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EXHIBIT 1
3,000,000 Shares
DIACRIN, INC.
Common Stock
UNDERWRITING AGREEMENT
_________, 2000
PAINEWEBBER INCORPORATED
NOMURA INTERNATIONAL PLC
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Diacrin, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Company"), proposes to sell an aggregate of
3,000,000 shares (the "Firm Shares") of the Company's Common Stock, $0.01 par
value per share (the "Common Stock"), to you and to the other underwriters named
in Schedule I (collectively, the "Underwriters"), for whom you are acting as
representatives (the "Representatives"). The Company has also agreed to grant to
you and the other Underwriters an option (the "Option") to purchase up to an
additional 450,000 shares of Common Stock (the "Option Shares") on the terms and
for the purposes set forth in Section 1(b). The Firm Shares and the Option
Shares are hereinafter collectively referred to as the "Shares."
The public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company and the Representatives, acting on behalf of
the several Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and, unless the
context otherwise indicates, all references contained herein to "this Agreement"
and to the phrase "herein" shall be deemed to include the Price Determination
Agreement.
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The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions of this Agreement, the Company agrees to sell to each
Underwriter named on Schedule I, and each Underwriter, severally and not
jointly, agrees to purchase from the Company at the purchase price per share for
the Firm Shares to be agreed upon by the Representatives and the Company in
accordance with Section 1(c) or 1(d) hereof and set forth in the Price
Determination Agreement, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I, plus such additional number of Firm Shares
which such Underwriter may become obligated to purchase pursuant to Section 8
hereof. Schedule I may be attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of
this Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 450,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for the Firm
Shares. The Option may be exercised only to cover over-allotments in the sale of
the Firm Shares by the Underwriters and may be exercised in whole or in part at
any time (but not more than once) on or before the 30th day after the date of
this Agreement (or, if the Company has elected to rely on Rule 430A, on or
before the 30th day after the date of the Price Determination Agreement), upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c) If the Company has elected to rely on Rule
430A, the public offering price per share for the Firm Shares and the purchase
price per share for the Firm Shares to be paid by the several Underwriters shall
be agreed upon and set forth in the Price Determination Agreement. In the event
such price has not been agreed upon and the Price Determination Agreement has
not been executed by the close of business on the fourteenth business day
following the date on which the Registration Statement (as hereinafter defined)
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 6 shall remain in effect.
(d) If the Company has elected not to rely on
Rule 430A, the public offering price per share for the Firm Shares and the
purchase price per share for the Firm Shares to be paid by the several
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement, which shall be dated the date hereof, and an
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amendment to the Registration Statement containing such per share price
information shall be filed before the Registration Statement becomes effective.
2. DELIVERY AND PAYMENT. The Firm Shares to be purchased
by each Underwriter hereunder, in definitive form, and in such denominations and
registered in such names as the Representatives may request upon at least 48
hours prior notice to the Company, shall be delivered by or on behalf of the
Company to the Representatives, through the facilities of the Depository Trust
Company ("DTC"), for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of
Federal Funds or similar same day funds to an account designated in writing by
the Company to PaineWebber Incorporated at least one business day prior to the
Closing Date (as hereinafter defined). Such payment shall be made at 10:00 a.m.,
New York City time, on the third business day (or fourth business day, if the
Price Determination Agreement is executed after 4:30 p.m.) after the date on
which the first bona fide offering of the Shares to the public is made by the
Underwriters or at such time on such other date, not later than ten business
days after such date, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Closing Date").
The Company will cause the certificates representing the Firm Shares to be made
available for checking and packaging at least 24 hours prior to the Closing Date
at the office of DTC or its designated custodian (the "Designated Office").
To the extent the Option is exercised, delivery of the Option
Shares against payment by the Underwriters (in the manner specified above) will
take place at the time and date (which may be the Closing Date) specified in the
Option Shares Notice.
The documents to be delivered to the Representatives on or
prior to the Closing Date or the Option Closing Date, as the case may be, under
Section 5 hereof will be delivered to the offices of Shearman & Sterling, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the Shares shall be delivered to
the Designated Office.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Firm Shares and Option Shares by the
Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and Option
Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use
of Form S-3 and a registration statement (Registration No. 333-30968) on Form
S-3 relating to the Shares, including a preliminary prospectus and such
amendments to such registration statement as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of
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the Securities and Exchange Commission (the "Commission") thereunder, and has
been filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule
430A") of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments and
of each related preliminary prospectus have been delivered to the
Representatives. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A or Rule 434 of the Rules and Regulations. If
the Company files a registration statement to register a portion of the Shares
and relies on Rule 462(b) of the Rules and Regulations for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to the "Registration Statement"
shall be deemed to include the Rule 462 Registration Statement, as amended from
time to time. The term "Prospectus" means the prospectus as first filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such
filing is required, the form of final prospectus included in the Registration
Statement at the Effective Date. Any reference herein to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on or before the Effective Date or the date of
such preliminary prospectus or the Prospectus, as the case may be. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date, or the date of any preliminary prospectus or the
Prospectus, as the case may be, and deemed to be incorporated therein by
reference.
(b) On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times prior to and including the Closing Date and, if later,
the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included or incorporated by reference in the Prospectus, did or will
comply with all applicable provisions of the Act, the Exchange Act, the rules
and regulations thereunder (the "Exchange Act Rules and Regulations") and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations. On the Effective Date and when any
post-effective amendment to the Registration Statement becomes effective, no
part of the Registration Statement or any such amendment did or will contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the
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statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing representations and warranties in this
Section 3(b) do not apply to any statements or omissions made in reliance on and
in conformity with information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto. For
all purposes of this Agreement, the Company and the Underwriters acknowledge
that the information set forth on the cover page of the Prospectus with respect
to the price to the public and underwriting discounts and commissions and the
statements set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives specifically for inclusion in the
preliminary prospectus, the Registration Statement or the Prospectus. The
Company has not distributed any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
preliminary prospectus, the Prospectus or any other materials, if any, permitted
by the Act.
(c) The documents which are incorporated by
reference in the preliminary prospectus and the Prospectus or from which
information is so incorporated by reference, when they become effective or were
filed with the Commission, as the case may be, complied in all material respects
with the requirements of the Exchange Act and the Exchange Act Rules and
Regulations; and any documents so filed and incorporated by reference subsequent
to the Effective Date shall, when they are filed with the Commission, conform in
all material respects with the requirements of the Act and the Exchange Act, as
applicable, the Exchange Act Rules and Regulations and the Rules and
Regulations.
(d) The Company is, and at the Closing Date, or
the Option Closing Date, as the case may be, will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Diacrin/Genzyme LLC (the "Joint Venture") is, and
at the Closing Date, or the Option Closing Date, as the case may be, will be, a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company and the Joint
Venture has, and at the Closing Date or the Option Closing Date, as the case may
be, will have, full power and authority to own or lease all the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and the Prospectus. Each of the Company and the Joint Venture is, and
at the Closing Date or the Option Closing Date, as the case may be, will be,
duly licensed or qualified to do business and in good standing as a foreign
corporation or limited liability company, as the case may be, in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary and where the failure to be so licensed or qualified
would have a material adverse effect on the Company or the Joint Venture. Except
for its 50% equity interest in the Joint Venture, the Company does not own, and
at the Closing Date or the Option Closing Date, as the case may be, will not
own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity. Complete and
correct copies of the certificate of incorporation and of the by-laws of the
Company and the Certificate of Formation and the Operating Agreement of the
Joint Venture and all amendments thereto
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have been delivered to the Representatives, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(e) The outstanding shares of Common Stock and
the Company's other capital stock have been duly authorized, validly issued,
fully paid and nonassessable and are not, from and after the Closing Date,
subject to any preemptive or similar right. The description of the Company's
capital stock in the Registration Statement and the Prospectus is, and at the
Closing Date or, if later, the Option Closing Date, will be, complete and
accurate in all material respects. Except as set forth in the Prospectus, the
Company does not have outstanding, and at the Closing Date and, if later, the
Option Closing Date, will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, any shares
of Common Stock, other than options to purchase common stock granted by the
Company after the date as of which information is provided in the Prospectus.
(f) The Shares have been duly authorized and,
upon their issuance pursuant to the terms described in the Prospectus and this
Agreement, will be validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right.
(g) The financial statements and schedules
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the financial condition of each of the Company and the
Joint Venture as of the respective dates thereof and the results of operations
and cash flows of each of the Company and the Joint Venture for the respective
periods covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Company or the Joint Venture are required by the Act or the
Rules and Regulations to be included in the Registration Statement or the
Prospectus. Xxxxxx Xxxxxxxx LLP and PriceWaterhouseCoopers LLC (the
"Accountants") who have reported on the financial statements and schedules of
the Company and the Joint Venture, respectively, are each independent
accountants with respect to the Company and the Joint Venture, respectively, as
required by the Act and the Rules and Regulations. The statements included in
the Registration Statement with respect to the Accountants pursuant to Rule 509
of Regulation S-K of the Rules and Regulations are true and correct in all
material respects.
(h) Each of the Company and the Joint Venture
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
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assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(i) Subsequent to the respective dates as of
which information is given in the Registration Statement and the Prospectus and
prior to the Closing Date or, if later, the Option Closing Date, except as set
forth in or contemplated by the Registration Statement and the Prospectus, (i)
there has not been and will not have been any change in the capitalization of
the Company (other than the grant or exercise of options approved by the Board
of Directors pursuant to the Company's option plans described in the Prospectus
or the exercise of warrants to purchase the Company's common stock outstanding
as of the date of the Prospectus), or any material change in the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and the Joint Venture, taken as a whole, arising for
any reason whatsoever, (ii) neither the Company nor the Joint Venture has
incurred nor will it incur any material liabilities or obligations, direct or
contingent, nor has it entered into nor will it enter into any material
transactions other than, with respect to the Company, pursuant to this Agreement
and the transactions referred to herein and (iii) the Company has not and will
not have paid or declared any dividends or other distributions of any kind on
any class of its capital stock.
(j) The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(k) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings pending
or, to the Company's knowledge, threatened against or affecting the Company or
the Joint Venture or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or the Joint
Venture or any of their respective directors or officers in their capacity as
such, before or by any Federal or state court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding could reasonably be expected to have
a material adverse effect on the Company or the Joint Venture or its business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and the Joint Venture, taken as a whole.
(l) Except as disclosed in the Prospectus, each
of the Company and the Joint Venture has, and at the Closing Date and, if later,
the Option Closing Date, will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry on its
business as contemplated in the Prospectus which if the Company or the Joint
Venture did not possess, would have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company and the Joint Venture, taken as a whole, (ii) complied
in all respects with all laws, regulations and orders applicable to it or its
business, except where any violation would not have a material adverse effect on
the condition (financial or otherwise), results of operations, business or
prospects of the Company and the Joint Venture, taken as a whole, (iii)
performed in all material respects
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all its obligations required to be performed by it, and is not, and at the
Closing Date or, if later, the Option Closing Date, will not be, in default,
under any indenture, mortgage, deed of trust, voting trust agreement, loan
agreement, bond, debenture, note agreement, lease, contract or other agreement
or instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected, except where such defaults
would not have a material adverse effect on the condition (financial or
otherwise), results of operations, business or prospects of the Company and the
Joint Venture, taken as a whole, and (iv) complied in all respects with the
provisions of its certificate of incorporation and by-laws or Certificate of
Formation and Operating Agreement, as the case may be, and is not, and at the
Closing Date, and, if later, the Option Closing Date, will not be, in violation
of any provision of its certificate of incorporation or by-laws or Certificate
of Formation and Operating Agreement, as the case may be. To the knowledge of
the Company, no other party under any material contract or other agreement to
which the Company or the Joint Venture is a party is in default in any material
respect thereunder.
(m) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of this Agreement by the Company or in connection with
the taking by the Company of any action contemplated hereby, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Shares.
(n) The Company has full corporate power and
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in accordance
with the terms hereof, except as enforceability may be limited (i) by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity) and limitations on equitable remedies
(including principles of commercial reasonableness or conscionability and an
implied covenant of good faith and fair dealing), (ii) by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, and (iii) with regard to provisions relating to indemnity or
contribution for liabilities arising under federal and state securities laws.
The performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby and the application of the net proceeds from
the offering and sale of the Shares in the manner set forth in the Prospectus
under "Use of Proceeds" will not (A) result in the creation or imposition of any
lien, charge or encumbrance upon any of the material assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of or
conflict with any of the terms or provisions of, or constitute a default under
the certificate of incorporation or by-laws of the Company, or any statute,
judgment, ruling, decree, order, rule or regulation of any court or other
governmental agency or body applicable to the business of the Company which
breach, violation, conflict or default could have a material adverse effect on
the business, properties, business prospects, condition (financial or otherwise)
or
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results of operations of the Company, or (B) result in the creation or
imposition of a lien, charge or encumbrance upon any of the material assets of
the Company pursuant to the terms or provisions of, or result in a material
breach or violation of or conflict with any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
any contract or other agreement to which the Company is a party or by which the
Company or any of its properties is bound or affected, which breach, violation,
conflict or default could have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company.
(o) Each of the Company and the Joint Venture
has good and marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Prospectus or are not material
to the business of the Company or the Joint Venture. Each of the Company and the
Joint Venture has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company or the Joint Venture.
(p) There is no document or contract of a
character required by the Act or the Rules and Regulations to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required. All material
contracts to which the Company or the Joint Venture is a party have been duly
authorized, executed and delivered by the Company or the Joint Venture, as the
case may be, constitute valid and binding agreements of the Company or the Joint
Venture, as the case may be, and are enforceable against the Company or the
Joint Venture, as the case may be, in accordance with the terms thereof, except
as enforceability may be limited (i) by general principles of equity (regardless
of whether such enforceability is considered in a proceeding at law or in
equity) and limitations on equitable remedies (including principles of
commercial reasonableness or conscionability and an implied covenant of good
faith and fair dealing), (ii) by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, (iii) with
regard to provisions relating to indemnity or contribution for liabilities
arising under federal and state securities laws and (iv) limitations on the
enforceability of agreements not to compete.
(q) No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Representatives was
or will be, when made, inaccurate, untrue or incorrect in any material respect.
(r) Neither the Company nor, to the Company's
knowledge, any of its directors, officers or controlling persons has taken,
directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
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(s) Except as disclosed in the Prospectus and as
have been duly and validly waived with respect to the offering of the Shares, no
holder of securities of the Company has rights to the registration of any
securities of the Company because of the filing of the Registration Statement.
(t) The Shares have been approved for listing by
the Nasdaq National Market.
(u) Neither the Company nor the Joint Venture is
involved in any material labor dispute nor, to the Company's knowledge, is any
such dispute threatened.
(v) Each of the Company and the Joint Venture
owns, or is licensed or otherwise has the full right to use, all patents, patent
rights, licenses, inventions, trademarks, service marks, trade secrets, trade
names, copyrights, know-how and proprietary techniques, including processes and
substances, and other intellectual property rights, described or referred to in
the Prospectus as owned or used by it or, except as disclosed in the Prospectus,
which are necessary for the conduct of its business, without material change
from that described in the Prospectus, which, if the Company or the Joint
Venture did not own or otherwise have the right to use, could result in a
material adverse effect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
the Joint Venture, taken as a whole. No claims have been asserted by any person
against the Company or, to the best of the Company's knowledge, the Joint
Venture, to the use of any of their respective intellectual property rights or
challenging or questioning the validity or effectiveness of any such
intellectual property rights. The use, in connection with the business and
operations of the Company or the Joint Venture, of such intellectual property
rights does not and will not, to the Company's knowledge, infringe on the valid
intellectual property rights of any person.
(w) None of the Company, the Joint Venture or,
to the Company's knowledge, any employee or agent of the Company or the Joint
Venture has made any payment of funds of the Company or the Joint Venture or
received or retained any funds in violation of any law, rule or regulation or of
a character required to be disclosed in the Prospectus.
(x) Neither the Company nor the Joint Venture
has received any communication (whether written or oral) relating to the
termination or threatened termination or modification or threatened modification
of any collaborative research, employment, consulting, licensing, marketing,
research and development, cooperative or any similar agreement which is material
to the Company and the Joint Venture, taken as a whole, and to which the Company
or the Joint Venture is a party, including without limitation all agreements
filed by the Company as exhibits to the Registration Statement.
(y) Except as described in the Prospectus, each
of the Company and the Joint Venture maintains insurance of the types and in
amounts generally deemed adequate for its business as presently conducted and
consistent with insurance coverage
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maintained by similar companies and businesses, all of which insurance is in
full force and effect.
(z) Neither the Company nor, to the Company's
knowledge, the Joint Venture (i) has received notice of violation of any
applicable environmental, health or safety statute, regulation, ordinance,
decree or permit binding upon it with respect to its business which it has not
corrected, (ii) has failed or is failing to comply in any material respect with
any applicable environmental, health or safety law, regulation or permit and
(iii) is subject to any judgment, order, writ, injunction or decree of any
court, governmental authority, agency or arbitration panel with respect to any
environmental, health or safety matter.
(aa) Each of the Company and the Joint Venture
has filed all necessary income tax returns and all necessary state income,
franchise, sales and use tax returns as required by law or regulation, domestic
or foreign, and has paid all taxes shown thereon as due, and the Company has no
knowledge of any tax deficiency which has been or might be asserted against it
or the Joint Venture which could materially and adversely affect the business of
the Company and the Joint Venture, taken as a whole; all tax liabilities are
adequately provided for on the books of the Company and the Joint Venture.
(bb) To the Company's knowledge, if any full-time
employee identified in the Prospectus has entered into any noncompetition,
nondisclosure, confidentiality or other similar agreement with any other party
other than the Company, such employee is neither in violation thereof nor is
expected to be in violation thereof as a result of the business conducted or
expected to be conducted by the Company as described in the Prospectus or such
person's performance of such person's obligations to the Company; and the
Company has not received written notice that any consultant or scientific
advisor of the Company is in violation of any noncompetition, nondisclosure,
confidentiality or similar agreement.
(cc) With respect to each employee benefit plan,
program and arrangement (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) maintained or contributed to by the Company, or
with respect to which the Company could incur any liability under ERISA
(collectively, the "Benefit Plans"), no event has occurred and, to the Company's
knowledge, there exists no condition or set of circumstances, in connection with
which the Company could be subject to any liability under the terms of such
Benefit Plan, applicable law (including, without limitation, ERISA and the
Internal Revenue Code of 1986, as amended) or any applicable agreement that
could materially adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company.
4. AGREEMENTS OF THE COMPANY. The Company agrees with
the several Underwriters as follows:
(a) The Company will not, either prior to the
Effective Date or thereafter during such period as the Prospectus is required by
law to be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or
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supplement to the Registration Statement or the Prospectus, unless a copy
thereof shall first have been submitted to the Representatives within a
reasonable period of time prior to the filing thereof and the Representatives
shall not have objected thereto in good faith.
(b) The Company will use its best efforts to
cause the Registration Statement to become effective (if it is not already
effective), and will notify the Representatives promptly, and, if requested,
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements to
the Registration Statement or the Prospectus or for additional information, (3)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose or the threat thereof, (4) of the happening of any event during the
period which the Prospectus is required by law to be delivered in connection
with the offering or sale of the Shares that in the judgment of the Company
makes any statement made in the Registration Statement or the Prospectus untrue
or that requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5) of receipt by the
Company or any representative or attorney of the Company of any other
communication from the Commission relating to the Company, the Registration
Statement, any preliminary prospectus or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company has
omitted any information from the Registration Statement pursuant to Rule 430A,
the Company will use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to Rule 430A and to notify
the Representatives promptly of all such filings.
(c) The Company will furnish to the
Representatives, without charge, two signed copies of the Registration Statement
and of any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus),
and will furnish to the Representatives, without charge, for transmittal to each
of the other Underwriters, a copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
but without exhibits.
(d) The Company will comply with all the
provisions of any undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from
time to time, the Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. The Company consents to the use
of the Prospectus or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur
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which in the judgment of the Company or counsel to the Underwriters should be
set forth in the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the Company
will forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each of the Underwriters,
without charge, such number of copies thereof as the Representatives may
reasonably request. The Company shall not file any document under the Exchange
Act before the termination of the offering of the Shares by the Underwriters if
such document would be deemed to be incorporated by reference into the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(f) Prior to any public offering of the Shares
by the Underwriters, the Company will cooperate with the Representatives and
counsel to the Underwriters in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; PROVIDED, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing
on the Effective Date, the Company will furnish to the Representatives and each
other Underwriter who may so request copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and will
furnish to the Representatives and each other Underwriter who may so request a
copy of each annual or other report it shall be required to file with the
Commission.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the Registration Statement and exhibits
thereto, each preliminary prospectus, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (2) the preparation
and delivery of certificates representing the Shares, (3) the word processing,
printing and reproduction of this Agreement, the Agreement Among Underwriters,
any Dealer Agreements and any Underwriters' Questionnaire, (4) furnishing
(including costs of shipping, mailing and courier) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and all
amendments and
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supplements thereto, as may be reasonably 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, (5) the listing of the Shares on the Nasdaq National Market,
(6) any filings required to be made by the Underwriters with the NASD, and the
reasonable fees, disbursements and other charges of counsel for the Underwriters
in connection therewith, (7) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 4(f), including the reasonable fees,
disbursements and other charges of counsel to the Underwriters in connection
therewith, and the preparation and printing of preliminary, supplemental and
final Blue Sky memoranda, (8) counsel to the Company, (9) the transfer agent for
the Shares and (10) the Accountants.
(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8) or if for any reason the Company shall be unable to perform its
obligations hereunder and this Agreement is terminated by the Underwriters as a
result thereof, the Company will reimburse the several Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly
or indirectly, take any action intended, or which might reasonably be expected,
to cause or result in, or which will constitute, stabilization of the price of
the shares of Common Stock to facilitate the sale or resale of any of the
Shares.
(l) The Company will apply the net proceeds 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".
(m) The Company will not, and will cause each of
its executive officers, directors and each beneficial owner of more than 5% of
the outstanding shares of Common Stock, other than the State of Wisconsin
Investment Board, to enter into agreements with the Representatives in the form
set forth in Exhibit B to the effect that they will not, for a period of 90 days
after the commencement of the public offering of the Shares, without the prior
written consent of the Representatives, offer to sell, contract to sell, grant
any option for the sale of or otherwise dispose of any shares of Common Stock or
securities convertible into Common Stock or rights to acquire such shares (other
than by the Company pursuant to stock option plans or in connection with other
employee incentive compensation arrangements) or in connection with the warrants
outstanding as of the date of the Prospectus.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement
has become effective shall be received by the Representatives not later than
5:00 p.m., New York City time, on the date of this Agreement or at such later
date and time as shall be consented to
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in writing by the Representatives and all filings required by Rule 424 of the
Rules and Regulations and Rule 430A shall have been made.
(b) (i) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by the Commission,
(ii) no order suspending the effectiveness of the Registration Statement or 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, to the Company's knowledge,
contemplated by the Commission or the authorities of any such jurisdiction,
(iii) any request for additional information on the part of the staff of the
Commission or any such authorities shall have been complied with and (iv) 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
the Representatives and the Representatives did not object thereto in good
faith, and the Representatives shall have received certificates, dated the
Closing Date and, if applicable, the Option Closing Date and signed on behalf of
the Company by the Chief Executive Officer of the Company and the principal
financial officer of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i) there
shall not have been, and no development shall have occurred which could
reasonably be expected to result in, a material adverse change in the general
affairs, business, business prospects, properties, management, condition
(financial or otherwise) or results of operations of the Company or the Joint
Venture, whether or not arising from transactions in the ordinary course of
business, in each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company nor the
Joint Venture shall have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, 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 the judgment of the
Representatives any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Shares by the Underwriters at the public
offering price.
(d) 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, the Joint Venture or any of the Company's 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 would materially and adversely affect the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the Company or the Joint Venture.
(e) Each of the representations and warranties
of the Company contained herein shall be true and correct in all material
respects at the Closing Date, as if
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made at the Closing Date, and, with respect to the Option Shares, at the Option
Closing Date, as if made at the Option Closing Date, and all covenants and
agreements contained herein to be performed on the part of the Company and all
conditions contained herein to be fulfilled or complied with by the Company at
or prior to the Closing Date and, with respect to the Option Shares, at or prior
to the Option Closing Date, shall have been duly performed, fulfilled or
complied with in all material respects.
(f) The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and satisfactory in form and substance to counsel for the
Underwriters, from Xxxx and Xxxx LLP, counsel to the Company, to the effect set
forth in Exhibit C.
(g) The Representatives shall have received an
opinion, dated the Closing Date and the Option Closing Date, and satisfactory in
form and substance to counsel for the Underwriters, from Lahive & Xxxxxxxxx,
patent counsel to the Company,
(h) The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, dated
the Option Closing Date, from Shearman & Sterling, counsel to the Underwriters,
with respect to the Registration Statement, the Prospectus and this Agreement,
which opinion shall be satisfactory in all respects to the Representatives.
(i) Concurrently with the execution and delivery
of this Agreement or, if the Company elects to rely on Rule 430A, on the date of
the Prospectus, each of the Accountants shall have furnished to the
Representatives a letter, dated the date of its delivery, addressed to the
Representatives and in form and substance satisfactory to the Representatives,
confirming that they are independent accountants with respect to the Company or
the Joint Venture, as the case may be, as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information for the Company or the Joint Venture, as the case may be,
contained in the Registration Statement or incorporated by reference therein. At
the Closing Date and, as to the Option Shares, the Option Closing Date, each of
the Accountants shall have furnished to the Representatives a letter, dated the
date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from such Accountants,
that nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the letter) not
more than three days prior to the Closing Date and the Option Closing Date which
would require any change in their letter dated the date of the Prospectus, if it
were required to be dated and delivered at the Closing Date and the Option
Closing Date.
(j) At the Closing Date and, as to the Option
Shares, the Option Closing Date, there shall be furnished to the Representatives
an accurate certificate, dated the date of its delivery, signed on behalf of the
Company by each of the Chief Executive Officer and the principal financial
officer of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus
(including any documents filed
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under the Exchange Act and deemed to be incorporated by reference into
the Prospectus) and (A) as of the date of such certificate, such
documents are true and correct in all material respects and do not
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not untrue or misleading and
(B) since the Effective Date or, if the Company elects to rely on Rule
430A, since the date of the Prospectus, to his knowledge, no event has
occurred as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in light of the
circumstances in which they were made, not untrue or misleading in any
material respect and there has been no document required to be filed
under the Exchange Act and the Exchange Act Rules and Regulations that
upon such filing would be deemed to be incorporated by reference into
the Prospectus that has not been so filed.
(ii) Each of the representations and
warranties of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate is delivered,
true and correct in all material respects;
(iii) Each of the covenants required
herein to be performed by the Company on or prior to the delivery of
such certificate has been duly, timely and fully performed in all
material respects and each condition herein required to be complied
with by the Company on or prior to the date of such certificate has
been duly, timely and fully complied with in all material respects; and
(iv) Since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, (A) there has not been, and no development has occurred
which could reasonably be expected to result in, a material adverse
change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results
of operations of the Company or the Joint Venture, whether or not
arising from transactions in the ordinary course of business, in each
case other than as set forth in or contemplated by the Registration
Statement and the Prospectus and (B) neither the Company nor the Joint
Venture has sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty,
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.
(k) On or prior to the Closing Date, the
Representatives shall have received the executed agreements referred to in
Section 4(m).
(l) The Shares shall be qualified for sale in
such states as the Representatives may reasonably request and each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.
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(m) Prior to the Closing Date, the Shares shall
have been duly authorized for listing by the Nasdaq National Market upon
official notice of issuance.
(n) The National Association of Securities
Dealers, Inc. shall have approved the underwriting terms and arrangements and
such approval shall not have been withdrawn or limited.
(o) The Company shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus or any documents filed
under the Exchange Act and deemed to be incorporated by reference into the
Prospectus, as to the accuracy at the Closing Date and the Option Closing Date
of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder, or as to the
fulfillment of the conditions concurrent and precedent to the obligations
hereunder of the Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), as and when incurred, to
which any Underwriter, or any such person, may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Shares under the securities laws
thereof or filed with the Commission, (ii) the omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading or (iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection with, or
relating in any manner to, the Shares or the offering contemplated hereby, and
which is included as part of or referred to in any loss, claim, liability,
expense or damage arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable under this clause
(iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such
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underwriter through its gross negligence or willful misconduct); provided that
(i) the Company will not be liable to the extent that such loss, claim,
liability, expense or damage arises from the sale of the Shares in the public
offering to any person by an Underwriter and is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of any Underwriter expressly for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus and (ii) the Company will not be liable to any Underwriter, the
directors, officers, employees or agents of such Underwriter or any person
controlling such Underwriter with respect to any loss, claim, liability, charge
or damage arising out of or based on any untrue statement or alleged untrue
statement or omission or alleged omission to state a material fact in any
preliminary prospectus which is corrected in the Prospectus if the person
asserting such loss, claim, liability, charge or damage purchased Shares from
such Underwriter but was not sent or given a copy of the Prospectus at or prior
to the written confirmation of the sale of such Shares to such person. This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) Each Underwriter will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission of a material fact made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives on behalf of such
Underwriter expressly for use in the Registration Statement, the Preliminary
Prospectus or the Prospectus. This indemnity will be in addition to any
liability that each Underwriter might otherwise have; provided, however, that in
no case shall any Underwriter be liable or responsible for any amount in excess
of the underwriting discounts and commissions received by such Underwriter.
(c) Any party that proposes to assert the right
to be indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified party of
its election to
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assume the defense, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses except as provided below and except for
the reasonable costs of investigation subsequently incurred by the indemnified
party in connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm (in addition to
local counsel) admitted to practice in such jurisdiction at any one time for all
such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
Notwithstanding any other provision of this Section 6 (c), if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement effected without its written
consent if (i) such settlement is entered into more than 60 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted, but
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after deducting any contribution received by the Company from persons other than
the Underwriters, such as persons who control the Company within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Representatives on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts and commissions received by
it and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 6(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 6(d), any person who controls a party to
this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer and director of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into
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pursuant to the last sentence of Section 6(c) hereof, no party will be liable
for contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of the Shares and payment therefore or (iii) any
termination of this Agreement.
7. TERMINATION. The obligations of the several
Underwriters under this Agreement may be terminated at any time on or prior to
the Closing Date (or, with respect to the Option Shares, on or prior to the
Option Closing Date), by notice to the Company from the Representatives, without
liability on the part of any Underwriter to the Company, if, prior to delivery
and payment for the Shares (or the Option Shares, as the case may be), (i) there
has been, since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the Company's business,
properties, business prospects, condition (financial or otherwise) or results of
operations, (ii) trading in any of the equity securities of the Company shall
have been suspended by the Commission, the NASD, by an exchange that lists the
Shares or by the Nasdaq Stock Market, (iii) trading in securities generally on
the New York Stock Exchange or the Nasdaq Stock Market shall have been suspended
or limited or minimum or maximum prices shall have been generally established on
such exchange or over the counter market, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or the NASD or any court or other governmental authority, (iv) a
general banking moratorium shall have been declared by either Federal or New
York State authorities or (v) any material adverse change in the financial or
securities markets in the United States or in political, financial or economic
conditions in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of a national emergency or war
or other calamity or crisis shall have occurred the effect of any of which is
such as to make it, in the sole judgment of the Representatives, impracticable
or inadvisable to market the Shares on the terms and in the manner contemplated
by the Prospectus.
8. SUBSTITUTION OF UNDERWRITERS. If any one or more of
the Underwriters shall fail or refuse to purchase any of the Firm Shares which
it or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
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increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. MISCELLANEOUS. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, Building 96, 13th Street, Charlestown Navy Yard, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: President, with a copy to Xxxx and Xxxx LLP, 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, Esq. or
(b) if to the Underwriters, to the Representatives at the offices of PaineWebber
Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department with a copy to Shearman & Sterling, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxxx. Any such notice
shall be effective only upon receipt. Any notice under Section 7 or 8 may be
made by telex or telephone, but if so made shall be subsequently confirmed in
writing.
This Agreement has been and is made solely for the benefit of
the several Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
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Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
DIACRIN, INC.
By:
---------------------
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
NOMURA INTERNATIONAL PLC
Acting on behalf of
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.
PAINEWEBBER INCORPORATED
By:
----------------------------
Title:
NOMURA INTERNATIONAL PLC
By:
-----------------------------
Title:
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SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
------------ ---------------
PaineWebber Incorporated..............................
Nomura International plc..............................
----------------
Total ................................................ 3,000,000
--------------------
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EXHIBIT A
DIACRIN, INC.
PRICE DETERMINATION AGREEMENT
_________, 2000
PAINEWEBBER INCORPORATED
NOMURA INTERNATIONAL PLC
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ______,
2000 (the "Underwriting Agreement"), among Diacrin, Inc., a Delaware corporation
(the "Company") and the several Underwriters named in Schedule I thereto or
hereto (the "Underwriters"), for whom PaineWebber Incorporated and Nomura
International plc are acting as representatives (the "U.S. Representatives").
The Underwriting Agreement provides for the purchase by the Underwriters from
the Company, subject to the terms and conditions set forth therein, of an
aggregate of 3,000,000 shares (the "Firm Shares") of the Company's common stock,
par value $0.01 per share. This Agreement is the Price Determination Agreement
referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with the Representatives as follows:
The initial public offering price per share for the Firm
Shares shall be $_______.
The purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.
The Company represents and warrants to each of the
Underwriters that the representations and warranties of the Company set forth in
Section 3 of the Underwriting Agreement are accurate as though expressly made at
and as of the date hereof.
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As contemplated by the Underwriting Agreement, attached as
Schedule I is a completed list of the several Underwriters, which shall be a
part of this Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.
If the foregoing is in accordance with your understanding of
the agreement among the Underwriters and the Company, please sign and return to
the Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
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Very truly yours,
DIACRIN, INC.
By:
---------------------
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
NOMURA INTERNATIONAL PLC
Acting on behalf of itself
themselves and as the
Representatives of the
other several Underwriters
named in Schedule I hereof.
PAINEWEBBER INCORPORATED
By:
----------------------------
Title:
NOMURA INTERNATIONAL PLC
By:
-----------------------------
Title:
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EXHIBIT B
__________, 2000
PAINEWEBBER INCORPORATED
NOMURA INTERNATIONAL plc
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In consideration of the agreement of the several Underwriters,
for which PaineWebber Incorporated and Nomura International plc (the
"Representatives") intend to act as Representatives to underwrite a proposed
public offering (the "Offering") of 3,000,000 shares of Common Stock, par value
$0.01 per share (the "Common Stock") of Diacrin, Inc., a Delaware corporation,
as contemplated by a registration statement with respect to such shares filed
with the Securities and Exchange Commission on Form S-3 (Registration No.
333-30968), the undersigned hereby agrees that the undersigned will not, for a
period of 90 days after the commencement of the public offering of such shares,
without the prior written consent of PaineWebber Incorporated, offer to sell,
sell, contract to sell, grant any option to sell, or otherwise dispose of, or
require the Company to file with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933 to register any shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or warrants or other rights to acquire shares of Common Stock of which the
undersigned is now, or may in the future become, the beneficial owner within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934).
Very truly yours,
By:
------------------------
Print Name:
------------------------
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EXHIBIT C
FORM OF OPINION OF
COUNSEL TO THE COMPANY
----------------------
[TO COME]
