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EXHIBIT 1.1
AUTOCYTE, INC.
3,100,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
, 1997
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UNDERWRITING AGREEMENT
, 1997
XXXXXX, READ & CO. INC.
UBS SECURITIES LLC
as Managing Underwriters
c/x XXXXXX, READ & CO. INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AutoCyte, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of 3,100,000 shares (the "Firm Shares") of Common
Stock, $0.01 par value (the "Common Stock"), of the Company. In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
465,000 shares of Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares". The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1, including a prospectus,
relating to the Shares. The Company has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(each thereof being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective (together with any registration statement
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act), including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430(A)
under the Act, is herein called the "Registration Statement", and the
prospectus, in the form filed by the Company with the Commission pursuant to
Rule 424(b) under the Act or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time it became
effective, is herein called the "Prospectus".
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the aggregate
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto in each case at a purchase price of $ per Share.
You shall release the Firm Shares for public sale promptly after this Agreement
becomes effective. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
the other terms and conditions herein set forth, the Underwriters shall have the
right to purchase, severally and not jointly, from the Company, all or a portion
of the Additional Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same purchase price per
share to be paid by the Underwriters to the Company for the Firm Shares. This
option may be exercised at any time on or before the thirtieth day following the
date hereof, by written notice from Xxxxxx, Read & Co. Inc. to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised, and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as the "additional
time of purchase"); provided, however, that the additional time of purchase
shall not be earlier than the time of purchase (as defined below) nor earlier
than the second business day* after the date on which the option shall have been
exercised nor later than the eighth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by [certified or official bank check/wire
transfer], in immediately available funds, against delivery of the certificates
for the Firm Shares to you for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York City time, on , 1997
(unless another time shall be agreed to by you and the Company or unless
postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are actually made is hereinafter sometimes
called the "time of purchase". Certificates for the Firm Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the time of purchase. For
the purpose of expediting the checking of the certificates for the Firm Shares
by
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* As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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you, the Company agrees to make such certificates available to you for such
purpose at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner as the payment for the
Firm Shares. Certificates for the Additional Shares shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the additional time of purchase. For the
purpose of expediting the checking of the certificates for the Additional Shares
by you, the Company agrees to make such certificates available to you for such
purpose at least one full business day preceding the additional time of
purchase.
3. Representations and Warranties of the Company. The Company
represents and warrants (as to itself and, where the context permits and without
specific reference thereto, to the cytology and pathology automation business
conducted by its predecessor, Roche Image Analysis Systems, Inc.) to each of
the Underwriters that:
(a) Each Preliminary Prospectus filed as a part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act fully complied
when so filed in all material respects with the Act, and when the
Registration Statement becomes or became effective and at all times
subsequent thereto up to the time of purchase and the additional time
of purchase, the Registration Statement and the Prospectus and any
amendments or supplements thereto, fully complied and will fully comply
in all material respects with the provisions of the Act, and the
Registration Statement, and all amendments and supplements thereto, at
all such times did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
the Prospectus at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or representation
with respect to any statement contained in the Registration Statement
or the Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf of
any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus and set forth in the section
of the Registration Statement and Prospectus entitled "Underwriting."
(b) As of the date of this Agreement, the Company has an
authorized capitalization as set forth under the heading entitled
"Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase
and the additional time of purchase, as the case may be, the Company
shall have an authorized capitalization as set forth under the heading
entitled "Pro Forma, As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock including Common Stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable and free of any preemptive rights; except
as described in the
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Registration Statement and the Prospectus there are no outstanding
rights, subscriptions, warrants, calls, options or other agreements of
any kind with respect to the capital stock of the Company; the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with full power
and authority to own its properties and conduct its business as
described in the Registration Statement and the Prospectus, to execute
and deliver this Agreement and to issue, sell and deliver the Shares as
herein contemplated.
(c) The Company has no subsidiaries, the Company does not own,
directly or indirectly, shares of capital stock of or other equity
interest in any corporation or other entity.
(d) The Company is duly qualified to do business and in good
standing in each jurisdiction in which it conducts its business; and
the Company is in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by
such jurisdictions.
(e) The Company is not in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), its Certificate of
Incorporation or Bylaws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any material
indenture, mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company is a party or by
which the Company or any of its properties are bound; and the
execution, delivery and performance of this Agreement, the issuance of
the Shares, the incurrence of the obligations set forth herein and the
consummation of the transactions contemplated hereby will not conflict
with, or result in any breach of or constitute a default under (nor
constitute any event which with notice, lapse of time, or both would
constitute a breach of, or default under), any provisions of the
Certificate of Incorporation or Bylaws of the Company or under any
provision of any license, indenture, mortgage, deed of trust, bank loan
or credit agreement or other agreement or instrument to which the
Company is a party or by which the Company or any of its properties may
be bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to
the Company.
(f) The Company is not a party to any litigation, and there is
no litigation pending or to the best knowledge of the Company,
threatened or contemplated, which seeks to enjoin or restrain the
execution, delivery and performance of this Agreement, the issuance of
the Shares, the incurrence of the obligations set forth herein or the
consummation of the transactions contemplated hereby.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company enforceable in accordance with its terms; the Board of
Directors of the Company or a committee thereof duly authorized by the
Board of Directors of the Company has duly adopted resolutions
authorizing the issuance and sale of the Shares by the Company; the
Shares to be sold by
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the Company, when issued and delivered to the Underwriters as
contemplated hereby, will be duly and validly authorized and fully paid
and non-assessable, and free and clear of any pledge, lien, charge,
encumbrance, security interest, preemptive right or other claim.
(h) The capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and Prospectus and the certificates for
the Shares are in due and proper form and the holders of the Shares
will not be subject to personal liability for the debts or other
liabilities or obligations of the Company by reason of being such
holders.
(i) No approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares as contemplated hereby other
than registration of the Shares under the Act, clearance of the
offering of such Shares with the National Association of Securities
Dealers, Inc. (the "NASD") and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters.
(j) Except for rights which have been waived pursuant to
waivers (true and accurate copies of which have been provided to the
Underwriters prior to the date of this Agreement) which are in full
force and effect on the date of this Agreement, as of the time of
purchase and as of the additional time of purchase, no person has the
right, contractual or otherwise, to cause the Company to issue to it,
or register pursuant to the Act, any shares of capital stock of the
Company upon the issue and sale of the Shares to the Underwriters
hereunder; no person has preemptive rights, rights of first refusal or
other rights to purchase any of the Shares; no person has any right to
have securities included in or registered pursuant to the Registration
Statement.
(k) Ernst & Young LLP, whose reports on the consolidated
financial statements of the Company are filed with the Commission as
part of the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the rules and regulations
thereunder.
(l) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(m) There are no actions, suits or proceedings pending or
threatened against the Company or any of its properties or affiliates,
at law or in equity, or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority
or agency which, individually or in the aggregate, could result in a
judgment, decree or order having a material adverse effect on the
properties, assets, liabilities, prospects, results of operations,
business or condition (financial or otherwise) of the Company (a
"Material Adverse Effect").
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(n) The audited financial statements (including the notes
thereto) included in the Registration Statement and the Prospectus
present fairly the financial position of the Company as of the dates
indicated and the results of operations and changes in financial
position of the Company for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved.
(o) The pro forma financial statements and other pro forma
financial information (including the notes thereto) included in the
Registration Statement and the Prospectus have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly computed on the
bases described therein. The assumptions used in the preparation of the
pro forma financial statements and other pro forma information in the
Registration Statement and the Prospectus are set forth therein and are
reasonable, and the adjustments used therein are appropriate to give
pro forma effect to the transactions or circumstances referred to
therein. The other financial and statistical information and data
relating to the Company set forth in the Registration Statement and the
Prospectus have been prepared on a basis consistent with the financial
statements and books and records of the Company. The other statistical
and market-related data set forth in the Registration Statement and the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
may be otherwise stated in the Registration Statement or Prospectus,
there has not been (A) any material and unfavorable change, financial
or otherwise, in the business, properties, assets, prospects,
regulatory environment, results of operations or condition (financial
or otherwise), present or prospective, of the Company, (B) any
transaction, which is material to the business, properties, assets,
prospects, regulatory environment, results of operations or condition
(financial or otherwise), present or prospective, of the Company,
contemplated or entered into by the Company or (C) any obligation,
contingent or otherwise, directly or indirectly incurred by the Company
which is material to the business, properties, assets, prospects,
regulatory environment, results of operations or condition (financial
or otherwise), present or prospective, of the Company.
(q) The Company has good title to all properties and assets
owned or leased by it, in each case, except as set forth in the
Registration Statement and the Prospectus, free and clear of all
pledges, liens, encumbrances, security interests, charges, mortgages
and defects of title other than liens for taxes which taxes are not yet
due and payable.
(r) Each issuance of securities referred to in Item 15 of the
Registration Statement (i) was effected in reliance upon a valid
exemption from the registration requirements of the Act and (ii) was
effected in compliance with the securities or blue sky laws of each
jurisdiction in which such securities were offered or sold.
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(s) The Company has not violated any foreign, federal, state
or local law, regulation, decree, order, directive, requirement or
judgment applicable to the Company relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), nor any
federal or state law relating to discrimination in the hiring,
promotion or pay of employees nor any applicable federal or state wages
and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, and
the Company has not received any notice which is pending alleging any
violation thereof or liability thereunder.
(t) The Company has such permits, licenses, consents,
approvals, franchises and authorizations required by federal, state,
local, foreign or other governmental or regulatory authorities
("Permits"), and has made all filings required, including without
limitation under any applicable Environmental Laws, as are necessary to
own, lease and operate its properties and to conduct its business. The
Company is not in material violation of, and has fulfilled and
performed all of its material obligations with respect to its Permits,
and the Company has not received notice from any Governmental Authority
of the revocation or termination, or threatened revocation or
termination, of any Permits or any other material impairment of the
rights of the holder of any Permit; and, except as described in the
Prospectus, the Permits contain no restrictions that are materially
burdensome to the Company.
(u) Compliance by the Company with Environmental Laws (as
currently in effect), including any capital or operating expenditure
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities, singly or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
(v) There is no claim pending or, to the best knowledge of the
Company, threatened or contemplated under any Environmental Laws
against the Company which, if adversely determined, individually or in
the aggregate, would have a Material Adverse Effect; there are no past
or present actions or conditions, including, without limitation, the
release of any hazardous substance or waste regulated under any
Environmental Law that are likely to form the basis of any such claim
against the Company, if adversely determined, individually or in the
aggregate would have a Material Adverse Effect.
(w) Neither the Company nor any employee of the Company has
made any payment of funds of the Company prohibited by law, and no
funds of the Company have been set aside to be used for any payment
prohibited by law.
(x) The Company has filed all federal or state income and
franchise tax returns required to be filed and has paid all taxes shown
thereon as due, and there is no material tax deficiency which has been
or might be asserted against the Company; all material tax liabilities
of the Company are adequately provided for on the books of the Company.
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(y) Neither the Company nor any of its affiliates has incurred
any liability for any finder's fees or similar payments in connection
with the transactions herein contemplated.
(z) The Company has in effect, with financially sound and
reputable insurers, insurance with respect to its business and
properties against loss or damage of the kind customarily insured
against by corporations of established reputation engaged in the same
or similar businesses and similarly situated, of such type and in such
amounts as are customarily carried under similar circumstances by such
other corporations.
(aa) Except as specifically disclosed in the Prospectus, the
Company owns or possesses adequate rights to use all patents, patent
rights, inventions, trade secrets, know-how, trademarks, service marks,
trade names and copyrights (collectively, "Intellectual Property
Rights") which are necessary to conduct its businesses as described or
contemplated in the Registration Statement and Prospectus; the Company
has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of the Company by
others with respect to any Intellectual Property Rights; the Company
has not received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property Rights which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, might
have a Material Adverse Effect; and to the knowledge of the Company,
none of the patents owned by the Company are unenforceable or invalid.
The Company has duly and properly filed or caused to be filed with the
United States Patent and Trademark Office (the "PTO") and applicable
foreign and international patent authorities all patent applications
described or referred to in the Prospectus, and believes it has
complied with the PTO's duty of candor and disclosure for each of the
United States patent applications described or referred to in the
Prospectus; the Company is unaware of any facts which would preclude
the grant of a patent from each of the patent applications described or
referred to in the Prospectus; and the Company has no knowledge of any
facts which would preclude it from having clear title to its patent
applications described or referred to in the Prospectus.
(bb) No labor disturbance by the employees of the Company
exists or, to the Company's knowledge, is imminent; the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, subassemblers, value added resellers,
subcontractors, original equipment manufacturers, authorized dealers or
international distributors that might be expected to result in a
Material Adverse Effect. No collective bargaining agreement exists with
any of the Company's employees and, to the best of the Company's
knowledge, no such agreement is imminent.
(cc) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Act) has taken, directly or
indirectly, any action which might in the future reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Stock, to facilitate the sale or resale of the Shares or
otherwise.
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(dd) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (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.
(ee) The Company has made all filings and received all
regulatory authorizations necessary to conduct the Company's business
as it is currently conducted in any foreign countries, including but
not limited to Australia and Switzerland, based on all available
information provided to the Company through the date hereof by
applicable regulatory authorities; the Company is in compliance with
all such regulatory authorizations; and the Company has no reason to
believe that any party granting any such authorization is considering
limiting, suspending or revoking the same and knows of no basis for any
such limitation, suspension or revocation.
(ff) The Company has obtained the agreement of each of its
directors, officers and securityholders not to sell, contract to sell,
grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 180 days after the date of this
Agreement.
(gg) The Company is not, and after application of the proceeds
as described under the caption "Use of Proceeds" in the Registration
Statement and the Prospectus, will not be an "investment company" or an
affiliated person of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended, and the rules and regulations
thereunder.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares, provided that the Company
shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to make every
reasonable effort to obtain the withdrawal of any order or suspension
as soon as practicable;
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(b) to make available to you in New York City or such other
places as you may designate, as soon as practicable after the
Registration Statement becomes effective, and thereafter from time to
time to furnish to the Underwriters, as many copies of the Prospectus
(or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective
date of the Registration Statement) as the Underwriters may reasonably
request for the purposes contemplated by the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act (which the Company agrees to file in a timely manner under such
Rules);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending
the effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or Prospectus and to file no such
amendment or supplement to which you shall object in writing; to file
promptly with the Commission any amendment to the Registration
Statement or Prospectus or any supplement to the Prospectus that may,
in the judgment of the Company or you, be required by the Securities
Act or requested by the Commission; and to file promptly, if the
Company elects to rely on Rule 462(b), a Registration Statement
pursuant to Rule 462(b) with the Commission in compliance with such
rule and pay the applicable fees in accordance with Rule 111 of the
Rules and Regulations by the earlier of (i) 10:00 P.M., New York time
on the date of this Agreement or (ii) the time confirmations are sent
or given, as specified by Rule 462(b);
(e) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement
(i) copies of any reports or other communications which the Company
shall send to its stockholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, and any
other document filed by the Company pursuant to Sections 12, 13, 14 or
15(d) of the Securities and Exchange Act of 1934, as amended, and (iii)
such other information as you may reasonably request regarding the
Company;
(f) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a
prospectus relating to the Shares is required to be delivered under the
Act which, in the judgment of the Company, would
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require the making of any change in the Prospectus then being used so
that the Prospectus, as then supplemented, would not include an untrue
statement of material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they are made, not misleading, and, during such time, to prepare
and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to such Prospectus as may be necessary
to reflect any such change and to furnish you a copy of such proposed
amendment or supplement before filing any such amendment or supplement
with the Commission;
(g) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement but ending not later than 15 months after the effective date
of the Registration Statement, as soon as is reasonably practicable
after the termination of such twelve-month period;
(h) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(i) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim financial statements, if any, of the
Company and its Subsidiaries which have been read by the Company's
independent certified public accountants, as stated in their letter
furnished pursuant to Section 6(d) of this Agreement; to refrain from
investing the proceeds from the sale of the Shares in a manner to cause
the Company to become an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(j) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of Proceeds" in the
Registration Statement and the Prospectus;
(k) whether or not the transactions contemplated by this
Agreement are consummated or this Agreement otherwise becomes effective
or is terminated, to pay all expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof and clauses
(iii), (iv) and (vi) below) in connection with (i) the preparation and
filing of the Registration Statement, each Preliminary Prospectus, the
Prospectus, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the
preparation, issuance, sale and delivery of the Shares, (iii) the word
processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of Information and
Powers of Attorney and the reproduction and/or printing and
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furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Shares for offering and sale under state laws and the determination
of their eligibility for investment under state law as aforesaid
(including the legal fees and filing fees and other disbursements of
counsel for the Underwriters) and the printing and furnishing of copies
of any blue sky surveys or legal investment surveys to the Underwriters
and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on the NASDAQ
National Market and any registration thereof under the Securities
Exchange Act of 1934 (the "Exchange Act"), (vi) any filing for review
of the public offering of the Shares by the NASD and (vii) the
performance of the Company's other obligations hereunder;
(l) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Sections 13, 14 or 15(d) of
the Exchange Act;
(m) not to sell, contract to sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable for Common Stock
or warrants or other rights to purchase Common Stock or permit the
registration under the Act of any shares of Common Stock, except for
the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement and except for issuances of Common Stock
upon the exercise of outstanding options, warrants and debentures, for
a period of 180 days after the date hereof, without the prior written
consent of Xxxxxx, Read & Co. Inc. acting on behalf of the Managing
Underwriters;
(n) to use its best efforts to cause the Shares to be listed
on the NASDAQ National Market; and
(o) not to take, directly or indirectly, any action designed
to cause or to result in, or that might constitute the stabilization or
manipulation of the Common Stock to facilitate the sale or resale of
the Shares.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of
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purchase (unless previously waived) and at the additional time of purchase, as
the case may be), the performance by the Company of its obligations hereunder
and to the following conditions:
(a) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Xxxxxx & Dodge LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form satisfactory to Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Underwriters, stating
that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and
authority to own its properties and conduct its business as
described in the Registration Statement and the Prospectus, to
execute and deliver this Agreement and to issue, sell and
deliver the Shares as herein contemplated;
(ii) the Company has no subsidiaries;
(iii) the Company is duly qualified to do business in
and is in good standing in, each jurisdiction in which it
conducts its businesses, owns or leases real property or
maintains an office and in which such qualification is
necessary;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company; the Board of Directors
of the Company or a committee thereof duly authorized by the
Board of Directors of the Company has duly adopted resolutions
authorizing the issuance and sale of the Shares by the
Company;
(v) the Shares, when issued and delivered to and paid
for by the Underwriters in accordance with the terms hereof,
will be duly and validly authorized and issued and will be
fully paid and non-assessable;
(vi) the Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus;
the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully
paid, non-assessable and free of statutory and contractual
preemptive rights; the Shares when issued will be free of any
preemptive rights, pledges, liens, encumbrances or claims; the
certificates for the Shares are in due and proper form and the
holders of the Shares will not be subject to personal
liability for the debts or other liabilities or obligations of
the Company by reason of being such holders;
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(vii) to the best of such counsel's knowledge, the
Company does not own, directly or indirectly, shares of
capital stock of or equity interest in any corporation or
other entity;
(viii) the capital stock of the Company, including
the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement
and Prospectus;
(ix) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by
reference therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act;
(x) the Registration Statement has become effective
under the Act and, to the best of such counsel's knowledge, no
stop order proceedings with respect thereto are pending or
threatened under the Act;
(xi) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Shares as contemplated hereby other than registration of the
Shares under the Act and the clearance of the offering of such
shares with the NASD (except such counsel need express no
opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters);
(xii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not and will not
conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice,
lapse of time, or both, would constitute a breach of or
default under), any provisions of the Certificate of
Incorporation or Bylaws of the Company or under any provision
of any license, indenture, mortgage, deed of trust, bank loan,
credit agreement or other agreement or instrument known to
such counsel to which the Company is a party or by which the
Company or any of its properties may be bound or affected, or
under any law, regulation or rule applicable to the Company or
under any decree, judgment or order known to such counsel
applicable to the Company;
(xiii) to the best of such counsel's knowledge, the
Company is not a party to any litigation, and there is no such
litigation pending or threatened, which seeks to enjoin or
restrain the execution, delivery and performance of this
Agreement, the incurrence of the obligations set forth herein
or the consummation of the transactions contemplated hereby;
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(xiv) the Company is not in breach of, or in default
under (nor has any event occurred which with notice, lapse of
time, or both would constitute a breach of, or default under),
any license, indenture, mortgage, deed of trust, bank loan or
any other agreement or instrument known to such counsel to
which the Company is a party or by which the Company or any of
its properties may be bound or affected or under any law,
regulation or rule applicable to the Company or under any
decree, judgment or order known to such counsel applicable to
the Company;
(xv) there are no contracts, licenses, agreements,
leases or documents known to such counsel of a character which
are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus
which have not been so filed, summarized or described;
(xvi) to the best of such counsel's knowledge, there
are no actions, suits or proceedings pending or threatened
against the Company or any of its properties, at law or in
equity or before or by any commission, board, body, authority
or agency which are required to be described in the
Registration Statement and the Prospectus but are not so
described;
(xvii) each issuance of securities referred to in
Item 15 of the Registration Statement (i) was effected in
reliance upon a valid exemption from the registration
requirements of the Act and (ii) was effected in compliance
with the securities or blue sky laws of each jurisdiction in
which such securities were offered and sold;
(xviii) the Company is not, and after application of
the proceeds as described under the caption "Use of Proceeds"
in the Registration Statement and the Prospectus, will not be
an "investment company" or an affiliated person of, or
"promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company
Act of 1940, as amended, and the rules and regulations
thereunder; and
(xix) such counsel have participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants of the
Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in
subparagraphs (vi) and (viii) above) and has not made any
independent verification or check of such statements (except
for purposes of subparagraphs (vi) and (viii) above), on the
basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives
of the Company) nothing has come to the attention of such
counsel that causes them to believe that the
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Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective
contained an 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 supplement thereto at the date of
such Prospectus or such supplement, and at all times up to and
including the time of purchase or additional time of purchase,
as the case may be, contains or contained an untrue statement
of a material fact or omits or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such
counsel need express no belief with respect to the financial
statements and schedules and other financial and statistical
data included in the Registration Statement or Prospectus).
(b) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Bell, Seltzer, Park & Xxxxxx, patent counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters and in form satisfactory to Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the
Underwriters, stating that:
(i) all patents and pending patent applications owned
by or licensed to the Company known to such counsel and all
contracts known to such counsel pursuant to which the Company
has, or has granted, rights to any patents or pending patent
applications are listed on Schedule A;
(ii) based upon such counsel's (a) inquiry of the
Company's representatives responsible for patent matters, (b)
review of the documentation of patent transfers in connection
with the RIAS acquisition, (c) such counsel's review of the
chain of title in the United States Patent and Trademark
Office (the "US PTO") of the Company's United States patents
and patent applications listed in Schedule A and (d) inquiries
of foreign associates responsible for filing and prosecuting
applications in foreign jurisdictions with regard to the
foreign patents and patent applications listed in Schedule A:
(i) the patents listed on Schedule A (the "Patents") and
patent applications listed on Schedule A (the "Applications")
have been validly assigned to the Company and (ii) the Company
is listed as the sole holder of record in the records of the
US PTO (or in the case of foreign patents, the appropriate
foreign patent office) of each of the Patents and each of the
Applications. Such counsel knows of no claims of third parties
to any ownership interest or lien with respect to any of the
Patents or Applications and we have no knowledge of any facts
which would preclude the Company from having clear title and
unencumbered right to the Patents and Applications. None of
the pending Applications has been abandoned. [The Company has
obtained assignment documents from the named inventors for
each of its Patents and Applications, and to the inventions
described and claimed therein and foreign
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applications filed for such inventions, and has caused these
assignments to be recorded in the US PTO and foreign patent
offices, as appropriate];
(iii) to the best of such counsel's knowledge, the
Company has complied with the US PTO duty of candor and
disclosure for each of the United States Patents and
Applications;
(iv) there are no legal or governmental proceedings
relating to the Company's patent rights, other than US PTO
reviews of Applications or comparable foreign proceedings, and
to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by government authorities or
others. To the best of such counsel's knowledge, there is no
pending or threatened interference proceeding or public use
proceeding with respect to any Application;
(v) no facts have come to such counsel's attention
that cause such counsel to believe that any of the claims of
the Patents or Applications is unenforceable or invalid. To
the best of such counsel's knowledge, there is no pending
action, suit, proceeding or claim by others challenging the
validity or enforceability of any claim of the Patents;
(vi) such counsel has conducted the following
searches with regard to the inventions claimed in the Patents
and Applications: [briefly describe] Based thereon and on
discussions with representatives of the Company responsible
for patent matters, such counsel is not aware of any patents
of others which are or would be infringed by the specific
current or proposed products or processes of the Company
referred to in the Prospectus. To the best of such counsel's
knowledge, there is no pending or threatened action, suit,
proceeding or claim by others that the Company is infringing
any patent;
(vii) except as described in the Prospectus, no
infringement by others of the claims of any of the Patents or
Applications has been brought to such counsel's attention, and
the Company has not requested that we render any advice
regarding issues of infringement by others;
(viii) such counsel has no knowledge of any facts
that would form a basis for the belief that the Company lacks
any rights or licenses to use all patents, know-how and other
intellectual property necessary to conduct the business now
conducted or proposed to be conducted by the Company as
described in the Prospectus;
(ix) to the best of such counsel's knowledge, the
statements in the Prospectus relating to patent, trademark and
licensing matters under the captions "Risk Factors-Dependence
on Patents, Copyrights, Licenses and Proprietary Rights; Risk
of Third Party Claims of Infringement" and "Business-Patents,
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Copyrights, Licenses and Proprietary Rights," and other
references in the Prospectus to patent, trademark and
licensing matters, insofar as such statements constitute a
summary of legal matters, documents or proceedings, are
accurate and present fairly the matters set forth therein; and
(x) no facts have come to such counsel's attention
which cause such counsel to believe that the statements in the
Prospectus relating to patent, trademark and licensing matters
under the captions "Risk Factors-Dependence on Patents,
Copyrights, Licenses and Proprietary Rights; Risk of Third
Party Claims of Infringement" and "Business-Patents,
Copyrights, Licenses and Proprietary Rights," and other
references in the Prospectus to patent, trademark and
licensing matters, contained an untrue statement of material
fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances in which
they were made, not misleading, or as of the date hereof,
contain an 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, in the
light of the circumstances under which they were made, not
misleading.
(c) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion
of Fenwick & West, regulatory counsel to the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form satisfactory to Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Underwriters, stating
that:
(i) the statements in the Prospectus under the
captions "Risk Factors - Uncertainty Regarding Obtaining FDA
Approval," "Risk Factors - Extensive Government Regulation,"
"Business - Clinical Trials of PREP and SCREEN" and "Business
-- Government Regulation," and other references in the
Prospectus to those matters described in such sections, are
accurate and complete statements of the legal matters,
documents and proceedings set forth therein;
(ii) no facts have come to such counsel's attention
which cause such counsel to believe that the statements in the
Prospectus under the captions "Risk Factors - Uncertainty
Regarding Obtaining FDA Approval," "Risk Factors - Extensive
Government Regulation," "Business - Clinical Trials of PREP
and SCREEN" and "Business -- Government Regulation," and other
references in the Prospectus to those matters described in
such sections, at the time the Registration Statement became
effective, contained an 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
as of the date hereof, contain an 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, in the light of the circumstances under which they
were made, not misleading; and
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(iii) such counsel has no actual knowledge of any
action, suit or proceeding pending or threatened by the FDA or
other federal regulatory authority, except in each case as
described in the Prospectus.
(d) You shall have received from Ernst & Young LLP, letters
dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by the Managing
Underwriters.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the
Underwriters, dated the time of purchase or the additional time of
purchase, as the case may be, in form and substance reasonably
satisfactory to you.
(f) No amendment or supplement to the Registration Statement
or Prospectus shall be filed prior to the time the Registration
Statement becomes effective to which you object in writing.
(g) The Registration Statement shall become effective, or if
Rule 430A under the Act is used, the Prospectus shall have been filed
with the Commission pursuant to Rule 424(b) under the Act, at or before
5:00 P.M., New York City time, on the date of this Agreement, unless a
later time (but not later than 5:00 P.M., New York City time, on the
second full business day after the date of this Agreement) shall be
agreed to by the Company and you in writing or by telephone, confirmed
in writing; provided, however, that the Company and you and any group
of Underwriters, including you, who have agreed hereunder to purchase
in the aggregate at least 50% of the Firm Shares may from time to time
agree on a later date.
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, (i) no material and unfavorable change, financial or otherwise
(other than as referred to in the Registration Statement and
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Prospectus), in the properties, assets, liabilities, results of
operations, business, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole shall occur or
become known and (ii) no transaction which is material and unfavorable
to the Company shall have been entered into by the Company or any of
its Subsidiaries.
(j) The Company will, at the time of purchase or additional
time of purchase, as the case may be, deliver to you a certificate of
its chief executive officer and chief financial officer to the effect
that the representations and warranties of the Company as set forth in
this Agreement and the conditions set forth in paragraph (h) and
paragraph (i) have been met and that they are true and correct as of
each such date.
(k) You shall have received signed letters from each of the
directors, officers and securityholders of the Company to the effect
that such persons shall not sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock of the Company or securities convertible into or
exchangeable for Common Stock or warrants or other rights to purchase
Common Stock for a period of 180 days after the date of this Agreement
without the prior written consent of Xxxxxx, Read & Co. Inc. acting on
behalf of the Managing Underwriters.
(l) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus and other
matters as of the time of purchase and the additional time of purchase,
as the case may be, as you may reasonably request.
(m) The Company shall have performed such of its obligations
under this Agreement as are to be performed by the terms hereof at or
before the time of purchase and at or before the additional time of
purchase, as the case may be.
(n) The Company shall have taken all actions necessary to (i)
effect a reverse stock split so that every ____________ shares of
Common Stock become one share of Common Stock, (ii) amend the Company's
Certificate of Incorporation to provide for the automatic conversion of
the Company's Series A Convertible Preferred Stock into Common Stock
upon the consummation of the offering contemplated by this Agreement
and (iii) terminate the Stockholders Agreement between the Company and
certain stockholders dated November 22, 1996.
(o) The Shares shall have been approved for listing on the
NASDAQ National Market, subject only to notice of issuance at or prior
to the time of purchase.
7. Effective Date of Agreement; Termination. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
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The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or in the absolute discretion
of Xxxxxx, Read & Co. Inc., acting on your behalf, or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, at any time prior to the time of purchase or, with
respect to the purchase of any Additional Shares, the additional time of
purchase, as the case may be, trading in securities on the New York Stock
Exchange shall have been suspended or minimum prices shall have been established
on the New York Stock Exchange, or if a banking moratorium shall have been
declared either by the United States or New York State authorities, or if the
United States shall have declared war in accordance with its constitutional
processes or there shall have occurred any material outbreak or escalation of
hostilities or other national or international calamity or crisis of such
magnitude in its effect on the financial markets of the United States as, in
your judgment or in the judgment of Xxxxxx, Read & Co. Inc., acting on your
behalf, or in the judgment of such group of Underwriters, to make it
impracticable to market the Shares.
If you or Xxxxxx, Read & Co. Inc., acting on your behalf, or any group
of Underwriters elects to terminate this agreement as provided in this Section
7, the Company and each other Underwriter shall be notified promptly by letter
or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(k), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. If any Underwriter shall
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1 hereof) the number
of Firm Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be taken up and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
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If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
9. Indemnity by the Company and the Underwriters.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, any person who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
their respective agents, representatives, employees, officers, partners
and directors (collectively, the "Underwriter indemnified parties"),
from and against any loss, expense, damage, judgment, liability or
claim (including the costs of investigating, defending or settling such
matters and fees and expenses of counsel in connection therewith) as
they are incurred (and regardless of whether the Underwriter
indemnified party is a party to the litigation, if any) which, jointly
or severally, any such Underwriter indemnified party may incur under
the Act, the Exchange Act or otherwise insofar as such loss, expense,
damage, judgment, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus, the
Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, expense, damage, judgment, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished
in writing by any Underwriter through you to the Company expressly for
use with reference to such Underwriter in such Registration Statement
or such Prospectus or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in either such Registration Statement
or Prospectus or necessary to make such information not misleading.
If any action or proceeding (including any governmental or
regulatory investigation or proceeding) is brought or asserted against
any Underwriter indemnified party in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such
Underwriter indemnified party shall promptly notify the Company in
writing of the institution of such action or proceeding and the Company
shall assume the defense of such action or proceeding, including the
employment of counsel
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satisfactory to the Underwriter indemnified party and payment of all
fees and expenses; provided that the omission to so notify the Company
shall not in any way relieve the Company from any liability it may have
to an Underwriter indemnified party. An Underwriter indemnified party
shall have the right to employ separate counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter indemnified party unless the employment of such counsel
shall have been authorized in writing by the Company in connection with
the defense of such action or the Company shall not have employed
counsel to have charge of the defense of such action within a
reasonable period of time or such Underwriter indemnified party or
parties shall have reasonably concluded that there may be one or more
defenses available to it or them which are different from or additional
to those available to the Company (in which case the Company shall not
have the right to direct the defense of such action on behalf of the
Underwriter indemnified party or parties), in any of which events such
fees and expenses shall be borne by the Company and paid as incurred
(it being understood, however, that the Company shall not be liable for
the expenses of more than one separate counsel (in addition to local
counsel), which counsel shall be designated by Xxxxxx, Read & Co. Inc.,
in any one action or series of related actions in the same jurisdiction
representing the Underwriter indemnified parties who are parties to
such action). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of
any such claim or action effected without its written consent (which
consent shall not be unreasonably withheld or delayed) unless the
Company shall be in breach of its obligations to pay fees and expenses
pursuant to this Agreement, but if settled with the written consent of
the Company, or if there is a final judgment with respect thereto, the
Company agrees to indemnify and hold harmless each Underwriter
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, and any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act (each, a "Company indemnified party")
from and against any loss, expense, damage, judgment, liability or
claim (including the costs of investigating, defending or settling such
matters and fees and expenses of counsel in connection with therewith)
as they are incurred (and regardless of whether the Company indemnified
party is a party to the litigation if any) which, jointly or severally,
such Company indemnified party may incur under the Act or otherwise,
insofar as such loss, expense, damage, judgment, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated either in such Registration
Statement or Prospectus or necessary to make such information not
misleading.
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If any action is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such action and such Underwriter shall assume the
defense of such action, including the employment of counsel and payment
of expenses. The Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such action or such
Underwriter shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to such
Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however,
that such Underwriter shall not be liable for the expenses of more than
one separate counsel in any one action or series of related actions in
the same jurisdiction representing the indemnified parties who are
parties to such action). Anything in this paragraph to the contrary
notwithstanding, no Underwriter shall be liable for any settlement of
any such claim or action effected without the written consent of such
Underwriter.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under the foregoing subsections of
this Section 9 in respect of any losses, expenses, damages, judgments,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, expenses, liabilities or claims (if
and only to the extent that indemnification of such indemnified party
would be required under this Section 9 if the indemnification provided
for in this Section 9 were available) (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, expenses, damages, judgments,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but 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. The relative fault of
the Company on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to
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information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, expenses,
damages, judgments, liabilities and claims referred to above shall be
deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending
any claim or action.
(d) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriter's obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and
not joint.
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any
Underwriter indemnified party, or by or on behalf of any Company
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Shares. The indemnity and
contribution agreements contained in this Section 9 are in addition to
any other remedies that the parties hereto may have in equity or at
law. The Company and each Underwriter agree promptly to notify the
others of the commencement of any litigation or proceeding against it
and, in the case of the Company, against any of the Company's officers
and directors in connection with the issuance and sale of the Shares,
or in connection with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Xxxxxx, Read & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 000 Xxxxxx
Xxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: President and Chief
Executive Officer.
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11. Construction. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED
AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
12. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and the
Underwriter indemnified parties and the Company indemnified parties referred to
in Section 9 hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
13. Counterparts. This agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
[INTENTIONALLY LEFT BLANK]
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If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
AUTOCYTE, INC.
By:_____________________________________
Name:
Title:
Accepted and agreed to as of the date
first above written, on behalf of
themselves, UBS SECURITIES LLC and
the other several Underwriters named
in Schedule A
XXXXXX, READ & CO. INC.
UBS SECURITIES LLC
By: XXXXXX, READ & CO. INC., as
Managing Underwriter
By:_______________________________
Name:
Title:
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SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
XXXXXX, READ & CO. INC.
UBS SECURITIES LLC
Total........................................................... 3,000,000
----- ---------
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