EXHIBIT 1.1
[Number of Shares]
CombinatoRx, Incorporated
Common Stock
UNDERWRITING AGREEMENT
, 2005
XX XXXXX & CO., LLC
PACIFIC GROWTH EQUITIES, LLC
SUNTRUST CAPITAL MARKETS, INC.
X.X. XXXXXXX & SONS, INC.
As Representatives of the Several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. CombinatoRx, Incorporated, a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of [ ] shares of common stock, $.001 par value
(the "Common Stock"), of the Company. The aggregate of [ ] shares so proposed to
be sold is hereinafter referred to as the "Firm Stock". The Company also
proposes to sell to the Underwriters, upon the terms and conditions set forth in
Section 3 hereof, up to an additional [ ] shares of Common Stock (the "Optional
Stock"). The Firm Stock and the Optional Stock are hereinafter collectively
referred to as the "Stock". XX Xxxxx & Co., LLC ("XX Xxxxx"), Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc. are
acting as representatives of the several Underwriters and in such capacity are
hereinafter referred to as the "Representatives." As part of the offering
contemplated by this Agreement, XX Xxxxx (the "Designated Underwriter") has
agreed to reserve, out of the Firm Stock purchased by it under this Agreement,
up to [ ] shares for sale to the Company's customers and business partners and
friends of the Company's officers, directors and employees (collectively,
"Participants"), as set forth in the Prospectus (as defined herein) under the
heading "Underwriting" (the "Directed Share Program"). The Firm Stock to be sold
by the Designated Underwriter pursuant to the Directed Share Program (the
"Directed Shares") will be sold by the Designated Underwriter pursuant to this
Agreement at the public offering price. Any Directed Shares not subscribed for
by the end of the business day on which this Agreement is executed will be
offered to the public by the Underwriters as set forth in the Prospectus.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters and the Designated
Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-121173)
(including all pre-effective amendments thereto, the "Initial
Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered to
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you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Securities Act") and the rules and regulations (the "Rules and
Regulations") of the Commission thereunder, which became effective upon
filing, no other document with respect to the Initial Registration
Statement has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) of the Rules and
Regulations, is hereinafter called a "Preliminary Prospectus"); the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities
Act and deemed by virtue of Rule 430A under the Securities Act to be
part of the Initial Registration Statement at the time it was declared
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statements"; and
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Securities Act, is hereinafter called the "Prospectus". No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Securities Act. No order preventing or suspending
the use of any Preliminary Prospectus, Prospectus, or any amendment or
supplement thereto has been issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the
case may be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the
foregoing representations and warranties in this paragraph (b) shall
not apply to information contained in or omitted from the Registration
Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein, which information
the parties hereto agree is limited to the Underwriter's Information
(as defined in section 16). The Prospectus contains all required
information under Rule 430A.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Delaware, and has all
power and authority (corporate or other) necessary to own or hold its
properties and to conduct the business in which it is engaged. The
Company is duly qualified to do business and is in good standing as a
foreign corporation or other legal entity in each jurisdiction in which
its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to so qualify or
have such power or authority (i) would not have, singularly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), results of operations, business, assets or prospects of the
Company or (ii) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or to
consummate any transaction contemplated by this Agreement or the
Prospectus (any such effect as described in clauses (i) or (ii), a
"Material
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Adverse Effect"). The Company does not own or control, directly or
indirectly, any interest in any corporation, partnership, limited
liability partnership, limited liability corporation, association or
other entity. The Company has no subsidiaries (as defined in Section
14).
(d) This Agreement has been duly authorized, executed and delivered by
the Company.
(e) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable and free of any
preemptive or similar rights and will conform to the description
thereof contained in the Prospectus.
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company, have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal
and state securities laws, and conform to the description thereof
contained in the Prospectus. There are, and immediately prior to the
Closing, there will be 1,587,023 shares of common stock issued and
outstanding and 503,400 shares of Series A convertible preferred stock,
par value $0.001, 3,364,250 shares of Series B convertible preferred
stock, par value $0.001, 10,746,666 shares of Series C convertible
preferred stock, par value $0.001 and 8,292,699 shares of Series D
convertible preferred stock, par value $0.001 of the Company (such
Series A convertible preferred stock, Series B convertible preferred
stock, Series C convertible preferred stock and Series D convertible
preferred stock, collectively, the "Preferred Stock") issued and
outstanding, and 4,835,230 shares of common stock are issuable upon the
exercise of all outstanding options, warrants and convertible
securities. There are no other authorized or outstanding shares of
capital stock, or options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock
of the Company. Immediately upon the First Closing, all outstanding
shares of Preferred Stock will automatically be converted into an
aggregate of 23,391,628 shares of common stock of the Company and all
outstanding warrants, rights or other securities convertible into or
exercisable for Preferred Stock or common stock will be converted into
or exercisable or exchangeable for an aggregate of 385,155 shares of
common stock of the Company (the shares of Common Stock issued upon
conversion of outstanding Preferred Stock or upon conversion, exercise
or exchange of all outstanding warrants, rights or other securities are
collectively referred to herein as, the "Converted Common Shares").
None of the outstanding shares of Common Stock or Preferred Stock was,
and none of the Converted Common Shares will be, issued in violation of
any preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. The description
of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as
described in the Prospectus accurately and fairly present the
information required under the Securities Act to be shown with respect
to such plans, arrangements, options and rights.
(g) The execution, delivery and performance of this Agreement by the
Company, the issue and sale of the Stock by the Company and the
consummation of the transactions contemplated hereby will not (with or
without notice or lapse of time or both) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, or give rise to any right of termination, or loss of
any benefit under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property
or assets of the Company is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Company or any statute or any judgment, order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets.
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(h) Except for such consents, approvals, authorizations, registrations
or qualifications as may be required under applicable state securities
laws, the National Association of Securities Dealers, Inc. ("NASD") and
the Nasdaq Stock Market, Inc. ("Nasdaq") in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body, which has not been
obtained or taken and is not in full force and effect, is required for
the execution, delivery and performance of this Agreement by the
Company, the offer and sale of the Stock and the consummation of the
transactions contemplated hereby.
(i) Ernst & Young LLP, who have expressed their opinions on the audited
financial statements and related schedules included in the Registration
Statements and the Prospectus are registered independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(j) The financial statements, together with the related notes and
schedules, included in the Prospectus and in each Registration
Statement fairly present the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in
accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved,
provided, however, that the unaudited financial statements do not
contain all footnotes required by GAAP. The financial statements,
together with the related notes and schedules, included in the
Prospectus comply in all material respects with the Securities Act and
the Rules and Regulations thereunder. No other financial statements or
supporting schedules or exhibits are required by the Securities Act or
the Rules and Regulations thereunder to be included in the Prospectus.
(k) The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus; and, since such date, there has
not been any change in the capital stock or long-term debt of the
Company or any material adverse change, or any change or development
involving a prospective material adverse change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the Company
other than as set forth in the Prospectus.
(l) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company is a party or of
which any property or assets of the Company is the subject which is
required to be described in the Registration Statement or the
Prospectus and is not described therein, or which, singularly or in the
aggregate, if determined adversely to the Company, might have a
Material Adverse Effect; and to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or by others. The Company is in compliance with all applicable federal,
state, local and foreign laws, regulations, orders and decrees
governing its business as prescribed by the United States Food and Drug
Administration (the "FDA"), or any other federal, state or foreign
agencies or bodies, including those bodies and agencies engaged in the
regulation of pharmaceuticals or biohazardous substances or materials,
except where noncompliance would not, singularly or in the aggregate,
have a Material Adverse Effect. All preclinical and clinical studies
undertaken by or on behalf of the Company have been and are being
conducted by the Company, or to the Company's knowledge by third
parties, in compliance in all material respects with all applicable
federal, state or foreign laws, rules, orders or regulations. No filing
or submission to the FDA or any other
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federal, state or foreign regulatory body contains any material
omission or material false information.
(m) The Company (i) is not in violation of its charter or by-laws, (ii)
is not in default in any respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, lease, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject
or (iii) is not in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree or judgment to which it
or its property or assets may be subject except in the case of clauses
(ii) and (iii) of this paragraph (m) for any violations or defaults
which, singularly or in the aggregate, would not have a Material
Adverse Effect.
(n) The Company possesses all licenses, certificates, authorizations
and permits issued by, and has made all declarations and filings with,
the appropriate local, state, federal or foreign regulatory agencies or
bodies which are necessary or desirable for the ownership of its
properties or the conduct of its business as described in the
Prospectus, including without limitation all such licenses,
certificates, authorizations and permits required by the FDA or any
other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous materials, except where
any failures to possess or make the same, singularly or in the
aggregate, would not have a Material Adverse Effect; all of such
licenses, certificates, authorizations and permits are valid and in
full force and effect, except where the invalidity of such licenses,
certificates, authorizations and permits or the failure of such
licenses, certificates, authorizations and permits to be in full force
and effect would not, singularly or in the aggregate, have a Material
Adverse Effect; and the Company has not received notification of any
revocation or modification (or proceedings related thereto) of any such
license, certificate, authorization or permit and has no reason to
believe that any such license, certificate, authorization or permit
will not be renewed. The studies, tests and preclinical or clinical
trials, if any, conducted by or on behalf of the Company that are
described in the Registration Statements or the Prospectus were and, if
still pending, are being, conducted in all material respects in
accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional scientific
standards; the descriptions of the results of such studies, tests and
trials contained in the Registration Statements or the Prospectus are
accurate in all material respects; and the Company has not received any
notices or correspondence from the FDA or any foreign, state or local
governmental body exercising comparable authority requiring the
termination, suspension or material modification of any studies, tests,
or preclinical or clinical trials conducted by or on behalf of the
Company.
(o) The Company is not, or after giving effect to the offering of the
Stock and the application of the proceeds thereof as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(p) Neither the Company, nor any of its officers or directors, nor to
the knowledge of the Company any of its affiliates, has taken or will
take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or
which caused or resulted in, 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.
(q) The Company owns or possesses legally enforceable rights from all
necessary third parties (the "Licensors") to use all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, know-how
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and other intellectual property rights necessary for the conduct of its
business described in the Prospectus, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. Except where such
failure to make the same would not, singularly or in the aggregate,
have a Material Adverse Effect, the Company is listed in the records of
the appropriate United States, state, or foreign registry as the sole
current owner of record for each intellectual property registration and
application for registration owned by the Company, except for such
intellectual property applications as have been filed in the name of
employees who are contractually obligated to assign all of their rights
in and to such intellectual property applications to the Company, and
all such applications and registrations have been duly maintained, are
subsisting, in full force and effect, have not been cancelled, expired,
or abandoned. The Company has not received written notification of any
revocation or modification of any registered intellectual property
right, and has no reason to believe that any renewable registered
intellectual property right will not be renewed, other than any
revocation, modification or failure to renew that would not, singularly
or in the aggregate, have a Material Adverse Effect. The Company's
business as now conducted, and as proposed to be conducted as described
in the Prospectus, does not and will not infringe or conflict with any
patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, know-how or other intellectual property right or
franchise right of any person, except where such infringement would
not, singly or in the aggregate, have a Material Adverse Effect. There
are no oppositions, cancellations, invalidity proceedings,
re-examination proceedings, suits, arbitrations, or threatened claims
pending or for which notice has been provided or, to the knowledge of
Company, threatened, challenging the Company's ownership of, right to
use, or the validity or enforceability of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license, know-how or
other intellectual property right or franchise right of any person
which would, singularly or in the aggregate, have a Material Adverse
Effect.
(r) Patent applications for all inventions owned by or licensed to the
Company that are material to the conduct of the business of the Company
in the manner in which it has been and is contemplated to be conducted
have been duly and properly filed or caused to be filed with the United
States Patent and Trademark Office ("PTO") and, in some cases,
applicable foreign and international patent authorities. Assignments
for all patents and patent applications, including, without limitation
any continuations, divisionals, continuations-in-part, renewals,
reissues and applications for registration of any of the foregoing
(collectively, the "Patents") owned by or licensed to the Company that
are material to the conduct of the business of the Company in the
manner in which it has been and is contemplated to be conducted have
been properly executed and recorded for each named inventor. To the
knowledge of the Company, all printed publications and patent
references material to the patentability of the inventions claimed in
the Patents have been disclosed to those patent offices so requiring.
To the knowledge of the Company, each of the Company, its assignors or
the Licensors, as applicable, has met its duty of candor and good faith
to the PTO for the Patents. To the knowledge of the Company, no
material misrepresentation has been made to any patent office in
connection with the Patents. The Company is not aware of any facts
material to a determination of patentability regarding the Patents not
disclosed to the PTO or other applicable patent office. The Company is
not aware of any facts not disclosed to the PTO or other applicable
patent office that would preclude the patentability, validity or
enforceability of any patent or patent application in the Patents. The
Company has no knowledge of any facts that would preclude the Company
or the Licensors, as applicable, from having clear title to the patents
and patent applications in the Patents.
(s) To the knowledge of the Company, no third party is engaging in any
activity that infringes, misappropriates or otherwise violates any
patent, trademark, service xxxx, trade name, copyright, trade secret,
license, know-how or any other intellectual property right or franchise
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right owned by or licensed to the Company, except as described in the
Prospectus and except for such activities that, singularly or in the
aggregate, would not have a Material Adverse Effect.
(t) With respect to each material agreement governing all rights in and
to any patent, trademark, service xxxx, trade name, copyright, trade
secret, license, know-how or any other intellectual property right or
franchise right licensed by or licensed to the Company: (i) the Company
has not received any notice of indemnification, termination or
cancellation under such agreement, received any notice of breach or
default under such agreement, which breach has not been cured, or
granted to any third party any rights, adverse or otherwise, under such
agreement that would constitute a material breach of such agreement;
and (ii) neither the Company nor, to the knowledge of the Company, any
other party to such agreement, is in breach or default thereof in any
material respect, and no event has occurred that, with notice or lapse
of time, would constitute such a material breach or default or permit
termination, modification or acceleration under such agreement.
(u) Except for (i) the security interests granted to General Electric
Capital Corporation, Lighthouse Capital IV, L.P. and Lighthouse Capital
V, L.P., as described in the Registration Statement; and (ii) liens and
encumbrances which are not, singularly or in the aggregate, material in
amount, the Company has good and marketable title in fee simple to, or
has valid rights to lease or otherwise use, all items of real or
personal property which are material to the business of the Company
free and clear of all liens, encumbrances, security interests, claims
and defects.
(v) No labor disturbance by the employees of the Company exists or, to
the Company's knowledge, is imminent, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect. The Company is not aware that any key employee, officer or
significant group of employees of the Company plans to terminate
employment with the Company.
(w) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred or could reasonably be expected to occur with respect to any
employee benefit plan which, singularly or in the aggregate, could have
a Material Adverse Effect; each employee benefit plan is in compliance
in all material respects with applicable law, including ERISA and the
Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan"; and each "pension plan" (as
defined in ERISA) for which the Company would have any liability that
is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could, singularly or in the
aggregate, cause the loss of such qualification.
(x) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company (or any other entity for whose acts or omissions
the Company is or may be liable) upon any of the property now or
previously owned or leased by the Company, or upon any other property,
in violation of any statute or any ordinance, rule, regulation, order,
judgment, decree or permit or which would, under any statute or any
ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any
violation or liability which would not have, singularly or in the
8
aggregate with all such violations and liabilities, a Material Adverse
Effect; and there has been no disposal, discharge, emission or other
release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Company has knowledge,
except for any such disposal, discharge, emission, or other release of
any kind which would not have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect.
(y) The Company (i) has timely filed all necessary federal, state and
foreign income and franchise tax returns, all of which when filed were
true, complete and correct in all material respects, (ii) has paid all
federal, state, local and foreign taxes, assessments, governmental or
other charges due and payable for which it is liable, and (iii) does
not have any tax deficiency or claims outstanding or assessed or, to
the Company's knowledge, proposed against it which could reasonably be
expected to have a Material Adverse Effect. The Company has not engaged
in any transaction which is a corporate tax shelter or which could be
characterized as such by the Internal Revenue Service or any other
taxing authority. The accruals and reserves on the books and records of
the Company in respect of tax liabilities for any taxable period not
yet finally determined are adequate to meet any assessments and related
liabilities for any such period, and since [December 31, 2004] the
Company has not incurred any liability for taxes other than in the
ordinary course.
(z) The Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business
and the value of its properties and as is customary for similarly sized
companies engaged in similar businesses in similar industries.
(aa) The Company maintains a system of internal accounting and other
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) The minute books of the Company have been made available to the
Underwriters and counsel for the Underwriters, and such books (i)
contain an accurate and fair summary of all meetings and actions of the
board of directors (including each board committee) and shareholders of
the Company since the time of its incorporation through the date of the
latest meeting and action, and (ii) accurately in all material respects
reflect all transactions referred to in such minutes.
(cc) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration
Statements are accurate and complete descriptions of such documents in
all material respects. Other than as described in the Prospectus, no
such franchise, lease, contract or agreement has been suspended or
terminated for convenience or default by the Company or any of the
other parties thereto, and the Company has not received notice of, and
has no other knowledge of, any such pending or threatened suspension or
termination, except for such pending or threatened suspensions or
terminations that would not reasonably be expected to, singularly or in
the aggregate, have a Material Adverse Effect. Further, other than as
described in the Prospectus, all such franchises, leases, contracts,
agreements and documents are in full force and
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effect and the Company is not in breach, violation or default of any
such franchises, leases, contracts, agreements or documents and no
event has occurred which with notice or lapse of time or both would
constitute a breach, violation or default of any such franchises,
leases, contracts, agreements or documents.
(dd) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
affiliates, customers or suppliers of the Company on the other hand,
which is required to be described in the Prospectus and which is not so
described.
(ee) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company in connection
with the filing or effectiveness of the Registration Statements or
otherwise, except for persons and entities who have expressly waived
such right in writing or who have been given timely and proper written
notice and have failed to exercise such right within the time or times
required under the terms and conditions of such right. Except as
described in the Prospectus, there are no persons with registration
rights or similar rights to have any securities registered by the
Company under the Securities Act.
(ff) The Company does not own any "margin securities" as that term is
defined in Regulation U of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), and none of the proceeds
of the sale of the Stock will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any margin security or for any other purpose which
might cause any of the Stock to be considered a "purpose credit" within
the meanings of Regulation T, U or X of the Federal Reserve Board.
(gg) Except as set forth in this Agreement, the Company is not a party
to any contract, agreement or understanding with any person that could
give rise to a valid claim against the Company or the Underwriters for
a brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(hh) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(ii) The Stock has been approved for listing subject to notice of
issuance on the Nasdaq National Market of the Nasdaq Stock Market, Inc.
(the "Nasdaq National Market").
(jj) The Company has taken all necessary actions to ensure that, upon
and at all times after the effectiveness of the Registration Statement,
it will be in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "Xxxxxxxx-Xxxxx
Act") that are then in effect and is actively taking steps to ensure
that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect upon the effectiveness of
such provisions.
(kk) The Company has taken all necessary actions to ensure that, upon
and at all times after Nasdaq shall have approved the Stock for
inclusion therein, it will be in compliance with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace
Rules that are then in effect and is actively taking steps to ensure
that it will be in compliance with other applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules not
currently in effect upon the effectiveness of such requirements.
10
(ll) Neither the Company nor, to the Company's knowledge, any employee
or agent of the Company, has made any contribution or other payment to
any official of, or candidate for, any federal, state, local or foreign
office in violation of any law or of the character required to be
disclosed in the Prospectus.
(mm) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term
is defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structured finance, special
purpose or limited purpose entity that could reasonably be expected to
materially affect the Company's liquidity or the availability of or
requirements for its capital resources required to be described in the
Prospectus which have not been described as required.
(nn) There are no outstanding loans, advances (except normal advances
for business expense in the ordinary course of business) or guarantees
or indebtedness by the Company, to or for the benefit of any of the
officers or directors of the Company, or any of their respective family
members, except as disclosed in the Prospectus.
(oo) There has been no dividend or distribution of any kind declared,
paid or made by the Company on any capital stock.
(pp) The Registration Statements, the Prospectus and the Preliminary
Prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign
jurisdictions in which they are distributed in connection with the
Directed Share Program. No authorization, approval, consent, license,
order, registration or qualification of or with any government,
governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws or regulations of any
foreign jurisdiction in which the Directed Shares are offered outside
the United States.
(qq) The Company has not offered, or caused the Underwriters to offer,
any Firm Stock to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a customer,
supplier or business partner of the Company to alter the customer's,
supplier's or business partner's level or type of business with the
Company or (ii) a trade journalist or publication to write or publish
favorable information about the Company or its products.
(rr) There are no rulemaking or similar proceedings before the FDA or
comparable federal, state, local or foreign government bodies which
involve the Company, which, if the subject of an action unfavorable to
the Company, could result, singularly or in the aggregate, in a
Material Adverse Effect.
(ss) Neither the Company nor any of its affiliates (within the meaning
of NASD Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, is
controlled by, or is under common control with, or is an associated
person (within the meaning of Article I, Section 1(ee) of the By-laws
of the NASD) of, any member firm of the NASD, other than as described
on Schedule [ ] hereof.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying [ ] shares of Firm Stock by a fraction the numerator of which is
the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
11
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $[ ] per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (through the facilities of The
Depositary Trust Company or, at the election of the Representatives, in the form
of definitive certificates, issued in such names and in such denominations as
the Representatives may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York City time, on the second full business day
preceding the First Closing Date (as defined below) against payment of the
aggregate Purchase Price therefor by wire transfer to an account at a bank
acceptable to XX Xxxxx, payable to the order of the Company, all at the offices
of Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York City time, on [ ], 2005, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to as
the "First Closing Date". The First Closing Date and the location of delivery
of, and the form of payment for, the Firm Stock may be varied by agreement
between the Company and XX Xxxxx.
In the event that the Representatives elect to have the Underwriters
take delivery of definitive certifcates, the Company shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least one full business day prior to the
First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company and for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name on
Schedule A hereto bears to the total number of shares of Firm Stock (subject to
adjustment by XX Xxxxx to eliminate fractions). The option granted hereby may be
exercised as to all or any part of the Optional Stock at any time, and from time
to time, not more than thirty (30) days subsequent to the date of this Agreement
and may be exercised only three times. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by XX Xxxxx to the
Company.
The option granted hereby may be exercised by written notice being
given to the Company by XX Xxxxx setting forth the number of shares of the
Optional Stock to be purchased by the Underwriters and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York City time, on the second full business day
preceding the Option Closing Date against payment of the aggregate Purchase
Price therefor in federal (same day) funds by certified or official bank check
or checks or wire transfer to an account at a bank acceptable to XX Xxxxx
payable to the order of the Company all at the offices of Ropes & Xxxx
12
LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each Underwriter hereunder. In the
event that the Representatives elect to have the Underwriters take delivery of
definitive certifcates, the Company shall make the certificates for the Optional
Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least one full business day prior to the
Option Closing Date. The Option Closing Date and the location of delivery of,
and the form of payment for, the Optional Stock may be varied by agreement
between the Company and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters and the Designated Underwriter that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representatives and
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the second business day following the execution and
delivery of this Agreement; make no further amendment or any supplement
to the Registration Statements or to the Prospectus to which the
Representatives shall reasonably object by notice to the Company after
a reasonable period (not less than two business days) to review; advise
the Representatives, promptly after it receives notice thereof, of the
time when any amendment to either Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriters with copies
thereof; advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statements or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, use its best efforts to obtain its
withdrawal as soon as practicable.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered any event occurs or
condition exists as a result of which the Prospectus as then amended or
supplemented would, when the Prospectus is delivered, include any
untrue statement of a material fact, or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary at
any time to amend or supplement the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and upon their request will prepare an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance. The Company will furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives
may from time to time reasonably request of such amended or
supplemented Prospectus; and in case any Underwriter is required to
deliver a prospectus relating to the Stock nine months or more after
the effective date of the Initial Registration Statement, the Company
upon the request of the Representatives and at the expense of such
Underwriter will prepare promptly an amended or supplemented Prospectus
as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Securities Act.
13
(c) The Company will furnish promptly to each of the Representatives
and to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith.
(d) The Company will deliver promptly to the Representatives in New
York City such number of the following documents as the Representatives
shall reasonably request: (i) conformed copies of the Registration
Statements as originally filed with the Commission and each amendment
thereto (in each case excluding exhibits), (ii) each Preliminary
Prospectus, and (iii) the Prospectus (not later than 10:00 A.M., New
York City time, on the business day following the execution and
delivery of this Agreement) and any amended or supplemented Prospectus
(not later than 10:00 A.M., New York City time, on the business day
following the date of such amendment or supplement).
(e) The Company will make generally available to its shareholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an earnings statement of the
Company (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as
the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities or Blue Sky laws of such
jurisdictions (domestic or foreign) as the Representatives may
designate and to continue such qualifications in effect for so long as
required for the distribution of the Stock; PROVIDED that the Company
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction.
(g) During the period of five years from the date hereof, the Company
will deliver, upon request, to the Representatives and to each of the
other Underwriters, (i) as soon as they are available, copies of all
reports or other communications furnished to shareholders and (i) as
soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission or any national
securities exchange or automatic quotation system on which the Stock is
listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 180 days from the date of
the Prospectus (the "Lock-Up Period") without the prior written consent
of XX Xxxxx other than the Company's sale of the Stock hereunder and
the issuance of shares of Common Stock or securities exercisable for
Common Stock pursuant to (i) employee benefit plans, qualified stock
option plans or other employee compensation plans, as such plans are in
existence on the date hereof and described in the Prospectus, or (ii)
currently outstanding options, warrants or rights. The Company will
cause (x) each shareholder, optionholder and warrantholder of the
Company that is an institutional investor to furnish to the
Representatives, prior to the First Closing Date, a letter,
substantially in the form of Exhibit II hereto, and (y) each officer
and director of the Company and each shareholder, optionholder and
warrantholder of the Company that is not an institutional investor to
furnish to the Representatives, prior to the First Closing Date, a
letter, substantially in the form of Exhibit I hereto, pursuant to
which letters such persons shall agree not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock for a period of 180 days
from the date of the Prospectus, without the prior written consent
14
of XX Xxxxx. The Company also agrees that during such period, the
Company will not file any registration statement, preliminary
prospectus or prospectus, or any amendment or supplement thereto, under
the Securities Act for any such transaction or which registers, or
offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a registration
statement on Form S-8 relating to employee benefit plans. The Company
hereby agrees that (i) if it issues an earnings release or material
news, or if a material event relating to the Company occurs, during the
last 17 days of the Lock-Up Period, or (ii) if prior to the expiration
of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the Lock-Up Period, the restrictions imposed by this paragraph (h)
shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of
the material news or material event.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates, the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
in the Registration Statement and the Prospectus.
(k) Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the
Company and of which the Representatives are notified), without the
prior written consent of the Representatives, unless in the judgment of
the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by
law.
(l) Without limiting the provisions of Section 4(h) in connection with
the offering of the Stock, until XX Xxxxx shall have notified the
Company of the completion of the resale of the Stock, the Company will
not, and will cause its affiliated purchasers (as defined in Regulation
M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Common
Stock, or attempt to induce any person to purchase any Common Stock;
and not to, and to cause its affiliated purchasers not to, make bids or
purchase for the purpose of creating actual, or apparent, active
trading in or of raising the price of the Common Stock.
(m) The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented
pursuant to Section 4(b).
(n) For at least one year from the date hereof, the Company shall at
all times comply with all applicable provisions of the Xxxxxxxx-Xxxxx
Act in effect from time to time.
(o) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds".
(p) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date
15
of the effectiveness of the Registration Statement. The Designated
Underwriter will notify the Company as to which Participants will need
to be so restricted. The Company will direct the transfer agent to
place stop transfer restrictions upon such securities for such period
of time.
(q) The Company will comply with all applicable securities and other
applicable securities and other laws, rules and regulations in each
foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
(r) The Company will use its best efforts to effect and, for at least
one year from the date hereof, maintain the quotation of the Stock on
the Nasdaq.
(s) The Company will use its best efforts to do and perform all things
required to be done or performed under this Agreement by the Company
prior to each Closing Date and to satisfy all conditions precedent to
the delivery of the Firm Stock and the Optional Stock.
(t) The Company will not declare, pay or otherwise make a dividend or
distribution of any kind on any of its capital stock prior to the
Closing Dates.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriters to pay, or
reimburse if paid by any Underwriter, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus, any amendments, supplements and exhibits
thereto and the costs of printing, reproducing and distributing the "Agreement
Among Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (d) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred
in connection with any required review by the NASD of the terms of sale of the
Stock and any filings made with the NASD; (e) any applicable listing or other
fees; (f) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 4(f) and of preparing,
printing and distributing Blue Sky Memoranda and Legal Investment Surveys
(including related fees and expenses of counsel to the Underwriters); (g) all
fees and expenses of the registrar and transfer agent of the Stock; (h) the cost
of preparing and printing stock certificates; (i) all fees and expenses the
Designated Underwriter incurred in connection with the Directed Share Program,
including the fees, disbursements and expenses of its counsel and stamp duties,
similar taxes or duties or other taxes, if any, incurred in connection with the
Directed Share Program; and (j) all other costs and expenses incident to the
offering of the Stock or the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants); provided that,
except as otherwise provided in this Section 5 and in Section 10, the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the resale of any Stock by them
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by
16
the Commission, and any request for additional information on the part
of the Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(a) and
the NASD shall have raised no objection to the fairness and
reasonableness of the terms of this Agreement or the transaction
contemplated hereby.
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that any Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement the Stock,
the Registration Statement and the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Ropes & Xxxx LLP shall have furnished to the Representatives such
counsel's written opinion, as counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in the form attached as
Exhibit III.
(e) Xxxxx & Elbing LLP shall have furnished to the Representatives such
counsel's written opinion, as patent counsel to the Company, addressed
to the Underwriters and dated the Closing Date, in the form attached as
Exhibit IV.
(f) Xxxxxxxx & Sunstein LLP shall have furnished to the Representatives
such counsel's written opinion, as patent counsel to the Company,
addressed to the underwriters and dated the Closing Date, in the form
attached as Exhibit V.
(g) The Representatives shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(h) At the time of the execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, addressed to the
Underwriters, and executed and dated such date, in form and substance
satisfactory to the Representatives (i) confirming that they are
independent certified public accountants with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations
and (ii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information contained
in the Registration Statements and the Prospectus.
(i) On the effective date of any post-effective amendment and on the
Closing Date, the Representatives shall have received a letter (the
"bring-down letter") from Ernst & Young LLP addressed to the
Underwriters and executed and dated the Closing Date confirming, as of
the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus as of
a date
17
not more than three business days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered
to the Representatives concurrently with the execution of this
Agreement pursuant to Section 6(g).
(j) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chief Executive Officer and
its Chief Financial Officer stating that (i) such officers have
carefully examined the Registration Statements and the Prospectus and
each amendment or supplement thereto and, in their opinion, the
Registration Statements and each amendment thereto, as of their
respective effective dates, and the Prospectus and each amendment
thereto, as of the respective date thereof and the Closing Date, did
not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) since the effective
date of the Initial Registration Statement no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statements or the Prospectus, (iii) to their knowledge
after reasonable investigation, as of the Closing Date, the
representations and warranties of the Company in this Agreement are
true and correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) subsequent to the
date of the most recent audited financial statements included in the
Prospectus, there has been no material adverse change in the financial
position or results of operation of the Company, or any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company taken as a whole, except as set forth in the
Prospectus.
(k) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus and since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in this
paragraph (j), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
(l) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Stock or materially and adversely affect the
business or operations of the Company; and no injunction, restraining
order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued as of the Closing Date
which would prevent the issuance or sale of the Stock or materially and
adversely affect the business or operations of the Company.
(m) Subsequent to the execution and delivery of this Agreement no
downgrading shall have occurred in the Company's corporate credit
rating.
(n) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall
18
have been suspended or minimum or maximum prices or maximum range for
prices shall have been established on any such exchange or such market
by the Commission, by such exchange or market or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities or a material disruption has occurred in commercial banking
or securities settlement or clearance services in the United States,
(iii) the United States shall have become engaged in hostilities, or
the subject of an act of terrorism, or there shall have been an
outbreak of or escalation in hostilities involving the United States,
or there shall have been a declaration of a national emergency or war
by the United States, as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated in
the Prospectus or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated in
the Prospectus.
(o) The Nasdaq National Market shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(p) XX Xxxxx shall have received the written agreements, (i)
substantially in the form of Exhibit II hereto of shareholders,
optionholders and warrantholders of the Company that are institutional
investors, and (ii) substantially in the form of Exhibit I hereto of
the directors and officers of the Company and of shareholders,
optionholders and warrantholders of the Company that are not
institutional investors.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
directors, officers, managers, members, employees, representatives and
agents and each person, if any, who controls any Underwriter within the
meaning of the Securities Act (collectively the "Underwriter
Indemnified Parties" and, each an "Underwriter Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Underwriter Indemnified Party
may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or
supplement thereto, (ii) the omission or alleged omission to state in
any Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto a material
fact required to be stated therein or necessary to make the statements
therein not misleading and shall reimburse each Underwriter Indemnified
Party promptly upon demand for any legal fees or other expenses
reasonably incurred by that Underwriter Indemnified Party in connection
with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon (i) an untrue statement or
alleged untrue statement in or omission or alleged omission from the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through
the
19
Representatives by or on behalf of any Underwriter specifically for use
therein, which information the parties hereto agree is limited to the
Underwriter's Information (as defined in Section 16); provided, further
however, that the foregoing indemnification agreement with respect to
the Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage
or liability purchased Securities, or any officers, employees,
representatives, agents or controlling persons of such Underwriter, if
(i) a copy of the Prospectus (as then amended or supplemented) was
required by law to be delivered to such person at or prior to the
written confirmation of the sale of Stock to such person, (ii) a copy
of the Prospectus (as then amended or supplemented) was not sent or
given to such person by or on behalf of such Underwriter and such
failure was not due to non-compliance by the Company with Section 4(d),
and (iii) the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
The Company shall indemnify and hold harmless the Designated
Underwriter and its directors, officers, managers, members, employees,
representatives and agents and each person, if any, who controls any
Underwriter within the meaning of the Securities Act (collectively, the
"Designated Underwriter Indemnified Parties," and each a "Designated
Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Designated Underwriter Indemnified Party may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share
Program, (ii) the omission or alleged omission to state in any material
prepared by or with the consent of the Company for distribution to
Participants in connection with the Directed Share Program of a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, (iii) the failure of any Participant to pay
for and accept delivery of Directed Shares that the Participant agreed
to purchase; or (iv) any other loss, claim, damage or liability, or any
action in respect of, related to, arising out of, or in connection with
the Directed Share Program, other than such losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the willful misconduct or gross
negligence of the Designated Underwriter.
The indemnity agreements provided for in this Section 7(a) are not
exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which
may otherwise be available under this Agreement, at law or in equity to
any Underwriter Indemnified Party and each Designated Underwriter
Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the
"Company Indemnified Parties" and each a "Company Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto
or (ii) 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, but in each case only to the extent that the
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 through the Representatives by or
on behalf of that Underwriter specifically for use therein, which
20
information the parties hereto agree is limited to the Underwriters'
Information (as defined in Section 16), and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably incurred
by such parties in connection with investigating or preparing to defend
or defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability or action as such expenses
are incurred; provided that the parties hereto hereby agree that such
written information provided by the Underwriters consists solely of the
Underwriter's Information. This indemnity agreement is not exclusive
and will be in addition to any liability which the Underwriters might
otherwise have and shall not limit any rights or remedies which may
otherwise be available under this Agreement, at law or in equity to the
Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, PROVIDED, FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party (which counsel shall not, except
with written consent of the Indemnified Party, be counsel to the
Indemnifying Party). After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that any indemnified party shall have the right to employ
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 unless (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by its counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable
for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such claim or
action and employ counsel reasonably satisfactory to the indemnified
party or does not diligently defend the claim or action, in which case,
if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume (or in the case of a failure to diligently defend, to continue
to defend) the defense of such action on behalf of such indemnified
party and the indemnifying party shall be responsible for all legal
fees or other expenses subsequently incurred by such indemnified party
in connection with the defense of such claim or action, it being
understood, however, that the indemnifying party 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 reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties (in addition to any local
counsel), which firm shall be designated in writing by XX Xxxxx, if the
indemnified parties under this Section 7 consist of any Underwriter
Indemnified Party, or by the Company if the indemnified parties under
this Section 8 consist of any Company Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements contained
in Sections 7(a) and 7(b), shall use all reasonable efforts to
cooperate with
21
the indemnifying party in the defense of any such action or claim.
Subject to the provisions of Section 7(d) below, no indemnifying party
shall be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably withheld
or delayed), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to the penultimate paragraph in Section 7(a)
hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than
one separate firm (in addition to any local counsel) for the Designated
Underwriter for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all
directors, officers, employees, representatives and agents of, and all
persons, if any, who control the Designated Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (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 (other than for fees and expenses that the indemnifying
party is reasonably contesting in good faith) prior to the date of such
settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or, 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) 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 from the offering of the Stock or if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of 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, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Stock purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters
on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission; provided that the parties hereto agree that the
written information furnished to the Company through the
Representatives by or on behalf of the Underwriters for use in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus consists solely of the Underwriter's Information. The
Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(f) were to be
determined by pro rata
22
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, damage or liability, or action in respect thereof, referred to
above in this Section 7(f) shall be deemed to include, for purposes of
this Section 7(f), 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 7(f), no Underwriter shall be required to contribute any amount
in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public were offered to the
public less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this Section
7(f) are several in proportion to their respective underwriting obligations and
not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to the Company prior to
delivery of and payment for the Firm Stock if, prior to that time, any of the
events described in Sections 6(j), 6(l) or 6(m) have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 8 or 10, (b) the Company shall fail to tender the Stock for
delivery to the Underwriters for any reason not permitted under this Agreement,
or (c) the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement the Company shall reimburse the Underwriters for
the fees and expenses of their counsel and for such other out-of-pocket expenses
as shall have been reasonably incurred by them in connection with this Agreement
and the proposed purchase of the Stock, and upon demand the Company shall pay
the full amount thereof to XX Xxxxx. If this Agreement is terminated pursuant to
Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their
23
underwriting obligation for all purposes of this Agreement. Nothing herein
contained shall relieve any defaulting Underwriter of its liability to the
Company or the other Underwriters for damages occasioned by its default
hereunder. Any termination of this Agreement pursuant to this Section 10 shall
be without liability on the part of any non-defaulting Underwriter or the
Company, except that the representations and warranties set forth in Section 2,
obligations with respect to expenses to be paid or reimbursed pursuant to
Sections 5 and 9 and the provisions of Section 7 and Section 11 through 20 shall
not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties and the
Designated Underwriter Indemnified Parties, and the indemnities of the several
Underwriters shall also be for the benefit of the Company Indemnified Parties.
It is understood that the Underwriter's responsibility to the Company is solely
contractual in nature and the Underwriters do not owe the Company, or any other
party, any fiduciary duty as a result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock. Notwithstanding any termination
of this Agreement, including without limitation any termination pursuant to
Section 8 or Section 10, the indemnities, covenants, agreements,
representations, warranties and other statements forth in Sections 2, 5, 7 and 9
and Sections 11 through 20, inclusive, of this Agreement shall not terminate and
shall remain in full force and effect at all times.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to XX Xxxxx & Co., LLC 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets
(Fax: 000-000-0000), with a copy to the same address, Attention: Legal
Department (Fax: 000-000-0000), and a copy to Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000, Attention:
Xxxxx X. Xxxxxxx;
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to CombinatoRx, Incorporated, 000 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: Xxxxxx Xxxxxxxxx (Fax:
000-000-0000), with a copy to Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxx (Fax:
000-000-0000);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to
Section 7 shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
acceptance telex to the Representatives, which address will be supplied
to any other party hereto by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
24
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the "Underwriters' Information" consists
solely of the following information in the Prospectus: the statements concerning
the Underwriters contained in the (i) last paragraph on the front cover
concerning delivery of the Stock by the Underwriters; and (ii) the third
paragraph, the tenth paragraph and the eleventh paragraph under the heading
"Underwriting" and the table of Underwriters participating in the offering.
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. 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. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
25
If the foregoing is in accordance with your understanding of the
agreement between the Company, and the several Underwriters, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
COMBINATORX, INCORPORATED
By:____________________________
Name:
Title:
Accepted as of the date first above written:
XX XXXXX & CO., LLC
PACIFIC GROWTH EQUITIES, LLC
SUNTRUST CAPITAL MARKETS, INC.
X.X. XXXXXXX & SONS, INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX & CO., LLC
By:______________________________
Name:
Title:
26
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- --------- ---------
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc. ---------- ----------
Total
========== ==========
27
EXHIBIT I
, 2005
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
COMBINATORX, INCORPORATED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx") and Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc.
(together with XX Xxxxx, the "Representatives"), to enter in to a certain
underwriting agreement with
CombinatoRx, Incorporated, a Delaware corporation
(the "Company"), with respect to the public offering (the "Public Offering") of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such Public Offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of XX
Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or any such securities
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares or
securities, the "Beneficially Owned Shares")) (ii) enter into any swap, hedge or
similar agreement or arrangement that transfers in whole or in part, the
economic risk of ownership of the Beneficially Owned Shares or securities
convertible into or exercisable or exchangeable for Common Stock or (iii) engage
in any short selling of the Common Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Restricted Period, or (ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restrictive Period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
28
The restrictions set forth herein shall not apply to any transfer or
disposition of any shares of Common Stock, any Beneficially Owned Shares or
securities convertible into or exercisable or exchangeable for Common Stock: (a)
as a bona fide gift or gifts; (b) to any trust, family limited partnership or
family limited liability company for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that any such
transfer shall not involve a disposition for value; or (c) by will or intestacy
to the undersigned's legal representative, heir or immediate family; PROVIDED
THAT, in each case, each and every transferee, distributee or donee thereof
agrees in writing, in form satisfactory to XX Xxxxx, to be bound by the terms of
this Agreement, a copy of which will be delivered to XX Xxxxx. For purposes of
this agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. Anything contained
herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common
Stock or Beneficially Owned Shares are transferred from the undersigned shall be
bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
Notwithstanding anything herein to the contrary, if the closing of the
Public Offering has not occurred prior to June 30, 2005, this Agreement shall be
of no further force or effect.
By:_____________________________
Name:
Title:
00
XXXXXXX XX
, 0000
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
COMBINATORX, INCORPORATED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx") and Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc.
(together with XX Xxxxx, the "Representatives"), to enter in to a certain
underwriting agreement with
CombinatoRx, Incorporated, a Delaware corporation
(the "Company"), with respect to the public offering (the "Public Offering") of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such Public Offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of XX
Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or any such securities
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares or
securities, the "Beneficially Owned Shares")) (ii) enter into any swap, hedge or
similar agreement or arrangement that transfers in whole or in part, the
economic risk of ownership of the Beneficially Owned Shares or securities
convertible into or exercisable or exchangeable for Common Stock or (iii) engage
in any short selling of the Common Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Restricted Period, or (ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restrictive Period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
The restrictions set forth herein shall not apply to any transfer or
disposition of: (a) any shares of Common Stock or any Beneficially Owned Shares
that were acquired by the undersigned after the completion of the Public
Offering in open market transactions; (b) any shares of Common Stock, any
Beneficially Owned Shares or securities convertible into or exercisable or
exchangeable for Common Stock as a bona fide gift or gifts; (c) any shares of
Common Stock, any Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable for Common Stock as a distribution to partners,
members or stockholders of the undersigned; (d) any shares of Common Stock, any
Beneficially Owned
30
Shares or securities convertible into or exercisable or exchangeable for Common
Stock to any trust, family limited partnership or family limited liability
company for the direct or indirect benefit of the undersigned or the immediate
family of the undersigned, provided that any such transfer shall not involve a
disposition for value; or (e) any shares of Common Stock, any Beneficially Owned
Shares or securities convertible into or exercisable or exchangeable for Common
Stock by will or intestacy to the undersigned's legal representative, heir or
immediate family; PROVIDED THAT, in each of the cases (b)-(e), each and every
transferee, distributee or donee thereof agrees in writing, in form satisfactory
to XX Xxxxx, to be bound by the terms of this Agreement, a copy of which will be
delivered to XX Xxxxx. For purposes of this agreement, "immediate family" shall
mean any relationship by blood, marriage or adoption, not more remote than first
cousin. Except in the case of any transfer or disposition pursuant to provision
(a) above, any person to whom shares of Common Stock or Beneficially Owned
Shares are transferred from the undersigned shall be bound by the terms of this
Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
Notwithstanding anything herein to the contrary, if the closing of the
Public Offering has not occurred prior to June 30, 2005, this Agreement shall be
of no further force or effect.
By:_____________________________
Name:
Title:
EXHIBIT III
Form of Legal Opinion of Company Counsel
EXHIBIT IV
Form of Legal Opinion of Company Patent Counsel
EXHIBIT V
Form of Legal Opinion of Company Patent Counsel
