwise important in the context of the sale of the
Shares.
(ll) The Common Stock 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, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the Nasdaq National Market is contemplating
terminating such registration or listing.
(mm) The Company has timely and properly filed with the Commission
all reports and other documents required to have been filed by it with the
Commission pursuant to the Act, the Exchange Act and the Regulations. True and
complete copies of all such reports and other documents have been delivered to
you or your counsel.
(nn) Except as described in the Registration Statement, the
preliminary prospectus and the Prospectus, and except in connection with
exercises of outstanding options and warrants to acquire not more than 223,127
shares of Common Stock, the Company has not sold or issued any shares of capital
stock within the six month period preceding the date of the Prospectus, all of
which sales and issuances were made in compliance with the Act and the
Regulations.
(oo) The information contained in the Registration Statement
regarding (i) the number of tissue samples on which the Company's Gene Express
database suite contains gene expression profiles, (ii) the number of gene
expression data points represented by such gene expression profiles, (iii) the
number of genes for which GeneChip provides quantitative expression levels, (iv)
the various numbers of genes identified or discovered by the Company, (v) the
number of genes for which GeneChip microarrays are available, (vi) the number of
tissue samples and GeneChip microarrays which can be produced by the Gene
Express database suite per month, and (vii) the number of tissue samples
acquired by the Company, are, in each case, true, accurate and complete in all
material respects. All statements in the Registration Statement regarding the
Company's expectations, plans and intentions for improvement in any number
referred to in clauses (i) - (vii) above constitute forward looking statements
as defined in Rule 175(c) under the Act and were made by the Company on a
reasonable basis and reflect the Company's good faith estimate of the matters
described therein.
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(pp) Each officer and director of the Company named under the
heading "Management" in the Prospectus, and each of the following stockholders
of the Company: Cross Atlantic Partners K/S; Cross Atlantic Partners II K/S;
Cross Atlantic Partners III K/S; Oxford Bioscience Partners II, L.P.; Oxford
Bioscience Partners (Bermuda) II, L.P.; Oxford Bioscience Partners (GS-Adjunct)
II, L.P.; Oxford Bioscience Partners (Adjunct) II, L.P.; Oxford Bioscience
Management Partners I; Oxford Bioscience Partners, L.P.; Oxford Bioscience
(Bermuda) Limited Partnership; and Oxford Bioscience Partners (Adjunct) L.P.
(such stockholders of the Company, together with each officer and director of
the Company named under the heading "Management" in the Prospectus, to be
referred to collectively as the "Locked-Up Parties"), has agreed to sign an
agreement substantially in the form attached hereto as Exhibit A (the "Lock-up
Agreements"). 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.
Any certificate signed by an officer of the Company and delivered to
the Representative 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.
(a) Each Selling Stockholder, severally and not jointly, represents
and warrants to each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and has,
and on the Closing Date and the Additional Closing Date, if any, will
have, good and clear title to such Shares, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever. Upon delivery of and payment for the Shares to be sold by such
Selling Stockholder pursuant to this Agreement on the Closing Date and the
Additional Closing Date, if any, good and clear title to such Shares will
pass to the Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests and claims whatsoever.
(ii) Such Selling Stockholder has, and on the Closing Date and
the Additional Closing Date, if any, will have, full legal right, power
and authority to enter into this Agreement and to sell, assign, transfer
and deliver the Shares in the manner provided herein. This Agreement has
been duly executed and delivered by such Selling Stockholder, and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification thereunder
may be limited by applicable law and except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(iii) The execution, delivery and performance of this
Agreement by such Selling Stockholder, the compliance by such Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby and
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thereby will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of
the various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, any indenture, loan
agreement, mortgage, lease or other material agreement or instrument to
which such Selling Stockholder is a party or by which such Selling
Stockholder or any property of such Selling Stockholder is bound or (iii)
violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over such Selling Stockholder or any property of such
Selling Stockholder.
(iv) Neither such Selling Stockholder, nor any person acting
on behalf of such Selling Stockholder, has taken, directly or indirectly,
any action designed to stabilize or manipulate the price of any security
of the Company, or which has constituted or which might in the future
reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company, to facilitate the sale or
resale of the Shares or otherwise.
(v) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such
Selling Stockholder to the Underwriters as to the matters covered thereby.
(b) Each Selling Stockholder listed as a Group A Selling Stockholder
on Schedule II hereto (each a "Group A Selling Stockholder"), severally, and not
jointly, represents and warrants to each Underwriter that:
At the time of the effectiveness of the Registration
Statement or the effectiveness of any Rule 462(b) Registration Statement
and any post-effective amendment thereto, when the Prospectus is first
filed with the Commission pursuant to Rule 424(b) or Rule 434 of the
Regulations, when any supplement to or amendment of the Prospectus is
filed with the Commission and at the Closing Date and the Additional
Closing Date, if any, the Registration Statement and the Prospectus and
any amendments thereof and supplements thereto did not and will not omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed
as part of the Registration Statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Regulations)
and when any amendment thereof or supplement thereto was first filed with
the Commission, such preliminary prospectus and any amendments thereof and
supplements thereto did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. No
representation and warranty is made in this subsection (b), however, with
respect to the statements set forth in the first (including the table),
third, seventh and eighth paragraphs under the caption "Underwriting" in,
and the last paragraph on the cover page of, the Prospectus.
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(c) Each Selling Stockholder listed as a Group B Selling Stockholder
on Schedule II hereto (each a "Group B Selling Stockholder"), severally, and not
jointly, represents and warrants to each Underwriter that:
At the time of the effectiveness of the Registration
Statement or the effectiveness of any Rule 462(b) Registration Statement
and any post-effective amendment thereto, when the Prospectus is first
filed with the Commission pursuant to Rule 424(b) or Rule 434 of the
Regulations, when any supplement to or amendment of the Prospectus is
filed with the Commission and at the Closing Date and the Additional
Closing Date, if any, the Registration Statement and the Prospectus and
any amendments thereof and supplements thereto did not and will not omit
to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed
as part of the Registration Statement for the registration of the Shares
or any amendment thereto or pursuant to Rule 424(a) of the Regulations)
and when any amendment thereof or supplement thereto was first filed with
the Commission, such preliminary prospectus and any amendments thereof and
supplements thereto did not contain an untrue statement of a material fact
and did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading. No
representation and warranty is made in this subsection (b), however, with
respect to any statements or omissions in the Registration Statement, the
Prospectus, any preliminary prospectus or in any amendments thereof or
supplements thereto, other than statements or omissions made therein in
reliance upon and in conformity with written information relating to such
Group B Stockholder furnished to the Company by or on behalf of such Group
B Stockholder for use therein.
3. Purchase, Sale and Delivery of the Shares.
(a) The Company agrees to issue and sell to the several Underwriters
the Firm Shares upon the terms herein set forth. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Underwriters,
severally and not jointly, agree to purchase from the Company, at a purchase
price per share of $ , the number of Firm Shares set forth opposite the
respective names of the Underwriters in Schedule I hereto plus an additional
number of Firm Shares which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) Payment of the purchase price for, and delivery of, the Firm
Shares and the Option Shares (if the option provided for in Section 3(c) below
shall have been exercised on or before the third full business day prior to the
Closing Date) shall be made at the offices of Winthrop, Stimson, Xxxxxx &
Xxxxxxx, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, or at such other place as
shall be agreed upon by ING Barings LLC and the Company, at 10:00 A.M. on the
third full business day (as permitted under Rule 15c6-1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 10 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth full business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the public offering price of the Firm Shares), or
such other time not later than five business days after such date as shall be
agreed upon by you
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and the Company (such time and date of payment and delivery being herein called
the "Closing Date"); provided, however, that if the Company has not made
available to the Underwriters copies of the Prospectus in such quantities and at
such places requested by the Underwriters, no later than noon on the business
day following the execution of this Agreement, ING Barings LLC may, in its sole
discretion, postpone the Closing Date until no later than two full business days
following the delivery of such copies of the Prospectus. Payment for the Firm
Shares shall be made to the Company by wire transfer in immediately available
funds to the order of the Company, against delivery to you for the respective
accounts of the Underwriters of the Firm Shares to be purchased by them.
Certificates for the Firm Shares shall be registered in such name or names and
in such authorized denominations as you may request on or before noon on the
business day prior to the Closing Date. The Company will permit you to examine
and package such certificates at or before noon on the business day prior to the
Closing Date. "Business day" shall mean any day other than a Saturday, Sunday or
a legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City."
(c) In addition, the Company hereby grants to the Underwriters the
option to purchase, severally and not jointly, up to 395,000 Company Option
Shares, and the Selling Stockholders hereby grant to the Underwriters the option
to purchase, severally and not jointly, up to 130,000 Selling Stockholder Option
Shares (each Selling Stockholder granting such option with respect to the number
of shares of Common Stock which appears opposite the name of such Selling
Stockholder on Schedule II hereto), each at the same purchase price per share to
be paid by the Underwriters to the Company for the Firm Shares as set forth in
this Section 3, for the sole purpose of covering over-allotments in the sale of
Firm Shares by the Underwriters. This option may be exercised from time to time
and at any time, in whole or in part, on or before the thirtieth day following
the date of the Prospectus, by notice from ING Barings LLC to the Company and
the Selling Stockholders. Such notice shall set forth the aggregate number of
Option Shares as to which the option is being exercised and the date and time,
as reasonably determined by ING Barings LLC, when the Option Shares are to be
delivered (such date and time being herein sometimes referred to as the
"Additional Closing Date"); provided, however, that the Additional Closing Date
shall not be earlier than the Closing Date or earlier than the second full
business day after the date on which the option shall have been exercised nor
later than the fifth full business day after the date on which the option shall
have been exercised (unless such time and date are postponed in accordance with
the provisions of Section 10 hereof). Payment for the Company Option Shares
shall be made to the Company by wire transfer in immediately available funds to
the order of the Company, against delivery to you for the respective accounts of
the Underwriters of the Company Option Shares to be purchased by them. Payment
for the Selling Stockholder Option Shares shall be made to the Selling
Stockholders by wire transfer in immediately available funds to the order of the
Selling Stockholders, against delivery to you for the respective accounts of the
Underwriters of the Selling Stockholder Option Shares to be purchased by them.
Certificates for the Option Shares shall be registered in such name or names and
in such authorized denominations as you may request on or before noon on the
business day prior to the Closing Date. The Company will permit you to examine
and package such certificates at or before noon on the business day prior to the
Closing Date.
The number of Option Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Option Shares
being purchased as the
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number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number increased as set forth in Section 10 hereof)
bears to the total number of Firm Shares being purchased from the Company,
subject, however, to such adjustments to eliminate any fractional shares as ING
Barings LLC in its sole discretion shall make.
(d) Time shall be of the essence and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Underwriters.
4. Offering. It is understood that the several Underwriters propose to
offer the Shares for sale to the public upon the terms set forth in the
Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
Underwriter that:
(a) If the Registration Statement has not been declared effective at
the time of the execution of this Agreement, the Company will use its best
efforts to cause the Registration Statement and any amendments thereto to become
effective as promptly as possible. If Rule 430A is used or the filing of the
Prospectus is otherwise required under Rule 424(b) or Rule 434, the Company will
file the Prospectus (properly completed if Rule 430A has been used) pursuant to
Rule 424(b) or Rule 434 within the prescribed time period and will provide
evidence satisfactory to you of such timely filing. If the Company elects to
rely on Rule 434, the Company will prepare and file a term sheet that complies
with the requirements of Rule 434. If the Company elects to rely on Rule 462(b)
under the Act, the Company shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) under the Act prior to the time
confirmations are sent or given, as specified by Rule 462(b)(2) under the Act,
and shall pay the applicable fees in accordance with Rule 111 under the Act.
The Company will notify you immediately (and, if requested by you,
will confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement, any preliminary
prospectus or the Prospectus or for additional information, (iii) of the mailing
or the delivery to the Commission for filing of any amendment of or supplement
to the Registration Statement or the Prospectus, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of the initiation, or the
threatening, of any proceedings therefor, (v) of the receipt of any comments
from the Commission, and (vi) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for sale in
any jurisdiction or the initiation or threatening of any proceeding for that
purpose. If a stop order or suspension of qualification is proposed at any time,
the Company will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain the lifting thereof as soon as possible. The
Company will not file any amendment to the Registration Statement or any
amendment of or supplement to, any preliminary prospectus or the Prospectus
(including the prospectus required to be filed pursuant to Rule 424(b) or Rule
434) that differs from the prospectus on file at the time of the effectiveness
of the Registration Statement before or after the effective date of the
Registration Statement to which you shall reasonably object in writing after
being timely furnished in advance a copy thereof.
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(b) If at any time when a prospectus relating to the Shares is
required to be delivered under the Act by an Underwriter or dealer any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would, in the reasonable judgment of ING Barings LLC, counsel to
the Underwriters or the Company, include an untrue statement of a material fact
or omit to state any material fact required to be stated therein, or necessary
to make the statements therein, not misleading, or if it shall be necessary at
any time to amend or supplement the Registration Statement, the preliminary
prospectus or the Prospectus to comply with any law, the Company promptly will
notify ING Barings LLC and prepare and file with the Commission and furnish at
its own expense to the Underwriters and dealers, an appropriate amendment or
supplement (in form and substance reasonably satisfactory to ING Barings LLC)
which will correct such untrue statement or omission or so that the Registration
Statement, any preliminary prospectus and the Prospectus will comply with the
law and will use its best efforts to have any amendment to the Registration
Statement declared effective as soon as possible.
(c) As soon as practicable, but not later than 45 days after the end
of its fiscal quarter in which the first anniversary date of the effective date
of the Registration Statement occurs, the Company will make generally available
(within the meaning of Section 11(a) of the Act) to its securityholders and to
you an earnings statement or statements of the Company which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Regulations, covering
a period of at least twelve consecutive months beginning after the effective
date of the Registration Statement; and will, during the period of five years
from the date of the Prospectus, make generally available (within the meaning of
Section 11(a) of the Act) to its securityholders as soon as practicable after
the end of each fiscal year, an annual report (including a balance sheet and
statements of financial condition, operations, cash flows and changes in
stockholders' equity of the Company, certified by the Company's independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), consolidated
summary financial information of the Company for such quarter in reasonable
detail.
(d) The Company will furnish without charge to you and counsel to
the Underwriters three complete signed copies of the Registration Statement
(including exhibits thereto), and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as, in the
reasonable opinion of counsel to the Underwriters, delivery of a prospectus by
an Underwriter or dealer may be required by the Act, as many copies of each
preliminary prospectus and the Prospectus and any amendment or supplement
thereto as you may request.
(e) The Company will arrange for the qualification of the Shares for
sale under the laws of such jurisdictions (both national and foreign) as ING
Barings LLC may designate and will make such applications, file such documents
and furnish such information as may be required for that purpose and will
maintain such qualifications in effect for so long as required for the
distribution of the Shares; provided, however, that in no event shall the
Company be required to qualify to do business in any such jurisdiction in which
it is not already qualified or to file a general consent to service of process
in any jurisdiction in which it is not now so required, other than in respect of
suits arising out of the offering or sale of the Shares. The Company will, from
time to time, prepare and file such statements, reports and other documents, as
are or may be required to continue such qualifications in effect for so long a
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period as ING Barings LLC may request for the distribution of the Shares. The
Company will cooperate with ING Barings LLC and counsel to the Underwriters in
connection with the filings required to be made by ING Barings LLC with the NASD
and will pay the fee of the NASD in connection with its review of the offering
of the Shares and will use its best efforts to maintain quotation of its shares
on the Nasdaq National Market System.
(f) During the period of five years from the effective date of the
Registration Statement, the Company will furnish to you and, upon request, to
each of the several Underwriters, without charge, copies of, in such quantities
as you or the Underwriters may request from time to time, (i) as soon as
available, all reports or other communications (financial or other) furnished
generally by the Company to its securityholders, (ii) as soon as practicable
after the end of each fiscal year, copies of the Annual Report of the Company
containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public or certified
public accountants; and (iii) as soon as practicable after the filing thereof,
copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on
Form 10-Q, Current Report on Form 8-K or other report filed by the Company with
the Commission, the NASD, any other supervisory, regulatory, administrative or
governmental agency, body or authority whether pursuant to the Exchange Act or
otherwise or any national securities exchange or system on which any class of
securities of the Company is listed or quoted.
(g) For a period of 90 days from the date of the Prospectus (the
"Lock-Up Period"), without the prior written consent of ING Barings LLC, neither
the Company nor any Locked-Up Party shall, directly or indirectly: (1) issue,
offer for sale, contract to sell, sell, pledge or otherwise dispose of (or enter
into any transaction or device which is designed to, or could be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by any person at any time in
the future of) any shares of Common Stock or securities convertible into,
exercisable or exchangeable for, or represent the right to receive, Common Stock
or sell or grant options, rights or warrants with respect to any shares of
Common Stock or any of the foregoing or announce the offering of or register for
sale any of the foregoing or any outstanding shares of Common Stock; provided
however, that the Company may grant options and issue and sell Common Stock
pursuant to any directors' and employees' stock plan (including any employees'
stock purchase plan), stock ownership plan, dividend reinvestment plan or
warrants of the Company in effect at the effective date of the Registration
Statement and which are described in the Prospectus so long as none of those
shares that may be issued to any Locked-Up Party may be transferred during the
Lock-Up Period and the Company shall enter stop transfer instructions with its
transfer agent and registrar against any such transfer; or (2) enter into any
swap, repurchase agreement, pledge, transfer or other transaction that transfers
to another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock or other securities, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. In addition, during such
period, the Company and the Subsidiary also agree not to file any registration
statement (other than a Form S-8 registration statement filed in connection with
shares of Common Stock received under a Company directors' and employees' stock
plan, stock ownership plan, employment agreement or dividend reinvestment plan)
with respect to, and each of the executive officers, directors and certain
securityholders of the Company has agreed not to make any
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demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock without the prior written consent of ING Barings
LLC.
(h) During the period when, in the opinion of counsel to the
Underwriters, the delivery of a Prospectus by an Underwriter or dealer may be
required by the Act, the Company will comply, at its own expense, with all
requirements imposed upon it by the Commission, the Act and the Exchange Act,
and the rules and regulations of the Commission promulgated thereunder, so far
as necessary to permit the continuance of sales of or dealing in the Shares
during such period in accordance with the provisions hereof and the Prospectus.
In addition, during such 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.
(i) Each of the Company and the Subsidiary will conduct its business
in compliance in all material respects with all applicable laws, rules,
regulations, decisions, directives and orders. The Company will do and perform
all things required or necessary to be done and performed under this Agreement
by the Company on or prior to the Closing Date and to comply or cause to be
satisfied, to the extent such are within its control, the conditions precedent
to the several obligations of the Underwriters specified in Section 9 hereof.
(j) Neither the Company nor any of its affiliates (as defined in
Regulation D under the Act), will take, directly or indirectly, any action
designed to cause or result in, or which constitutes or which might reasonably
be expected to cause, result in, or constitute, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of the shares of Common
Stock of the Company to facilitate the offering and distribution of the Shares
or any other action prohibited by Regulation M under the Exchange Act.
(k) The Company will apply the net proceeds to the Company from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds."
(l) The Company shall engage and maintain, at its expense, a
registrar and transfer agent for the Shares.
(m) The Company will use its best efforts to maintain listing of its
shares of Common Stock on the Nasdaq National Market.
(n) The Company is familiar with the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such a
manner so as to ensure that the Company was not and will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(o) The Company shall cause to be prepared and delivered, at its
expense, within one business day from the date hereof, to the Underwriters an
"electronic Prospectus" to be used by the Underwriters in connection with the
offering and sale of the Shares . As used herein, the term "electronic
Prospectus" means a form of Prospectus, and any amendment or supplement thereto,
that meets each of the following conditions: (i) it shall be encoded in an
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electronic format, satisfactory to you, that may be transmitted electronically
by the Underwriters to offerees and purchasers of the Shares for at least during
the period when, in the opinion of counsel to the Underwriters, the Prospectus
is required to be delivered under the Act or the Exchange Act; (ii) it shall
disclose the same information as the paper Prospectus and Prospectus filed
pursuant to XXXXX, except to the extent that graphic and image material cannot
be disseminated electronically, in which case such graphic and image material
shall be replaced in the electronic Prospectus with a fair and accurate
narrative description or tabular representation of such material, as
appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to you, that will allow investors to store and
have continuously ready access to the Prospectus at any future time, without
charge to investors (other than any fee charged for subscription to the system
as a whole and for on-line time).
6. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement is terminated, the Company will pay, or
reimburse ING Barings LLC if paid by the Underwriters, all costs, fees and
expenses incident to the performance of the obligations of the Company and the
Selling Stockholders under this Agreement, including but not limited to costs,
fees and expenses of or relating to (i) the preparation by the Company, printing
and filing of the Registration Statement and exhibits to it, each preliminary
prospectus, the Prospectus and any amendment or supplement to the Registration
Statement or the Prospectus (including, without limitation, the fees and
expenses of the Company's counsel, accountants and other advisors), (ii) the
preparation and delivery of certificates representing the Shares, (iii) the
printing of this Agreement and Underwriter's Questionnaires, Underwriter's
Powers of Attorney, Blue Sky Memoranda, Master Agreements Among Underwriters and
Master Selling Agreements, and all other documents relating to the public
offering of the Shares (including those documents supplied to the Underwriters
in quantities as hereinabove stated) and furnishing (including costs of shipping
and mailing) such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all exhibits, schedules, consents, certificates of
experts, amendments and supplements thereto, as may be requested for use in
connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold, (iv) the quotation of the Shares on the
Nasdaq National Market, (v) any filings required to be made with, and the review
by, the NASD and the fees, disbursements and other charges of the Underwriters'
counsel in connection therewith, (vi) the registration or qualification (or
obtaining exemptions from such registration or qualification) of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(e), including the fees, disbursements and other
charges of the Underwriters' counsel in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (vii) the issuance, transfer and delivery of the Shares to the
Underwriters and the Selling Stockholders, including any issue, transfer, stamp
or other taxes payable thereon, (viii) the transfer agent or registrar for the
Shares, (ix) the costs and expenses of the Underwriters incident to the
preparation and undertaking of "road show" preparations to be made to
prospective investors (but, in the case of this clause (ix), only to the extent
specifically approved by the Company), and (x) all other fees, costs and
expenses referred to in Part II of the Registration Statement. Except as
otherwise provided herein, the Underwriters shall pay their own expenses,
including the fees and disbursement of their counsel.
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(b) If this Agreement shall be terminated by the Company otherwise
than as explicitly permitted by this Agreement, or if any condition to the
obligations of the Underwriters set forth in Section 9 hereof is not satisfied,
or if this Agreement shall be terminated by ING Barings LLC as permitted
hereunder pursuant to Section 9, Section 10 or Section 12, or if the sale to the
Underwriters of the Shares on the Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse ING Barings LLC and the other Underwriters (or such Underwriters as
have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been incurred by ING
Barings LLC and the Underwriters in connection with the proposed purchase and
the offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, its directors, officers, employees, and agents and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, against any and all losses, liabilities,
claims, damages, actions and expenses whatsoever, as incurred (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing, compromising or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement for
the registration of the Shares, as originally filed or any amendment thereof, or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission to state therein a
material fact necessary in order to make statements therein, not misleading; or
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iv) in whole or in part upon any
failure of the Company to perform its obligations hereunder or under law; or (v)
any act or failure to act or any alleged act or failure to act by an Underwriter
in connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i), (ii), (iii) or (iv) above, provided that the Company will
not be liable under this clause (v) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its bad faith
or willful misconduct; and provided, however, that the Company will not be
liable in any such case covered by clauses (i), (ii), (iii), (iv) or (v) above
to the extent but only to the extent that any such loss, liability, claim,
damage, action or expense arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information
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relating to an Underwriter furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein; and provided, further, that
with respect to any preliminary prospectus, the foregoing indemnity in this
clause 7(a) shall not inure to the benefit of any Underwriter from whom the
person asserting any loss, claim, damage, liability or expense purchased Shares,
or any of its directors, officers or employees or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter 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, action or expense. The Company acknowledges that the
statements set forth in the first (including the table), third, seventh and
eighth paragraphs under the captain "Underwriting" in, and in the last paragraph
on the cover page of, the Prospectus constitute the only information furnished
in writing relating to an Underwriter by or on behalf of any Underwriter
expressly for use in the Registration Statement relating to the Shares as
originally filed or in any amendment thereof, any related preliminary prospectus
or the Prospectus or in any amendment thereof or supplement thereto, as the case
may be. This indemnity agreement will be in addition to any liability which the
Company may otherwise have, including under this Agreement.
(b) Each Group A Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter, its directors, officers,
employees, and agents and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any and all losses, liabilities, claims, damages, actions and
expenses whatsoever, as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing,
compromising or defending against any litigation, commenced or threatened, or
any claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise, insofar as such losses, liabilities,
claims, damages or expenses (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement for the registration of the Shares,
as originally filed or any amendment thereof, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission to state therein a material fact
necessary in order to make statements therein, not misleading; or (iii) in whole
or in part upon any inaccuracy in the representations and warranties of the
Company or such Group A Selling Stockholder contained herein; or (iv) in whole
or in part upon any failure of the Company or such Group A Selling Stockholder
to perform its obligations hereunder or under law; or (v) any act or failure to
act or any alleged act or failure to act by an Underwriter in connection with,
or relating in any manner to, the Shares or the offering contemplated hereby,
and which is included as part of or referred to in any loss, claim, damage,
liability or action arising out of or based upon any matter covered by clause
(i), (ii), (iii) or (iv) above, provided that no Group A Selling Stockholder
will be liable under this clause (v) to the extent that a court of competent
jurisdiction shall have determined by a final judgment that such loss, claim,
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damage, liability or action resulted directly from any such acts or failures to
act undertaken or omitted to be taken by such Underwriter through its bad faith
or willful misconduct; and provided, however, that no Group A Selling
Stockholder will be liable in any such case covered by clauses (i), (ii), (iii),
(iv) or (v) above to the extent but only to the extent that any such loss,
liability, claim, damage, action or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information relating to an Underwriter furnished to the Company by or on behalf
of any Underwriter through you expressly for use therein; and provided, further,
that with respect to any preliminary prospectus, the foregoing indemnity in this
clause 7(b) shall not inure to the benefit of any Underwriter from whom the
person asserting any loss, claim, damage, liability or expense purchased Shares,
or any of its directors, officers or employees or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter 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, action or expense. Each Group A Selling Stockholder
acknowledges that the statements set forth in the first (including the table),
third, seventh and eighth paragraphs under the captain "Underwriting" in, and in
the last paragraph on the cover page of, the Prospectus constitute the only
information furnished in writing relating to an Underwriter by or on behalf of
any Underwriter expressly for use in the Registration Statement relating to the
Shares as originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be. Notwithstanding the foregoing, (y) the aggregate liability
of any Group A Selling Stockholder pursuant to this paragraph (b) and for any
breach of any representation or warranty contained in this Agreement by such
Group A Selling Stockholder shall be limited to an amount equal to the proceeds
(after deducting underwriting discounts and commissions) received by such Group
A Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Group A Selling Stockholder hereunder, and (z) to the extent the Company is
also liable for indemnification under Section 7(a) above, no Group A Selling
Stockholder shall be liable for indemnification under this Section 7(b) until,
and then only to the extent that, the indemnified party has made demand for
indemnification pursuant to Sections 7(a) and 7(e) from the Company and the
Company shall have rejected such demand or shall not have made payment to
satisfy in full such indemnification claim within thirty days of the date of
such original demand. This indemnity agreement will be in addition to any
liability which the Company and the Selling Stockholders may otherwise have,
including under this Agreement.
(c) Each Group B Selling Stockholder severally, and not jointly,
agrees to indemnify and hold harmless each Underwriter, its directors, officers,
employees, and agents and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any and all losses, liabilities, claims, damages, actions and
expenses whatsoever, as incurred (including but not limited to attorneys' fees
and any and all expenses whatsoever incurred in investigating, preparing,
compromising or defending against any litigation, commenced or threatened, or
any claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other federal or state
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statutory law or regulation, or at common law or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Shares, as originally filed or any amendment thereof, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission to state therein a
material fact necessary in order to make statements therein, not misleading, in
the case of clause (i) above and this clause (ii) to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or any Underwriter by such Group B Selling
Stockholder, directly or through such Group B Selling Stockholder's
representatives, specifically for use in the preparation thereof; or (iii) in
whole or in part upon any inaccuracy in the representations and warranties of
such Group B Selling Stockholder contained herein; or (iv) in whole or in part
upon any failure of such Group B Selling Stockholder to perform its obligations
hereunder or under law; and provided, however, that no Group B Selling
Stockholder will be liable in any such case covered by clauses (i), (ii), (iii)
or (iv) above to the extent but only to the extent that any such loss,
liability, claim, damage, action or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information relating to an Underwriter furnished to the Company by or on behalf
of any Underwriter through you expressly for use therein; and provided, further,
that with respect to any preliminary prospectus, the foregoing indemnity in this
clause 7(c) shall not inure to the benefit of any Underwriter from whom the
person asserting any loss, claim, damage, liability or expense purchased Shares,
or any of its directors, officers or employees or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter 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, action or expense. Each Group B Selling Stockholder
acknowledges that the statements set forth in the first (including the table),
third, seventh and eighth paragraphs under the captain "Underwriting" in, and in
the last paragraph on the cover page of, the Prospectus constitute the only
information furnished in writing relating to an Underwriter by or on behalf of
any Underwriter expressly for use in the Registration Statement relating to the
Shares as originally filed or in any amendment thereof, any related preliminary
prospectus or the Prospectus or in any amendment thereof or supplement thereto,
as the case may be. Notwithstanding the foregoing, (y) the aggregate liability
of any Group B Selling Stockholder pursuant to this paragraph (c) and for any
breach of any representation or warranty contained in this Agreement by such
Group B Selling Stockholder shall be limited to an amount equal to the proceeds
(after deducting underwriting discounts and commissions) received by such Group
B Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Group B Selling Stockholder hereunder and (z) to the extent the Company is
also liable for indemnification under Section 7(a) above, no Group B Selling
Stockholder shall be liable for indemnification under this Section 7(c) until,
and
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then only to the extent that, the indemnified party has made demand for
indemnification pursuant to Sections 7(a) and 7(e) from the Company and the
Company shall have rejected such demand or shall not have made payment to
satisfy in full such indemnification claim within thirty days of the date of
such original demand. This indemnity agreement will be in addition to any
liability which the Company and the Selling Stockholders may otherwise have,
including under this Agreement.
(d) Each Underwriter severally, and not jointly, agrees to indemnify
and hold harmless the Company, each Selling Stockholder, each of the directors
of the Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to an Underwriter furnished to the Company by or on behalf of any
Underwriter through you expressly for use therein; provided, however, that in no
case shall any Underwriter be liable or responsible for any amount in excess of
the underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter hereunder. This indemnity will be in addition to any liability
which any Underwriter may otherwise have, including under this Agreement. The
Company and each Selling Stockholder acknowledge that the statements set forth
in the first (including the table), third, seventh and eighth paragraphs under
the captain "Underwriting" in, and in the last paragraph on the cover page of,
the Prospectus constitute the only information furnished in writing relating to
an Underwriter by or on behalf of any Underwriter expressly for use in the
Registration Statement relating to the Shares as originally filed or in any
amendment thereof, any related preliminary prospectus or the Prospectus or in
any amendment thereof or supplement thereto, as the case may be.
(e) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against an indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability or
obligation which it may have under this Section 7 or otherwise (i) unless the
failure to notify shall result in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not in any event relieve the
indemnifying party from any obligations other than the indemnification
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obligation provided in paragraph (a) or (b) above). In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified parties promptly after receiving the aforesaid notice from an
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified parties. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party or parties in conducting
the defense of any such action or that there may be one or more legal defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the indemnifying parties, it
being understood, however, that the indemnifying party or parties shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (plus separate local counsel, if retained by the
indemnified party or parties) at any time for all such indemnified parties. An
indemnifying party shall not be liable for any settlement of any claim or action
effected without its written consent; provided, however, that such consent was
not unreasonably withheld. Notwithstanding the foregoing, 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 in this
Section 7, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) 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, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent is for money damages only and
includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
Any losses, claims, damages, liabilities, expenses or actions for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 or under Section 8 below shall be paid by the indemnifying party
to the indemnified party as such losses, claims, damages, liabilities or
expenses are incurred, but in all cases, no later than thirty (30) days of
invoice to the indemnifying party.
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The indemnity and contribution agreements contained in this Section
7 and in Section 8 below and the representation and warranties of the Company
and the Selling Stockholders set forth in this Agreement shall remain operative
and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter or any director, officer or employee of or person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, or any Selling Stockholder, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, or to the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7 and Section 8 below.
The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7 and Section 8 below and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 7 and Section 8 below fairly allocate the risks in light of the ability
of the parties to investigate the Company and its business in order to assure
that adequate disclosure is made in the Registration Statement, the preliminary
prospectus and Prospectus as required by the Act and the Exchange Act.
8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, each indemnifying
party shall severally contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company, one or more of the
Selling Stockholders and one or more of the Underwriters may be subject, in such
proportions as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders (relative as to each other), on the one
hand, and the Underwriters, severally, on the other hand, from the offering of
the Shares or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 7 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Selling Stockholders (relative as to
each other), on the one hand, and the Underwriters, severally, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders, on the one hand, and the Underwriters, severally, on the
other and the Company and the Selling Stockholders relative to each other, shall
be deemed to be in the same proportion as the total proceeds from the offering
of the Shares (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the Selling Stockholders bears
to the
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underwriting discounts and commissions received by the Underwriters,
respectively. The relative fault of the Company and the Selling Shareholders, on
the one hand, and of the Underwriters, severally, on the other and the Company
and the Selling Stockholders relative to each other, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Underwriters and the Selling Stockholders agree that it would not be just
and 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 which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 8, (i) in no case shall any Underwriter be liable or responsible
for any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter hereunder, and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Further notwithstanding the
provisions of this Section 8 and the preceding sentence, 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. For purposes of this Section 8, each
director, officer, employee and agent of an Underwriter and each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person, if any, who controls the Company or a Selling
Stockholder within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 8. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties, notify each party or parties from whom contribution may be sought,
but the omission to so notify such party or parties shall not relieve the party
or parties from whom contribution may be sought from any obligation it or they
may have under this Section 8 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its consent,
provided that such consent was not unreasonably withheld.
The Underwriters' obligations in this Section 8 to contribute are several
in proportion to their respective underwriting obligations and not joint. 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.
9. Conditions to the Obligations of the Underwriters. The several
obligations of the Underwriters to purchase and pay for the Firm Shares and the
Option Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the date hereof, the Closing Date and any
Additional Closing Date, to the absence from any certificates, opinions, written
statements or
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letters furnished to you or to Underwriters' counsel pursuant to this Section 9
of any misstatement or omission, to the timely performance by the Company and
the Selling Stockholders of its covenants and other obligations hereunder and to
each of the following additional conditions:
(a) The Registration Statement shall have become effective not later
than, if pricing pursuant to Rule 430A, 5:30 P.M., New York time on the date of
this Agreement, and if pricing pursuant to a pricing amendment, 12:00 P.M., New
York time on the date an amendment to the Registration Statement containing the
public offering price has been filed with the Commission, or at such later time
and date as shall have been consented to in writing by ING Barings LLC; if the
Company shall have elected to rely upon Rule 430A or Rule 434 of the
Regulations, the Prospectus shall have been filed with the Commission in a
timely fashion in accordance with Section 5(a) hereof; and, at or prior to the
Closing Date no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereof shall have been issued and no
proceedings for such purpose shall have been initiated or threatened by the
Commission; no order suspending the qualification or registration of the Shares
under the securities or Blue Sky laws of any jurisdiction shall be in effect and
no proceeding for such purpose shall be pending before or threatened or
contemplated by the authorities of any such jurisdiction; any request for
additional information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and to the satisfaction of counsel to the
Underwriters; after the date hereof no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not reasonably object thereto;
and the NASD, upon review of the terms of the public offering of the Shares,
shall not have raised any objection to the fairness or reasonableness of the
underwriting terms and arrangements.
(b) The Company shall have furnished to you the opinion of Xxxxxx
Godward LLP, counsel for the Company, dated the Closing Date and the Additional
Closing Date, if applicable, addressed to the Underwriters and in form and
substance reasonably satisfactory to Winthrop, Stimson, Xxxxxx & Xxxxxxx,
Underwriters' counsel, to the effect that:
(i) Each of the Company and the Subsidiary has been duly
incorporated and is validly existing and in good standing under the laws
of Delaware, with the corporate power and authority to own, lease and
operate its properties and engage in the business in which it is engaged
or proposes to engage as described in the Registration Statement and the
Prospectus. To such counsel's knowledge, each of the Company and the
Subsidiary is duly registered and qualified to do business as a foreign
corporation in good standing in each jurisdiction where the character or
location of its properties (owned, leased or licensed) or the nature or
conduct of its business requires such registration or qualification,
except where the failure to so register or qualify, individually or in the
aggregate, would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole. To such counsel's knowledge, except as set
forth in the Registration Statement and the Prospectus, or the
Underwriting Agreement, 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 an
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equity interest in any firm, partnership, association, joint venture or
other entity, other than the Subsidiary.
(ii) All the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are fully paid
and nonassessable, are owned by the Company, free and clear of any Liens,
shareholders' agreements, voting trusts or defects of title, and were not
issued in violation of statutory or, to such counsel's best knowledge,
other preemptive rights, co-sale rights, resale rights, rights of first
refusal, or similar rights.
(iii) The Company's authorized equity capitalization is as set
forth in the Registration Statement and the Prospectus; the Common Stock,
the Firm Shares, the Option Shares and all others shares of capital stock
of the Company conform to the description thereof contained in the
Registration Statement (as incorporated by reference therein from the
Company's Registration Statement Form 8-A filed with the Commission on
November 4, 1997). The outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessible. The Shares to be issued and sold to the Underwriters
pursuant to the Underwriting Agreement have been duly authorized, and when
issued and delivered to and paid for by the Underwriters pursuant to the
Underwriting Agreement, will be validly issued and fully paid and
nonassessable, and to such counsel's knowledge will be transferred to the
Underwriters free and clear of any Liens and will not have been issued in
violation of or subject to any statutory or, to such counsel's best
knowledge, other preemptive rights, resale rights, co-sale rights, rights
of first refusal, or similar rights. The certificates for the Shares are
in valid and sufficient form. The holders of outstanding shares of capital
stock of the Company are not entitled to statutory or, to such counsel's
best knowledge, other preemptive rights, co-sale rights, rights of first
refusal, resale rights or similar rights in respect of the Shares. Except
as described in the Registration Statement and the Prospectus, to such
counsel's best knowledge, there are no authorized or outstanding 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 the Subsidiary 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 the Subsidiary or any
such convertible or exercisable or exchangeable securities or instruments
or any such rights, warrants or options. To such counsel's knowledge, the
only holders of securities of the Company which have any rights to the
registration of securities of the Company because of the filing of the
Registration Statement or otherwise in connection with the sale of the
Shares contemplated by the Underwriting Agreement are listed on Schedule
1(hh) to the Underwriting Agreement, and all such rights of such holders
have been effectively waived as of the date thereof.
(iv) To the best knowledge of such counsel, there are no legal
or governmental actions, suits, proceedings or investigations pending or
threatened against the Company or the Subsidiary, or as to which the
business, assets or property of the Company or the Subsidiary would be
subject or bound, that are of a character required to be disclosed in the
Registration Statement or the Prospectus which have not been disclosed
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therein. The statements in the Registration Statement and the Prospectus
under the caption "Business--Legal Proceedings", insofar as such
statements constitute a summary of matters of law, relating to pending
litigation fairly summarize, in all material respects, the matters
referred to therein.
(v) The Registration Statement has become effective under the
Act; all filings required by Rule 424(b) of the Regulations have been made
in the manner and within the time period required by Rule 424(b). To the
best knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened. The Registration Statement and
the Prospectus (other than the financial statements and supporting
schedules, financial data and statistical data, as to which such counsel
need not express any opinion) and each amendment or supplement thereto
comply as to form in all material respects with the applicable
requirements of the Act and the Regulations.
(vi) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company, and is the valid and binding
agreement of the Company. The Company has the corporate power and
authority to enter into the Underwriting Agreement and to issue, sell and
deliver to the Underwriters the Shares to be issued and sold by it
thereunder.
(vii) To the best knowledge of such counsel, the Company and
the Subsidiary are not in violation of their respective certificates of
incorporation, as amended.
(viii) Neither the issuance, offer, sale or delivery of the
Shares, the execution, delivery and performance by the Company of the
Underwriting Agreement nor the compliance by the Company with all the
provisions thereof nor the consummation of the transactions contemplated
thereby (other than performance of the Company's indemnification and
contribution obligations thereunder, concerning which no opinion is
expressed), (A) constitutes or will constitute a breach or violation of or
a default (or an event that with notice or the lapse of time or both would
constitute such a breach, violation or default) under, any of the terms or
provisions of the certificate of incorporation or by-laws of the Company
or the Subsidiary, (B) constitutes or will constitute a breach or
violation of, or a default (or an event that with notice or the lapse of
time or both would constitute such a breach, violation or default), or the
termination of any Contract filed as an exhibit to any of the Company's
filings with the Commission pursuant to the 1934 Act, nor (C) violates or
will violate any law, statute, rule or regulation applicable to the
Company or the Subsidiary (other than state securities or blue sky laws
concerning which no opinion need be expressed) or any judgment, decree or
order known to such counsel and applicable to the Company or the
Subsidiary of any court or governmental agency, body or authority, having
jurisdiction over the Company or the Subsidiary or any of their property
or assets, the default under or the breach or violation of which, in the
case of clauses (B) and (C) above, individually or in the aggregate, could
have a Material Adverse Effect on the Company and the Subsidiary taken as
a whole.
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(ix) The Company is not now, and as a result of the offer and
sale of the Shares in the manner contemplated in the Underwriting
Agreement, the Registration Statement, the preliminary prospectus and the
Prospectus and the application of the net proceeds of such sale as
described in the Registration Statement, the preliminary prospectus 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, without taking
account of any exemption arising out of the number or type of holders of
the Company's securities.
(x) No consent, approval, authorization, filing,
qualification, Permit or order of any court or governmental agency, body
or authority, or, to the knowledge of such counsel, from the Company's
securityholders is required for the Company's execution, delivery and
performance of the Underwriting Agreement, the issuance, sale or delivery
of the Shares thereunder or the consummation of any other of the
transactions contemplated in the Underwriting Agreement or the fulfillment
of the terms thereof, except such as have been obtained under the Act and
the Exchange Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of the
Shares by the Underwriters and such other approvals (specified in such
opinion) as have been obtained and which are in full force and effect.
(xi) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and is quoted on the Nasdaq National Market, and to
the best of such counsel's knowledge, the Company has not received any
notification that the Commission or the Nasdaq National Market is
contemplating the termination of such registration or listing.
(xii) To such counsel's knowledge, each Selling Stockholder is
the lawful owner of the Shares to be sold by such Selling Stockholder
pursuant to the Underwriting Agreement and has good and clear title to
such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever, and upon delivery of
and payment for the Shares sold by each Selling Stockholder pursuant to
the Underwriting Agreement on the Closing Date, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests and claims whatsoever.
(xiii) Each Selling Stockholder had, at the time of entering
into the Underwriting Agreement, and on the Closing Date, has full legal
right, power and authority to enter into this Agreement and to sell,
assign, transfer and deliver the Shares in the manner provided herein.
This Agreement has been duly executed and delivered by each Selling
Stockholder, and is a valid and binding agreement of each Selling
Stockholder, enforceable in accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable law and except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(xiv) To such counsel's knowledge, the execution, delivery and
performance of the Underwriting Agreement by each Selling Stockholder, the
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compliance by each Selling Stockholder with all the provisions thereof and
the consummation of the transactions contemplated thereby do not (i)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, any indenture, loan agreement,
mortgage, lease or other material agreement or instrument to which any
Selling Stockholder is a party or by which any Selling Stockholder or any
property of any Selling Stockholder is bound or (iii) violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree
of any court or any governmental body or agency having jurisdiction over
any Selling Stockholder or any property of any Selling Stockholder.
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the
Company, representatives of the independent public accountants for the Company
and the Underwriters at which the contents of the Prospectus and related matters
were discussed and no facts have come to the attention of such counsel which
cause such counsel to believe that the Registration Statement (other than
financial statements and supporting schedules, other financial data and
statistical data, as to which such counsel need not express any opinion) at the
time it became effective (including all information deemed to be part of the
Registration Statement (other than financial statements and supporting
schedules, other financial data and statistical data, as to which such counsel
need not express any opinion) at the time of effectiveness pursuant to Rule
430A, Rule 462 or Rule 434, if applicable) contained an untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus (other than financial statements and supporting schedules, other
financial data and statistical data, as to which such counsel need not express
any opinion) as of its date and as of the Closing Date contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel (A) need not opine as to laws of
any jurisdiction other than the States of California and Delaware (only as to
the Delaware General Corporation Law), and the federal laws of the United
States, or as to whether the laws of any particular jurisdiction apply, and (B)
may rely as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officers of departments of various jurisdictions having custody of
documents respecting the corporate existence or good standing of the Company and
the Subsidiary and on certificates from the Selling Stockholders, provided that
copies of any such statements or certificates shall be delivered to
Underwriters' counsel upon request. Moreover, except to the extent set forth in
the immediately preceding paragraph, such counsel need not render any opinion as
to compliance with any antifraud provisions of any law, rule or regulation
relating to (i) securities or (ii) the sale or issuance thereof.
(c) The Company shall have furnished to the Underwriters the
opinions of Xxxxxx, Xxxxx & Xxxxxxx, Xxxxx & Xxxxxxx and Xxxxx X. Xxxxxxxxx,
Esq., intellectual property counsel to the Company, dated the Closing Date (and
the
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Additional Closing Date, if applicable), each in a form reasonably acceptable to
the Underwriters and their counsel.
(d) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement, preliminary prospectus
or Prospectus, and the registration, authorization, issue, sale and delivery of
the Shares as herein contemplated shall be satisfactory in form and substance to
you and to Underwriters' counsel in your and your counsel's reasonable
discretion. The Underwriters shall have received from Winthrop, Stimson, Xxxxxx
& Xxxxxxx, Underwriters' counsel, a favorable opinion, dated the Closing Date
(and the Additional Closing Date, if applicable), with respect to the issuance
and sale of the Shares, the Registration Statement, the Prospectus and other
related matters as you may reasonably require, and the Company, the Subsidiary
and the Selling Stockholders shall have furnished to Underwriters' counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon the matters referred to in this Section.
(e) At the Closing Date (and the Additional Closing Date, if
applicable) you shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of the Company, dated the Closing Date (and the
Additional Closing Date, if applicable), to the effect that (i) the condition
set forth in subsection (a) of this Section 9 has been satisfied, (ii) as of the
date hereof and as of the Closing Date (and the Additional Closing Date, if
applicable) all the representations and warranties of the Company set forth in
this Agreement are accurate with the same force and effect as if made on each of
such dates, (iii) as of the Closing Date (and the Additional Closing Date, if
applicable) the agreements and obligations of the Company to be performed
hereunder on or prior thereto have been duly performed, (iv) when the
Registration Statement became effective and at all times subsequent thereto up
to the delivery of such certificate, the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained the information
required to be included therein by the Act and the applicable rules and
regulations of the Commission thereunder, and conformed to the requirements of
the Act and the applicable rules and regulations of the Commission thereunder;
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, did not and do not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and since the effective date of the
Registration Statement, there has occurred no event required to be set forth in
an amended or supplemented Prospectus which has not been so set forth; and (v)
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company and the Subsidiary have
not sustained any material loss or interference with their respective business
or properties from fire, flood, hurricane, accident or other calamity, whether
or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any material adverse change, or
any development involving a prospective material adverse change, in the
business, management, properties, operations, prospects, condition (financial or
otherwise), or results of operations of the Company and the Subsidiary taken as
a whole, or any transaction that is material to the Company and its subsidiaries
taken as a whole, except transactions entered into in the ordinary course of
business, or any obligation, direct or contingent, that is material to the
Company and its
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subsidiaries, taken as a whole, incurred by the Company or its subsidiaries,
except obligations incurred in the ordinary course of business, or any change in
the capital stock or outstanding indebtedness of the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its subsidiaries.
(f) All the representations and warranties of each Selling
Stockholder contained in this Agreement shall be true and correct on the Closing
Date and the Additional Closing Date, if any, with the same force and effect as
if made on the Closing Date and the Additional Closing Date and you shall have
received on the Closing Date and the Additional Closing Date, if any, a
certificate dated the Closing Date and the Additional Closing Date from each
Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied with all of the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied by
such Selling Stockholder on or prior to the Closing Date.
(g) At the time this Agreement is executed and at the Closing Date
and the Additional Closing Date, if applicable, Xxxxxx Xxxxxxxx, LLP shall have
furnished to you a letter or letters, dated respectively as of the time this
Agreement is executed and as of the Closing Date (and the Additional Closing
Date, if applicable), addressed to you and based upon the procedures described
in such letter, but carried out to a date not more than five (5) days prior to
the Closing Date or the Additional Closing Date, as the case may be, and
otherwise in form and substance satisfactory to you, confirming that they are
independent public accountants with respect to the Company within the meaning of
the Act and Regulation S-X, stating that the answer to item 10 of the
Registration Statement is correct as it relates to them and that:
(i) in their opinion the audited consolidated financial
statements, the related consolidated financial statement schedules and the
audited financial statements of the Company included in the Registration
Statement and the Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the Act
and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and the Subsidiary;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of the meetings of the
stockholders and the board of directors of the Company and the Subsidiary;
and inquiries of certain officials of the Company and the Subsidiary who
have responsibility for financial and accounting matters of the Company
and the Subsidiary as to transactions and events subsequent to December
31, 1998, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and with the published rules and regulations of the Commission with
respect to registration statements on Form S-3; and said unaudited
financial statements are not in conformity with generally accepted
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accounting principles applied on a basis substantially consistent with
that of the audited financial statements included in the Registration
Statement and the Prospectus;
(2) at December 31, 1999 there was any change in the capital
stock, stockholders' equity, long-term debt and working capital of the
Company or any decreases in current assets or net assets as compared
with amounts shown in the September 30, 1999 financial statements, or for
the period from October 1, 1999 to December 31, 1999 there were any
decreases, compared with the corresponding period in the preceding year,
in net sales or in total or per share amounts of net income, except in all
instances for changes or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed necessary by
ING Barings LLC;
(3) the information included in the Registration Statement
and Prospectus in response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information) and Item 402
(Executive Compensation) is not in conformity with the applicable
disclosure requirements of Regulation S-K; or
(4) there was any change at January 25, 2000 in the capital
stock, stockholders' equity, long-term debt and working capital of the
Company or any decreases in current assets, net assets or working
capital as compared with the amounts shown in the December 31, 1999
financial statements or, for the period from January 1, 2000 to a date
within five days of the date of such letter, there were any decreases as
compared with the corresponding period in the preceding year in net sales
or total or per share amounts of net income, except for changes or
decreases that the registration statement discloses have occurred or as
set forth in such letter;
(iii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of Interim
financial information as described in Statement of Auditing Standards No.
71 ("SAS 71"), Interim Financial Information, on the unaudited financial
statements included in the Registration Statement and the Prospectus; and
(iv) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and the Subsidiary) set forth in the
Registration Statement and the Prospectus, which have been specified by
you prior to the date of such letter, agrees with the accounting records
of the Company and its subsidiaries, excluding any questions of legal
interpretation.
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In addition, ING Barings LLC shall have received from Xxxxxx Xxxxxxxx LLP
a letter addressed to the Company and made available to you for the use of the
Underwriters stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in establishing the
scope of their examination of the Company's consolidated financial statements as
of December 31, 1998, did not disclose any weaknesses in internal controls that
they considered to be substantial or material weaknesses.
In the event that the letters to be delivered referred to above set forth
note any changes, decreases or increases in the financial information included
in the Registration Statement and the Prospectus, it shall be a further
condition to the obligations of the Underwriters hereunder that ING Barings LLC
shall have determined in its sole judgment, that such changes, decreases or
increases as are set forth in such letters do not reflect a material adverse
change in the stockholders' equity or long-term debt of the Company as compared
with the amounts shown in the latest balance sheet of the Company included in
the Prospectus, or a material adverse change in total net revenues or net income
of the Company, in each case as compared with the corresponding period of the
prior year.
(h) Subsequent to the date this Agreement is executed or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (f) of this Section
9 or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or other), earnings, business or properties
of the Company and the Subsidiary, whether or not arising in the ordinary course
of business, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in ING Barings LLC's sole judgment, material and adverse and that
makes it impracticable or inadvisable to proceed with the offering or delivery
of the Shares as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto).
(i) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change, or any development involving a prospective material
adverse change, in the general affairs, business, prospects, properties,
management, key personnel, condition (financial or other) or results of
operations of the Company and the Subsidiary, whether or not arising from
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transactions in the ordinary course of business, in each case other than as set
forth in the Registration Statement and the Prospectus (or, in the case of a
prospective change, other than as contemplated by the Registration Statement and
the Prospectus), and (ii) the Company shall not have sustained any material loss
or interference with its business or properties from fire, explosion, flood,
hurricane or other casualty or calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental action,
order or decree, which is not set forth in the Registration Statement and the
Prospectus, if in your reasonable judgment any such development makes it
impracticable or inadvisable to consummate the sale and delivery of the Shares
at the public offering price.
(j) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any federal,
state, or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or proceeding
an unfavorable ruling, decision or finding could reasonably be expected to have
a Material Adverse Effect on the Company and its subsidiaries taken as a whole.
(k) At the time of execution of this Agreement, except as may have
otherwise been consented to in writing by ING Barings LLC, the Company shall
have furnished to you a letter addressed to you from each Locked-Up Party, in
which each such person agrees not to (1) offer for sale, contract to sell, sell,
pledge or otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock or securities convertible
into, exercisable or exchangeable for, or represent the right to receive, Common
Stock or sell or grant options, rights or warrants with respect to any shares of
Common Stock or register for sale any outstanding shares of Common Stock; or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock or securities, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise for a period of 90 days following the time of
execution of this Agreement without your prior written consent, other than
shares of Common Stock disposed of as gifts or transfers to immediate family
members or trusts or partnerships, the beneficiaries and sole partners of which
are immediate family members, provided that the donee or transferee agrees in
writing to be bound in the same manner.
(l) The Shares shall be qualified for sale in such jurisdictions as
you shall have requested subject to the terms hereof, each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
Closing Date and the Additional Closing Date, if applicable.
(m) The Company shall have timely filed with the Nasdaq National
Market a notification form for the listing of additional shares on the Nasdaq
National Market with respect to the Firm Shares and the Option Shares, if any.
Such Firm Shares and such Option Shares, if any, shall have been approved for
designation upon notice of issuance on the Nasdaq National Market prior to the
Effective Date.
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(n) The Company and the Selling Stockholders shall have furnished to
you such certificates, in addition to those specifically mentioned herein, as
you may have reasonably requested (i) as to the accuracy and completeness (to
the extent required under applicable law) at the Closing Date and the Additional
Closing Date, if applicable, of any statement in the Registration Statement, the
preliminary prospectus or the Prospectus, (ii) as to the accuracy at the Closing
Date and the Additional Closing Date, if applicable, of the representations,
warranties and covenants of the Company and the Selling Stockholders herein,
(iii) as to the performance by the Company and the Selling Stockholders of its
obligations hereunder, or (iv) as to the fulfillment of the conditions
concurrent and precedent to your obligations hereunder.
(o) Prior to the Closing Date and the Additional Closing Date, if
applicable, the Company and the Selling Stockholders shall have furnished to the
Underwriters such further information and documents as you may reasonably
request.
If any of the conditions specified in this Section shall not have
been fulfilled in all respects when and as required to be satisfied, or if any
of the opinions and certificates mentioned above or elsewhere in this Agreement
shall not be reasonably satisfactory in form and substance to you and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be terminated at, or at any time on or prior to, the Closing Date
(and Additional Closing Date, if applicable) by ING Barings LLC. Notice of such
termination shall be given to the Company promptly in writing or by telephone
confirmed in writing.
10. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligations to purchase Firm Shares or Option Shares hereunder, and if the Firm
Shares or Option Shares with respect to which such default relates do not (after
giving effect to arrangements, if any, made by you pursuant to subsection (b)
below) exceed in the aggregate 10% of the number of Firm Shares or Option
Shares, the Shares to which the default relates shall be purchased by the
non-defaulting Underwriters in proportion to the respective proportions which
the numbers of Firm Shares set forth opposite their respective names in Schedule
I hereto bear to the aggregate number of Firm Shares set forth opposite the
names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than 10% of the
Firm Shares or Option Shares, as the case may be, you may in your discretion
arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Option Shares, as the case may be, to which such default relates on
the terms contained herein. In the event that within 5 calendar days after such
a default you do not arrange for the purchase of the Firm Shares or Option
Shares, as the case may be, to which such default relates as provided in this
Section 10, this Agreement or, in the case of a default with respect to the
Option Shares, the obligations of the Underwriters to purchase and of the
Company to sell the Option Shares shall thereupon terminate, without liability
on the part of the Company with respect thereto (except in each case as provided
in Section 6, 7(a) and 8 hereof) or the Underwriters, but nothing in this
Agreement shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder. Notwithstanding the foregoing, if
any
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default occurs with respect to the Additional Closing, this Agreement will not
terminate with respect to the Firm Shares purchased prior to such time.
(c) In the event that the Firm Shares or Option Shares to which the
default relates are to be purchased by the non-defaulting Underwriters, or are
to be purchased by another party or parties as aforesaid, you or the Company
shall have the right to postpone the Closing Date or Additional Closing Date, as
the case may be, for a period not exceeding five business days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus or in any other documents and arrangements, and the
Company agrees to file promptly any amendment or supplement to the Registration
Statement or the Prospectus which, in the opinion of Underwriters' counsel, may
thereby be made necessary or advisable. The term "Underwriter" as used in this
Agreement shall include any party substituted under this Section 9 with like
effect as if it had originally been a party to this Agreement with respect to
such Firm Shares and Option Shares.
11. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Underwriters, the Company and the
Selling Stockholders contained in this Agreement, including the agreements
contained in Section 5 and Section 6, the indemnity agreements contained in
Section 7 and the contribution agreements contained in Section 8, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof or by or on
behalf of the Company, any of its officers and directors or any controlling
person thereof or by or on behalf of any Selling Stockholder or any controlling
person of any Selling Stockholder, and shall survive delivery of and payment for
the Shares to and by the Underwriters. The representations contained in Sections
1 and 2 and the agreements contained in Sections 6, 7, 8 and 12(d) hereof also
shall survive the termination of this Agreement, including termination pursuant
to Section 10 or 12 hereof.
12. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon the later of when (i)
you and the Company shall have received notification of the effectiveness of the
Registration Statement or (ii) the execution of this Agreement. If either the
public offering price or the purchase price per Share has not been agreed upon
prior to 5:00 P.M., New York time, on the fifth full business day after the
Registration Statement shall have become effective, this Agreement shall
thereupon terminate without liability to the Company or the Underwriters except
as herein expressly provided. Until this Agreement becomes effective as
aforesaid, it may be terminated by the Company and the Selling Stockholders by
notifying you or by you notifying the Company. Notwithstanding the foregoing,
the provisions of this Section 12 and of Sections 1, 2, 6, 7 and 8 hereof shall
at all times be in full force and effect.
(b) ING Barings LLC shall have the right to terminate this Agreement
at any time on or prior to the Closing Date, or the obligations of the
Underwriters to purchase the Option Shares at any time on or prior to the
Additional Closing Date, as the case may be (but in any event prior to delivery
of and payment for the Shares), if (A) any domestic or international event or
act or occurrence has materially disrupted, or in your opinion will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (B)
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if trading on the New York or American Stock Exchanges or Nasdaq National Market
shall have been suspended, or limited, minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been required, on the New York Stock Exchange or the Nasdaq National Market by
the New York Stock Exchange or the Nasdaq National Market or by order of the
Commission or any other governmental authority having jurisdiction; or (C) if a
banking moratorium has been declared by a state or federal authority or if any
new restriction materially adversely affecting the distribution of the Firm
Shares or the Option Shares, as the case may be, shall have become effective; or
(D)(i) there shall have occurred any outbreak or escalation of hostilities or
there is an outbreak or escalation of national or international hostilities or
there is a declaration by the United States of a national emergency or war or
(ii) if there has been any crisis or calamity or any change or development in
United States' or international political, financial or economic conditions, if
the effect of any such event in (D)(i) or (D)(ii), in the sole judgment of ING
Barings LLC makes it impracticable or inadvisable to proceed with the offering,
sale and delivery of the Firm Shares or the Option Shares, as the case may be,
on the terms contemplated by the Prospectus (exclusive of any supplement
thereto) or to enforce contracts for the sale of securities; or (E) in the sole
judgment of ING Barings LLC there shall have occurred any Material Adverse
Effect on the Company and its subsidiaries taken as a whole or (F) the Company
shall have sustained a loss by strike, fire, flood, earthquake, accident or
other calamity of such character as in the sole judgment of ING Barings LLC may
interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured. Any
termination pursuant to this Section shall be without liability on the part of
(a) the Company to any Underwriter, except that the Company shall be obligated
to reimburse the expenses of ING Barings LLC and the underwriters to the extent
required pursuant to Sections 6, 7 and 8 hereof, (b) any Underwriter to the
Company or (c) of any party hereto to any other party except that the provisions
of Sections 6, 7 and 8 shall at all times be effective and shall survive such
termination.
(c) Any notice of termination pursuant to this Section 12 shall be
by telephone or facsimile and confirmed in writing by letter.
13. Agreements of the Selling Stockholders. Each Selling Stockholder
agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by such Selling
Stockholder to the Underwriters.
(b) To do and perform all things to be done and performed by such
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by
such Selling Stockholder pursuant to this Agreement.
14. Notices. Any notice or notification in any form to be given hereunder
shall be in writing and shall be delivered in person or sent by telephone or
facsimile transmission (but in the case of a notification by telephone, with
subsequent confirmation by letter or facsimile transmission).
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Any notice or notification to you shall be addressed to:
ING Barings LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: H. Xxxx Xxxxxxx
With a copy to:
Winthrop, Xxxxxxx Xxxxxx & Xxxxxxx
Financial Centre
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Any notice or notification to the Company shall be addressed to the
Company at:
Gene Logic Inc.
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
With a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attention: D. Xxxxxxx Xxxx, Esq.
Any notice or notification to either Selling Stockholder shall be
addressed to such Selling Stockholder, care of the Company at:
Gene Logic Inc.
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attention: D. Xxxxxxx Xxxx, Esq.
Any notice or notification shall (subject to confirmation when required)
take effect at the time of receipt.
15. Parties. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Underwriters, the Company, the Selling Stockholders
and the controlling persons,
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directors, officers, employees and agents referred to in Section 7 and 8, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Shares from any of the Underwriters. Notwithstanding the foregoing,
this Agreement and the terms and provisions hereof are, unless otherwise
specified herein, for the sole benefit of only those persons, except that (a)
the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of each
Purchaser Indemnified Party and (b) the indemnity agreement of the Underwriters
contained in Section 7 hereof shall be deemed to be for the benefit of each
Company Indemnified Party.
16. 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 New York or the courts of
the State of New York in each case located in the City and County of New York
(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 an office
at New York, New York, United States 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 New York.
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 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 Judgment,
including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
17. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
contracts made and to be performed within the State of New York. This Agreement
may be executed in one or more counterparts, and if executed in more than one
counterpart, the executed counterparts shall together constitute a single
instrument. The descriptive headings in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
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Time shall be of the essence of this 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.
If any provision or portion of any provision of the Agreement, or the
application of any such provision or any portion thereof to any party or
circumstances, shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining portion of such provision and the remaining
provisions of this agreement, and the application of such provision or portion
of such provision as is held invalid or unenforceable to any parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and such remaining portion of such provision and
the remaining provisions of this Agreement shall continue to be valid and in
full force and effect.
If the foregoing is in accordance with the Underwriters' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Underwriters in accordance with its terms.
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This Agreement may be signed in counterparts which together shall
constitute one and the same instrument.
Very truly yours,
Gene Logic Inc.
By: __________________________________
Name:
Title:
______________________________________
Xxxxxxx X. Xxxxxxx, M.D., Ph.D.
______________________________________
Xxxx X. Xxxxxxx
______________________________________
Y. Xxxxxxx Xxxxxxxx, M.D.
______________________________________
Xxxxxxx X. Xxxxxx, Ph.D.
The foregoing Underwriting Agreement is hereby confirmed and accepted as
of the date first above written.
ING Barings LLC
By: __________________________________
Name:
Title:
For itself and the other several Underwriters named in Schedule I to the
foregoing Agreement.
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SCHEDULES
I - Underwriters
II - Selling Stockholders
1(n) - Intellectual Property
Exhibits
A - Form of Lock-Up Agreement
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SCHEDULE I
Number of Firm
Shares to be
Underwriter Purchased
----------- ---------
ING Barings LLC...............................
Xxxxxxxxx & Xxxxx LLC.........................
FleetBoston Xxxxxxxxx Xxxxxxxx Inc............
Xxxx Xxxxxxxx Incorporated....................
---------
Total............................. 3,500,000
=========
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SCHEDULE II
Number of Selling
Stockholder Option
Selling Stockholder Type of Selling Stockholder Shares to be Sold
------------------- --------------------------- -----------------
Xxxxxxx X. Xxxxxxx, M.D., Ph.D. Group A Selling Stockholder 60,000
Xxxx X. Xxxxxxx Group A Selling Stockholder 40,000
Y. Xxxxxxx Xxxxxxxx, M.D. Group B Selling Stockholder 25,000
Xxxxxxx X. Xxxxxx, Ph.D. Group B Selling Stockholder 5,000
-------
Total............................................ 130,000
=======
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Exhibit A
Form of Lock-Up Agreement
ING Barings LLC
Xxxxxxxxx & Xxxxx LLC
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxx Xxxxxxxx Xxxxxxx
As Representatives of the Several Underwriters
c/o ING Barings LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Gene Logic Inc.
Dear Sirs:
The undersigned is the record owner of shares of common stock, par value
$.01 per share, and/or warrants or options to purchase shares of common stock
and/or shares of preferred stock, par value $.01 per share (such shares of
common stock, warrants and options herein referred to as the "Securities"), of
Gene Logic Inc., a Delaware corporation (the "Company"). The undersigned
understands that the Company currently intends to file with the Securities and
Exchange Commission a Registration Statement on Form S-3 (the "Registration
Statement"), for the registration of the Company's common stock, which will be
underwritten by a group of underwriters for whom ING Barings LLC, Xxxxxxxxx &
Xxxxx LLC, FleetBoston Xxxxxxxxx Xxxxxxxx Inc. and Xxxx Xxxxxxxx Xxxxxxx will
act as representatives.
The undersigned agrees that the undersigned will not, without the prior
consent of ING Barings LLC, directly or indirectly for a period of 90 days from
the date the Registration Statement has been declared effective: (1) offer for
sale, contract to sell, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition by any person at any time in the future of) any Securities or
securities convertible into, exercisable or exchangeable for, or represent the
right to receive, Securities or sell or grant options, rights or warrants with
respect to any Securities or register for sale any outstanding Securities; or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such Securities or securities, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Securities or other
securities, in cash or otherwise.
Notwithstanding the foregoing, (i) gifts or (ii) transfers to (A) the
undersigned's immediate family or (B) a trust or partnership the beneficiaries
and sole partners of which are members of the undersigned's immediate family
and/or the undersigned, shall not be prohibited by this agreement if the donee
or transferee agrees in writing to be bound by the foregoing in the same manner
as it applies to the undersigned. "Immediate family" shall mean spouse, lineal
descendants, father, mother, brother or sister to the transferor. This agreement
shall not prohibit
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the exercise of any stock options, except that the Securities obtained upon any
such exercise shall be subject to the limitations on disposition herein.
Very truly yours,
________________________________ By: _____________________________________
Legal name of Stockholder as it Name:
appears on the Corporate Records Title:
2
