Exhibit 1.1
6,000,000
COMBINATORx, INCORPORATED
COMMON STOCK
UNDERWRITING AGREEMENT
, 2005
XX XXXXX & CO., LLC
PACIFIC GROWTH EQUITIES, LLC
SUNTRUST CAPITAL MARKETS, INC.
X.X. XXXXXXX & SONS, INC.
As Representatives of the Several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. CombinatoRx, Incorporated, a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of 6,000,000 shares of common stock, $.001 par
value (the "Common Stock"), of the Company. The aggregate of 6,000,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 3 hereof, up to an additional 900,000 shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". XX Xxxxx & Co., LLC ("XX Xxxxx"),
Pacific Growth Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx &
Sons, Inc. are acting as representatives of the several Underwriters and in such
capacity are hereinafter referred to as the "Representatives." As part of the
offering contemplated by this Agreement, XX Xxxxx (the "Designated Underwriter")
has agreed to reserve, out of the Firm Stock purchased by it under this
Agreement, up to 300,000 shares for sale to the Company's customers and business
partners and friends of the Company's officers, directors and employees
(collectively, "Participants"), as set forth in the Prospectus (as defined
herein) under the heading "Underwriting" (the "Directed Share Program"). The
Firm Stock to be sold by the Designated Underwriter pursuant to the Directed
Share Program (the "Directed Shares") will be sold by the Designated Underwriter
pursuant to this Agreement at the public offering price. Any Directed Shares not
subscribed for by the end of the business day on which this Agreement is
executed will be offered to the public by the Underwriters as set forth in the
Prospectus.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Underwriters and the Designated
Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-121173)
(including all pre-effective amendments thereto, the "Initial
Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been
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declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Securities Act")
and the rules and regulations (the "Rules and Regulations") of the
Commission thereunder, which became effective upon filing, no other
document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order
suspending the effectiveness of the Initial Registration Statement,
any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the Rules and
Regulations, is hereinafter called a "Preliminary Prospectus"); the
various parts of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, including all exhibits thereto
and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act and deemed by virtue of Rule 430A under the Securities
Act to be part of the Initial Registration Statement at the time it
was declared effective, each as amended at the time such part of the
Initial Registration Statement became effective or such part of the
Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, are hereinafter collectively called the
"Registration Statements"; and such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Securities Act, is
hereinafter called the "Prospectus". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Securities
Act. No order preventing or suspending the use of any Preliminary
Prospectus, Prospectus, or any amendment or supplement thereto has
been issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform) in all material respects
to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statements and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that the foregoing representations and warranties
in this paragraph (b) shall not apply to information contained in or
omitted from the Registration Statements or the Prospectus or any such
amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information the parties hereto agree is
limited to the Underwriter's Information (as defined in Section 16).
The Prospectus contains all required information under Rule 430A.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
and has all power and authority (corporate or other) necessary to own
or hold its properties and to conduct the business in which it is
engaged. The Company is duly qualified to do business and is in good
standing as a foreign corporation or other legal entity in each
jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to so qualify or have such power or authority (i) would not
have, singularly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), results of operations, business,
assets or prospects of the Company or (ii) impair in any material
respect the ability of the Company to perform its obligations under
this Agreement or to consummate any transaction contemplated by this
Agreement or the Prospectus (any such effect as described in clauses
(i) or (ii), a "Material Adverse Effect"). The Company does not own or
control, directly or indirectly, any interest in
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any corporation, partnership, limited liability partnership, limited
liability corporation, association or other entity. The Company has no
subsidiaries (as defined in Section 14).
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
any preemptive or similar rights and will conform to the description
thereof contained in the Prospectus.
(f) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company, have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal
and state securities laws, and conform to the description thereof
contained in the Prospectus. There are, and immediately prior to the
Closing, there will be 906,870 shares of common stock issued and
outstanding and 503,400 shares of Series A convertible preferred
stock, par value $0.001, 3,364,250 shares of Series B convertible
preferred stock, par value $0.001, 10,746,666 shares of Series C
convertible preferred stock, par value $0.001 and 8,292,699 shares of
Series D convertible preferred stock, par value $0.001 of the Company
(such Series A convertible preferred stock, Series B convertible
preferred stock, Series C convertible preferred stock and Series D
convertible preferred stock, collectively, the "Preferred Stock")
issued and outstanding, and 2,787,030 shares of common stock are
issuable upon the exercise of all outstanding options, warrants and
convertible securities (other than Preferred Stock). There are no
other authorized or outstanding shares of capital stock, or options,
warrants, preemptive rights, rights of first refusal or other rights
to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company.
Immediately upon the First Closing, all outstanding shares of
Preferred Stock will automatically be converted into an aggregate of
13,366,644 shares of common stock of the Company and all outstanding
options, warrants, rights or other securities convertible into or
exercisable for Preferred Stock or common stock will be converted into
or exercisable or exchangeable for an aggregate of 2,787,030 shares of
common stock of the Company (the shares of Common Stock issued upon
conversion of outstanding Preferred Stock or upon conversion, exercise
or exchange of all outstanding warrants, rights or other securities
are collectively referred to herein as, the "Converted Common
Shares"). None of the outstanding shares of Common Stock or Preferred
Stock was, and none of the Converted Common Shares will be, issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company.
The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted
thereunder, as described in the Prospectus accurately and fairly
present the information required under the Securities Act to be shown
with respect to such plans, arrangements, options and rights.
(g) The execution, delivery and performance of this Agreement by
the Company, the issue and sale of the Stock by the Company and the
consummation of the transactions contemplated hereby will not (with or
without notice or lapse of time or both) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, or give rise to any right of termination,
or loss of any benefit under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or any statute or any judgment, order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties or assets.
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(h) Except for such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable
state securities laws, the National Association of Securities Dealers,
Inc. ("NASD") and the Nasdaq Stock Market, Inc. ("Nasdaq") in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body, which has not been obtained or taken and is not in full force
and effect, is required for the execution, delivery and performance of
this Agreement by the Company, the offer and sale of the Stock and the
consummation of the transactions contemplated hereby.
(i) Ernst & Young LLP, who have expressed their opinions on the
audited financial statements and related schedules included in the
Registration Statements and the Prospectus are registered independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(j) The financial statements, together with the related notes
and schedules, included in the Prospectus and in each Registration
Statement fairly present the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in
accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved, PROVIDED, HOWEVER, that the unaudited financial statements
do not contain all footnotes required by GAAP. The financial
statements, together with the related notes and schedules, included in
the Prospectus comply in all material respects with the Securities Act
and the Rules and Regulations thereunder. No other financial
statements or supporting schedules or exhibits are required by the
Securities Act or the Rules and Regulations thereunder to be included
in the Prospectus.
(k) The Company has not sustained, since the date of the latest
audited financial statements included in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus; and, since such date, there has
not been any change in the capital stock or long-term debt of the
Company or any material adverse change, or any change or development
involving a prospective material adverse change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the
Company other than as set forth in the Prospectus.
(l) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company is a party or of
which any property or assets of the Company is the subject which is
required to be described in the Registration Statement or the
Prospectus and is not described therein, or which, singularly or in
the aggregate, if determined adversely to the Company, might have a
Material Adverse Effect; and to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or by others. The Company is in compliance with all applicable
federal, state, local and foreign laws, regulations, orders and
decrees governing its business as prescribed by the United States Food
and Drug Administration (the "FDA"), or any other federal, state or
foreign agencies or bodies, including those bodies and agencies
engaged in the regulation of pharmaceuticals or biohazardous
substances or materials, except where noncompliance would not,
singularly or in the aggregate, have a Material Adverse Effect. All
preclinical and clinical studies undertaken by or on behalf of the
Company have been and are being conducted by the Company, or to the
Company's knowledge by third parties, in compliance in all material
respects with all applicable federal, state or foreign laws, rules,
orders or regulations. No filing or submission to the FDA or any other
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federal, state or foreign regulatory body contains any material
omission or material false information.
(m) The Company (i) is not in violation of its charter or
by-laws, (ii) is not in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, lease,
deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
property or assets is subject or (iii) is not in violation in any
respect of any law, ordinance, governmental rule, regulation or court
decree or judgment to which it or its property or assets may be
subject except in the case of clauses (ii) and (iii) of this paragraph
(m) for any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(n) The Company possesses all licenses, certificates,
authorizations and permits issued by, and has made all declarations
and filings with, the appropriate local, state, federal or foreign
regulatory agencies or bodies which are necessary or desirable for the
ownership of its properties or the conduct of its business as
described in the Prospectus, including without limitation all such
licenses, certificates, authorizations and permits required by the FDA
or any other federal, state or foreign agencies or bodies engaged in
the regulation of pharmaceuticals or biohazardous materials, except
where any failures to possess or make the same, singularly or in the
aggregate, would not have a Material Adverse Effect; all of such
licenses, certificates, authorizations and permits are valid and in
full force and effect, except where the invalidity of such licenses,
certificates, authorizations and permits or the failure of such
licenses, certificates, authorizations and permits to be in full force
and effect would not, singularly or in the aggregate, have a Material
Adverse Effect; and the Company has not received notification of any
revocation or modification (or proceedings related thereto) of any
such license, certificate, authorization or permit and has no reason
to believe that any such license, certificate, authorization or permit
will not be renewed. The studies, tests and preclinical or clinical
trials, if any, conducted by or on behalf of the Company that are
described in the Registration Statements or the Prospectus were and,
if still pending, are being, conducted in all material respects in
accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional scientific
standards; the descriptions of the results of such studies, tests and
trials contained in the Registration Statements or the Prospectus are
accurate in all material respects; and the Company has not received
any notices or correspondence from the FDA or any foreign, state or
local governmental body exercising comparable authority requiring the
termination, suspension or material modification of any studies,
tests, or preclinical or clinical trials conducted by or on behalf of
the Company.
(o) The Company is not, or after giving effect to the offering
of the Stock and the application of the proceeds thereof as described
in the Prospectus will not be, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission thereunder.
(p) Neither the Company, nor any of its officers or directors,
nor to the knowledge of the Company any of its affiliates, has taken
or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company,
or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(q) The Company owns or possesses legally enforceable rights
from all necessary third parties (the "Licensors") to use all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, know-how
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and other intellectual property rights necessary for the conduct of
its business described in the Prospectus, and the Company is not aware
of any claim to the contrary or any challenge by any other person to
the rights of the Company with respect to the foregoing. Except where
such failure to make the same would not, singularly or in the
aggregate, have a Material Adverse Effect, the Company is listed in
the records of the appropriate United States, state, or foreign
registry as the sole current owner of record for each intellectual
property registration and application for registration owned by the
Company, except for such intellectual property applications as have
been filed in the name of employees who are contractually obligated to
assign all of their rights in and to such intellectual property
applications to the Company, and all such applications and
registrations have been duly maintained, are subsisting, in full force
and effect, have not been cancelled, expired, or abandoned. The
Company has not received written notification of any revocation or
modification of any registered intellectual property right, and has no
reason to believe that any renewable registered intellectual property
right will not be renewed, other than any revocation, modification or
failure to renew that would not, singularly or in the aggregate, have
a Material Adverse Effect. The Company's business as now conducted,
and as proposed to be conducted as described in the Prospectus, does
not and will not infringe or conflict with any patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses,
know-how or other intellectual property right or franchise right of
any person, except where such infringement would not, singly or in the
aggregate, have a Material Adverse Effect. There are no oppositions,
cancellations, invalidity proceedings, re-examination proceedings,
suits, arbitrations, or threatened claims pending or for which notice
has been provided or, to the knowledge of Company, threatened,
challenging the Company's ownership of, right to use, or the validity
or enforceability of any patent, trademark, service xxxx, trade name,
copyright, trade secret, license, know-how or other intellectual
property right or franchise right of any person which would,
singularly or in the aggregate, have a Material Adverse Effect.
(r) Patent applications for all inventions owned by or licensed
to the Company that are material to the conduct of the business of the
Company in the manner in which it has been and is contemplated to be
conducted have been duly and properly filed or caused to be filed with
the United States Patent and Trademark Office ("PTO") and, in some
cases, applicable foreign and international patent authorities.
Assignments for all patents and patent applications, including,
without limitation any continuations, divisionals,
continuations-in-part, renewals, reissues and applications for
registration of any of the foregoing (collectively, the "Patents")
owned by or licensed to the Company that are material to the conduct
of the business of the Company in the manner in which it has been and
is contemplated to be conducted have been properly executed and
recorded for each named inventor. To the knowledge of the Company, all
printed publications and patent references material to the
patentability of the inventions claimed in the Patents have been
disclosed to those patent offices so requiring. To the knowledge of
the Company, each of the Company, its assignors or the Licensors, as
applicable, has met its duty of candor and good faith to the PTO for
the Patents. To the knowledge of the Company, no material
misrepresentation has been made to any patent office in connection
with the Patents. The Company is not aware of any facts material to a
determination of patentability regarding the Patents not disclosed to
the PTO or other applicable patent office. The Company is not aware of
any facts not disclosed to the PTO or other applicable patent office
that would preclude the patentability, validity or enforceability of
any patent or patent application in the Patents. The Company has no
knowledge of any facts that would preclude the Company or the
Licensors, as applicable, from having clear title to the patents and
patent applications in the Patents.
(s) To the knowledge of the Company, no third party is engaging
in any activity that infringes, misappropriates or otherwise violates
any patent, trademark, service xxxx, trade name, copyright, trade
secret, license, know-how or any other intellectual property right or
franchise
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right owned by or licensed to the Company, except as described in the
Prospectus and except for such activities that, singularly or in the
aggregate, would not have a Material Adverse Effect.
(t) With respect to each material agreement governing all rights
in and to any patent, trademark, service xxxx, trade name, copyright,
trade secret, license, know-how or any other intellectual property
right or franchise right licensed by or licensed to the Company: (i)
the Company has not received any notice of indemnification,
termination or cancellation under such agreement, received any notice
of breach or default under such agreement, which breach has not been
cured, or granted to any third party any rights, adverse or otherwise,
under such agreement that would constitute a material breach of such
agreement; and (ii) neither the Company nor, to the knowledge of the
Company, any other party to such agreement, is in breach or default
thereof in any material respect, and no event has occurred that, with
notice or lapse of time, would constitute such a material breach or
default or permit termination, modification or acceleration under such
agreement.
(u) Except for (i) the security interests granted to General
Electric Capital Corporation, Lighthouse Capital IV, L.P. and
Lighthouse Capital V, L.P., as described in the Registration
Statement; and (ii) liens and encumbrances which are not, singularly
or in the aggregate, material in amount, the Company has good and
marketable title in fee simple to, or has valid rights to lease or
otherwise use, all items of real or personal property which are
material to the business of the Company free and clear of all liens,
encumbrances, security interests, claims and defects.
(v) No labor disturbance by the employees of the Company exists
or, to the Company's knowledge, is imminent, that could reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect. The Company is not aware that any key employee, officer or
significant group of employees of the Company plans to terminate
employment with the Company.
(w) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred or could reasonably be expected to occur
with respect to any employee benefit plan which, singularly or in the
aggregate, could have a Material Adverse Effect; each employee benefit
plan is in compliance in all material respects with applicable law,
including ERISA and the Code; the Company has not incurred and does
not expect to incur liability under Title IV of ERISA with respect to
the termination of, or withdrawal from, any "pension plan"; and each
"pension plan" (as defined in ERISA) for which the Company would have
any liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could,
singularly or in the aggregate, cause the loss of such qualification.
(x) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release
of any kind of toxic or other wastes or other hazardous substances by,
due to, or caused by the Company (or any other entity for whose acts
or omissions the Company is or may be liable) upon any of the property
now or previously owned or leased by the Company, or upon any other
property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under
any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any
liability, except for any violation or liability which would not have,
singularly or in the
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aggregate with all such violations and liabilities, a Material Adverse
Effect; and there has been no disposal, discharge, emission or other
release of any kind onto such property or into the environment
surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Company has knowledge,
except for any such disposal, discharge, emission, or other release of
any kind which would not have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect.
(y) The Company (i) has timely filed all necessary federal,
state and foreign income and franchise tax returns, all of which when
filed were true, complete and correct in all material respects, (ii)
has paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is liable,
and (iii) does not have any tax deficiency or claims outstanding or
assessed or, to the Company's knowledge, proposed against it which
could reasonably be expected to have a Material Adverse Effect. The
Company has not engaged in any transaction which is a corporate tax
shelter or which could be characterized as such by the Internal
Revenue Service or any other taxing authority. The accruals and
reserves on the books and records of the Company in respect of tax
liabilities for any taxable period not yet finally determined are
adequate to meet any assessments and related liabilities for any such
period, and since [December 31, 2004] the Company has not incurred any
liability for taxes other than in the ordinary course.
(z) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties and as is customary for
similarly sized companies engaged in similar businesses in similar
industries.
(aa) The Company maintains a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) The minute books of the Company have been made available to
the Underwriters and counsel for the Underwriters, and such books (i)
contain an accurate and fair summary of all meetings and actions of
the board of directors (including each board committee) and
shareholders of the Company since the time of its incorporation
through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such
minutes.
(cc) There is no franchise, lease, contract, agreement or
document required by the Securities Act or by the Rules and
Regulations to be described in the Prospectus or to be filed as an
exhibit to the Registration Statements which is not described or filed
therein as required; and all descriptions of any such franchises,
leases, contracts, agreements or documents contained in the
Registration Statements are accurate and complete descriptions of such
documents in all material respects. Other than as described in the
Prospectus, no such franchise, lease, contract or agreement has been
suspended or terminated for convenience or default by the Company or
any of the other parties thereto, and the Company has not received
notice of, and has no other knowledge of, any such pending or
threatened suspension or termination, except for such pending or
threatened suspensions or terminations that would not reasonably be
expected to, singularly or in the aggregate, have a Material Adverse
Effect. Further, other than as described in the Prospectus, all such
franchises, leases, contracts, agreements and documents are in full
force and
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effect and the Company is not in breach, violation or default of any
such franchises, leases, contracts, agreements or documents and no
event has occurred which with notice or lapse of time or both would
constitute a breach, violation or default of any such franchises,
leases, contracts, agreements or documents.
(dd) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, affiliates, customers or suppliers of the Company on the
other hand, which is required to be described in the Prospectus and
which is not so described.
(ee) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company in
connection with the filing or effectiveness of the Registration
Statements or otherwise, except for persons and entities who have
expressly waived such right in writing or who have been given timely
and proper written notice and have failed to exercise such right
within the time or times required under the terms and conditions of
such right. Except as described in the Prospectus, there are no
persons with registration rights or similar rights to have any
securities registered by the Company under the Securities Act.
(ff) The Company does not own any "margin securities" as that
term is defined in Regulation U of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), and none of the
proceeds of the sale of the Stock will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security
or for any other purpose which might cause any of the Stock to be
considered a "purpose credit" within the meanings of Regulation T, U
or X of the Federal Reserve Board.
(gg) Except as set forth in this Agreement, the Company is not a
party to any contract, agreement or understanding with any person that
could give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder's fee or like payment
in connection with the offering and sale of the Stock.
(hh) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(ii) The Stock has been approved for listing subject to notice of
issuance on the Nasdaq National Market of the Nasdaq Stock Market,
Inc. (the "Nasdaq National Market").
(jj) The Company has taken all necessary actions to ensure that,
upon and at all times after the effectiveness of the Registration
Statement, it will be in compliance with all applicable provisions of
the Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations
promulgated thereunder or implementing the provisions thereof (the
"Xxxxxxxx-Xxxxx Act") that are then in effect and is actively taking
steps to ensure that it will be in compliance with other applicable
provisions of the Xxxxxxxx-Xxxxx Act not currently in effect upon the
effectiveness of such provisions.
(kk) The Company has taken all necessary actions to ensure that,
upon and at all times after Nasdaq shall have approved the Stock for
inclusion therein, it will be in compliance with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace
Rules that are then in effect and is actively taking steps to ensure
that it will be in compliance with other applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules not
currently in effect upon the effectiveness of such requirements.
10
(ll) Neither the Company nor, to the Company's knowledge, any
employee or agent of the Company, has made any contribution or other
payment to any official of, or candidate for, any federal, state,
local or foreign office in violation of any law or of the character
required to be disclosed in the Prospectus.
(mm) There are no transactions, arrangements or other
relationships between and/or among the Company, any of its affiliates
(as such term is defined in Rule 405 of the Securities Act) and any
unconsolidated entity, including, but not limited to, any structured
finance, special purpose or limited purpose entity that could
reasonably be expected to materially affect the Company's liquidity or
the availability of or requirements for its capital resources required
to be described in the Prospectus which have not been described as
required.
(nn) There are no outstanding loans, advances (except normal
advances for business expense in the ordinary course of business) or
guarantees or indebtedness by the Company, to or for the benefit of
any of the officers or directors of the Company, or any of their
respective family members, except as disclosed in the Prospectus.
(oo) There has been no dividend or distribution of any kind
declared, paid or made by the Company on any capital stock.
(pp) The Registration Statements, the Prospectus and the
Preliminary Prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which they are distributed in
connection with the Directed Share Program. No authorization,
approval, consent, license, order, registration or qualification of or
with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws or
regulations of any foreign jurisdiction in which the Directed Shares
are offered outside the United States.
(qq) The Company has not offered, or caused the Underwriters to
offer, any Firm Stock to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (i) a
customer, supplier or business partner of the Company to alter the
customer's, supplier's or business partner's level or type of business
with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
(rr) There are no rulemaking or similar proceedings before the
FDA or comparable federal, state, local or foreign government bodies
which involve the Company, which, if the subject of an action
unfavorable to the Company, could result, singularly or in the
aggregate, in a Material Adverse Effect.
(ss) Neither the Company nor any of its affiliates (within the
meaning of NASD Conduct Rule 2720(b)(1)(a)) directly or indirectly
controls, is controlled by, or is under common control with, or is an
associated person (within the meaning of Article I, Section 1(ee) of
the By-laws of the NASD) of, any member firm of the NASD, other than
as described on Schedule C hereof.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying 6,000,000 shares of Firm Stock by a fraction the numerator of
which is the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
11
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $[__] per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (through the facilities of The
Depositary Trust Company or, at the election of the Representatives, in the form
of definitive certificates, issued in such names and in such denominations as
the Representatives may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York City time, on the second full business day
preceding the First Closing Date (as defined below) against payment of the
aggregate Purchase Price therefor by wire transfer to an account at a bank
acceptable to XX Xxxxx, payable to the order of the Company, all at the offices
of Ropes & Xxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York City time, on [ ], 2005, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to as
the "First Closing Date". The First Closing Date and the location of delivery
of, and the form of payment for, the Firm Stock may be varied by agreement
between the Company and XX Xxxxx.
In the event that the Representatives elect to have the Underwriters
take delivery of definitive certifcates, the Company shall make the certificates
for the Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least one full business day prior to the
First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company and for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name on
Schedule A hereto bears to the total number of shares of Firm Stock (subject to
adjustment by XX Xxxxx to eliminate fractions). The option granted hereby may be
exercised as to all or any part of the Optional Stock at any time, and from time
to time, not more than thirty (30) days subsequent to the date of this Agreement
and may be exercised only three times. No Optional Stock shall be sold and
delivered unless the Firm Stock previously has been, or simultaneously is, sold
and delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by XX Xxxxx to the
Company.
The option granted hereby may be exercised by written notice being
given to the Company by XX Xxxxx setting forth the number of shares of the
Optional Stock to be purchased by the Underwriters and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in
the form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York City time, on the second full
business day preceding the Option Closing Date against payment of the aggregate
Purchase Price therefor in federal (same day) funds by certified or official
bank check or checks or wire transfer to an account at a bank acceptable to XX
Xxxxx payable to the order of the Company all at the offices of Ropes & Xxxx
12
LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each Underwriter hereunder. In the
event that the Representatives elect to have the Underwriters take delivery of
definitive certifcates, the Company shall make the certificates for the Optional
Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York at least one full business day prior to the
Option Closing Date. The Option Closing Date and the location of delivery of,
and the form of payment for, the Optional Stock may be varied by agreement
between the Company and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters and the Designated Underwriter that:
(a) The Company will prepare the Rule 462(b) Registration
Statement, if necessary, in a form approved by the Representatives and
file such Rule 462(b) Registration Statement with the Commission on
the date hereof; prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the second business day following
the execution and delivery of this Agreement; make no further
amendment or any supplement to the Registration Statements or to the
Prospectus to which the Representatives shall reasonably object by
notice to the Company after a reasonable period (not less than two
business days) to review; advise the Representatives, promptly after
it receives notice thereof, of the time when any amendment to either
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Underwriters with copies thereof; advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statements or the Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, use its best efforts to obtain
its withdrawal as soon as practicable.
(b) If at any time prior to the expiration of nine months after
the effective date of the Initial Registration Statement when a
prospectus relating to the Stock is required to be delivered any event
occurs or condition exists as a result of which the Prospectus as then
amended or supplemented would, when the Prospectus is delivered,
include any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend or supplement the Prospectus to
comply with the Securities Act, the Company will promptly notify the
Representatives thereof and upon their request will prepare an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance. The Company will furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of such amended or supplemented Prospectus; and in case any
Underwriter is required to deliver a prospectus relating to the Stock
nine months or more after the effective date of the Initial
Registration Statement, the Company upon the request of the
Representatives and at the expense of such Underwriter will prepare
promptly an amended or supplemented Prospectus as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
13
(c) The Company will furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed copy of
each of the Registration Statements as originally filed with the
Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(d) The Company will deliver promptly to the Representatives in
New York City such number of the following documents as the
Representatives shall reasonably request: (i) conformed copies of the
Registration Statements as originally filed with the Commission and
each amendment thereto (in each case excluding exhibits), (ii) each
Preliminary Prospectus, and (iii) the Prospectus (not later than 10:00
A.M., New York City time, on the business day following the execution
and delivery of this Agreement) and any amended or supplemented
Prospectus (not later than 10:00 A.M., New York City time, on the
business day following the date of such amendment or supplement).
(e) The Company will make generally available to its
shareholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(f) The Company will promptly take from time to time such
actions as the Representatives may reasonably request to qualify the
Stock for offering and sale under the securities or Blue Sky laws of
such jurisdictions (domestic or foreign) as the Representatives may
designate and to continue such qualifications in effect for so long as
required for the distribution of the Stock; PROVIDED that the Company
shall not be obligated to qualify as foreign corporations in any
jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction.
(g) During the period of five years from the date hereof, the
Company will deliver, upon request, to the Representatives and to each
of the other Underwriters, (i) as soon as they are available, copies
of all reports or other communications furnished to shareholders and
(i) as soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission or any national
securities exchange or automatic quotation system on which the Stock
is listed or quoted, with the filing of any such document with the
Commission by XXXXX and the email delivery of such document (or of a
notice of such filing) to a designated email address of each
Representative and Underwriter deemed sufficient to satisfy the
Company's obligation to deliver such document under this Section 4(g).
(h) The Company will not directly or indirectly offer, sell,
assign, transfer, pledge, contract to sell, or otherwise dispose of
any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock for a period of 180 days
from the date of the Prospectus (the "Lock-Up Period") without the
prior written consent of XX Xxxxx other than (A) the Company's sale of
the Stock hereunder, (B) the issuance of shares of Common Stock or
securities exercisable for Common Stock pursuant to (i) employee
benefit plans, qualified stock option plans or other employee
compensation plans, as such plans are in existence on the date hereof
and described in the Prospectus, or (ii) currently outstanding
options, warrants or rights, and (C) the issuance of not more than an
aggregate of [1,113,702] shares of Common Stock (including warrants
exercisable for such shares of Common Stock) to unaffiliated third
parties in connection with one or more strategic partnerships, joint
ventures, collaborations or similar arrangements for the purpose of
promoting, marketing or distributing the Company's product candidates,
or in connection with one or more acquisitions or licenses by the
Company of any business, products or technologies, provided, however
in the case of clause (C) that, prior to the
14
issuance of any such shares or warrants, each recipient thereof shall
have entered into and delivered to you a lock-up agreement
substantially in the form of Exhibit I hereto. The Company will cause
(x) each shareholder, optionholder and warrantholder of the Company
that is an institutional investor to furnish to the Representatives,
prior to the First Closing Date, a letter, substantially in the form
of Exhibit II hereto, (y) each officer and director of the Company and
each shareholder, optionholder (other than optionholders listed on
Schedule B hereto) and warrantholder of the Company that is not an
institutional investor to furnish to the Representatives, prior to the
First Closing Date, a letter, substantially in the form of Exhibit I
hereto, and (z) each optionholder listed on Schedule B hereto to
furnish to the Representatives, prior to the First Closing Date, a
letter, substantially in the form of Exhibit III hereto, pursuant to
which letters such persons shall agree not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock for a period of 180
days from the date of the Prospectus, without the prior written
consent of XX Xxxxx. The Company also agrees that during such period,
the Company will not file any registration statement, preliminary
prospectus or prospectus, or any amendment or supplement thereto,
under the Securities Act for any such transaction or which registers,
or offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a
registration statement on Form S-8 relating to employee benefit plans.
The Company hereby agrees that (i) if it issues an earnings release or
material news, or if a material event relating to the Company occurs,
during the last 17 days of the Lock-Up Period, or (ii) if prior to the
expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the
last day of the Lock-Up Period, the restrictions imposed by this
paragraph (h) shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(i) The Company will supply the Representatives with copies of
all correspondence to and from, and all documents issued to and by,
the Commission in connection with the registration of the Stock under
the Securities Act.
(j) Prior to each of the Closing Dates, the Company will furnish
to the Representatives, as soon as they have been prepared, copies of
any unaudited interim financial statements of the Company for any
periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(k) Prior to each of the Closing Dates, the Company will not
issue any press release or other communication directly or indirectly
or hold any press conference with respect to the Company, its
condition, financial or otherwise, or earnings, business affairs or
business prospects (except for routine oral marketing communications
in the ordinary course of business and consistent with the past
practices of the Company and of which the Representatives are
notified), without the prior written consent of the Representatives,
unless in the judgment of the Company and its counsel, and after
notification to the Representatives, such press release or
communication is required by law.
(l) Without limiting the provisions of Section 4(h) in
connection with the offering of the Stock, until XX Xxxxx shall have
notified the Company of the completion of the resale of the Stock, the
Company will not, and will cause its affiliated purchasers (as defined
in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial
interest, any Common Stock, or attempt to induce any person to
purchase any Common Stock; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Common Stock.
15
(m) The Company will not take any action prior to the Option
Closing Date which would require the Prospectus to be amended or
supplemented pursuant to Section 4(b).
(n) For at least one year from the date hereof, the Company
shall at all times comply with all applicable provisions of the
Xxxxxxxx-Xxxxx Act in effect from time to time.
(o) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus under the heading "Use of
Proceeds".
(p) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement.
The Designated Underwriter will notify the Company as to which
Participants will need to be so restricted. The Company will direct
the transfer agent to place stop transfer restrictions upon such
securities for such period of time.
(q) The Company will comply with all applicable securities and
other applicable securities and other laws, rules and regulations in
each foreign jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program.
(r) The Company will use its best efforts to effect and, for at
least one year from the date hereof, maintain the quotation of the
Stock on the Nasdaq.
(s) The Company will use its best efforts to do and perform all
things required to be done or performed under this Agreement by the
Company prior to each Closing Date and to satisfy all conditions
precedent to the delivery of the Firm Stock and the Optional Stock.
(t) The Company will not declare, pay or otherwise make a
dividend or distribution of any kind on any of its capital stock prior
to the Closing Dates.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriters to pay,
or reimburse if paid by any Underwriter, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus, any amendments, supplements and exhibits
thereto and the costs of printing, reproducing and distributing the "Agreement
Among Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (d) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred
in connection with any required review by the NASD of the terms of sale of the
Stock and any filings made with the NASD; (e) any applicable listing or other
fees; (f) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 4(f) and of preparing,
printing and distributing Blue Sky Memoranda and Legal Investment Surveys
(including related fees and expenses of counsel to the Underwriters); (g) all
fees and expenses of the registrar and transfer agent of the Stock; (h) the cost
of preparing and printing stock certificates; (i) all fees and expenses the
Designated Underwriter incurred in connection with the Directed Share Program,
including the fees, disbursements and expenses of its counsel and stamp duties,
similar taxes or duties or other taxes, if any, incurred in connection with the
Directed Share Program; and (j) all other costs and expenses incident to the
offering of the Stock or the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants); PROVIDED that,
except as otherwise provided in this Section 5 and in Section 9, the
16
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the resale of any Stock by them
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of
the Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(a) and
the NASD shall have raised no objection to the fairness and
reasonableness of the terms of this Agreement or the transaction
contemplated hereby.
(b) None of the Underwriters shall have discovered and disclosed
to the Company on or prior to the Closing Date that any Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of
counsel for the Underwriters, is material or omits to state any fact
which, in the opinion of such counsel, is material and is required to
be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of this Agreement the
Stock, the Registration Statement and the Prospectus and all other
legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Ropes & Xxxx LLP shall have furnished to the Representatives
such counsel's written opinion, as counsel to the Company, addressed
to the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, with respect to the
matters set forth on Exhibit IV.
(e) Xxxxx & Elbing LLP shall have furnished to the
Representatives such counsel's written opinion, as patent counsel to
the Company, addressed to the Underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Representatives,
with respect to the matters set forth on Exhibit V.
(f) Xxxxxxxx & Sunstein LLP shall have furnished to the
Representatives such counsel's written opinion, as patent counsel to
the Company, addressed to the underwriters and dated the Closing Date,
in form and substance reasonably satisfactory to the Representatives,
with respect to the matters set forth on Exhibit VI.
(g) The Representatives shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date, with respect to such matters as
the Underwriters may reasonably require, and the Company shall have
17
furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(h) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter,
addressed to the Underwriters, and executed and dated such date, in
form and substance satisfactory to the Representatives (i) confirming
that they are independent certified public accountants with respect to
the Company within the meaning of the Securities Act and the Rules and
Regulations and (ii) stating the conclusions and findings of such firm
with respect to the financial statements and certain financial
information contained in the Registration Statements and the
Prospectus.
(i) On the effective date of any post-effective amendment and on
the Closing Date, the Representatives shall have received a letter
(the "bring-down letter") from Ernst & Young LLP addressed to the
Underwriters and executed and dated the Closing Date confirming, as of
the date of the bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus as of
a date not more than three business days prior to the date of the
bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its
letter delivered to the Representatives concurrently with the
execution of this Agreement pursuant to Section 6(h).
(j) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chief Executive Officer
and its Chief Financial Officer stating that (i) such officers have
carefully examined the Registration Statements and the Prospectus and
each amendment or supplement thereto and, in their opinion, the
Registration Statements and each amendment thereto, as of their
respective effective dates, and the Prospectus and each amendment
thereto, as of the respective date thereof and the Closing Date, did
not include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) since the effective
date of the Initial Registration Statement no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statements or the Prospectus, (iii) to their knowledge
after reasonable investigation, as of the Closing Date, the
representations and warranties of the Company in this Agreement are
true and correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) subsequent to the
date of the most recent audited financial statements included in the
Prospectus, there has been no material adverse change in the financial
position or results of operation of the Company, or any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), results of operations, business or
prospects of the Company taken as a whole, except as set forth in the
Prospectus.
(k) The Company shall not have sustained since the date of the
latest audited financial statements included in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth in the Prospectus and since such date there shall
not have been any change in the capital stock or long-term debt of the
Company or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of
the Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in this
paragraph (k), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
18
(l) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Stock or materially and adversely
affect the business or operations of the Company; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the Stock or
materially and adversely affect the business or operations of the
Company.
(m) Subsequent to the execution and delivery of this Agreement
no downgrading shall have occurred in the Company's corporate credit
rating.
(n) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange, the Nasdaq
National Market or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, (iii) the
United States shall have become engaged in hostilities, or the subject
of an act of terrorism, or there shall have been an outbreak of or
escalation in hostilities involving the United States, or there shall
have been a declaration of a national emergency or war by the United
States, as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated in the
Prospectus or (iv) there shall have occurred such a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated
in the Prospectus.
(o) The Nasdaq National Market shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
(p) XX Xxxxx shall have received the written agreements,
(i) substantially in the form of Exhibit II hereto of shareholders,
optionholders and warrantholders of the Company that are institutional
investors, (ii) substantially in the form of Exhibit I hereto of the
directors and officers of the Company and of shareholders,
optionholders (other than the optionholders listed on Schedule B
hereto) and warrantholders of the Company that are not institutional
investors, and (iii) substantially in the form of Exhibit III hereto
of the optionholders of the Company listed on Schedule B hereto.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its directors, officers, managers, members, employees,
representatives and agents and each person, if any, who controls any
Underwriter within the meaning of the Securities Act (collectively the
"Underwriter Indemnified Parties" and, each an "Underwriter
Indemnified Party") against any loss, claim,
19
damage or liability, joint or several, or any action in respect
thereof, to which that Underwriter Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading and shall reimburse each Underwriter
Indemnified Party promptly upon demand for any legal fees or other
expenses reasonably incurred by that Underwriter Indemnified Party in
connection with investigating or preparing to defend or defending
against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon (i) an untrue
statement or alleged untrue statement in or omission or alleged
omission from the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for use therein, which information the
parties hereto agree is limited to the Underwriter's Information (as
defined in Section 16); provided, further however, that the foregoing
indemnification agreement with respect to the Preliminary Prospectus
shall not inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage or liability purchased
Securities, or any officers, employees, representatives, agents or
controlling persons of such Underwriter, if (i) a copy of the
Prospectus (as then amended or supplemented) was required by law to be
delivered to such person at or prior to the written confirmation of
the sale of Stock to such person, (ii) a copy of the Prospectus (as
then amended or supplemented) was not sent or given to such person by
or on behalf of such Underwriter and such failure was not due to
non-compliance by the Company with Section 4(d), and (iii) the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
The Company shall indemnify and hold harmless the Designated
Underwriter and its directors, officers, managers, members, employees,
representatives and agents and each person, if any, who controls any
Underwriter within the meaning of the Securities Act (collectively,
the "Designated Underwriter Indemnified Parties," and each a
"Designated Underwriter Indemnified Party") against any loss, claim,
damage or liability, joint or several, or any action in respect
thereof, to which that Designated Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection
with the Directed Share Program, (ii) the omission or alleged omission
to state in any material prepared by or with the consent of the
Company for distribution to Participants in connection with the
Directed Share Program of a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, (iii)
the failure of any Participant to pay for and accept delivery of
Directed Shares that the Participant agreed to purchase, or (iv) any
other loss, claim, damage or liability, or any action in respect of,
related to, arising out of, or in connection with the Directed Share
Program, other than such losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to
have resulted from the willful misconduct or gross negligence of the
Designated Underwriter.
The indemnity agreements provided for in this Section 7(a) are not
exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights
20
or remedies which may otherwise be available under this Agreement, at
law or in equity to any Underwriter Indemnified Party and each
Designated Underwriter Party.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company its officers, employees, representatives
and agents, each of its directors and each person, if any, who
controls the Company within the meaning of the Securities Act
(collectively the "Company Indemnified Parties" and each a "Company
Indemnified Party") against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the
Company Indemnified Parties may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for use therein, which information
the parties hereto agree is limited to the Underwriters' Information
(as defined in Section 16), and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably
incurred by such parties in connection with investigating or preparing
to defend or defending against or appearing as third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Underwriters
consists solely of the Underwriter's Information. This indemnity
agreement is not exclusive and will be in addition to any liability
which the Underwriters might otherwise have and shall not limit any
rights or remedies which may otherwise be available under this
Agreement, at law or in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, PROVIDED, FURTHER, that the failure to notify
the indemnifying party shall not relieve it from any liability which
it may have to an indemnified party otherwise than under this Section
7. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party (which counsel shall
not, except with written consent of the Indemnified Party, be counsel
to the Indemnifying Party). After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation;
PROVIDED, HOWEVER, that any indemnified party shall have the right to
employ separate counsel in any such action and to participate in the
defense thereof but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the employment
thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by its
counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it
is advisable for such
21
indemnified party to employ separate counsel or (iii) the indemnifying
party has failed to assume the defense of such claim or action and
employ counsel reasonably satisfactory to the indemnified party or
does not diligently defend the claim or action, in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume (or
in the case of a failure to diligently defend, to continue to defend)
the defense of such action on behalf of such indemnified party and the
indemnifying party shall be responsible for all legal fees or other
expenses subsequently incurred by such indemnified party in connection
with the defense of such claim or action, it being understood,
however, that the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for
all such indemnified parties (in addition to any local counsel), which
firm shall be designated in writing by XX Xxxxx, if the indemnified
parties under this Section 7 consist of any Underwriter Indemnified
Party, or by the Company if the indemnified parties under this Section
7 consist of any Company Indemnified Parties. Each indemnified party,
as a condition of the indemnity agreements contained in Sections 7(a)
and 7(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. Subject
to the provisions of Section 7(d) below, no indemnifying party shall
be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld or
delayed), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to the penultimate paragraph in
Section 7(a) hereof in respect of such action or proceeding, then in
addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate firm (in addition to any local
counsel) for the Designated Underwriter for the defense of any losses,
claims, damages and liabilities arising out of the Directed Share
Program, and all directors, officers, employees, representatives and
agents of, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act.
(d) If at any time an indemnified party shall have requested
that an indemnifying party reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by this
Section 7 effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying
party of the request for reimbursement, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request (other than for fees and expenses that
the indemnifying party is reasonably contesting in good faith) prior
to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party
under Section 7(a) or, 7(b), then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect
to
22
the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Stock purchased
under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Stock purchased under
this Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company
on the one hand or the Underwriters on the other, the intent of the
parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission;
provided that the parties hereto agree that the written information
furnished to the Company through the Representatives by or on behalf
of the Underwriters for use in any Preliminary Prospectus, either of
the Registration Statements or the Prospectus consists solely of the
Underwriter's Information. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 7(e) 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, damage
or liability, or action in respect thereof, referred to above in this
Section 7(e) shall be deemed to include, for purposes of this Section
7(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
7(e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public were offered to the
public less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this
Section 7(e) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by XX Xxxxx, in its absolute discretion by notice given to the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 6(k), 6(m) or 6(n) have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. Notwithstanding anything to
the contrary in this Agreement, if (a) this Agreement shall have been terminated
pursuant to Section 8 or 10, (b) the Company shall fail to tender the Stock for
delivery to the Underwriters for any reason not permitted under this Agreement,
or (c) the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement the Company shall reimburse the Underwriters for
the fees and expenses of their counsel and for such other out-of-pocket expenses
as shall have been reasonably incurred by them in connection with this Agreement
and the proposed purchase of the Stock, and upon demand the Company shall pay
the full amount thereof to XX Xxxxx. If this Agreement is terminated pursuant to
Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such
23
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed ten percent (10%) of the total number of shares underwritten, the other
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the shares which such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate number of shares with respect to
which such default or defaults occur is more than ten percent (10%) of the total
number of shares underwritten and arrangements satisfactory to the
Representatives and the Company for the purchase of such shares by other persons
are not made within forty-eight (48) hours after such default, this Agreement
shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except that the representations
and warranties set forth in Section 2, obligations with respect to expenses to
be paid or reimbursed pursuant to Sections 5 and 9 and the provisions of Section
7 and Sections 11 through 20 shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties and the
Designated Underwriter Indemnified Parties, and the indemnities of the several
Underwriters shall also be for the benefit of the Company Indemnified Parties.
It is understood that the Underwriter's responsibility to the Company is solely
contractual in nature and the Underwriters do not owe the Company, or any other
party, any fiduciary duty as a result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any person controlling any of them and
shall survive delivery of and payment for the Stock. Notwithstanding any
termination of this Agreement, including without limitation any termination
pursuant to Section 8 or Section 10, the indemnities, covenants, agreements,
representations, warranties and other statements forth in Sections 2, 5, 7 and 9
and Sections 11 through 20, inclusive, of this Agreement shall not terminate and
shall remain in full force and effect at all times.
13. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
24
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to XX Xxxxx & Co., LLC 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Capital Markets (Fax: 000-000-0000), with a copy to the same address,
Attention: Legal Department (Fax: 000-000-0000), and a copy to
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx,
XX 00000, Attention: Xxxxx X. Xxxxxxx;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to CombinatoRx, Incorporated,
000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: Xxxxxx
Xxxxxxxxx (Fax: 000-000-0000), with a copy to Ropes & Xxxx LLP,
Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxx (Fax: 000-000-0000);
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to
Section 7 shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
acceptance telex to the Representatives, which address will be
supplied to any other party hereto by the Representatives upon
request. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof.
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange,
Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the "Underwriters' Information"
consists solely of the following information in the Prospectus: the statements
concerning the Underwriters contained in the (i) last paragraph on the front
cover concerning delivery of the Stock by the Underwriters; and (ii) the third
paragraph, the tenth paragraph and the eleventh paragraph under the heading
"Underwriting" and the table of Underwriters participating in the offering.
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
25
If the foregoing is in accordance with your understanding of the
agreement between the Company, and the several Underwriters, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
COMBINATORx, INCORPORATED
By:
---------------------
Name:
Title:
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
PACIFIC GROWTH EQUITIES, LLC
SUNTRUST CAPITAL MARKETS, INC.
X.X. XXXXXXX & SONS, INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX & CO., LLC
By:
------------------------------
Name:
Title:
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
---- ---------- ----------
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
---------- ----------
Total
========== ==========
SCHEDULE B
OPTIONHOLDERS TO FURNISH EXHIBIT III LETTER
SCHEDULE C
EXHIBIT I
, 2005
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
COMBINATORX, INCORPORATED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx") and Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc.
(together with XX Xxxxx, the "Representatives"), to enter in to a certain
underwriting agreement with
CombinatoRx, Incorporated, a Delaware corporation
(the "Company"), with respect to the public offering (the "Public Offering") of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such Public Offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of XX
Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or any such securities
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares or
securities, the "Beneficially Owned Shares")) (ii) enter into any swap, hedge or
similar agreement or arrangement that transfers in whole or in part, the
economic risk of ownership of the Beneficially Owned Shares or securities
convertible into or exercisable or exchangeable for Common Stock or (iii) engage
in any short selling of the Common Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Restricted Period, or (ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restrictive Period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
The restrictions set forth herein shall not apply to any transfer or
disposition of any shares of Common Stock, any Beneficially Owned Shares or
securities convertible into or exercisable or exchangeable for Common Stock: (a)
as a bona fide gift or gifts; (b) to any trust, family limited
I - 2
partnership or family limited liability company for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that any such transfer shall not involve a disposition for value; or (c) by will
or intestacy to the undersigned's legal representative, heir or immediate
family; PROVIDED THAT, in each case, each and every transferee, distributee or
donee thereof agrees in writing, in form satisfactory to XX Xxxxx, to be bound
by the terms of this Agreement, a copy of which will be delivered to XX Xxxxx.
For purposes of this agreement, "immediate family" shall mean any relationship
by blood, marriage or adoption, not more remote than first cousin. Anything
contained herein to the contrary notwithstanding, any person to whom shares of
Common Stock, securities convertible into or exercisable or exchangeable for
Common Stock or Beneficially Owned Shares are transferred from the undersigned
shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
Notwithstanding anything herein to the contrary, if the closing of the
Public Offering has not occurred prior to June 30, 2005, this Agreement shall be
of no further force or effect.
By:
----------------------------
Name:
Title:
EXHIBIT II
, 2005
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
COMBINATORX, INCORPORATED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx") and Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc.
(together with XX Xxxxx, the "Representatives"), to enter in to a certain
underwriting agreement with
CombinatoRx, Incorporated, a Delaware corporation
(the "Company"), with respect to the public offering (the "Public Offering") of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such Public Offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of XX
Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or any such securities
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares or
securities, the "Beneficially Owned Shares")) (ii) enter into any swap, hedge or
similar agreement or arrangement that transfers in whole or in part, the
economic risk of ownership of the Beneficially Owned Shares or securities
convertible into or exercisable or exchangeable for Common Stock or (iii) engage
in any short selling of the Common Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Restricted Period, or (ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restrictive Period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
The restrictions set forth herein shall not apply to any transfer or
disposition of: (a) any shares of Common Stock or any Beneficially Owned Shares
that were acquired by the undersigned after the completion of the Public
Offering in open market transactions; (b) any shares of Common Stock, any
Beneficially Owned Shares or securities convertible into or exercisable or
exchangeable for Common Stock as a bona fide gift or gifts; (c) any shares of
Common Stock, any Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable for Common Stock as a distribution to partners,
II - 2
members or stockholders of the undersigned; (d) any shares of Common Stock, any
Beneficially Owned Shares or securities convertible into or exercisable or
exchangeable for Common Stock to any trust, family limited partnership or family
limited liability company for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that any such transfer
shall not involve a disposition for value; or (e) any shares of Common Stock,
any Beneficially Owned Shares or securities convertible into or exercisable or
exchangeable for Common Stock by will or intestacy to the undersigned's legal
representative, heir or immediate family; PROVIDED THAT, in each of the cases
(b)-(e), each and every transferee, distributee or donee thereof agrees in
writing, in form satisfactory to XX Xxxxx, to be bound by the terms of this
Agreement, a copy of which will be delivered to XX Xxxxx. For purposes of this
agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. Except in the case of any transfer
or disposition pursuant to provision (a) above, any person to whom shares of
Common Stock or Beneficially Owned Shares are transferred from the undersigned
shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
Notwithstanding anything herein to the contrary, if the closing of the
Public Offering has not occurred prior to June 30, 2005, this Agreement shall be
of no further force or effect.
By:
----------------------------
Name:
Title:
EXHIBIT III
, 2005
XX Xxxxx & Co., LLC
Pacific Growth Equities, LLC
SunTrust Capital Markets, Inc.
X.X. Xxxxxxx & Sons, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
COMBINATORX, INCORPORATED PUBLIC OFFERING OF COMMON STOCK
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx") and Pacific Growth
Equities, LLC, SunTrust Capital Markets, Inc. and X.X. Xxxxxxx & Sons, Inc.
(together with XX Xxxxx, the "Representatives"), to enter in to a certain
underwriting agreement with
CombinatoRx, Incorporated, a Delaware corporation
(the "Company"), with respect to the public offering (the "Public Offering") of
shares of the Company's Common Stock, par value $0.001 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 180 days following
the date of the final prospectus filed by the Company with the Securities and
Exchange Commission in connection with such Public Offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of XX
Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock
(including, without limitation, shares of Common Stock or any such securities
which may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations promulgated under the Securities Act of 1933, as
the same may be amended or supplemented from time to time (such shares or
securities, the "Beneficially Owned Shares")) (ii) enter into any swap, hedge or
similar agreement or arrangement that transfers in whole or in part, the
economic risk of ownership of the Beneficially Owned Shares or securities
convertible into or exercisable or exchangeable for Common Stock or (iii) engage
in any short selling of the Common Stock.
If (i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days of the
Restricted Period, or (ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Restrictive Period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
2,286 of the shares of Common Stock owned by the undersigned are
excluded from the restrictions set forth in this Agreement.
III - 2
The restrictions set forth herein shall not apply to any transfer or
disposition of any shares of Common Stock, any Beneficially Owned Shares or
securities convertible into or exercisable or exchangeable for Common Stock: (a)
as a bona fide gift or gifts; (b) to any trust, family limited partnership or
family limited liability company for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that any such
transfer shall not involve a disposition for value; or (c) by will or intestacy
to the undersigned's legal representative, heir or immediate family; PROVIDED
THAT, in each case, each and every transferee, distributee or donee thereof
agrees in writing, in form satisfactory to XX Xxxxx, to be bound by the terms of
this Agreement, a copy of which will be delivered to XX Xxxxx. For purposes of
this agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. Anything contained
herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common
Stock or Beneficially Owned Shares are transferred from the undersigned shall be
bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of
any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock that are registered in the name of the undersigned
or that are Beneficially Owned Shares. In order to enable the aforesaid
covenants to be enforced, the undersigned hereby consents to the placing of
legends and/or stop transfer orders with the transfer agent of the Common Stock
with respect to any shares of Common Stock or Beneficially Owned Shares.
Notwithstanding anything herein to the contrary, if the closing of the
Public Offering has not occurred prior to June 30, 2005, this Agreement shall be
of no further force or effect.
By:
----------------------------
Name:
Title:
EXHIBIT IV
Form of Legal Opinion of Company Counsel
EXHIBIT V
Xxxxx & Elbing LLP Opinion
EXHIBIT VI
Xxxxxxxx & Sunstein LLP Opinion
