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EXHIBIT 1.1
Draft of December __, 1997
NANOGEN, INC.
Common Stock
UNDERWRITING AGREEMENT
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__________ __, 1997
Xxxxxx Xxxxxxx & Co., Incorporated
Xxxxxx Brothers, Incorporated
SBC Warburg Dillon Read, Incorporated
as Representatives of the several Underwriters
named in Schedule I hereto
c/o Morgan Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Nanogen, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of __________ shares of its common stock ($0.001
per share par value) (the "Firm Shares"),
The Company also proposes to issue and sell to the several Underwriters
not more than an additional __________ shares of its common stock ($___ per
share par value) (the "Additional Shares"), if and to the extent that you, as
managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Article II hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "Shares." The shares of common
stock, ($___ per share par value), of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"Common Stock."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement;" the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company files a registration statement to register a portion of the
Shares and relies on Rule 462(b) under the Securities Act for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to the "Registration Statement"
shall be deemed to refer to both the registration statement referred to above
(Commission File No. 333-_______) and the Rule 462 Registration Statement, in
each case as amended from time to time.
As part of the offering contemplated by this Agreement, Xxxxxx Xxxxxxx &
Co. Incorporated ("Xxxxxx Xxxxxxx") has agreed to reserve out of the Shares set
forth opposite its name on Schedule I to this Agreement, up to __________
shares, for sale to the Company's employees, officers, and directors and other
parties associated with the Company (collectively, "Participants"), as set forth
in the Prospectus under the heading "Underwriting" (the "Directed Share
Program"). The Shares to be sold by Xxxxxx Xxxxxxx pursuant to the Directed
Share Program (the "Directed Shares") will be sold by Xxxxxx Xxxxxxx pursuant to
this Agreement at the public offering price. Any Directed Shares not orally
confirmed for purchase by any Participants by the end of the first business day
after the date on which this Agreement is executed will be offered to the public
by Xxxxxx Xxxxxxx as set forth in the Prospectus.
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I.
The Company represents and warrants to each of the Underwriters that:
(a) The Registration Statement has become effective, no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration Statement
and the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations and
warranties set forth in this paragraph (b) do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company.
(d) The Company does not own or control, directly or indirectly, any
interest in any other corporation, association, or other business entity.
(e) The Company has good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by it
which is material to the business of the Company in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company except as described in or
contemplated by the Prospectus.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are validly
issued, fully paid and non-assessable. Except as set forth in the Prospectus,
the Company does not have outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations. All outstanding shares of capital stock and options and other
rights to acquire capital stock have been issued in compliance with the
registration and qualification provisions of all applicable securities laws and
were not issued in violation of any preemptive rights, rights of first refusal
or other similar rights.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive rights, rights of first refusal or similar rights.
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(i) This Agreement has been duly authorized, executed and delivered
by the Company.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or bylaws of the Company, or any agreement or other instrument binding upon the
Company that is material to the Company, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company from that set forth in the Prospectus.
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company has not
incurred any material liability or obligation, direct or contingent, nor entered
into any material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock other than ordinary and customary dividends; and (iii) there has not been
any material change in the capital stock, short-term debt or long-term debt of
the Company, except in each case as described in or contemplated by the
Prospectus.
(m) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company is a party or to which
any of the properties of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.
(n) The Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, to own, lease, license and use its properties and assets and to
conduct its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material adverse
effect on the Company.
(o) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 or Rule 462 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the rules and
regulations of the Commission thereunder.
(p) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" or an entity "controlled" by
an "investment company" as such terms are defined in the Investment Company Act
of 1940, as amended.
(q) There is no owner of any securities of the Company who has any
rights, not effectively satisfied or waived, to require registration of any
shares of capital stock of the Company in connection with the filing of the
Registration Statement or the sale of any shares thereunder.
(r) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not been
refused any insurance coverage sought or applied for; and the Company has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or otherwise,
or the earnings, business or operations of the Company, except as described in
or contemplated by the Prospectus.
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(s) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"), (ii) has received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective businesses
and (iii) is in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on the
Company.
(t) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the Company.
(u) The Company owns or possesses adequate licenses or other rights
to use all patents, copyrights, trademarks, service marks, trade names,
technology and know-how necessary (in any material respect) to conduct its
business in the manner described in the Prospectus, the Company is not obligated
to pay a royalty, grant a license, or provide other consideration to any third
party in connection with its patents, copyrights, trademarks, service marks,
trade names, or technology other than as disclosed in the Prospectus, and,
except as disclosed in the Prospectus, the Company has not received any notice
of infringement or conflict with (and the Company knows of any infringement or
conflict with) asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names, technology or know-how which
could result in any material adverse effect upon the Company and, except as
disclosed in the Prospectus, the discoveries, inventions, products or processes
of the Company referred to in the Prospectus do not, to the best knowledge of
the Company, infringe or conflict with any right or patent of any third party,
or any discovery, invention, product or process which is the subject of a patent
application filed by any third party, known to the Company which could have a
material adverse effect on the Company. No third party, including any academic
or governmental organization, possesses rights to the Company's patents,
copyrights, trademarks, service marks, trade names, or technology which, if
exercised, could enable such third party to develop products competitive to
those of the Company or could have a material adverse effect on the ability of
the Company to conduct its business in the manner described in the Prospectus.
(v) The Company possesses all consents, approvals, orders,
certificates, authorizations and permits issued by and has made all declarations
and filings with, all appropriate federal, state or foreign governmental or
self-regulatory authorities and all courts and other tribunals necessary to
conduct its business and to own, lease, license and use its properties in the
manner described in the Prospectus, and the Company has not received any notice
of proceedings related to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, or failure to obtain or
file would result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company, except as
described in or contemplated by the Prospectus.
(w) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(x) No material labor dispute with the employees of the Company
exists, except as described in or contemplated by the Prospectus, or, to the
best knowledge of the Company, is imminent; and the Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers,
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manufacturers or contractors that could result in any material adverse change in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company.
(y) All outstanding shares of Common Stock, and all securities
convertible into or exercisable or exchangeable for Common Stock, are subject to
valid, binding and enforceable agreements (collectively, the "Lock-up
Agreements") that restrict the holders thereof from (1) offering, pledging,
selling, contracting to sell, selling any option or contract to purchase,
purchasing any option or contract to sell, granting any option, right, or
warrant for the purchase of, or otherwise transferring or disposing of, directly
or indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) entering into any swap or
similar agreement that transfers, in whole or in part, the economic risk of
ownership of Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, otherwise than (i) as a bona fide gift or
gifts, (ii) by will or intestacy to the holder's immediate family or to a trust
the beneficiaries of which are exclusively the holder and/or a member or members
of the holder's immediate family, (iii) as a distribution to limited partners or
shareholders of the holder, or (iv) with the prior written consent of Xxxxxx
Xxxxxxx Xxxx Xxxxxx Incorporated; proved that a gift, transfer or distribution
pursuant to clause (i), (ii) or (iii) above shall be conditioned upon such
donee, transferee or distributee executing and delivering a copy of a Lock-up
Agreement to Xxxxxx Xxxxxxx Xxxx Xxxxxx Incorporated and further that such
holders will not make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock prior to the expiration of 180 days
after the date of the Prospectus.
(z) The Company (i) has entered into enforceable agreements
(collectively, the "Option Agreements") with each holder of a currently
outstanding option issued under the Company's 199_ Stock Plan and 199_ Stock
Option/Stock Issuance Plan (the "Option Plans") and each person who has acquired
shares of Common Stock pursuant to the exercise of any option granted under the
Option Plans that pursuant to the terms of the Option Agreements and the Option
Plans, none of such options or shares may be sold or otherwise transferred or
disposed of for a period of 180 days after the date of the initial public
offering of the Shares, and (ii) has imposed or will impose prior to the
effective date of the Registration Statement a stop-transfer instruction with
the Company's transfer agent in order to enforce the foregoing lock-up
provisions imposed pursuant to the Option Agreements and the Option Plans to the
same extent as is required in the Lock-up Agreements.
(aa) As of the date the Registration Statement becomes effective, the
Common Stock will be authorized for quotation on the Nasdaq National Market upon
official notice of issuance.
(bb) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida), relating to issuers doing
business with Cuba.
(cc) The execution and delivery of the Agreement and Plan of Merger
dated as of __________, 1997 (the "Merger Agreement") between Nanogen, Inc., a
California corporation (the "California Corporation"), and the Company,
effecting the reincorporation of the California Corporation under the laws of
the State of Delaware, was duly authorized by all necessary corporate action on
the part of each of the California Corporation and the Company. Each of the
California Corporation and the Company had all corporate power and authority to
execute and deliver the Merger Agreement, to file the Merger Agreement with the
Secretary of State of California and the Secretary of State of Delaware and to
consummate the reincorporation contemplated by the Merger Agreement, and the
Merger Agreement at the time of execution and filing constituted a valid and
binding obligation of each of the California Corporation and the Company.
(dd) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier'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.
(ee) The Agreement and Plan of Merger among the Company, Nanotronics,
Inc. ("Nanotronics") and the shareholders of Nanotronics, dated as of November
__, 1997, was duly authorized by all necessary corporate
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action on the part of each of the Company and Nanotronics, Inc. Each of the
Company and Nanotronics has the has the corporate power and authority to execute
and deliver the Agreement and Plan of Merger, and to consummate the
transactions contemplated by the Agreement, and the Plan of Merger Agreement at
the time of filing constituted a valid and binding obligation on each of the
Company, Nanotronics, and Acquisition Subsidiary.
Furthermore, the Company represents and warrants to Xxxxxx Xxxxxxx that
(I) the Registration Statement, the Prospectus and any preliminary prospectus
comply, and any further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
or any preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that (ii) 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 and
regulations of foreign jurisdictions in which the Directed Shares are offered
outside the United States.
II.
The Company hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Company the respective number of Firm
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) set forth in Schedule I hereto opposite the name of such Underwriter
at $_____ a share (the purchase price).
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company hereby agrees to
issue and sell to the Underwriters the Additional Shares, and the Underwriters
shall have a one-time right to purchase, severally and not jointly, up to
__________ Additional Shares at the purchase price. Additional Shares may be
purchased as provided in Article IV hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule I hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx Xxxx Xxxxxx Incorporated on behalf of the Underwriters, it will
not, during the period ending 180 days after the date of the Prospectus, (1)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or similar arrangement
that transfers, in whole or in part, the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise, other than (i) the Shares to be sold hereunder, (ii) any
shares of Common Stock sold by the Company upon the exercise of an option or
warrant or other right to acquire shares of the Company or the conversion of a
security outstanding on the date hereof described in the Prospectus, (iii) any
options or other rights to purchase or acquire any shares of Common Stock or any
shares of Common Stock issuable upon exercise of such options or other rights
granted in connection with any compensatory arrangement with a director,
officer, employee, consultant or advisor, so long as such person is otherwise
subject to a Lock-Up Agreement, or (iv) any shares of Common Stock or other
right to acquire shares of the Company issued pursuant to equipment or lease
financing activities entered into in the ordinary course of the Company's
business, so long as each person or entity acquiring shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
is otherwise subject to a Lock-Up Agreement.
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III.
The Company is advised by you that the Underwriters propose to make a
public offering of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company is
further advised by you that the Shares are to be offered to the public initially
at $_____ a share (the public offering price) and to certain dealers selected by
you at a price that represents a concession not in excess of $_____ a share
under the public offering price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
IV.
Payment for the Firm Shares shall be made in Federal or other funds
immediately available in New York City against delivery of such Firm Shares for
the respective accounts of the several Underwriters, at 7:00 a.m., California
time, on __________ __, 1997, or at such other time on the same or such other
date, not later than __________ __, 1997, as shall be designated in writing by
you. The time and date of each such payment are hereinafter referred to as the
Closing Date.
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters, at 7:00 a.m., California time, on such date (which may be the same
as the Closing Date but shall in no event be earlier than the Closing Date nor
later than ten business days after the giving of the notice hereinafter referred
to) as shall be designated in a written notice from you to the Company of your
determination, on behalf of the Underwriters, to purchase a number, specified in
said notice, of Additional Shares, or on such other date, in any event not later
than __________ __, 1997 as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "Option Closing Date".
The notice of the determination to exercise the option to purchase Additional
Shares and of the Option Closing Date may be given at any time within 30 days
after the date of this Agreement.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the purchase price therefor.
V.
The obligations of the Company and the several obligations of the
Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than the date hereof.
The several obligations of the Underwriters hereunder are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act, and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Registration
Statement that, in your
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judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company, to the effect set forth in
clause (a)(i) above, and to the effect that the representations and warranties
of the Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officers signing and delivering such certificate may rely upon the
best of their knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
Pillsbury Madison & Sutro LLP, counsel for the Company, dated the Closing Date,
to the effect that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company;
(ii) the Company does not own or control, directly or
indirectly, any interest in any other corporation, association, or other
business entity;
(iii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus;
(iv) the shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly authorized and
are validly issued, non-assessable and fully paid;
(v) the Shares to be sold by the Company have been duly
authorized, and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued and non-assessable, and to such counsel's
knowledge, fully paid, and the issuance of such Shares will not be subject to
any preemptive rights, rights of first refusal or similar rights;
(vi) the Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by the Company. This Agreement has been duly
authorized, executed and delivered by the Company;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or the certificate of incorporation
or bylaws of the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company that is material to the
Company, taken as a whole, or, to such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court having jurisdiction over the
Company, and no consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be required
by the securities or Blue Sky laws of the various states and jurisdictions in
connection with the offer and sale of the Shares;
(viii) the statements (1) in the Prospectus under the captions
"Risk Factors -- Shares Eligible for Future Sale," "Risk Factors -- Dependence
on Collaborative Alliances; Reliance on Collaborators," "Business --
Collaborative Alliances "Business - Government Regulation," "Management,"
"Certain Transactions," "Description of Capital Stock" and "Shares Eligible for
Future Sale" and (2) in the Registration Statement in Items
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14 and 15, in each case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ix) after due inquiry, such counsel does not know of any
legal, regulatory or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the properties
of the Company is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(x) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
(xi) to the knowledge of such counsel, there is no legal or
beneficial owner of any securities of the Company who has any rights, not
effectively satisfied or waived, to require registration of any shares of
capital stock of the Company in connection with the filing of the Registration
Statement;
(xii) such counsel is of the opinion that the Company is (1)
in compliance with any and all applicable Environmental Laws, (2) has received
all permits, licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (3) is in compliance with all
terms and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company;
(xiii) the execution and delivery of the Merger Agreement,
effecting the reincorporation of the California Corporation under the laws of
the State of Delaware, was duly authorized by all necessary corporate action on
the part of each of the California Corporation and the Company; and
(xiv) each of the California Corporation and the Company had
all corporate power and authority to execute and deliver the Merger Agreement,
to file the Merger Agreement with the Secretary of State of California and the
Secretary of State of Delaware and to consummate the reincorporation
contemplated by the Merger Agreement, and the Merger Agreement at the time of
execution and filing constituted a valid and binding obligation of each of the
California Corporation and the Company.
(xv) each of the Company and Acquisition Subsidiary had all
corporate power and authority to execute and deliver the Agreement and Plan of
Merger, and to consummate the transactions contemplated by the Agreement and
Plan of Merger, and the Agreement and Plan of Merger at the time of execution
constituted a valid and binding obligation of each of the Company and
Nanotronics.
(xvi) to the knowledge of such counsel: (1) the Registration
Statement has become effective under the Securities Act, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Securities Act and nothing has come to such counsel's
attention to lead it to believe that such proceedings are contemplated; and (2)
any required filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) under the Securities Act has been made in the manner and within the
time period required by such Rule 424(b);
(xvii) the Shares to be sold under this Agreement to the
Underwriters are duly authorized for quotation on the Nasdaq National Market;
and
(xviii)such counsel shall also state that (i) they believe that
the Registration Statement and the Prospectus (except for financial statements
and schedules and other financial data therein, as to which they need express no
belief) complied as to form in all material respects with the requirements of
the Act and the rules and regulations of the Commission thereunder and (ii) they
confirm that they have no reason to believe that (except for
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financial statements and schedules and other financial data therein, as to which
they need express no belief) the Registration Statement (and the prospectus
included therein) as of its effective date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that (except for
financial statements and schedules and other financial data therein, as to which
they need express no belief) the Prospectus, as of the date of the Prospectus
and such date or dates as such opinion is delivered, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) You shall have received on the Closing Date an opinion of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
subparagraphs (v), the last sentence of subparagraph (vi), (viii) (but only as
to the statements in the Prospectus under "Description of Capital Stock"),
stating that such counsel has read the first [_______] paragraphs of the portion
of the Registration Statement and the Prospectus entitled "Underwriters" (the
"Underwriter Portion"), and (xviii) of paragraph (c) above and to the effect
that the statements in the Underwriter Portion, insofar as such statements
constitute a summary of this Agreement, fairly present the information called
for with respect to such Agreement.
With respect to subparagraph (xviii) of paragraph (c) above, Pillsbury
Madison & Sutro LLP and Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
(e) You shall have received on the Closing Date an opinion of
intellectual property counsel for the Company, dated the Closing Date, to the
effect that:
(i) such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and certain
trademark matters;
(ii) such counsel is familiar with the technology used by the
Company in its business and the manner of its use and has read the portions of
the Registration Statement and the Prospectus entitled "Risk Factors --
Uncertainty of Patent and Proprietary Technology Protection; Potential Inability
to License Technology from Third Parties," "Risk Factors -- Product Liability
Exposure; Inadequacy or Unavailability of Insurance Coverage," and "Business --
Proprietary Technology and Patents" (collectively, the "Intellectual Property
Portion");
(iii) the Intellectual Property Portion contains accurate
descriptions of the Company's patent applications, issued and allowed patents,
and patents licensed to the Company and fairly summarizes the legal matters,
documents and proceedings relating thereto;
(iv) based upon a review of the third party rights made known
to counsel and discussions with Company scientific personnel, such counsel is
not aware of any valid United States or foreign patent that is or would be
infringed by the activities of the Company in the manufacture, use or sale of
any presently proposed product, the technologies employed by the Company or the
method of their use in any presently proposed product, each as described in the
Prospectus;
(v) such counsel has reviewed the Company's patent
applications filed in the United States and outside the United States (the
"Applications") and in the opinion of such counsel the Applications have been
properly prepared and filed on behalf of the Company, and are being diligently
pursued by the Company; the inventions described in the Applications are
assigned or licensed to the Company; to such counsel's knowledge, no other
entity or individual has any right or claim in any of the inventions,
Applications, or any patent to be issued therefrom, and in such counsel's
opinion each of the Applications discloses patentable subject matter;
(vi) such counsel is aware of no pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which any property of the
Company is subject and such counsel is not aware of any pending or threatened
action, suit or claim by others
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that the Company is infringing or otherwise violating any patent rights of
others, based upon review of the Applications such counsel is not aware of any
rights of third parties to any of the Company's inventions described in the
Applications, issued, approved or licensed patents which could reasonably be
expected to materially affect the ability of the Company to conduct its business
as described in the Prospectus, including the commercialization of its products
currently under development; and
(vii) such counsel has no reason to believe that the
information contained in the Intellectual Property Portion of the Registration
Statement or the Prospectus at the time it became effective contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that, at the Closing Date, the information contained in the Intellectual
Property Portion of the Prospectus or any amendment or supplement to the
Intellectual Property Portion of the Prospectus contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
The opinion of Pillsbury Madison & Sutro LLP described in paragraph (c),
the opinion of [patent counsel] described in paragraph (e) and the opinion of
[regulatory counsel] described in paragraph (f) above shall each be rendered to
you at the request of the Company, and shall so state therein.
(f) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from Ernst & Young LLP, independent
public accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(g) The Lock-up Agreements, as well as all other "lock-up" agreements
imposed by the Option Agreements between you and certain stockholders, officers
and directors of the Company relating to sales of shares of Common Stock of the
Company or any securities convertible into or exercisable or exchangeable for
such Common Stock, delivered to you on or before the date hereof, shall be in
full force and effect on the Closing Date.
(h) The shares of Common Stock of the Company shall have received
approval for listing, upon official notice of issuance, on the Nasdaq National
Market.
(i) The Company shall have complied with the provisions of paragraph (a)
of Section VI hereof with respect to the furnishing of Prospectuses on the
business day next succeeding the date of this Agreement in such quantities as
you may reasonably request.
(j) The Company shall have delivered all other certificates as may be
reasonably requested by Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel for the Underwriters.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed in compliance with the provisions
hereof only if Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation,
counsel for the Underwriters, shall be reasonably satisfied that they comply in
form and scope.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares, other matters related to the issuance of the Additional Shares and an
opinion or opinions of Pillsbury Madison & Sutro LLP, [patent counsel] and
[regulatory counsel] in form and substance satisfactory to Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the Underwriters.
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VI
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish to you, without charge, five (5) signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph (c) below, as
many copies of the Prospectus and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request. In the case of the
Prospectus, to furnish copies of the Prospectus in New York City, prior to 3:00
p.m., on the business following the date of this Agreement, in such quantities
as you reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and to file no such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, counsel for the Underwriters, the Prospectus is
required by law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of your counsel, it is
necessary to amend or supplement the Prospectus to comply with law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish to
the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request and to pay all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with any review of the
offering of the Shares by the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earnings statement covering the
twelve-month period ending ________________, 1999 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) During a period of three years from the effective date of the
Registration Statement, the Company will furnish to you copies of (i) all
reports to its stockholders and (ii) all reports, financial statements and proxy
or information statements filed by the Company with the Commission or any
national securities exchange.
(g) The Company will apply the proceeds from the sale of the Shares
as set forth under in "Use of Proceeds" in the Prospectus.
(h) The Company will use its best efforts to obtain and maintain in
effect the quotation of the Shares on the Nasdaq National Market and will take
all necessary steps to cause the Shares to be included on the Nasdaq National
Market as promptly as practicable and to maintain such inclusion for a period of
three years after the date hereof or until such earlier date as the Shares shall
be listed for regular trading privileges on the Nasdaq National Market or
another national securities exchange approved by you.
(i) The Company will comply with all registration, filing and
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which may from time to time be applicable to the Company.
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(j) The Company will comply with all provisions of all undertakings
contained in the Registration Statement.
(k) Prior to the Closing Date or the Option Closing Date, as the
case may be, the Company will not, directly or indirectly, issue any press
release or other communication directly or indirectly and will not hold any
press conference with respect to the Company, or its financial condition,
results of operations, business, properties, assets or prospects, or this
offering, without your prior written consent.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press
release or other public statement, reasonably satisfactory to you, responding to
or commenting on such rumor, publication or event.
(m) The Company agrees: (i) to enforce the terms of the lock-up
agreements contained in the Option Agreements to the same extent as required in
the Lock-up Agreements, (ii) issue stop-transfer instructions to the transfer
agent for the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the applicable
Lock-up Agreement, or any agreement executed pursuant to either Option Plan, to
the same extent as required in the Lock-up Agreements, and (iii) upon written
request of Xxxxxx Xxxxxxx Xxxx Xxxxxx Incorporated, to release from the Lock-up
Agreements, or any agreement executed pursuant to either Option Plan those
shares of Common Stock held by those holders set forth in such request. In
addition, except with the prior written consent of Xxxxxx Xxxxxxx Xxxx Xxxxxx
Incorporated, the Company agrees (i) not to amend or terminate, or waive any
right under, any Lock-up Agreement, or any agreement executed pursuant to either
Option Plan or take any other action that would directly or indirectly have the
same effect as an amendment or termination, or waiver of any right under, any
Lock-up Agreement, or any agreement executed pursuant to either Option Plan that
would permit any holder of shares of Common Stock, or securities convertible
into or exercisable or exchangeable for Common Stock, to offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, make any short sale of, grant any option, right, or warrant
for the purchase of, enter into any swap or similar agreement that transfers, in
whole or in part, the economic risk of ownership of Common Stock, or otherwise
transfer or dispose of, directly or indirectly, any of such shares of Common
Stock or other securities prior to the expiration of 180 days after the date of
the Prospectus, (ii) not to release any such stop-transfer instruction as
described in (ii) above prior to the expiration of 180 days after the date of
the Prospectus, and (iii) not to consent to any sale, short sale, grant of an
option for the purchase of, or other disposition or transfer of shares of Common
Stock, or securities convertible into or exercisable or exchangeable for Common
Stock, subject to a Lock-up Agreement, or any agreement executed pursuant to
either Option Plan.
(n) The Company will place a restrictive legend on any shares of
Common Stock acquired pursuant to the exercise, after the date hereof and prior
to the expiration of the 180-day period after the date of the initial public
offering of the Shares, of any option granted under either of the Option Plans
or pursuant to the exercise of any warrant, which legend shall restrict the
transfer of such shares prior to the expiration of such 180-day period. In
addition, the Company agrees that, without the prior written consent of Xxxxxx
Xxxxxxx Xxxx Xxxxxx Incorporated, it will not release any stockholder, option
holder or warrant holder from the market standoff provision imposed by the
Company pursuant to the terms of either Option Plan, or earlier than 180 days
after the date of the initial public offering of the Shares.
(o) In connection with the Directed Share Program, the Company will
ensure that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (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.
Xxxxxx Xxxxxxx will notify the Company as to which Participants will need to be
so restricted. At the request of Xxxxxx Xxxxxxx, the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time.
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(p) That is connection with the Direct Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. (The "NASD") or the NASD
rules from sale, transfer, assignment, pledge of hypothecation for a period of
three months following the date of the effectiveness of the Registration
Statement. Xxxxxx Xxxxxxx 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) To pay fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the Company
will comply with all applicable securities and other applicable laws, rules and
regulations in each foreign jurisdiction in which the Directed Shares are
offered in connection with the Directed Share Program.
VII
The Company agrees to pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including,
but not limited to, all expenses incident to (i) the preparation and filing of
the Registration Statement (including all exhibits thereto) and the Prospectus
and all amendments and supplements thereto, (ii) the preparation, issuance and
delivery of the Shares, including any transfer taxes payable in connection with
the transfer and sale of the Shares to the Underwriters, (iii) the fees and
disbursements of the Company's counsel and accountants, (iv) the qualification
of the Shares under state securities or Blue Sky laws in accordance with the
provisions of paragraph (d)of Article VI hereof, including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of any Blue Sky or Legal Investment
Memoranda, (v) the printing and delivery to the Underwriters, in quantities as
hereinabove stated, of copies of the Registration Statement (including all
exhibits thereto) and all amendments thereto and of each preliminary prospectus
and the Prospectus and any amendments or supplements thereto, (vi) the printing
and delivery to the Underwriters of copies of any Blue Sky or Legal Investment
Memoranda, (vii) the filing fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc., made in
connection with the offering of the Shares, (viii) any expenses incurred by the
Company in connection with a "road show" presentation to potential investors,
(ix) the listing of the Common Stock on the Nasdaq National Market and (x) all
document production charges and expenses of counsel to the Underwriters (but not
including their fees for professional services) in connection with the
preparation of this Agreement.
VIII
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, or is under
common control with, or is controlled by, any Underwriter, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter or any person controlling such Underwriter, from whom
the person asserting any such losses, claims, damages or liabilities purchased
Shares, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not
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sent or given by or on behalf of such Underwriter to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
The Company agrees to indemnify and hold harmless Xxxxxx Xxxxxxx and
each person, if any, who controls Xxxxxx Xxxxxxx within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act ('Xxxxxx
Xxxxxxx Entities"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonable incurred in connection with defending or investigating any such
action or claim) (I) caused by any untrue statement or alleged untree statement
of a material fact contained in the prospectus wrapper material prepared by or
with the consent of the Company for distribution in foreign jurisdictions in
connection with the Directed Share Program attached to the Prospectus or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statement therein, when considered in conjunction with the Prospectus or any
applicable preliminary prospectus, not misleading; (ii) caused by the failure of
any Participant to pay for and accept delivery of the shares which, immediately
following the effectiveness of the Registration Statement, were subject to a
properly confirmed agreement to purchase; or (iii) related to, arising out of,
or in connection with the Directed Share Program, provided that, the Company
shall not be responsible under this subparagraph (iii) for any losses, claim,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
Xxxxxx Xxxxxxx Entities.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any 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 only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to any of the two preceding paragraphs, such person (the "Indemnified
Party") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Party") in writing and the Indemnifying Party, upon
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in respect of the legal expenses of any Indemnified Party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (a) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and (b) the fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of Underwriters, such firm shall be designated in writing by
Xxxxxx Xxxxxxx Xxxx Xxxxxx Incorporated. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such
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firm shall be designated in writing by the Company. The Indemnifying Party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested an Indemnifying Party to reimburse the Indemnified Party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party
shall not have reimbursed the Indemnified Party in accordance with such request
prior to the date of such settlement. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such proceeding.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section [section and paragraph indemnifying Xxxxxx
Xxxxxxx for damages arising out of the Directed Share Program] 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 Xxxxxx Xxxxxxx for the defense of any losses, claims, damages and
liabilities arising out of the Directed Share Program, and all persons, if any,
who control Xxxxxx Xxxxxxx within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act.
If the indemnification provided for in the first or second paragraph of
this Article VIII is unavailable to an Indemnified Party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Indemnifying Party or parties on the one hand and the
Indemnified Party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Indemnifying Party or parties on the one hand and of the Indemnified Party
or parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, 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 hand in connection with the
offering of the Shares shall be deemed to be in the same respective proportions
as the net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Shares. The relative fault of the Company on the one hand and the Underwriters
on the other hand 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 or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Article VIII are several in proportion to the respective number
of Shares they have purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Article VIII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, 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 Article VIII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any
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damages that such Underwriter has otherwise been required to pay by reason of
such 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 remedies provided
for in this Article VIII are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or in
equity.
The indemnity and contribution provisions contained in this Article VIII
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, or the Company,
its officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Shares.
IX
This Agreement shall be subject to termination by notice given by you to
the Company, if (a) after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your sole
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event singly or together with any
other such event makes it, in your sole judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
X
This Agreement shall become effective upon execution and delivery hereof
by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided, however, that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to Article
II be increased pursuant to this Article X by an amount in excess of one-ninth
of such number of Shares without the written consent of such Underwriter. If, on
the Closing Date or the Option Closing Date, as the case may be, any Underwriter
or Underwriters shall fail or refuse to purchase Shares and the aggregate number
of Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date or the Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
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If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
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This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
Very truly yours,
Nanogen, Inc.
By________________________________________
Xxxxxx X. Xxxxxxxx,
Chairman and Chief Executive Officer
Accepted, __________ __, 1998
Xxxxxx Xxxxxxx & Co., Incorporated
Xxxxxx Brothers Inc.
SBC Warburg Dillon Read, Inc.
Acting severally on behalf of themselves
and the several Underwriters named herein.
By: Xxxxxx Xxxxxxx Xxxx Xxxxxx Incorporated
By_____________________________________
Xxxxxxxxx X. Xxxxxxxx,
Managing Director
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SCHEDULE I
UNDERWRITER Number of Firm Shares
To Be Purchased
Xxxxxx Xxxxxxx & Co., Incorporated..................................
Xxxxxx Brothers, Inc................................................
SBC Warburg Dillon Read, Inc........................................
Total................................................
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