DISTRIBUTION AGREEMENT
December __, 2001
UBS Warburg LLC 000 Xxxxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
Aphton Corporation, a Delaware corporation (the "Company"), confirms its
agreement with UBS Warburg LLC, as agent ("you" or the "Agent") with respect to
the issuance and sale from time to time by the Company, in the manner and
subject to the terms and conditions described below, up to an aggregate of
1,500,000 shares (the "Maximum Number of Shares") of common stock, $0.001 par
value per share (the "Common Stock"), of the Company. Such shares are
hereinafter collectively referred to as the "Shares." The Shares are described
in the Prospectus referred to below.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-72964) for the
registration of at least the Maximum Number of Shares, under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), and the offering of the Shares from time to time in
accordance with Rule 415 under the Act, and the Company has filed such
post-effective amendments thereto as may be required prior to any sale of Shares
by the Company. Such registration statement (as so amended, if applicable) has
been declared effective by the Commission and is referred to herein as the
"Registration Statement." The final prospectus and all applicable amendments or
supplements thereto (including any pricing supplements relating to the sale of
Shares from time to time), in the form first furnished to the Agent, are
collectively referred to herein as the "Prospectus." All references to the
"Registration Statement" and the "Prospectus" also shall be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to any delivery by the
Company of any Purchase Notice (as defined herein); provided, that if the
Company files a registration statement with the Commission pursuant to Rule
462(b) under the Act (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to the "Registration Statement" also shall be deemed
to include the Rule 462(b) Registration Statement. A "preliminary prospectus"
shall be deemed to refer to any prospectus used before the registration
statement became effective and any prospectus furnished by the Company after the
registration statement became effective and prior to any delivery by the Company
of any Purchase Notice which omitted information to be included in a form of
prospectus filed with the Commission pursuant to Rule 424(b) under the Act. For
purposes of this Agreement, all references to the Registration Statement,
Prospectus or preliminary prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
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The Company and the Agent agree as follows:
1. Issuance and Sale.
(a) Upon the basis of the representations and warranties and subject to the
terms and conditions herein set forth on any Exchange Business Day (as
defined below) selected by the Company from the date hereof until the
earlier of (i) January 21, 2002, and (ii) the termination of this
Agreement pursuant to Section 9 or 10 (the "Termination Date") (the
period beginning on the date hereof and ending on the earlier of such
dates, the "Commitment Period"), (A) with respect to purchases by Agent
as principal, the Company shall sell to the Agent, and the Agent agrees
to purchase from the Company, the number of Shares determined in the
manner and on the terms set forth herein, and (B) with respect to
purchases by Agent as agent, the Agent and the Company shall enter into
an agreement regarding the issuance and sale of the number of Shares
determined in the manner and on the terms set forth below. The Commitment
Period may be extended until [April 20, 2002] upon the Agent's delivery
to the Company of a written notice on any date prior to January 7, 2002
to that effect and the Company's acceptance of such request, provided
that such extension is contingent upon the Company providing the Agent
with any due diligence materials and information requested by the Agent
necessary for the Agent to satisfy its due diligence obligations, and
satisfaction of the other terms and conditions set forth herein.
(b) Subject to the terms and conditions set forth below, the Company appoints
you as Agent in connection with the offer and sale of Shares. In the case
of sales of Blocks (as defined below), the Agent agrees, as agent of the
Company, to use its best efforts when requested in the manner described
herein to solicit offers to purchase the Shares upon the terms and
conditions set forth in the Prospectus and as agreed to with the Company.
Each of the Agent and the Company agrees to perform the respective
agreements specifically provided to be performed by it herein. The
Company and the Agent agree that any Shares, the placement of which the
Agent arranges, shall be placed by such Agent in reliance on the
representations, warranties, covenants and agreements of the Company
contained herein and shall be subject to the terms and conditions set
forth herein. The Agent shall not have any obligation whatsoever to
purchase Blocks from the Company as principal, but the Agent and the
Company may agree expressly from time to time that the Agent shall
purchase the Blocks as principal on terms and conditions to be agreed.
(c) Following delivery of a Purchase Notice (as defined below), the Agent
will communicate to the Company, orally, each offer to purchase Blocks
solicited by such Agent on an agency basis. The Agent shall have the
right, in its sole discretion, reasonably exercised, to reject any
proposed purchase of Blocks, as a whole or in part, by persons solicited
by the Agent and any such rejection shall not be deemed a breach of the
Agreement contained herein. The Company may accept or reject any proposed
purchase of the Blocks, in whole or in part, and any such rejection shall
not be deemed a breach of the Company's agreement herein.
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(d) The Agent shall make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Blocks
has been solicited by the Agent and accepted by the Company. If the
Company shall default on its obligation to deliver Blocks to a purchaser
whose offer it has accepted, the Company shall (i) hold the Agent
harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) notwithstanding such default, pay to
such Agent any fee to which it would otherwise be entitled in connection
with such sale.
2. Purchases as Principal.
(a) All purchases of Shares, other than purchases of Blocks, unless otherwise
expressly agreed, shall be purchased by the Agent as principal. In the
absence of a separate written agreement, the Agent's commitment to
purchase Shares as principal shall be deemed to have been made on the
basis of the representations, warranties and covenants contained herein
and shall be subject to the terms and conditions set forth herein.
(b) For purchases as principal (other than Blocks), the Company shall sell to
the Agent, and the Agent agrees to purchase from the Company, the number
of Shares determined in the manner and on the terms set forth below. The
Agent intends to resell the Shares purchased under this Agreement in
transactions and at prices related to the prevailing market price of the
Common Stock or in such other manner as may be provided in the Prospectus
and may engage in sales of Common Stock, including short sales, in
advance of or on the Purchase Date for any Shares deliverable pursuant to
a Purchase Notice.
3. Delivery of Purchase Notices.
(a) The Company may exercise its right to sell Shares (including Blocks)
hereunder by delivering (in accordance with Section 12 hereof) on any
Exchange Business Day (as defined below) a written notice to the Agent of
its election to sell Shares (each such notice, a "Purchase Notice"). Each
Purchase Notice shall specify:
(i) whether such Shares shall be sold through the Agent acting as
principal or whether the Company and the Agent have expressly agreed
that the Company shall sell such shares to the Agent acting as agent;
(ii) the number of Shares that the Company intends to sell (the "Specified
Number of Shares"), which shall be no less than 5% and no more than
20% of the average daily trading volume in the Common Stock on the
Exchange for the thirty (30) Exchange Business Days preceding the date
of delivery of the Purchase Notice, except as otherwise agreed in
writing by the Agent in its sole discretion;
(iii) whether the Company will grant the Agent the right to elect to
purchase additional Shares in accordance with subsection (c) below;
and
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(iv) in the case of a purchase of Shares by the Agent acting as principal,
whether the Company elects to give the Agent the option to increase
the number of Shares to be sold by the Company and purchased by the
Agent acting as principal on such Purchase Date.
A Purchase Notice shall not set forth a Specified Number of Shares
that, when added to the aggregate number of Shares previously
purchased and to be purchased pursuant to pending Purchase Notices (if
any) hereunder, results in a total that exceeds the Maximum Number of
Shares. The Company shall have responsibility for maintaining records
with respect to the aggregate principal amount of Shares sold, or for
otherwise monitoring the availability of Shares for sale under the
Registration Statement. The Company may deliver only one Purchase
Notice with respect to any Purchase Date. A Purchase Notice conforming
to the foregoing requirements, once given, shall be irrevocable, and
the Company shall be obligated to sell the Specified Number of Shares
(subject to increase pursuant to paragraph (c) below) and the Agent
shall be obligated, subject to the satisfaction of the conditions set
forth in this Agreement, to (x) in case of sales by the Agent acting
as agent, use its reasonable best efforts to solicit offers for the
Shares, and (y) in case of purchases by the Agent acting as principal,
purchase such Shares in accordance with the Purchase Notice.
(b) The "Purchase Date" in respect of the Shares deliverable pursuant to any
Purchase Notice shall be the Exchange Business Day next following the day
on which such Purchase Notice is delivered; provided that if a Purchase
Notice is delivered prior to 8:30 a.m. (New York time) on an Exchange
Business Day, the Purchase Date in respect of such Shares shall be such
date of delivery. For sales and purchases which the Agent undertakes as
principal, the price per Share for the sale and purchase of any such
Shares pursuant to this Agreement shall be equal to the volume weighted
average price per share at which shares of the Common Stock traded on the
Exchange during regular trading hours on the Purchase Date, as reported
on the Nasdaq National Market System (the "Gross Sale Price"), less the
Agent's commission of (i) 5 1/4% of the Gross Sale Price for all Shares
sold and purchased as principal on such Purchase Date, if the Company
shall have granted, and the Agent shall have exercised in whole or in
part, an option pursuant to paragraph (c) below to increase the number of
Shares sold and purchased as principal on such Purchase Date, or (ii) 6%
of the Gross Sale Price, in any other case (the Gross Sale Price less the
Agent's commission is referred to herein as the "Net Sale Price"). For
sales and purchases of Blocks that the Agent undertakes on a principal
basis, the price per Share and the commission shall be agreed upon
between the Company and the Agent on the date of delivery of the Purchase
Notice.
(c) If the Company shall have so specified in a Notice of Purchase, which
relates to a sale to the Agent acting as principal, delivered in respect
of a Purchase Date, the Agent will have the option to elect, by notice to
the Company delivered not later than 4:30 p.m. (New York time) on such
Purchase Date, to increase the number of
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Shares to be sold by the Company and purchased by the Agent acting as
principal on such Purchase Date, provided that such number of Shares to
be sold by the Company shall not exceed two times the Specified Number of
Shares; and provided further that such number of Shares to be sold by the
Company, when added to the aggregate number of Shares previously
purchased and to be purchased pursuant to pending Purchase Notices (if
any) hereunder, shall not exceed the Maximum Number of Shares. The
Specified Number of Shares to be sold by the Company on any Purchase
Date, as it may be increased pursuant to this paragraph (c), is
hereinafter referred to as the "Purchased Number of Shares" in respect of
such Purchase Date.
(d) If the Purchased Number of Shares for any Purchase Date exceeds 50% of
the total number of shares of Common Stock traded on the Exchange during
regular trading hours on the Purchase Date, the Purchased Number shall be
reduced to 50% of such total number of shares traded unless, in its sole
discretion, the Agent waives this condition in writing as to any Purchase
Date.
(e) As used herein:
"Block" means, as more fully defined in Rule 10b-18 promulgated under the
1934 Act, a quantity of stock that either (i) has a purchase price of
$200,000 or more; or (ii) is at least 5,000 shares and has a purchase
price of at least $50,000; or (iii) is at least 20 round lots of the
security and totals 150 percent or more of the trading volume for that
security or, in the event that trading volume data are unavailable, is at
least 20 round lots of the security and totals at least 1/10th of one
percent (.001) of the outstanding shares of the security, exclusive of
any shares owned by an affiliate; provided, however, that a block under
subsection (i), (ii) and (iii) of this paragraph shall not include any
amount that a broker or a dealer, acting as principal, has accumulated
for the purpose of sale or resale to the issuer or to any affiliated
purchaser of the issuer if the issuer or such affiliated purchaser knows
or has reason to know that such amount was accumulated for such purpose,
nor shall it include any amount that a broker or dealer has sold short to
the issuer or to any affiliated purchaser of the issuer if the issuer or
such affiliated purchaser knows or has reason to know that the sale was a
short sale.
"Exchange Business Day" means any day that is a trading day for the
Exchange other than a day on which trading on the Exchange is scheduled
to close prior to its regular weekday closing time,
"Exchange" means the Nasdaq National Market System, and
(f) Payment of the purchase price for Shares sold by the Company on any
Purchase Date pursuant to a Purchase Notice shall be made to the Company
by federal funds wire transfer to account number ________________ against
delivery of such Shares to: (x) the accounts specified in writing by the
Agent for sales made by the Agent acting as agent, or (y) the Agent
through the facilities of the Depository Trust Company for purchase from
the Company by the Agent acting as principal.
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Such payment and delivery shall be made at or about 10:00 a.m., local
time in New York, New York, on the third Exchange Business Day following
each Purchase Date (the "Closing Date"). If the Company fails for any
reason to make timely delivery of such Shares, the Company shall
indemnify the Agent and its successors and assigns and hold them harmless
from and against any loss, damage, expense, liability or claim that the
Agent may incur as a result of such failure.
4. Representations and Warranties of the Company. The Company represents and
warrants to the Agent, on and as of (i) the date hereof, (ii) each date on which
the Company delivers a Purchase Notice to the Agent, (iii) each Purchase Date,
(iv) each Closing Date, and (v) each date on which the Registration Statement or
the Prospectus is amended or supplemented or there is filed by the Company with
the Commission any document incorporated by reference into the Prospectus (other
than any Current Report on Form 8-K relating exclusively to the issuance of
Shares under the Registration Statement)(each such date listed in (i) through
(v), a "Representation Date") that:
(a) the Company meets the requirements for use of Form S-3 under the Act; the
Registration Statement (including any Rule 462(b) Registration Statement)
has become effective under the Act and no stop order suspending the
effectiveness of the Registration Statement (including any Rule 462(b)
Registration Statement) has been issued under the Act and no proceedings
for that purpose have been instituted or are pending or, to the Company's
knowledge, are threatened by the Commission, and any request on the part
of the Commission for additional information has been complied with; the
Registration Statement (including any Rule 462(b) Registration Statement)
and any amendments thereto (including the filing of the Company's most
recent Annual Report on Form 10-K with the Commission (the "Annual Report
on Form 10-K")) comply in all material respects with the requirements of
the Act and do not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; each preliminary prospectus
and prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424
under the Act, complied when so filed in all material respects with the
Act; each preliminary prospectus and the Prospectus delivered to the
Agent for use in connection with the offering of Shares are identical to
any electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T; and
neither the Prospectus nor any amendment or supplement thereto includes
an 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; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement
or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the Agent expressly
for use in the Registration Statement or the Prospectus;
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(b) the documents incorporated or deemed to be incorporated by reference in
the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and, when read together with the other
information in the Prospectus, at the date of the Prospectus and at each
Representation Date, did not and will not include an 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;
(c) as of the date of this Agreement the Company has, and as of each
Representation Date the Company will have, an authorized capitalization
as set forth in the Registration Statement and the Prospectus; all of the
issued and outstanding shares of capital stock of the Company and the
Subsidiaries (as defined below), including the Common Stock, and to the
Company's knowledge, after due inquiry, have been duly and validly
authorized and issued and are fully paid and non-assessable, have been
issued in compliance with all applicable laws (including, but not limited
to, federal and state securities laws) and were not issued in violation
of any preemptive right, resale right, right of first refusal or similar
right;
(d) the Maximum Number of Shares is less than 10% of the aggregate market
value of the Company's outstanding voting stock held by non-affiliates of
the Company (calculated as of a date within 60 days prior to the date of
the filing of the Registration Statement);
(e) except as disclosed in the Registration Statement, each of the Company
and each subsidiary of the Company set forth on Schedule I hereto (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation and is in good
standing under the laws of its respective jurisdiction of incorporation
with all requisite corporate power and authority to own, lease and
operate its respective properties and to conduct its respective business
as conducted and as proposed to be conducted as described in the
Registration Statement and Prospectus;
(f) each of the Company and the Subsidiaries is duly qualified or registered
to do business as a foreign corporation in good standing in each
jurisdiction in which it conducts its respective business as conducted,
and as proposed to be conducted as described in the Registration
Statement and Prospectus, where the ownership or leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to so qualify, individually or in the aggregate,
would not have a material adverse effect on the business, prospects,
properties, financial condition or results of operation of the Company
and the Subsidiaries, taken as a whole (a "Material Adverse Effect");
(g) the Company has no significant subsidiaries (as defined in Rule 1-02 of
Regulation S-X under the Act) other than the Subsidiaries; other than the
Subsidiaries the Company does not own, directly or indirectly, any shares
of stock or any other
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equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other
entity;
(h) complete and correct copies of the certificates of incorporation and of
the bylaws of the Company and the Subsidiaries and all amendments thereto
have been delivered to you or included in the Registration Statement, and
except as set forth in the Registration Statement no changes therein will
be made during the term of this agreement;
(i) except as disclosed in the Registration Statement, all of the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and
(except as otherwise described in this Section 4(i)) are owned by the
Company subject to no security interest, other encumbrance or adverse
claims; no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding;
(j) except as disclosed in the Registration Statement, the Company and each
of the Subsidiaries are in compliance in all material respects with all
applicable laws, orders, rules, regulations, directives, decrees and
judgments;
(k) except as disclosed in the Registration Statement, neither the Company
nor any of the Subsidiaries is in breach of, or in default (nor has any
event occurred which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), under (a) its respective
certificate of incorporation, charter or by-laws or (b) in the
performance or observance of any obligation, agreement, covenant or
condition contained in any license, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which any of them or any of
their properties is bound, except in the case of clause (b), for such
breaches or defaults as would not reasonably be expected to have a
Material Adverse Effect, and the execution, delivery and performance of
this Agreement, the issuance and sale of the Shares and the consummation
of the transactions contemplated hereby will not conflict with, or result
in any breach of or constitute a default under (nor constitute any event
which with notice, lapse of time, or both would result in any breach of,
or constitute a default under) (i) any provision of the articles of
incorporation, charter or by-laws of the Company or any of the
Subsidiaries, or (ii) any provision of any license, indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by which any
of them or their respective properties may be bound or affected, or (iii)
any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company or any of the
Subsidiaries, except in the case of clauses (ii) and (iii) for such
conflicts, breaches, or defaults, individually or in the aggregate, as
would not reasonably be expected to have a Material Adverse Effect;
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(l) the Company has full legal right, power and authority to enter into and
perform this Agreement and to consummate the transactions contemplated
herein; this Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except (i) as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, or (ii) as any rights to indemnity
or contribution hereunder may be limited by federal and state securities
laws and public policy considerations;
(m) the capital stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the
Registration Statement and Prospectus, and the certificates for the
Shares (to the extent such Shares are certificated) are in due and proper
form;
(n) the issuance and sale of the Shares through or to the Agent hereunder
have been duly authorized by the Company; when issued and delivered
against payment therefor as provided in this Agreement, the Shares will
be validly issued, fully paid and non-assessable and the issuance of the
Shares will not be subject to any preemptive or similar rights; no person
or entity holds a right to require or participate in the registration
under the Act of the Shares pursuant to the Registration Statement; no
person or entity has a right of participation or first refusal with
respect to the sale of the Shares by the Company;
(o) there are no contracts, agreements or understandings between the Company
or its Subsidiaries and any person or entity granting such person or
entity the right, contractual or otherwise, to cause the Company to issue
to it, or register pursuant to the Act, any securities or shares of
capital stock of the Company upon the issue and sale of the Shares to the
Agent hereunder, or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement, nor
does any person have preemptive rights, co-sale rights, rights of first
refusal or other rights to purchase any of the Shares other than those
that have been expressly waived before the date hereof;
(p) the form of certificates evidencing the Shares (to the extent such Shares
are certificated) complies with all applicable legal requirements and, in
all material respects, with all applicable requirements of the charter
and bylaws of the Company and the requirements of the NASD;
(q) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with (i) the
execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby or (ii) the sale
and delivery of the Shares, other than (x) such as have been obtained, or
will have been obtained on the relevant Closing Date under the Act or the
1934 Act, (y) such approvals as have been obtained in connection with the
approval of the listing of the Shares on the Nasdaq National Market
System and (z) any necessary qualification under the securities or blue
sky
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laws of the various jurisdictions in which the Shares are being offered
by the Agent;
(r) Ernst & Young LLP, whose report on the consolidated financial statements
of the Company and the Subsidiaries is filed with the Commission as part
of the Registration Statement and Prospectus, are and were during the
periods covered by their reports independent public accountants as
required by the Act;
(s) each of the Company and the Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective
business, unless the failure to possess such licenses, authorizations,
consents and other governmental or regulatory authorizations and
approvals, individually or in the aggregate, could not reasonably be
expected to have Material Adverse Effect; neither the Company nor any of
the Subsidiaries is in violation of, in default under or has received any
notice regarding a possible violation, default or revocation of any such
license, authorization, consent or approval or any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries the effect of which
could reasonably be expected to have a Material Adverse Effect;
(t) the Prospectus in paper format delivered to the Agent for use in
connection with this offering will be identical in all material respects
to the version of the Prospectus created to be transmitted to the
Commission for filing via XXXXX, except to the extent permitted by
Regulation S-T;
(u) all legal or governmental proceedings, contracts, leases or documents of
a character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(v) except as disclosed in the Registration Statement, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of the Subsidiaries or any of their respective officers is a party or
of which any of their respective properties is subject at law or in
equity, or before or by any federal, state, local or foreign governmental
or regulatory commission, which, if determined adversely to the Company
or any of its Subsidiaries, could result in a judgment, decree or order
which could reasonably be expected to have a Material Adverse Effect or
prevent consummation of the transactions contemplated hereby;
(w) the consolidated financial statements of the Company and the Subsidiaries
included in the Registration Statement and the Prospectus present fairly
in all material respects the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and the
Subsidiaries for the periods specified; such financial statements have
been prepared in conformity with generally accepted
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accounting principles as applied in the United States and on a consistent
basis during the periods involved and in accordance with Regulation S-X
promulgated by the Commission; the financial statement schedules included
or incorporated by reference in the Registration Statement and the
Prospectus fairly present in all material respects the information
required to be shown therein; no other financial statements or schedules
are required by Form S-3 or otherwise to be included in the Registration
Statement or Prospectus; any pro forma financial statements and other pro
forma financial information included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines for pro
forma financial statements, have been properly compiled on the pro forma
bases set forth therein and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to reflect the transaction or
circumstances referred to therein;
(x) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, prospects, properties or assets
described or referred to in the Registration Statement, or the results of
operations, condition (financial or otherwise), business or operations of
the Company and the Subsidiaries, whether or not arising in the ordinary
course of business, or (ii) any transaction which is material to the
Company or the Subsidiaries, planned or entered into by the Company or
any of the Subsidiaries, or (iii) any obligation, direct or contingent,
which is material to the Company and the Subsidiaries, incurred by the
Company or the Subsidiaries, except obligations incurred in the ordinary
course of business, or (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiaries, or (v) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company. Neither the Company nor the Subsidiaries
has any material contingent obligation which is not disclosed in the
Registration Statement;
(y) the Company has filed in a timely manner all reports required to be filed
pursuant to Sections 13, 14, 15(d) of the 1934 Act during the preceding
twelve calendar months and if during such period the Company has relied
on Rule 12b-25(b) under the 1934 Act ("Rule 12b-25(b)") with respect to a
report or a portion of a report, that report or portion of a report has
actually been filed within the time period prescribed by Rule 12b-25(b);
(z) the Company is not and, after giving effect to the offering and sale of
the Shares, 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 (the "Investment Company Act");
(aa) except as disclosed in the Prospectus or on Schedule 4(aa), there are no
outstanding (i) securities or obligations of the Company or any of its
Subsidiaries convertible into or exchangeable for any capital stock of
the Company or any such
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Subsidiary, or (ii) warrants, rights or options to subscribe for or
purchase from the Company or any such Subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or
(iii) obligations of the Company or any such Subsidiary to issue any
shares of capital stock, any such convertible or exchangeable securities
or obligation, or any such warrants, rights or options;
(bb) each of the Company, the Subsidiaries, and each of their respective
officers, directors and controlling persons has not taken, and will not
take, directly or indirectly, any action which is designed to or which
has constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(cc) the Company (i) is not required to register as a "broker" or "dealer" in
accordance with the provisions of the 1934 Act or the rules and
regulations thereunder, and (ii) directly, or indirectly through one or
more intermediaries, does not control any member firm of the NASD;
(dd) the Company has not relied upon the Agent or legal counsel for the Agent
for any legal, tax or accounting advice in connection with the offering
and sale of the Shares;
(ee) any certificate signed by any officer of the Company or any Subsidiary
delivered to the Agent or to counsel for the Agent pursuant to or in
connection with this Agreement shall be deemed a representation and
warranty by the Company to the Agent as to the matters covered thereby;
(ff) to the Company's knowledge, all agreements between the Company or any of
the Subsidiaries and third parties expressly referenced in the Prospectus
are legal, valid and binding obligations of the Company or one or more of
the Subsidiaries, enforceable in accordance with their respective terms,
except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and by general principles of equity;
(gg) no relationship, direct or indirect, exists between or among the Company
or any of the Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of the
Subsidiaries, on the other hand, which is required by the Act to be
described in the Registration Statement and the Prospectus that is not so
described;
(hh) with such exceptions as could not reasonably be expected to have a
Material Adverse Effect on the Company and the Subsidiaries, taken as a
whole, the Company and the Subsidiaries have good and marketable title in
fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and
defects, except such as are disclosed in the Prospectus or such as do not
materially and adversely affect the value of such property and do not
interfere
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with the use made or proposed to be made of such property by the Company
and the Subsidiaries; and any real property and buildings held under
lease by the Company or any Subsidiary are held under valid, existing and
enforceable leases, with such exceptions as are disclosed in the
Prospectus or are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or such
Subsidiary;
(ii) the Company and the Subsidiaries have ownership or license or legal right
to use all material patent, copyright, trade secret and trademark rights
known by it to be necessary to the conduct of the business of the Company
and the Subsidiaries as now conducted (collectively, "Intellectual
Property") other than Intellectual Property generally available on
commercial terms from other sources;
(jj) all material licenses or other material agreements under which (i) the
Company and the Subsidiaries are granted rights in Intellectual Property,
other than Intellectual Property generally available on commercial terms
from other sources, and (ii) the Company or any Subsidiary has granted
rights to others in Intellectual Property owned or licensed by the
Company or the Subsidiaries, are in full force and effect and there is no
material default by the Company or any Subsidiary or, to the Company's
knowledge, any other party thereto;
(kk) each of the Company and the Subsidiaries have taken all reasonable steps
required in accordance with sound business practice and business judgment
to establish and preserve its ownership of all material copyright, trade
secret and other proprietary rights with respect to its products and
technology;
(ll) to the Company's knowledge, after due inquiry, the present business,
activities and products of the Company and the Subsidiaries do not
infringe any Intellectual Property of any other person, except where such
infringement would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. Except as described in documents filed
with the Commission, to the Company's knowledge, no proceeding charging
the Company or any Subsidiary with infringement of any adversely held
Intellectual Property has been filed; the Company and the Subsidiaries
are not making unauthorized use of any confidential information or trade
secrets obtained by the Company or its Subsidiaries from any other
person; the activities of each of the Company or the Subsidiaries or any
of its employees on behalf of the Company or any Subsidiary do not
violate any agreements or arrangements known to the Company or any
Subsidiary which any such employees have with other persons, if any;
(mm) the Company and each of its Subsidiaries maintain 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 as applied in the United States and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization;
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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;
(nn) each of the Company and the Subsidiaries have filed on a timely basis all
material federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all
taxes shown as due thereon; and no tax deficiency has been asserted
against any such entity, nor does any such entity know of any tax
deficiency which is likely to be asserted against any such entity which
if, determined adversely to any such entity, could have a Material
Adverse Effect; all tax liabilities are adequately provided for on the
respective books of such entities;
(oo) neither the Company nor any of the Subsidiaries nor, to the best of the
Company's knowledge, any agent, officer or director purporting to act on
behalf of the Company or any of the Subsidiaries has at any time; (i)
made any contributions to any candidate for political office, or failed
to disclose fully any such contributions, in violation of law, or (ii)
made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, or
(iii) received or retained any funds in violation of law or of a
character required to be disclosed in the Prospectus;
(pp) the Shares have been approved for listing, upon official notice of
issuance, on the Nasdaq National Market System;
(qq) in connection with this offering, the Company has not offered and will
not offer shares of its Common Stock or any other securities convertible
into or exchangeable or exercisable for shares of Common Stock in a
manner in violation of the Act; the Company has not distributed and will
not distribute any offering material in connection with the offer and
sale of the Shares, other than the Prospectus, Registration Statement and
other materials permitted by the Act; and
(rr) the Company has not incurred any liability for any finder's fees or
similar payments in connection with the transactions herein contemplated.
5. Certain Covenants of the Company. The Company hereby agrees with the Agent:
(a) before amending or supplementing the Registration Statement or the
Prospectus, or, during any period of time in which a Prospectus relating
to the Shares is required to be delivered under the Act, to furnish to
the Agent a copy of each such proposed amendment or supplement before
filing any such amendment or supplement with the Commission;
(b) to make no post-effective amendment or supplement to the Registration
Statement or the Prospectus which shall have been disapproved by the
Agent by notice in
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writing to the Company after notice thereof and reasonable opportunity to
review and comment thereon;
(c) to prepare, with respect to any Shares sold by the Company to the Agent
pursuant to this Agreement, a Pricing Supplement with respect to such
Shares in a form previously approved by the Agent and to file such
Pricing Supplement pursuant to Rule 424(b) under the Act not later than
the close of business of the Commission on the third business day after
any Purchase Date on which an aggregate of __% or more of the Shares were
sold, and provide each such Pricing Supplement to the Agent at the same
time;
(d) to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act for so
long as the delivery of a Prospectus is required in connection with the
offering or sale of the Shares, and during such same period to advise the
Agent, promptly after the Company receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, or the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Shares, or the suspension of the
qualification of the Shares 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 amendment or supplementation of
the Registration Statement or Prospectus or for additional information;
and
(e) in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any such prospectus or suspending any
such qualification, to use promptly its reasonable best efforts to obtain
its withdrawal;
(f) to furnish such information as may be required and otherwise to cooperate
in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may reasonably designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided that the Company shall not be
required to qualify as a foreign corporation, become a dealer of
securities, or become subject to taxation in, or to consent to the
service of process under the laws of any such state (except service of
process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation of any proceeding for such
purpose;
(g) to make available to the Agent in Stamford, Connecticut, as soon as
practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Agent, as many copies of
the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration
- 15 -
Statement) as the Agent may reasonably request for the purposes
contemplated by the Act; and for so long as this agreement is in effect,
the Company will prepare and file promptly, subject to Section 5(b)
hereof, such amendment or amendments to the Registration Statement and
the Prospectus as may be necessary to comply with the requirements of
Section 10(a)(3) of the Act;
(h) to furnish to you for a period of three years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its stockholders or shall from time to time publish
or publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, and (iii)
copies of documents or reports filed with any national securities
exchange on which any class of securities of the Company is listed, and
to furnish to you from time to time during the term of this Agreement
such other information as you may reasonably request regarding the
Company or the Subsidiaries, in each case as soon as such reports,
communications, documents or information becomes available;
(i) if at any time during the term of this Agreement any event shall occur or
condition exist as a result of which it is necessary, in the reasonable
opinion of counsel for the Agent or counsel for the Company, to further
amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not
misleading in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, or if it shall be necessary, in
the reasonable opinion of either such counsel, to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the Act, immediate notice shall be given, and confirmed
in writing, to the Agent to cease the solicitation of offers to purchase
the Shares in the Agent's capacity as agent and to cease sales of any
Shares the Agent may then own as principal, and the Company will promptly
prepare and file with the Commission such amendment or supplement,
whether by filing documents pursuant to the Act, the 1934 Act or
otherwise, as may be necessary to correct such untrue statement or
omission or to make the Registration Statement and Prospectus comply with
such requirements;
(j) to generally make available to its security holders as soon as
practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the
provisions of Section 11(a) under the Act) covering each twelve-month
period beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined
in such Rule 158) of the Registration Statement with respect to each sale
of Shares;
(k) to furnish to you two signed copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto,
including all exhibits thereto and all documents incorporated by
reference therein;
- 16 -
(l) to apply the net proceeds from the sale of the Shares in the manner
set forth under the caption "Use of Proceeds" in the Prospectus;
(m) to pay all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto,
and the printing and furnishing of copies of each thereof to the Agent
and to dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares, (iii) the
producing, word processing and/or printing of this Agreement, any powers
of Attorney and any closing documents (including compilations thereof)
and the reproduction and/or printing and furnishing of copies of each
thereof to the Agent (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law as
aforesaid (including the legal fees and filing fees and other
disbursements of counsel for the Agent) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to the
Agent, (v) the listing of the Shares on the Exchange and any registration
thereof under the 1934 Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the fees and disbursements
of counsel to the Agent in connection therewith, (vii) all other fees and
disbursements of counsel to the Company and counsel to the Agent, and
(viii) the performance of the Company's other obligations hereunder;
provided that the Agent shall be responsible for any transfer taxes on
resale of Shares by it;
(n) to furnish to you, before filing with the Commission subsequent to the
effective date of the Registration Statement and during the period
referred to in paragraph (g) above, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the 1934 Act;
(o) to use its reasonable best efforts to cause the Shares to be listed
on the Exchange; and
(p) to use its best efforts to satisfy, or cause to be satisfied, the
conditions set forth below in Section 6 on or in respect of each Closing
Date hereunder.
6. Execution of Agreement. The Agent's obligation to execute this Agreement
shall be subject to the satisfaction of the following conditions in connection
with and on the intended date of the execution of this Agreement:
(a) the Company shall have delivered to the Agent:
(i) an officer's certificate signed by two of its executive officers
certifying as to the matters set forth in Exhibit A hereto;
(ii) an opinion of White & Case LLP, counsel for the Company,
addressed to the Agent and dated the date of this Agreement, in
the form of Exhibit B hereto, with
- 17 -
only such departures from such form as Stroock & Stroock & Xxxxx
LLP, counsel for the Agent, shall have approved;
(iii) an intellectual property opinion of White & Case LLP, addressed
to the Agent and dated the date of this Agreement, in the form of
Exhibit C hereto, with only such departures from such form as
Stroock & Stroock & Xxxxx LLP, counsel for the Agent, shall have
approved;
(iv) a letter of Ernst & Young LLP dated the date of this Agreement
and addressed to the Agent;
(v) evidence reasonably satisfactory to the Agent and its counsel
that the Registration Statement has become effective;
(vi) evidence reasonably satisfactory to the Agent and its counsel
that the Shares have been approved for listing on the Exchange,
subject only to notice of issuance at or before the time of
purchase on the relevant Purchase Date; and
(vii) such other documents as the Agent shall reasonably request; and
(b) The Agent shall have received the favorable opinion of Stroock &
Stroock & Xxxxx LLP as to the matters set forth in Exhibit E hereto.
7. Additional Covenants of the Company. The Company further covenants and
agrees with the Agent as follows:
(a) Each delivery of a Purchase Notice by the Company to the Agent shall
be deemed to be an affirmation that the representations and warranties
of the Company herein contained and contained in any certificate
delivered to the Agent pursuant hereto are true and correct at the
time of such delivery, and an undertaking that such representations
and warranties will be true and correct at the time of the
consummation of the purchase by the Agent, and at the time of delivery
to the Agent of Shares pursuant to the Purchase Notice, as though made
at and as of each such time (it being understood that such
representations and warranties shall relate to the Registration
Statement and Prospectus as amended and supplemented to the time of
such Purchase Notice);
(b) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (including by the filing of any document
incorporated by reference therein, but excluding any prospectus
supplement relating solely to the offering of Shares pursuant to a
Purchase Notice), the Company shall furnish or cause to be furnished
to the Agent forthwith a certificate, dated the date of filing with
the Commission or the date of effectiveness of such amendment or
supplement, as applicable, in form satisfactory to the Agent, to the
effect that the statements contained in the certificate referred to in
Section 6(a)(i) hereof are true and correct in all material respects
at the time of the filing or effectiveness of such amendment or
supplement, as applicable, as though made at and as of such time
(except that
- 18 -
such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such time)
or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to Section 6(a)(i) hereof, modified as
necessary to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such
certificate. Any such certificate shall also include a certification
that there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise since the date of the last such certificate previously
delivered to the Agent;
(c) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented (including by the filing of any document
incorporated by reference therein, but excluding any prospectus
supplement relating solely to the offering of Shares pursuant to a
Purchase Notice), the Company shall furnish or cause to be furnished
forthwith to the Agent and to counsel for the Agent the written
opinion of White & Case LLP, or other counsel satisfactory to the
Agent, dated the date of filing with the Commission or the date of
effectiveness of such amendment or supplement, as applicable, in form
and substance satisfactory to the Agent, of the same tenor as the
opinion referred to in Section 6(a)(ii) hereof, but modified as
necessary to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such opinion
or, in lieu of such opinion, counsel last furnishing such opinion to
the Agent shall furnish the Agent with a letter substantially to the
effect that the Agent may rely on such last opinion to the same extent
as though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing
reliance);
(d) Each time that the Registration Statement or the Prospectus shall be
amended or supplemented to include additional financial information
(including by the filing of any document incorporated by reference
therein), the Company shall cause Ernst & Young LLP immediately to
furnish to the Agent a letter, dated the date of filing with the
Commission or the date of effectiveness of such amendment or
supplement, as applicable, of the same tenor as the letter referred to
in Section 6(a)(iii) hereof, but modified to relate to the
Registration Statement and Prospectus as amended and supplemented to
the date of such letter; and
(e) Prior to the date of this Agreement (i) no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto, and no order directed at any document incorporated
by reference therein and no order preventing or suspending the use of
any Prospectus will have been issued by the Commission, and no
suspension of the qualification of the Shares for offering or sale in
any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes, will have occurred; and (ii) the
Registration Statement and the Prospectus shall not contain an untrue
statement of material fact or omit to
- 19 -
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
8. Conditions of Agent's Obligation to Purchase Shares. The Company's right
to deliver a Purchase Notice and the Agent's obligation to, as the case may be,
solicit purchases on an agency basis for, or purchase, the Shares pursuant to a
Purchase Notice shall be subject to the satisfaction of the following conditions
at the time of delivery of the Purchase Notice, the time of the commencement of
trading on the Exchange on the Purchase Date and at the time of closing on the
Closing Date:
(a) the representations and warranties on the part of the Company herein
contained or contained in any certificate of an officer or officers of
the Company delivered pursuant to the provisions hereof shall be true
and correct in all material respects;
(b) the Company shall have performed and observed its covenants and other
obligations hereunder in all material respects;
(c) from the date of delivery of the Purchase Notice until the Closing
Date, trading in the Common Stock on the Exchange shall not have been
suspended;
(d) the Shares to be issued pursuant to the Purchase Notice shall have
been approved for listing on the Exchange, subject only to notice of
issuance;
(e) the Company shall furnish evidence reasonably satisfactory to the
Agent and its counsel that the Registration Statement has become
effective; and
(f) no amendment or supplement to the Registration Statement or Prospectus
shall have been filed to which the Agent shall have objected in
writing.
9. Termination by Agent. The obligations of the Agent hereunder shall be
subject to termination at any time in the sole and absolute discretion of the
Agent, (i) if any of the conditions specified in Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, or (ii) if
there has been since the respective dates as of which information is given in
the Registration Statement, any material adverse change, or any development
involving a prospective material adverse change, in or affecting the assets,
operations, business or condition (financial or otherwise) of the Company,
whether or not arising in the ordinary course of business, or (iii) if there has
since the date hereof occurred an outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic, political or
other conditions the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Agent, impracticable to
market or deliver the Shares or enforce contracts for the sale of the Shares, or
(iv) if trading in any securities of the Company has been suspended by the
Commission or by the NASD or if trading generally on the Nasdaq National Market
System has been suspended (including automatic halt in trading pursuant to
market-decline triggers other than those in which solely program trading is
temporarily halted), or limitations on prices for trading (other than
limitations on hours or numbers of days of trading) have been fixed, or maximum
ranges for prices for securities have
- 20 -
been required, by such exchange or the NASD or by order of the Commission or any
other governmental authority, or (v) if there has been any downgrading in the
rating of any of the Company's debt securities or preferred stock by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act), or (vi) if any federal or state
statute, regulation, rule or order of any court or other governmental authority
has been enacted, published, decreed or otherwise promulgated which in the
reasonable opinion of the Agent has a Material Adverse Effect or will have a
Material Adverse Effect on the assets, operations, business or condition
(financial or otherwise) of the Company, or (vii) if any action has been taken
by any federal, state or local government or agency in respect of its monetary
or fiscal affairs which in the reasonable opinion of the Agent has a Material
Adverse Effect on the securities markets in the United States, or (viii) if any
other material adverse change to the assets, operations, business or condition
(financial or otherwise) of the Company has occurred, and in the case of any of
the events specified in clauses (i) through (viii), such event, singly or
together with any other such events, makes it, in the judgment of the Agent,
impracticable or inadvisable to market or deliver the Shares on the terms and in
the manner contemplated in the Prospectus.
If the Agent elects to terminate this Agreement as provided in this Section
9, the Company shall be notified promptly by telephone, promptly confirmed by
facsimile. If a Purchase Notice is pending at the time of termination, the Agent
may declare such Purchase Notice void or may require the Company to complete the
sale of Shares as specified in the Purchase Notice, at the Agent's sole
discretion.
If the solicitation of purchases on an agency basis or purchase by the
Agent as principal of the Shares, as contemplated by this Agreement, is not
carried out by the Agent for any reason permitted under this Agreement or if
such sale is not carried out because the Company shall be unable to comply in
all material respects with any of the terms of this Agreement, the Company shall
not be under any obligation or liability under this Agreement (except to the
extent provided in Sections 5(m) and 11 hereof) and the Agent shall be under no
obligation or liability to the Company under this Agreement (except to the
extent provided in Section 11 hereof) or to one another hereunder.
10. Termination by Company. Subject to Sections 8 and 9, if the Agent
defaults in its obligation to consummate a purchase of Shares to be purchased by
it hereunder (otherwise than for a reason sufficient to justify the termination
of this Agreement under the provisions of Section 9 hereof) and does not cure
such default within five Exchange Business Days, the Company may terminate this
Agreement by notice to the Agent.
11. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the Agent,
its directors and officers and any person who controls the Agent
within the meaning of Section 15 of the Act or Section 20 of the 1934
Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, the Agent or any such person may incur under the Act, the
1934 Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a
- 21 -
material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment
thereof by the Company) or in a Prospectus (the term "Prospectus" for
the purpose of this Section 11 being deemed to include any preliminary
prospectus, the Prospectus and the Prospectus as it may be amended or
supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or Prospectus or
necessary to make the statements made therein not misleading, except
insofar as any such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by the Agent to the Company expressly
for use with reference to the Agent in such Registration Statement or
such Prospectus or arises out of or is based upon any omission or
alleged omission to state a material fact by the Agent in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any action, suit or proceeding (together, a "Proceeding") is brought
against the Agent or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, the Agent
or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of
such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all reasonable fees
and expenses; provided, however, that the omission to so notify the Company
shall not relieve the Company from any liability which the Company may have
to the Agent or any such person or otherwise. The Agent or such person
shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Agent or of such person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of
such Proceeding or the Company shall not have, within a reasonable period
of time in light of the circumstances, employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded based on advice of counsel that there may be
defenses available to it or them which are different from, additional to or
in conflict with those available to the Company, in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf
of the indemnified party or parties, in any of which events such reasonable
fees and expenses shall be borne by the Company and paid as incurred, it
being understood, however, that the Company shall not be liable for the
reasonable expenses of more than one separate counsel, in addition to any
local counsel, in any one Proceeding or series of related Proceedings in
the same jurisdiction representing the indemnified parties who are parties
to such Proceeding. The Company shall not be liable for any settlement of
any Proceeding effected without its written consent but if settled with the
written consent of the Company, the Company agrees to indemnify and hold
harmless the Agent and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified
- 22 -
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then 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 60
Exchange Business Days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request before the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. 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 and does not include an admission of fault, culpability
or a failure to act, by or on behalf of such indemnified party.
(b) The Agent agrees to indemnify, defend and hold harmless the Company,
its directors and officers, and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the 1934
Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the
1934 Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by the Agent
to the Company expressly for use with reference to the Agent in the
Registration Statement, as amended by any post-effective amendment
thereof by the Company, or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against the Agent pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Agent in writing of the institution of such Proceeding and the Agent shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees
and expenses; provided, however, that the omission to so notify the Agent
shall not relieve the Agent from any liability which the Agent may have to
the Company or any such person or otherwise. The Company or such person
shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Company or
such person unless the employment of such counsel shall have been
authorized in writing by the Agent in connection with the defense of such
Proceeding or the Agent shall not have, within a reasonable period of time
in light of the circumstances, employed
- 23 -
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to or in conflict with those available to such Agent (in which case the
Agent shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but the Agent may employ
counsel and participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the Agent), in any of which events
such reasonable fees and expenses shall be borne by the Agent and paid as
incurred (it being understood, however, that the Agent shall not be liable
for the reasonable expenses of more than one separate counsel (in addition
to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties
who are parties to such Proceeding). The Agent shall not be liable for any
settlement of any such Proceeding effected without the written consent of
the Agent but if settled with the written consent of the Agent, the Agent
agrees to indemnify and hold harmless the Company and any such person from
and against any loss or liability by reason of such settlement.
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
sentence of this paragraph, then 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 60
Exchange Business Days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request before the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. 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.
(c) If the indemnification provided for in this Section 11 is unavailable
to an indemnified party under subsections (a) and (b) of this Section
11 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
on the one hand and the Agent on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
of the Agent on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the
- 24 -
Company on the one hand and the Agent on the other shall be deemed to
be in the same respective proportions as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Agent, bear to the aggregate
public offering price of the Shares. The relative fault of the Company
on the one hand and of the Agent on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the Company or by the
Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this
subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 11 were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section
11, the Agent shall not be required to contribute any amount in excess
of the amount by which the total price at which the Shares
underwritten by such Agent and distributed to the public were offered
to the public exceeds the amount of any damage which the Agent has
otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 11 and
the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the Agent, its directors or officers
or any person (including each officer or director of such person) who
controls the Agent within the meaning of Section 15 of the Act or Section
20 of the 1934 Act, or by or on behalf of the Company, its directors or
officers or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the 1934 Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares.
The Company and the Agent agree promptly to notify each other of the
commencement of any Proceeding against it and, against any of their
respective officers or directors in connection with the issuance and sale
of the Shares, or in connection with the Registration Statement or
Prospectus.
12. Notices. All notices hereunder shall be in writing and delivered by
hand, overnight courier, mail or facsimile, and if to the Agent, shall be
sufficient in all respects if delivered to UBS Warburg LLC, 000 Xxxxxxxxxx
Xxxx., Xxxxxxxx, XX 00000, with separate copies to the
- 25 -
attention of: Xxxxx Lessen, Xxxxxxx Xxxxxxxxxx and Xxxxx Xxx, Facsimile No.
(000) 000-0000; Operations - Corporate Action Department, Facsimile No. (203)
719-0795; and Legal Affairs (Equities Group), Facsimile No. (000) 000-0000, and
if to the Company, shall be sufficient in all respects if delivered or sent to
the Company at the offices of the Company at 00 XX 0xx Xxxxxx, Xxxxx, Xxxxxxx
00000, Attention: Xxxx Xxxxx. Notwithstanding the foregoing, Purchase Notices
shall be delivered to the Agent by facsimile at (000) 000-0000 and receipt
confirmed by telephone at (000) 000-0000 or (000) 000-0000, and notices to the
Company pursuant to Section 1(d) shall be delivered to the Company by facsimile
at (000) 000-0000 and receipt confirmed by telephone at (000) 000-0000. A
Purchase Notice received by the Agent after 4 p.m. on an Exchange Business Day
or on a day that is not an Exchange Business Day shall be deemed to have been
delivered on the next following Exchange Business Day.
13. Governing Law; Construction. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York, other
than rules governing choice of applicable law. The Section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.
14. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have nonexclusive jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction, service
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against UBS Warburg LLC or any
indemnified party. Each of UBS Warburg LLC and the Company, on its behalf and,
to the extent permitted by applicable law, on behalf of its stockholders and
affiliates, waives all right to trial by jury in any action, proceeding or
counterclaim, whether based upon contract, tort or otherwise, in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
15. Parties in Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Agent and the Company and to the extent
provided in Section 11 hereof the controlling persons, directors and officers
referred to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from the Agent) shall acquire or have any right under or by virtue of
this Agreement.
16. Counterparts. This Agreement may be signed by the parties in one or
more counterparts, which together shall constitute one and the same agreement
among the parties.
- 26 -
17. Successors and Assigns. This Agreement shall be binding upon the Agent
and the Company and their successors and assigns and any successor or assign of
any substantial portion of the Company's and the Agent's respective businesses
and/or assets.
18. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary of
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS Warburg LLC is a separately
incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency of UBS AG, and are not
otherwise an obligation or responsibility of a branch or agency of UBS AG.
A lending affiliate of UBS Warburg LLC may have lending relationships with
issuers of securities underwritten or privately placed by UBS Warburg LLC. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBS Warburg LLC
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of UBS
Warburg LLC.
UBS Warburg LLC and one or more of its affiliates may make markets in the
Common Stock or other securities of the Company, in connection with which they
may buy and sell, as agent or principal, for long or short account, shares of
Common Stock or other securities of the Company, at the same time that UBS
Warburg LLC is acting as Agent pursuant to this Agreement.
- 27 -
If the foregoing correctly sets forth the understanding among the Company
and the Agent, please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between the Company and the Agent.
Very truly yours,
APHTON CORPORATION
By:_______________________
Name:
Title:
Accepted and agreed to as of the date first above written:
UBS WARBURG LLC
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
- 28 -
Schedule I
Subsidiaries of the Company
Currently, the Company has no subsidiaries.
- 29 -
Exhibit A
Officers' Certificate
1. The representations and warranties of the Company in the Distribution
Agreement are true and correct in all material respects as of the date
hereof as though made on and as of this date;
2. The Company has performed all obligations and satisfied all conditions
on its part to be performed or satisfied pursuant to the Distribution
Agreement at or prior to the date hereof;
3. The Company's Registration Statement (File No. 333-72964) under the
Securities Act of 1933 has become effective; no stop order suspending the
effectiveness of such Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Securities and Exchange Commission (the "Commission"); and all requests for
additional information on the part of the Commission have been complied
with; and
4. Except as otherwise disclosed in writing to the Agent by the Company,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, prospects, properties or assets
described or referred to in the Registration Statement, or the results of
operations, condition (financial or otherwise), business or operations of
the Company and the Subsidiaries, whether or not arising in the ordinary
course of business, or (ii) any transaction which is material to the
Company or the Subsidiaries, planned or entered into by the Company or any
of the Subsidiaries, or (iii) any obligation, direct or contingent, which
is material to the Company and the Subsidiaries, incurred by the Company or
the Subsidiaries, except obligations incurred in the ordinary course of
business, or (iv) any material change in the capital stock or outstanding
indebtedness of the Company or the Subsidiaries, or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company; and neither the Company nor the Subsidiaries has any material
contingent obligation which is not disclosed in the Registration Statement.
- 30 -
Exhibit B
Opinion of White & Case LLP
[Aphton Corporation - Form of Opinion]
i. The Company has been duly incorporated and is validly existing as a
corporation in corporate good standing under the laws of the State of
Delaware and has the corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement, and to enter into this Agreement, to issue, sell
and deliver the Shares and consummate the transactions contemplated in the
Prospectus;
ii. The common stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Registration
Statement and Prospectus;
iii. The Shares have been duly and validly authorized by the Company for offer,
sale, issuance and delivery pursuant to this Agreement and, when issued and
delivered against payment therefor as provided in the Distribution
Agreement, will be duly and validly issued and fully paid and
non-assessable;
iv. To such counsel's knowledge, the Company is duly qualified to do business
as a foreign corporation and in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify would
not have a material adverse effect on the business, properties, financial
condition or results of operation of the Company taken as a whole (a
"Material Adverse Effect");
v. To such counsel's knowledge and other than as set forth in the Prospectus,
there are no actions, suits, claims, investigations or proceedings pending
or threatened to which the Company is a party or of which any of their
respective properties is subject at law or in equity, or before or by any
federal, state or local governmental or regulatory commission, board, body,
authority or agency, which could prevent consummation of the transactions
contemplated hereby or which are required to be described in the
Registration Statement or the Prospectus but are not so described;
vi. This Agreement has been duly authorized, executed and delivered by the
Company;
vii. The execution, delivery and performance of this Agreement, the issuance and
sale of the Shares and the consummation of the transactions contemplated
hereby will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of time,
or both would result in any breach of, or constitute a default under), any
provisions of the charter or by-laws of the Company or, to such counsel's
knowledge, under any provision of any license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the Company
is a party or by which
- 31 -
any of them or their respective properties may be bound or affected and
which have been filed by the Company with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are
listed in the exhibit index to the Company's most recent Annual Report on
Form 10-K or are subsequently filed under the Exchange Act, or under any
decree, judgment or order known to such counsel to be applicable to the
Company or under any federal, state or local law, regulation or rule;
viii. No approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the transactions
as contemplated hereby except such as may be required by the Act and the
applicable rules and regulations thereunder, the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by
the Agent (as to which such counsel expresses no opinion) or under the
rules and regulations of the National Association of Securities Dealers,
Inc. ("NASD") (as to which such counsel expresses no opinion);
ix. The statements set forth in the Prospectus in the second sentence of the
fourth paragraph under the caption "The Company", under the caption "Risk
Factors--Our potential products are in the early stages of product
development", "Risk Factors--We expect to continue incurring operating
losses in the next several years", "Risk Factors--We have substantial
capital requirements and we may not be able to obtain additional
financing", "Risk Factors--Our different approach to disease treatment may
not prove successful", "Risk Factors--The development of our products is
subject to extensive regulation", "Risk Factors--We depend on strategic
alliances and may need additional strategic collaborators in the future",
"Risk Factors--The industry in which we operate is characterized by rapid
technological change and intense competition", "Risk Factors--Our ability
to enforce our patents and proprietary rights is uncertain", "Risk
Factors--We depend on key personnel", "Risk Factors--We may be exposed to
product liability claims and uninsured risk", "Risk Factors--Our business
involves the use of hazardous materials that could expose us to
environmental liability", "Risk Factors--We depend on others for
manufacturing and marketing", "Risk Factors--Future healthcare reforms may
adversely affect our financial results", "Risk Factors--Our success depends
on third party reimbursement", "Risk Factors--Ownership of our common stock
is concentrated", "Risk Factors--The price of our common stock may be
volatile", "Risk Factors--The exercise of outstanding warrants and other
rights to obtain additional shares could dilute the value of the shares"
and Item 15 of the Registration statement, insofar as they purport to
describe the provisions of the laws and documents referred to therein,
fairly summarize the matters referred to therein in all material respects;
x. The Company is not and, after giving effect to the offering and sale of the
Shares, will not be required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
xi. The documents incorporated by reference in the Prospectus or any further
amendment or supplement thereto made by the Company prior to the date of
delivery of such opinion (other than the financial statements and related
schedules therein, as to which such
- 32 -
counsel need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
xii. The Registration Statement and the Prospectus and any further amendments
and supplements thereto made by the Company prior to the date of delivery
of such opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations of the Commission thereunder;
Such counsel shall also state that, although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in paragraphs (ii) and (ix) above, nothing has
come to their attention that has led them to believe (a) that, as of its
effective date, the Registration Statement or, as of its date, any further
amendment thereto made by the Company prior to the date of delivery of such
opinion (other than the financial statements and related schedules therein,
as to which such counsel need express no belief) contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or (b) that, as of its date, the Prospectus and documents
incorporated by reference therein or any further amendment or supplement to
the Prospectus (and documents incorporated by reference therein) made by
the Company prior to the time and date of delivery of such opinion (other
than the financial statements and related schedules therein, as to which
such counsel need express no belief) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (c) that, as of the date of delivery of such
opinion, either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the time and
date of delivery of such opinion (other than the financial statements and
related schedules therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be filed or
of any contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required.
- 33 -
Exhibit C
Intellectual Property Opinion of White & Case LLP
[Form of Intellectual Property Opinion]
[ADDRESS]
[OPINION LETTER TO AGENT]
RE: Aphton Corporation
Pursuant to Distribution Agreement
Ladies and Gentlemen:
We are Intellectual Property Counsel for the Company in connection with certain
intellectual property matters and in connection with the distribution of shares
of Aphton Corporation (the "Company") common stock ("Common Stock") pursuant to
the Distribution Agreement as agreed to on December __, 2001. This opinion is
provided pursuant to the above referenced Distribution Agreement between the
Company and the Underwriters.
In connection with this opinion, we have been asked to review statements
relating to patents, patent applications and trade secrets (the "Intellectual
Property") of the Company and as made in or referenced by the Distribution
Agreement. We have made this review and provide our opinion with respect to the
above-identified sections of these documents. Our opinion is limited to
Intellectual Property matters, as noted above.
We are familiar with certain of the technology used by the Company in its
business, to the extent of its disclosure to us by the Company, which is the
subject matter of certain of the patents, patent applications and trade secrets
described in the above identified documents. The opinions and beliefs expressed
in this letter represent our considered judgment and are based upon compilations
of applicable laws generally available to the public and effective as of the
date hereof.
As used in this letter, the phrase "to our knowledge" when used as a
qualification with respect to the existence or absence of any matter, means
that, during our representation of the Company and having no independent
investigation with respect thereto, no information has come to our attention
which has given us actual knowledge of the existence of facts contrary to the
stated existence or absence of the matter.
Based on our review of the above-identified sections of the Distribution
Agreement, and subject to and limited by the foregoing and the exceptions and
limitations set forth below, we offer the following opinions and conclusions:
- 34 -
1. For the purpose of this opinion, the terms "know," "known," or "knowledge"
refer to the actual knowledge by us, as well as the knowledge arising from our
review of documents and materials relevant to the matters addressed in the
paragraphs below, and the knowledge arising from our inquiry of employees or
officers of the Company familiar with a matter to which this opinion pertains.
2. All patents and pending patent applications ("Patents") that are owned by or
licensed to the Company are listed on IP Schedule A, attached hereto.
Information concerning the application number, filing data, and status of the
applications encompassed by our representation of the Company is set forth in IP
Schedule A.
3. Except as set forth below, to our knowledge, the statements in the
Distribution Agreement, insofar as such statements pertain to Intellectual
Property matters, accurately and fairly represent the information referred to
therein. We express no opinion, however, as to the bases upon which the Company
decides to file patent applications, the dependency of the Company's commercial
success on any factors including protection of proprietary technology and the
procurement and enforceability of patents, nor as to the Company's reliance on
various methods to protect its proprietary rights.
4. To our knowledge, and based upon a representation by the Company regarding
the conception and reduction to practice of the patents, patent applications and
trade secrets related to the technology described in the above-identified
documents, (A) there are no rights of parties other than the Company to any of
the patents, patent applications or trade secret rights related to the
technology described in the Distribution Agreement, (B) there are no pending or
threatened actions, suits, proceedings or claims by others challenging the
Company's rights to or in any such patents, patent applications or trade secret
rights and (C) there are no pending or threatened actions, suits, proceedings or
claims by others that the Company is infringing or otherwise violating any
patent or trade secret rights of others.
5. To the best of our knowledge, the Company and its licensors have complied
with the examination requirements of the United States Patent and Trademark
Office ("USPTO") duty of candor and disclosure for each of the United States
Patent listed in IP Schedule A. No fact has come to such counsel's attention
that causes such counsel to question the enforceability of any of the Patents,
or to question the validity of any claim of an issued patent or pending patent
application listed on IP Schedule A.
6. We are aware of no legal or governmental proceedings relating to the
Company's patent rights, other than normal ex parte USPTO examination
proceedings. No patent application listed in IP Schedule A has been formally
abandoned, and all patents have been lawfully issued.
7. To our knowledge, there are no facts or circumstances which, if asserted in
litigation, would be likely to render any of the trade secret rights reflected
in the Company's filed patent applications invalid, or unenforceable except to
the extent they have been or will be disclosed upon publication of such patent
applications or upon the issuance of patents.
8. There are no agreements with third parties relating to the acquisition,
licensing and/or transfer of intellectual property rights which have or are
anticipated to have a material impact on
- 35 -
the Company's existing or future business, including license agreements, joint
venture agreements, marketing and/or distribution agreements or other
collaboration agreements, that are not currently in effect or that will be
expiring soon, nor further has there been any notice of termination or other act
indicating a desire to terminate any of the aforesaid agreements.
9. Except as described in the above identified documents, we are not aware of
any facts that prevent the Company from using its intellectual property and
know-how to conduct its business or from enforcing its rights to its patents or
patent applications.
10. We are not aware of any facts or prior art that would lead us to believe
that any of the Companies patents are or may infringe the patent or patents of
third parties.
11. We believe and have so informed the Company that its _________ products are
covered by one or more of the issued patents and the claims therein listed in IP
Schedule A, attached hereto.
This letter is limited to the matters set forth herein, and no matter may be
inferred or implied beyond the matters expressly stated in this letter. We
assume no obligation to advise you, subsequent to the delivery of this letter,
of any matters that could result in a change in the opinions or beliefs set
forth herein. This letter has been prepared solely for your use in connection
with the Purchase and/or Distribution of stock shares under the appropriate
documents, and may not be used for any other purpose, or be relied upon by any
other person or entity. It should not be quoted in whole or in part or otherwise
be referred to, nor be filed with nor furnished to any governmental agency or
other person or entity, without the prior written consent of the undersigned.
Very Truly Yours,
[Law Firm]
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IP SCHEDULE A--APHTON CORPORATION
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Patent No. Country Filing Issue Inventors Explanation of Maintenance APH Status Oppositions Litigation
Serial No. Date Date Relation to Fee/Annuity Interest Interferences Status
(Title) Company Business Fee Status Status
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00/00/00 00/00/00
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Exhibit D
Opinion of Stroock & Stroock & Xxxxx LLP
[Form of Opinion]
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company is qualified
to do business as a foreign corporation in good standing in the State of
Florida. [Each Subsidiary of the Company has been duly organized or formed
and is validly existing as a corporation, limited partnership, limited
liability company or partnership, as the case may be, in good standing
under the laws of its jurisdiction of organization or formation. Each
Subsidiary of the Company is qualified to do business as a foreign
corporation, limited partnership, limited liability company or partnership,
as the case may be, in good standing in Delaware.]
2. All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and
were not issued in violation of or subject to any preemptive or similar
rights. [All of the issued and outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, and
are fully paid and nonassessable and were not issued in violation of or
subject to any preemptive or similar rights. The issued shares of capital
stock of each of the Company's Subsidiaries are owned of record, directly
or indirectly, by the Company free and clear of any and all liens, charges,
claims, security interests or encumbrances.]
3. The Company has full corporate power and authority to enter into the
Distribution Agreement and to issue, sell and deliver the Shares to the
Agent as agent or to the Agent as principal, as provided in the
Distribution Agreement, and the Distribution Agreement has been duly
authorized, executed and delivered by the Company and is the legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
While we have not verified, and are not passing upon and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus, we have participated
in conferences with certain officers and other representatives of the Company,
counsel for the Company, representatives of the independent auditors for the
Company and your representatives, at which the contents of the Registration
Statement and Prospectus and related matters were discussed and, on the basis of
the foregoing (relying as to materiality to a large extent on the opinions of
officers and other representatives of the Company), no facts have come to our
attention that lead us to believe that the Registration Statement (except with
respect to the financial statements, schedules and other financial data,
including therein, as to which we make no statement), 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 in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading or that the Prospectus (except with respect to the
financial statements, schedules and other financial data included therein, as to
which we make no
- 38 -
statement), as of its date, and as of the date hereof, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
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