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EXHIBIT 1.1
ALANEX CORPORATION
Common Stock
UNDERWRITING AGREEMENT
October __, 1996
PAINEWEBBER INCORPORATED
XXXXXXX & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Alanex Corporation, a Delaware corporation (the "Company"),
proposes to sell an aggregate of 2,500,000 shares (the "Firm Shares") of the
Company's Common Stock, par value $0.001 per share (the "Common Stock"), to you
and to the other underwriters named in Schedule I (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 375,000
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b). The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "Shares."
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company and the Representatives,
acting on behalf of the several Underwriters, and such agreement shall be set
forth in a separate written instrument substantially in the form of Exhibit A
hereto (the "Price Determination Agreement"). The Price Determination
Agreement may take the form of an exchange of any standard form of written
telecommunication among the Company and the Representatives and shall specify
such applicable information as is indicated in Exhibit A hereto. The offering
of the Shares will be governed by this Agreement, as supplemented by the Price
Determination Agreement. From and after the date of the execution and delivery
of the Price Determination Agreement, this
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Agreement shall be deemed to incorporate, and, unless the context otherwise
indicates, all references contained herein to "this Agreement" and to the
phrase "herein" shall be deemed to include the Price Determination Agreement.
Prior to the execution of this Agreement, Alanex Corporation,
a California corporation ("Alanex California"), was merged with and into the
Company (such transaction being referred to herein as the "Merger"), pursuant
to a Merger Agreement in substantially the form of Exhibit 2.1 to the
Registration Statement (the "Merger Agreement").
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations,
warranties and agreements of the Company herein contained and subject to all
the terms and conditions of this Agreement, the Company agrees to sell to each
Underwriter named below, and each Underwriter, severally and not jointly,
agrees to purchase from the Company at the purchase price per share for the
Firm Shares to be agreed upon by the Representatives and the Company in
accordance with Section 1(c) and set forth in the Price Determination
Agreement, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I, plus such additional number of Firm Shares which
such Underwriter may become obligated to purchase pursuant to Section 8 hereof.
Schedule I may be attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of
this Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 375,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for the Firm
Shares. The Option may be exercised only to cover over-allotments in the sale
of the Firm Shares by the Underwriters and may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date
of this Agreement (or, if the Company has elected to rely on Rule 430A, on or
before the 30th day after the date of the Price Determination Agreement), upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
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(c) The initial public offering price per share
for the Firm Shares and the purchase price per share for the Firm Shares to be
paid by the several Underwriters shall be agreed upon and set forth in the
Price Determination Agreement. In the event such price has not been agreed
upon and the Price Determination Agreement has not been executed by the close
of business on the fourteenth business day following the date on which the
Registration Statement becomes effective, this Agreement shall terminate
forthwith, without liability of any party to any other party except that
Section 6 shall remain in effect.
2. Delivery and Payment. Delivery of the Firm Shares
shall be made to the Representatives for the accounts of the Underwriters
against payment of the purchase price by, at the option of the Company, wire
transfer or certified or official bank check payable in New York Clearing House
(same-day) funds to the order of the Company at the office of PaineWebber
Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Such
payments shall be made at 10:00 a.m., New York City time, on the third business
day (or fourth business day, if the Price Determination Agreement is executed
after 4:30 p.m.) after the date on which the first bona fide offering of the
Shares to the public is made by the Underwriters or at such time on such other
date, not later than ten business days after such date, as may be agreed upon
by the Company and the Representatives (such date is hereinafter referred to as
the "Closing Date").
(a) To the extent the Option is exercised,
delivery of the Option Shares against payment by the Underwriters (in the
manner specified above) will take place at the offices specified above for the
Closing Date at the time and date (which may be the Closing Date) specified in
the Option Shares Notice.
(b) Certificates evidencing the Shares shall be
in definitive form and shall be registered in such names and in such
denominations as the Representatives shall request at least two business days
prior to the Closing Date or the Option Closing Date, as the case may be, by
written notice to the Company. For the purpose of expediting the checking and
packaging of certificates for the Shares, the Company agrees to make such
certificates available for inspection at least 24 hours prior to the Closing
Date or the Option Closing Date, as the case may be.
(c) The cost of original issue tax stamps, if
any, in connection with the issuance and delivery of the Firm Shares and Option
Shares by the Company to the respective Underwriters shall be borne by the
Company. The Company will pay and save each Underwriter and any subsequent
holder of the Shares harmless from any and all liabilities with respect to or
resulting from any failure or delay in paying Federal and state stamp and other
transfer taxes, if any, which may be payable or determined to be payable in
connection with the original issuance or sale to such Underwriter of the Firm
Shares and Option Shares.
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3. Representations and Warranties of the Company. The
Company represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No.
333-09929) on Form S-1 relating to the Shares, including a preliminary
prospectus and such amendments to such registration statement as may have been
required to the date of this Agreement, has been prepared by the Company under
the provisions of the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, and
has been filed with the Commission. The term "preliminary prospectus" as used
herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A
("Rule 430A") of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments
and of each related preliminary prospectus have been delivered to the
Representatives. The term "Registration Statement" means the registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits and any information
deemed to be included by Rule 430A or Rule 434 of the Rules and Regulations.
If the Company files a registration statement to register a portion of the
Shares and relies on Rule 462(b) of the Rules and Regulations for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to the "Registration
Statement" shall be deemed to include the Rule 462 Registration Statement, as
amended from time to time. The term "Prospectus" means the prospectus as first
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
or, if no such filing is required, the form of final prospectus included in the
Registration Statement at the Effective Date.
(b) On the Effective Date, the date the
Prospectus is first filed with the Commission pursuant to Rule 424(b) (if
required), at all times subsequent to and including the Closing Date and, if
later, the Option Closing Date and when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission, the Registration Statement and the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement thereto), including the financial
statements included in the Prospectus, did or will comply with all applicable
provisions of the Act and the Rules and Regulations and will contain all
statements required to be stated therein in accordance with the Act and the
Rules and Regulations. On the Effective Date and when any post-effective
amendment to the Registration Statement becomes effective, no part of the
Registration Statement or any such amendment did or will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. At the Effective Date, the date the Prospectus or any amendment or
supplement to the Prospectus is filed with the Commission and at the Closing
Date and, if later, the Option Closing Date, the Prospectus did not or will not
contain any
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untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing representations and warranties
in this Section 3(b) do not apply to any statements or omissions made in
reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement or Prospectus or any amendment or
supplement thereto. For all purposes of this Agreement, the amounts of the
selling concession and reallowance set forth in the Prospectus constitute the
only information relating to any Underwriter furnished in writing to the
Company by the Representatives specifically for inclusion in the Registration
Statement, the preliminary prospectus or the Prospectus. The Company has not
distributed any offering material in connection with the offering or sale of
the Shares other than the Registration Statement, the preliminary prospectus,
the Prospectus or any other materials, if any, permitted by the Act and the
Rules and Regulations.
(c) The Company is, and at the Closing Date will
be, a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation. The Company has, and at the
Closing Date will have, full corporate power and authority to conduct all the
activities conducted by it, to own or lease all the assets owned or leased by
it and to conduct its business as described in the Registration Statement and
the Prospectus. The Company is, and at the Closing Date will be, duly licensed
or qualified to do business and in good standing as a foreign corporation in
all jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such licensing or
qualification necessary, except where any failure to be so licensed or
qualified would not, individually or in the aggregate, have a material adverse
effect on the Company or its business, properties, business prospects,
financial condition or results of operations, taken as a whole (a "Material
Adverse Effect"). Except as disclosed in the Registration Statement, the
Company does not own, and at the Closing Date will not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity. Complete and correct
copies of the certificate of incorporation and of the by-laws of the Company
and all amendments thereto have been delivered to the Representatives, and no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Option Closing Date.
(d) The outstanding shares of Common Stock have
been, and the Shares to be issued and sold by the Company upon such issuance
will be, duly authorized, validly issued, fully paid and nonassessable and are
not, and will not be, subject to any preemptive or similar right. The
description of the Common Stock in the Registration Statement and the
Prospectus is, and at the Closing Date will be, accurate in all material
respects and fairly summarizes the information presented. Except as set forth
in the Prospectus, the Company does not have outstanding, and at the Closing
Date will not have outstanding, any options to purchase, or any rights or
warrants to subscribe for, or any
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securities or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of Common Stock or any such warrants, convertible
securities or obligations.
(e) The financial statements and schedules
included in the Registration Statement or the Prospectus present fairly the
financial condition of the Company as of the respective dates thereof and the
results of operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period involved,
except as otherwise disclosed in the Prospectus. No other financial statements
or schedules of the Company are required by the Act or the Rules and
Regulations to be included in the Registration Statement or the Prospectus.
KPMG Peat Marwick LLP (the "Accountants") who have reported on such financial
statements and schedules, are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations.
(f) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus (including (i) the granting of stock options
pursuant to the Company's 1996 Equity Incentive Plan, (ii) the exercise of
employee stock options outstanding on the date hereof and (iii) the offering of
shares of Common Stock pursuant to the Company's Employee Stock Purchase Plan),
(i) there has not been and will not have been any change in the capitalization
of the Company, (ii) the Company has not incurred nor will it incur any material
liabilities or obligations, direct or contingent, nor has it entered into nor
will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein and (iii) the Company has not
and will not have paid or declared any dividends or other distributions of any
kind on any class of its capital stock.
(h) The Company is not, and after giving effect
to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Registration Statement and Prospectus will not be,
an "investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
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(i) Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings
pending or, to the best knowledge of the Company, threatened against or
affecting the Company or any of its officers in their capacity as such, before
or by any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an unfavorable
ruling, decision or finding would reasonably be expected to have a Material
Adverse Effect.
(j) The Company has, and at the Closing Date will
have, (i) all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business and (iii) performed all its obligations
required to be performed by it, and is not, and at the Closing Date will not
be, in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other agreement")
to which it is a party or by which its property is bound or affected, except,
in each case, where the failure to have such license, permit, consent, order,
approval or other authorization, or the failure to comply or perform or where
such default would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Company, no other party under any material contract or other agreement to which
it is a party is in default in any material respect thereunder. The Company is
not, nor at the Closing Date will be, in violation of any provisions of its
certificate of incorporation or by-laws.
(k) No consent, approval, authorization or order
of, or any filing or declaration with, any court or governmental agency or body
is required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of this Agreement by the Company or in connection with
the taking by the Company of any action contemplated hereby, except such as
have been obtained under the Act or the Rules and Regulations and such as may
be required under state securities or Blue Sky laws or the by-laws and rules of
the National Association of Securities Dealers, Inc. (the "NASD") in connection
with the purchase and distribution by the Underwriters of the Shares.
(l) The Company has full corporate power and
authority to enter into this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company and is enforceable against the Company in
accordance with the terms hereof, except as indemnification and contribution
provisions may be limited by applicable law and except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of equitable
relief. The
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performance of this Agreement and the consummation of the transactions
contemplated hereby and the application of the net proceeds from the offering
and sale of the Shares in the manner set forth in the Prospectus under "Use of
Proceeds" will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the Company pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right
to terminate any of its obligations under, or result in the acceleration of any
obligation under, the certificate of incorporation or by-laws of the Company,
any contract or other agreement to which the Company is a party or by which the
Company or any of its properties is bound or affected, or violate or conflict
with any judgment, ruling, decree, order, statute, rule or regulation of any
court or other governmental agency or body applicable to the business or
properties of the Company, except, in each case, where such lien, charge,
encumbrance, breach, violation, default, termination, acceleration, or conflict
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(m) The Company has good legal title to all
properties and assets described in the Prospectus as owned by it, free and
clear of all liens, charges, encumbrances or restrictions, except such as are
described in the Prospectus or are not material to the business of the Company.
The Company has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company.
(n) There is no document or contract of a
character required by the Act and the Rules and Regulations to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which is not described or filed as required. All
such contracts to which the Company is a party have been duly authorized,
executed and delivered by the Company, constitute valid and binding agreements
of the Company and are enforceable against the Company in accordance with the
terms thereof, except as indemnification and contribution provisions may be
limited by applicable law and except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights, and subject to general equity
principles and to limitations on availability of equitable relief.
(o) No statement, representation or warranty made
by the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representatives was or will
be, when made, inaccurate, untrue or incorrect in any material respect (except
that such phrase "in all material respects" shall be disregarded to the extent
any such statement, representation or warranty is qualified by "material,"
"material adverse change," "Material Adverse Effect" or any phrase using any
such term).
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(p) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares.
(q) No holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement.
(r) The Shares have been approved for quotation
on the Nasdaq National Market, subject to notice of official issuance.
(s) The Company is not involved in any material
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened.
(t) Neither the Company nor, to the Company's
knowledge, any employee or agent of the Company has made any payment of funds
of the Company or received or retained any funds in violation of any law, rule
or regulation or of a character required to be disclosed in the Prospectus.
(u) The Company has complied, and until the
completion of the distribution of the Shares will comply, with all of the
provisions of Section 517.075 of the Florida Securities and Investor Protection
Act and regulation 3E-900.001 issued thereunder with respect to the offering
and sale of the Shares.
(v) The Company owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights, technology and know-how necessary to conduct the business
conducted by it as described in the Prospectus and the Company has not received
any notice of infringement of or conflict with (and has no knowledge of any
such infringement of or conflict with) asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights, technology
or know-how which could result in any Material Adverse Effect; and the
Company's discoveries, inventions, products or processes referred to in the
Prospectus do not, to the knowledge of the Company, infringe or conflict with
any right or patent, or any discovery, invention, product or process which is
the subject of a patent application known to the Company, which infringement or
conflict could, individually or in the aggregate, result in a Material Adverse
Effect.
(w) The Company has obtained any permits,
consents and authorizations required to be obtained by it under laws or
regulations relating to the protection of the environment or concerning the
handling, storage, disposal or discharge of
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toxic materials (collectively "Environmental Laws"), and any such permits,
consents and authorizations remain in full force and effect, except where the
failure to so obtain or maintain any such permits, consents or authorizations
would not, individually or in the aggregate, have a Material Adverse Effect.
The Company is in compliance with the Environmental Laws in all material
respects, and there is no pending or, to the Company's knowledge, threatened,
action or proceeding against the Company alleging violations of the
Environmental Laws.
(x) Except as disclosed in the Registration
Statement or the Prospectus, the Company maintains insurance of the types and
in amounts generally deemed adequate for its businesses and consistent with
insurance coverage maintained by similar companies and businesses, all of which
insurance is in full force and effect.
(y) There are no subsidiaries of the Company.
(z) Each of the Company and Alanex California has
filed or received a deferral relating to all material federal, state and
foreign income and franchise tax returns and has paid all taxes shown as due
thereon, other than taxes which are being contested in good faith and for which
adequate reserves have been established in accordance with GAAP; and the
Company has no knowledge of any tax deficiency which has been or might be
asserted or threatened against either the Company or Alanex California which
would reasonably be expected to have a Material Adverse Effect.
(aa) The Company has and Alanex California had
full corporate power and authority to enter into the Merger Agreement and to
consummate the Merger. The Merger Agreement was duly authorized, executed and
delivered by each of the Company and Alanex California and constituted a valid
and binding agreement of the Company and Alanex California and was enforceable
against the Company and Alanex California in accordance with the terms thereof,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to limitations
on availability of equitable relief. The performance of the Merger Agreement
and the consummation of Merger and other transactions contemplated thereby did
not result in the creation or imposition of any lien, charge or encumbrance
upon any of the assets of either the Company or Alanex California pursuant to
the terms or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or give any other party
a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the respective charters or by-laws of the
Company or Alanex California, any contract or other agreement to which the
Company or Alanex California is a party or by which the Company is or Alanex
California was or any of their respective properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body
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applicable to the business or properties of the Company or Alanex California
except, in each case, where such lien, charge, encumbrance, breach, violation,
default, termination, acceleration or conflict would not individually or in the
aggregate, have a Material Adverse Effect.
(bb) The Merger was consummated in accordance with
the Merger Agreement without waiver or modification of its terms unless any
such waiver or modification was approved in writing by the Representatives, and
such Merger is effective under applicable law with the effects set forth in
Section 259 of the Delaware General Corporation Law. All consents and
approvals to the Merger, including any necessary regulatory approvals required
for the Company to conduct its business in the same manner as the business of
Alanex California immediately prior to the Merger, have been obtained, except
where the failure to obtain such consent or approval would not have a Material
Adverse Effect; and all actions by or in respect of or filing with any
governmental body, agency, official or authority required to consummate or
permit the consummation of the Merger have been obtained or filed.
4. Agreements of the Company. The Company agrees with
the several Underwriters as follows:
(a) The Company will not, prior to the Effective
Date or thereafter during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by an Underwriter or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will use its best efforts to
cause the Registration Statement to become effective, and will notify the
Representatives promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or
for additional information, (3) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, or the threat thereof, (4) of
the happening of any event during the period mentioned in the second sentence
of Section 4(e) that in the judgment of the Company makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in light of the circumstances in which they are made,
not misleading and (5) of receipt by the Company, its counsel or auditors or
any representative of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any preliminary
prospectus or the Prospectus. If at any time the
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Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. The Company will
use its best efforts to comply with the provisions of and make all requisite
filings with the Commission pursuant to Rule 430A and to notify the
Representatives promptly of all such filings.
(c) The Company will furnish to the
Representatives, without charge, two signed copies of the Registration Statement
and of any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto and will furnish to the Representatives,
without charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d) The Company will comply with all the
provisions of the undertakings contained in Part II of the Registration
Statement.
(e) On the Effective Date, and thereafter from
time to time, the Company will deliver to each of the Underwriters, without
charge, as many copies of the Prospectus or any amendment or supplement thereto
as the Representatives may reasonably request. The Company consents to the use
of the Prospectus or any amendment or supplement thereto by the several
Underwriters and by all dealers to whom the Shares may be sold, both in
connection with the offering or sale of the Shares and for any period of time
thereafter during which the Prospectus is required by law to be delivered in
connection therewith. If during such period of time any event shall occur which
in the judgment of the Company or counsel to the Underwriters should be set
forth in the Prospectus in order to make any statement therein, in the light of
the circumstances under which it was made, not misleading, or if it is necessary
to supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of the Underwriters, without charge,
such number of copies thereof as the Representatives may reasonably request.
(f) Prior to any public offering of the Shares by
the Underwriters, the Company will cooperate with the Representatives and
counsel to the Underwriters in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on
the Effective Date, the Company will furnish to the Representatives and each
other Underwriter who may so request copies of such financial statements and all
annual reports, quarterly reports and
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current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, and such other
documents, reports and information as shall be furnished by the Company to its
stockholders or security holders generally.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need
not be audited but shall be in reasonable detail) for a period of 12 months
ended commencing after the Effective Date, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated
by this Agreement are consummated or this Agreement is terminated, the Company
will pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to
(1) the preparation, printing and filing of the Registration Statement and
exhibits to it, each preliminary prospectus, the Prospectus and any amendment
or supplement to the Registration Statement or the Prospectus, (2) the
preparation and delivery of certificates representing the Shares, (3) the
printing of this Agreement, the Agreement Among Underwriters, any Dealer
Agreements and any Underwriters' Questionnaire, (4) furnishing (including costs
of shipping, mailing and courier) such copies of the Registration Statement,
the Prospectus and any preliminary prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold, (5) the listing and quotation of the Shares on the Nasdaq
National Market, (6) any filings required to be made by the Underwriters with
the NASD, and the reasonable fees, disbursements and other charges of counsel
for the Underwriters in connection therewith, (7) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(f), including the
reasonable fees, disbursements and other charges of counsel to the Underwriters
in connection therewith, and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (8) counsel to the Company, (9) the
transfer agent for the Shares and (10) the Accountants.
(j) If this Agreement shall be terminated (i) by
the Company pursuant to any of the provisions hereof (otherwise than pursuant
to Section 8) or (ii) by the Underwriters pursuant to Section 5 (other than a
termination resulting solely from a failure to satisfy the conditions listed in
paragraph (h) or (n) of Section 5), Section 7(a) or Section 7(b)(i), the
Company will reimburse the several Underwriters for all out-of-pocket expenses
(including the fees, disbursements and other charges of counsel to the
Underwriters) reasonably incurred by them in connection herewith.
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(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares in
violation of the Exchange Act or applicable Nasdaq National Market rules.
(l) The Company will apply the net proceeds from
the offering and sale of the Shares to be sold by the Company substantially in
the manner set forth in the Prospectus under "Use of Proceeds" and shall file
such reports with the Commission with respect to the sale of the Shares and the
application of the proceeds therefrom as may be required in accordance with
Rule 463 under the Act.
(m) During the period of 180 days commencing at
the Closing Date, the Company will not, without the prior written consent of
PaineWebber Incorporated, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, any Common Stock or
securities convertible into Common Stock, other than to the Underwriters
pursuant to this Agreement and other than pursuant to employee benefit plans,
provided, that the Company will not grant options to purchase shares of Common
Stock pursuant to such employee benefit plans at a price less than the initial
public offering price.
(n) The Company will cause each beneficial owner
of outstanding securities of the Company to enter into agreements with the
Representatives in the form set forth in Exhibit B.
5. Conditions of the Obligations of the Underwriters.
In addition to the execution and delivery of the Price Determination Agreement,
the obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement
has become effective shall be received by the Representatives not later than
5:00 p.m., New York City time, on the date of this Agreement or at such later
date and time as shall be consented to in writing by the Representatives and
all filings required by Rule 424 of the Rules and Regulations and Rule 430A
shall have been made.
(b) (i) No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall be pending or threatened by the Commission,
(ii) no order suspending the effectiveness of the Registration Statement or the
qualification or registration of the Shares under the securities or Blue Sky
laws of any jurisdiction shall be in effect and no proceeding for such purpose
shall be pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or the authorities of
any jurisdiction shall have been complied with to the
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satisfaction of the staff of the Commission or such authorities and (iv) after
the date hereof, no amendment or supplement to the Registration Statement or
the Prospectus shall have been filed unless a copy thereof was first submitted
to the Representatives and the Representatives did not object thereto in good
faith, and the Representatives shall have received certificates, dated the
Closing Date and the Option Closing Date and signed by the Chief Executive
Officer or the Chairman of the Board of Directors of the Company and the
Director of Finance of the Company (who may, as to proceedings threatened, rely
upon the best of their information and belief), to the effect of clauses (i),
(ii) and (iii).
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i)
there shall not have been a material adverse change in the business, business
prospects, properties, management, financial condition or results of operations
of the Company, taken as a whole, whether or not arising from transactions in
the ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in the judgment of
the Representatives any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price (a "Material Adverse Change").
(d) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted against the
Company or any of its officers or directors in their capacities as such, before
or by any Federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, in which
litigation or proceeding an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company.
(e) Each of the representations and warranties of
the Company contained herein shall be true and correct in all material respects
(except that such phrase "in all material respects" shall be disregarded to the
extent any such representation and warranty is qualified by "material",
"material adverse change", "Material Adverse Effect" or any phrase using any
such term) at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, as if made at the Closing Date and, with respect to the
Option Shares, at the Option Closing Date, and all covenants and agreements
herein contained to be performed on the part of the Company and all conditions
herein contained to be fulfilled or complied with by the Company at or prior to
the Closing Date and, with respect to the
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Option Shares, at or prior to the Option Closing Date, shall have been duly
performed, fulfilled or complied with.
(f) The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and reasonably satisfactory in form and substance to
counsel for the Underwriters, from Xxxxxx Godward LLP, counsel to the Company,
to the effect set forth in Exhibit C.
(g) The Representatives shall have received an
opinion, dated the Closing Date, and with respect to the Option Shares, the
Option Closing Date, and reasonably satisfactory in form and substance to
counsel for the Underwriters, from Knobbe, Martens, Xxxxx & Bear, patent
counsel to the Company, to the effect set forth in Exhibit D.
(h) The Representatives shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Shearman &
Sterling, counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be reasonably
satisfactory to the Representatives.
(i) On the date of the Prospectus, the
Accountants shall have furnished to the Representatives a letter, dated the
date of its delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations and with respect to the financial and other
statistical and numerical information contained in the Registration Statement.
At the Closing Date and, as to the Option Shares, the Option Closing Date, the
Accountants shall have furnished to the Representatives a letter, dated the
date of its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from the Accountants,
that nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the letter)
not more than five days prior to the Closing Date and the Option Closing Date
which would require any change in their letter dated the date of the
Prospectus, if it were required to be dated and delivered at the Closing Date
and the Option Closing Date.
(j) At the Closing Date and, as to the Option
Shares, the Option Closing Date, there shall be furnished to the
Representatives an accurate certificate, dated the date of its delivery, signed
by each of the Chief Executive Officer and the Director of Finance of the
Company, in form and substance satisfactory to the Representatives, to the
effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and
(A) as of the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a
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material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading and (B) since the Effective Date, no
event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect.
(ii) Each of the representations and
warranties of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate is delivered,
true and correct in all material respects (except that such phrase "in
all material respects" shall be disregarded to the extent any such
representation and warranty is qualified by "material", "material
adverse change", "Material Adverse Effect" or any phrase using any
such term).
(iii) Each of the covenants required
herein to be performed by the Company on or prior to the delivery of
such certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company on or
prior to the date of such certificate has been duly, timely and fully
complied with.
(iv) A Material Adverse Change has not
occurred.
(k) On or prior to the Closing Date, the
Representatives shall have received the executed agreements referred to in
Section 4(n).
(l) The Shares shall be qualified for sale in
such states as the Representatives may reasonably request, each such
qualification shall be in effect and not subject to any stop order or other
proceeding on the Closing Date and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall
have been qualified for quotation on the Nasdaq National Market, subject only
to notice of official issuance.
(n) The NASD shall not have raised any objection
with respect to the fairness and reasonableness of the underwriting terms and
arrangements that has not been resolved to the NASD's satisfaction.
(o) The Company shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company herein, as to the performance by the Company of its
obligations
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hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4(i) and (j) herein.
6. Indemnification.
(a) The Company will indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person, if any, who controls each Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), to which they,
or any of them, may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, liabilities, expenses or damages arise out of
or are based on (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus, (ii) the omission or alleged omission to state in
such document a material fact required to be stated in it or necessary to make
the statements in it not misleading or (iii) any act or failure to act or any
alleged act or failure to act by an underwriter in connection with, or relating
in any manner to, the Shares or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such underwriter through its gross negligence or willful misconduct);
provided that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage (i) arises from the sale of the Shares in
the public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus or (ii) results solely from an untrue statement of
a material fact contained in, or the omission of a material fact
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from, such preliminary prospectus, which untrue statement or omission was
completely corrected in the Prospectus (as then amended or supplemented) if the
Company shall sustain the burden of proving that the Underwriters sold Shares
to the person alleging such loss, claim, liability, expense or damage without
sending or giving, at or prior to the written confirmation of such sale, a copy
of the Prospectus (as then amended or supplemented) if the Company had
previously furnished copies thereof to the Underwriters within a reasonable
amount of time prior to such sale or such confirmation, and the Underwriters
failed to deliver the corrected Prospectus, if required by law to have so
delivered it. This indemnity agreement will be in addition to any liability
that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, each
director of the Company and each officer of the Company who signs the
Registration Statement to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only insofar as losses, claims, liabilities,
expenses or damages arise out of or are based on any untrue statement or
omission or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in writing to
the Company by the Representatives on behalf of such Underwriter expressly for
use in the Registration Statement, the Preliminary Prospectus or the
Prospectus. This indemnity will be in addition to any liability that each
Underwriter may otherwise have.
(c) Any party that proposes to assert the right
to be indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a claim is
to be made against an indemnifying party or parties under this Section 6,
notify each such indemnifying party of the commencement of such action,
enclosing a copy of all papers served, but the omission so to notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 6 unless,
and only to the extent that, such omission results in the forfeiture of
substantive rights or defenses by the indemnifying party. If any such action
is brought against any indemnified party and it notifies the indemnifying party
of its commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement of the
action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel will be at the expense of such indemnified
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party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from
or in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be
at the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees, disbursements and other charges of more than one separate firm admitted
to practice in such jurisdiction at any one time for all such indemnified party
or parties. All such fees, disbursements and other charges will be reimbursed
by the indemnifying party promptly as they are incurred. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto) (a "Settlement"), unless such Settlement includes an unconditional
release of each indemnified party from all liability arising or that may arise
out of such claim, action or proceeding. Notwithstanding any other provision
of this Section 6(c), if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
Settlement effected without its written consent if (i) such Settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such Settlement at least 30 days prior to such Settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
Settlement.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted,
but after deducting any contribution received by the Company from persons other
than the Underwriters, such as persons who control the Company within the
meaning of the Act,
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officers of the Company who signed the Registration Statement and directors of
the Company, who also may be liable for contribution) to which the Company and
any one or more of the Underwriters may be subject in such proportion as shall
be appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Representatives on behalf of the Underwriters,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this
Section 6(d), any person who controls a party to this Agreement within the
meaning of the Act will have the same rights to contribution as that party, and
each officer of the Company who signed the Registration Statement will have the
same rights to contribution as the Company, subject in each case to the
provisions hereof. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in respect of which
a claim for contribution may be made under this Section 6(d), will notify any
such party or parties from whom contribution may be sought, but the omission so
to notify will not relieve the party or parties from whom contribution may be
sought from any other
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obligation it or they may have under this Section 6(d). Except for a
Settlement entered into pursuant to the last sentence of Section 6(c), no party
will be liable for contribution with respect to any action or claim settled
without its written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of the Shares and payment therefor or (iii) any
termination of this Agreement.
7. Termination.
(a) If the Company shall fail on the Closing Date
or on the Option Closing Date to sell and deliver the Shares or Option Shares
which it is obligated to sell hereunder then the Underwriters may, at their
option, by notice from the Representatives to the Company terminate this
Agreement without any liability on the part of any Underwriter to the Company.
(b) The obligations of the several Underwriters
under this Agreement may be terminated at any time on or prior to the Closing
Date (or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representatives, without liability on
the part of any Underwriter to the Company, if, prior to delivery and payment
for the Shares (or the Option Shares, as the case may be), in the sole judgment
of the Representatives, (i) there has been, since the respective dates as of
which information is given in the Registration Statement, any Material Adverse
Change, (ii) trading in any of the equity securities of the Company shall have
been suspended by the Commission, the NASD, by an exchange that lists the
Shares or by the NASDAQ Stock Market, (iii) trading in securities generally on
the New York Stock Exchange or in the NASDAQ Stock Market shall have been
suspended or limited or minimum or maximum prices shall have been generally
established on such exchange or over-the-counter market, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by such exchange or
over-the-counter market or by order of the Commission or the NASD or any court
or other governmental authority, (iv) a general banking moratorium shall have
been declared by either Federal or New York State authorities or (v) any
material adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United States
or any outbreak or material escalation of hostilities or declaration by the
United States of a national emergency or war or other calamity or crisis shall
have occurred the effect of any of which is such as to make it, in the sole
judgment of the Representatives, impracticable or inadvisable to market the
Shares on the terms and in the manner contemplated by the Prospectus.
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8. Substitution of Underwriters. If any one or more of
the Underwriters shall fail or refuse to purchase any of the Firm Shares which
it or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares
which they have respectively agreed to purchase pursuant to Section 1 bears to
the aggregate number of Firm Shares which all such non-defaulting Underwriters
have so agreed to purchase, or in such other proportions as the Representatives
may specify; provided, that in no event shall the maximum number of Firm Shares
which any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior
written consent of such Underwriter. If any Underwriter or Underwriters shall
fail or refuse to purchase any Firm Shares and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase exceeds one-tenth of the aggregate number of the Firm
Shares and arrangements satisfactory to the Representatives and the Company for
the purchase of such Firm Shares are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any
Shares under this Agreement. In any such case either the Representatives or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken pursuant to this Section 8
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
9. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, 0000 Xxxxxxx Xxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000,
Attention: President, or (b) if to the Underwriters, to the Representatives at
the offices of PaineWebber Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Finance Department. Any such notice
shall be effective only upon receipt. Any notice under Section 7 or 8 may be
made by telex or telephone, but if so made shall be subsequently confirmed in
writing.
This Agreement has been and is made solely for the benefit of
the several Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as
used in this Agreement shall not include a purchaser, as such purchaser, of
Shares from any of the several Underwriters.
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24
All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon
or arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
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25
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
ALANEX CORPORATION
By:____________________________________
Name:
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXX & COMPANY, INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves
and as the Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name:
Title:
26
SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
PaineWebber Incorporated
Xxxxxxx & Company, Inc.
Sutro & Co. Incorporated
Total . . . . . . . . . . . . . . . . . . . . . . . ______________________
2,500,000
=========
27
EXHIBIT A
ALANEX CORPORATION
Common Stock
PRICE DETERMINATION AGREEMENT
October ___, 1996
PAINEWEBBER INCORPORATED
XXXXXXX & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated
October ___, 1996 (the "Underwriting Agreement"), among Alanex Corporation, a
Delaware corporation (the "Company"), and the several Underwriters named in
Schedule I thereto or hereto (the "Underwriters"), for whom PaineWebber
Incorporated, Xxxxxxx & Company, Inc. and Sutro & Co. Incorporated are acting
as representatives (the "Representatives"). The Underwriting Agreement
provides for the purchase by the Underwriters from the Company, subject to the
terms and conditions set forth therein, of an aggregate of 2,500,000 shares
(the "Firm Shares") of the Company's common stock, par value $.001 per share.
This Agreement is the Price Determination Agreement referred to in the
Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the
undersigned agree with the Representatives as follows:
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2
The initial public offering price per share for the Firm
Shares shall be $_______.
The purchase price per share for the Firm Shares to be paid by
the several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.
The Company represents and warrants to each of the
Underwriters that the representations and warranties of the Company set forth
in Section 3 of the Underwriting Agreement are accurate as though expressly
made at and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as
Schedule I is a completed list of the several Underwriters, which shall be a
part of this Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of
the agreement among the Underwriters and the Company, please sign and return to
the Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
ALANEX CORPORATION
By:______________________
Name:
Title:
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3
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXX & COMPANY, INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves
and as the Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name:
Title:
30
EXHIBIT B
June ___, 1996
PAINEWEBBER INCORPORATED
XXXXXXX & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters,
pursuant to which PaineWebber Incorporated, Xxxxxxx & Company, Inc. and Sutro &
Co. Incorporated (the "Representatives") intend to act as Representatives to
underwrite a proposed public offering (the "Offering") of shares of Common
Stock, par value $0.001 per share (the "Common Stock"), of Alanex Corporation,
a Delaware corporation, as contemplated by a registration statement (the
"Registration Statement") with respect to such shares to be filed with the
Securities and Exchange Commission (the "Commission") on Form S-1 or SB-2, as
appropriate, the undersigned hereby agrees that the undersigned will not,
directly or indirectly, for a period of 180 days after the commencement of the
Offering, without the prior written consent of PaineWebber Incorporated, (1)
sell, transfer or otherwise dispose of, or offer, contract or grant an option
to sell, transfer or otherwise dispose of, or make any short sales of, or
require the Company to file with the Commission a registration statement under
the Securities Act of 1933, as amended, to register any shares of Common Stock
or securities convertible into or exchangeable for Common Stock of the Company
or warrants or other rights to acquire shares of Common Stock of the Company of
which the undersigned is now, or may in the future become, the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (other than pursuant to employee stock option plans of the Company or
in connection with other employee incentive compensation arrangements with the
Company)) or (2) enter into any swap or similar agreement that transfers, in
whole or in part, any of the economic consequences of the ownership of the
Common Stock, whether any such transaction described in clause (1) or (2)
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2
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise, other than (i) as a bona fide gift or gifts, (ii) by will or
intestacy or to a trust the beneficiaries of which are the undersigned or
members of his or her family or (iii) as a distribution to limited partners or
shareholders of the undersigned, provided that such gift, transfer or
distribution shall be conditioned upon the donee's, transferee's or
distributee's execution and delivery to PaineWebber Incorporated of a Lock-Up
Agreement containing terms identical to the terms contained herein.
The undersigned acknowledges that the Representatives are
relying on the agreements of the undersigned contained herein in carrying out
the Offering and in entering underwriting agreements with respect thereto.
Very truly yours,
By:_________________________________
Print
Name:_______________________________
32
EXHIBIT C
Form of Opinion of
Xxxxxx Godward LLP*
1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct all the activities conducted by
it, to own or lease all the assets and properties owned or leased by it and to
conduct its business as described in the Registration Statement and the
Prospectus.
2. To the best of our knowledge, the Company is duly
qualified to transact business as a foreign corporation and is in good standing
in each state or territory of the United States in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so qualify or
be in good standing would not have a Material Adverse Effect.
3. All of the outstanding shares of Common Stock have
been, and the Shares, when paid for by the Underwriters in accordance with the
terms of the Agreement, will be, duly authorized, validly issued, fully paid
and nonassessable. The Shares are not subject to any preemptive or similar
right under (i) the statutes and judicial and administrative decisions of the
State of Delaware, (ii) the Company's certificate of incorporation or by-laws
or (iii) any instrument, contract or other agreement described in the
Registration Statement or any instrument, document, contract or agreement filed
as an exhibit to the Registration Statement. Except as described in the
Registration Statement or the Prospectus, to the best of our knowledge, the
Company has no commitment to issue, and the Company has no outstanding options,
warrants or other rights calling for the issuance of, any share of capital
stock of the Company to any person or any security or other instrument that by
its terms is convertible into, exercisable for or exchangeable for capital
stock of the Company.
4. No consent, approval, authorization or order of, or
any filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, sale or delivery of
the Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in
__________________________________
* All references in this opinion to the Agreement shall include the
Price Determination Agreement. Capitalized terms used herein and not
otherwise defined have the same meanings as in the Underwriting
Agreement.
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2
connection with the taking by the Company of any action contemplated thereby,
except such as have been obtained under the Act and the Rules and Regulations
and such as may be required under state securities or "Blue Sky" laws or by the
by-laws and rules of the NASD in connection with the purchase and distribution
by the Underwriters of the Shares.
5. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Registration Statement and the Prospectus
under the caption "Capitalization" except for issuances of common stock upon
exercise of outstanding options and warrants. The Shares conform in all
material respects as to legal matters to the description thereof in the
Prospectus under the caption "Description of Capital Stock--Common Stock" and
the statements made under such caption, to the extent they constitute matters
of law or legal conclusions, are accurate in all material respects and fairly
summarize the information presented therein to the extent required by the Act
and the Rules and Regulations. The form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
statutory requirements of the General Corporation Law of the State of Delaware.
6. The Registration Statement and the Prospectus comply
in all material respects as to form with the requirements of the Act and the
Rules and Regulations (except that we express no opinion as to financial
statements, schedules and other financial data and statistical data derived
therefrom contained in the Registration Statement or the Prospectus). To the
best of our knowledge, any instrument, document, lease, license, contract or
other agreement to which the Company is a party (collectively, "Documents")
required to be described or referred to in the Registration Statement or the
Prospectus has been described or referred to therein to the extent required by
the Act and the Rules and Regulations and any Document required by the Act and
the Rules and Regulations to be filed as an exhibit to the Registration
Statement has been filed as an exhibit thereto.
7. To the best of our knowledge, except as disclosed in
the Registration Statement or the Prospectus, no person or entity has the right
to require the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.
8. All descriptions in the Prospectus of statutes,
regulations or legal or governmental proceedings contained under the caption
"Shares Eligible for Future Sale" are accurate in all material respects and
fairly summarizes the information presented to the extent required by the Act
and the Rules and Regulations.
9. The Company has full corporate power and authority to
enter into the Agreement, and the Agreement has been duly authorized, executed
and delivered by the Company, is a valid and binding agreement of the Company
and, except for the
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3
indemnification and contribution provisions thereof, as to which we express no
opinion, is enforceable against the Company in accordance with the terms
thereof.
10. The execution and delivery by the Company of, and the
performance by the Company of its agreements in, the Agreement do not and will
not (i) violate the certificate of incorporation or by-laws of the Company,
(ii) breach or result in a default under, cause the time for performance of any
obligation to be accelerated under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company pursuant
to the terms of, any Document filed as an exhibit to the Registration Statement
except, in each case, where such breach, default, acceleration, lien, charge or
encumbrance would not have a Material Adverse Effect, (iii) breach or otherwise
violate any existing obligation of the Company under any court or
administrative order, judgment or decree of which we have knowledge or (iv)
violate applicable provisions of any statute or regulation in the
United States or the Delaware General Corporation Law.
11. The Company is not an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended.
12. The Shares have been duly approved for quotation on
the Nasdaq National Market.
13. The Company and Alanex California had full corporate
power and authority to enter into the Merger Agreement and to consummate the
Merger. The Merger Agreement was duly authorized, executed and delivered by
each of the Company and Alanex California and constituted a valid and binding
agreement of the Company and Alanex California and was enforceable against the
Company and Alanex California in accordance with the terms thereof. The
performance of the Merger Agreement and the consummation of Merger did not,
except as would not have a Material Adverse Effect, result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of either
the Company or Alanex California pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the respective charters or by-laws of the Company or Alanex California, any
Document filed as an exhibit to the Registration Statement, or violate or
conflict with any judgment, ruling, decree, order, statute, rule or regulation
of any court or other governmental agency or body applicable to the business or
properties of the Company or Alanex California.
14. The Merger was consummated in accordance with the
Merger Agreement without waiver or modification of its terms in any material
respect except to the extent any such waiver or modification has been approved
in writing by the Representatives,
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4
and such Merger is effective under applicable law with the effects set forth in
Section 259 of the Delaware General Corporation Law.
15. We have been advised by the Staff of the Commission
that the Registration Statement became effective under the Act on
_____________, 1996 and that, to the best of our knowledge, no order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending or threatened.
16. The required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period required by
Rule 424(b).
17. To the best of our knowledge, there are no actions,
suits, proceedings or investigations pending or overtly threatened against the
Company before or by any court, governmental agency or arbitrator which (i)
seek to challenge the legality or enforceability of the Agreement or (ii) are
required to be described in the Prospectus under the Act and the Rules and
Regulations that have not been described as required.
In connection with the preparation of the Registration
Statement and the Prospectus, we have participated in conferences with officers
and representatives of the Company and with its certified public accountants
(as you and your counsel have done). At such conferences we have made
inquiries of such officers, representatives and accountants, and discussed the
contents of the Registration Statement and the Prospectus. We have not
ourselves independently verified, and accordingly, do not comment upon, the
accuracy, completeness or fairness of the Registration Statement or the
Prospectus. Based upon the foregoing, nothing has come to our attention that
causes us to believe that, as of the Effective Date, the Registration Statement
[or any amendment thereto] contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus [or any
amendment or supplement thereto,] at the time such Prospectus was issued, [at
the time any such amended or supplemented Prospectus was issued,] at the
Closing Date [and the Option Closing Date], contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading (except that we express
no comment as to financial statements, schedules and other financial data or
statistical data derived therefrom contained in the Registration Statement or
the Prospectus).
Opinion 9 and 13 are subject to the qualification that the
enforceability of the Agreement, the Documents and the Merger Agreement may be:
(i) subject to bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally; and (ii) subject to general
principles of equity (regardless of whether such enforceability is
36
5
considered in a proceeding at law or in equity) including principles of
commercial reasonableness or conscionability and an implied covenant of good
faith and fair dealing.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Agreement and may not be
circulated to, or relied upon by, any other person.
In rendering the foregoing opinion, counsel may rely, to the
extent they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the State of Delaware, and as to
matters of fact, upon certificates of officers of the Company and of government
officials; provided that such counsel shall state that the opinion of any other
counsel is in form satisfactory to such counsel. Copies of all such opinions
and certificates shall be furnished to counsel to the Underwriters on the
Closing Date.
37
EXHIBIT D
Form of Opinion of
Knobbe, Martens, Xxxxx & Bear
1. The portions of the Registration Statement and the
Prospectus entitled "Risk Factors--Uncertainties Associated with Patents and
Proprietary Rights" and "Business--Patents and Proprietary Information"
(together, the "Patent Paragraphs") are accurate and complete statements or
summaries of the matters set forth therein.
2. There are no legal or governmental proceedings, other
than patent applications pending, relating to patent rights of the Company, to
which the Company is a party, and, to our knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others and no basis
for any such proceedings exist.
3. To our knowledge, the Company has not received any
communication in which it is alleged that the Company is infringing or
violating patent rights of third parties.
4. The Company owns or possesses licenses or other
rights to use all patents, trade secrets, trademarks, service marks or other
proprietary information or materials necessary to conduct the business now
being or proposed to be conducted by the Company as described in the
Prospectus.
5. Although we have not independently verified the
accuracy and completeness of the statements contained in the Registration
Statement and the Prospectus, nothing has come to our attention that would
cause us to believe that, at the time the Registration Statement became
effective under the Securities Act of 1933, as amended, the description and
statements in the Patent Paragraphs of the Registration Statement contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein
not misleading; or as of the date of the Prospectus or the date of this
opinion, the description and statements in the Patent Paragraphs of the
Prospectus contained or contain any untrue statement of a material fact or
omitted or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
