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EXHIBIT 1.1
MARCH ___, 2000
5,000,000 Shares
VIROLOGIC, INC.
Common Stock
UNDERWRITING AGREEMENT
_________ __, 2000
IBC WORLD MARKETS CORP.
ING BARINGS LLC
PRUDENTIAL SECURITIES INCORPORATED
on behalf of the Several
Underwriters named on
Schedule I attached hereto
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ViroLogic, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as Representatives (the "Representatives"), an aggregate
of 5,000,000 shares (the "Firm Shares") of the Company's Common Stock, with a
par value of $0.001 per share (the "Common Stock"). The respective amounts of
the Firm Shares to be purchased by each of the several Underwriters are set
forth opposite their names on Schedule I attached hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 750,000 shares (the "Option Shares") of Common Stock from the Company
for the sole purpose of covering over-allotments in connection with the sale of
the Firm Shares. The Firm Shares and the Option Shares are together called the
"Shares."
As part of the offering contemplated by this Agreement, the
Representatives have agreed to reserve out of the Firm Shares purchased by them
up to 250,000 shares (the "Directed Shares") for sale to the Company's
directors, officers, employees and other parties associated with the Company, as
determined by the Company (each, individually a "Participant" and, collectively,
the "Participants") under the terms of the friends and family directed sales
program (the "Friends and Family Program"). Shares to be sold pursuant to the
Friends and Family Program shall be sold pursuant to this Agreement at the
public offering price. Any Directed Shares not confirmed for purchase by a
Participant by 5:00 p.m. (New York time) on the date of this Agreement will be
offered to the public by the Representatives as set forth in the Prospectus (as
such term is hereinafter defined).
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1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase
from the Company, at a price of $_____ per share (the "Initial Price"),
the number of Firm Shares set forth opposite the name of such
Underwriter under the column "Number of Firm Shares to be Purchased from
the Company" on Schedule I to this Agreement, subject to adjustment in
accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be purchased
by each Underwriter shall be the same percentage (adjusted by the
Representatives to eliminate fractions) of the total number of Option
Shares to be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case
upon written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares to
the Representatives for the respective accounts of the Underwriters, and payment
of the purchase price by certified or official bank check or checks payable in
New York Clearing House (same day) funds drawn to the order of the Company for
the shares purchased from the Company, against delivery of the respective
certificates therefor to the Representatives, shall take place at the offices of
CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 10:00 a.m., New York City time, on the third business day following the date
of this Agreement, or at such time on such other date, not later than 10
business days after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised
in whole or in part on one or more occasions, delivery by the Company of the
Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks payable
in New York Clearing House (same day) funds to the Company shall take place at
the offices of CIBC World Markets Corp. specified above at the time and on the
date (which may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in Section 1(b)
hereof (such time and date of delivery and payment are called the "Option Shares
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Closing Date"). The Firm Shares Closing Date and the Option Shares Closing Date
are called, individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b) hereof and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The Company
has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement (as hereinafter defined)
on Form S-1 (No. 333-30896), including a preliminary prospectus relating to the
Shares, and such amendments thereof as may have been required to the date of
this Agreement. Copies of such Registration Statement (including all amendments
thereof) and of the related Preliminary Prospectus (as hereinafter defined) have
heretofore been delivered by the Company to you. The term "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used
in this Agreement means the initial registration statement (including all
exhibits, financial schedules and information deemed to be a part of the
Registration Statement through incorporation by reference or otherwise), as
amended at the time and on the date it becomes effective (the "Effective Date")
including the information (if any) deemed to be part thereof at the time of
effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an
abbreviated registration statement to register additional Shares pursuant to
Rule 462(b) under the Rules (the "462(b) Registration Statement") then any
reference herein to the Registration Statement shall also be deemed to include
such 462(b) Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
on, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed the Preliminary
Prospectus, dated as of March 27, 2000, and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any supplement
or amendment to the Prospectus is filed with the
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Commission and each Closing Date, the Registration Statement and the
Prospectus (and any amendment thereof or supplement thereto) will
comply, in all material respects, with the applicable provisions of the
Securities Act and the Rules. The Registration Statement did not, as of
the Effective Date, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and on
the Effective Date and the other dates referred to above neither the
Registration Statement nor the Prospectus, nor any amendment thereof or
supplement thereto, will contain any untrue statement of a material fact
or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. When
any related preliminary prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any amendment
thereto or pursuant to Rule 424(a) of the Rules) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act
and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading except
as may have been corrected in all material respects by subsequent
amendment or supplement prior to or as a part of the Registration
Statement and Prospectus. Notwithstanding the foregoing, none of the
representations and warranties in this Section 4(a) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by the Representatives on
behalf of the several Underwriters for use in the Registration Statement
or the Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus is the paragraph with respect
to stabilization on the inside front cover page of the Prospectus and
the statements contained under the caption "Underwriting" in the
Prospectus.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required
filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules has been or will be made in the manner and within
the time period required by such Rule 424(b).
(c) The financial statements of the Company (including all notes
and schedules thereto) included in the Registration Statement and
Prospectus present fairly the financial position, the results of
operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown
therein of the Company at the respective dates and for the respective
periods to which they apply; and such financial statements and related
schedules and notes have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation
of the results for such periods have been made. The "Summary Financial
Data" and "Selected Financial Data" included in the Prospectus present
fairly the information shown therein as at the respective dates and for
the respective periods specified and the summary and selected financial
data have been
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presented on a basis consistent with the consolidated financial
statements so set forth in the Prospectus and other financial
information.
(d) Ernst & Young LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the
periods covered by their reports, were independent public accountants as
required by the Securities Act and the Rules.
(e) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
The Company has no subsidiary or subsidiaries and does not control,
directly or indirectly, any corporation, partnership, joint venture,
association or other business organization. The Company is duly
qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted by it or location of the assets or properties owned, leased or
licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results of
operations or financial condition of the Company (a "Material Adverse
Effect"). The Company does not own, lease or license any asset or
property or conduct any business outside the United States of America.
The Company has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity (collectively, the "Permits"), to
own, lease and license its assets and properties and conduct its
business, all of which are valid and in full force and effect, as
described in the Registration Statement and the Prospectus, except where
the lack of such Permits, individually or in the aggregate, would not
have a Material Adverse Effect. The Company has fulfilled and performed
in all respects all of its obligations with respect to such Permits and
no event has occurred that allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
impairment of the rights of the Company thereunder except for such
failure to fulfill and for such events as would not, individually or in
the aggregate, have a Material Adverse Effect. Except as may be required
under the Securities Act and state and foreign Blue Sky laws, no other
Permits are required to enter into, deliver and perform this Agreement
and to issue and sell the Shares.
(f) The Company owns or possesses adequate and enforceable
rights to use all patent, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by it reasonably necessary for the conduct of
its business. The Company has not received any notice of, or is not
aware of, any infringement of or conflict with asserted rights of others
with respect to any Intangibles. No departed employee of the Company has
a right of reverter, or any other interest, with respect to any
Intangible.
(g) The Company has good and marketable title in fee simple to
all items of real property and good and marketable title to all personal
property described in the Prospectuses as being owned by it except where
the lack of such good and marketable title would not have a Material
Adverse Effect. Any real property and buildings described in the
Prospectuses as being held under lease by the Company is held by it
under valid, existing and enforceable leases, free and clear of all
liens, encumbrances, claims, security interests and defects, except
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such as are described in the Registration Statement and the Prospectus
or where the failure to have such leases would not have a Material
Adverse Effect.
(h) There are no litigation or governmental proceedings to which
the Company is subject or which is pending or, to the knowledge of the
Company, threatened, against the Company, which, individually or in the
aggregate, might have a Material Adverse Effect, prevent or delay the
consummation of this Agreement or which is required to be disclosed in
the Registration Statement and the Prospectus that is not so disclosed.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any loss or adverse change
with regard to the assets or properties, business, results of operations
or financial condition of the Company except as would not have a
Material Adverse Effect; (b) the Company has not sustained any loss or
interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any
court or legislative or other governmental action, order or decree which
would have a Material Adverse Effect; and (c) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus, except as reflected therein, the Company has not (i) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except such liabilities or obligations
incurred in the ordinary course of business, (ii) entered into any
material transaction not in the ordinary course of business or (iii)
declared or paid any dividend or made any distribution on any shares of
its stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its stock.
(j) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required by the Securities Act or
Rules. Each description of a contract, document or other agreement in
the Registration Statement and the Prospectus accurately reflects in all
respects the terms of the underlying document, contract or agreement.
Each agreement described in the Registration Statement and Prospectus or
listed in the Exhibits to the Registration Statement or incorporated by
reference is in full force and effect and is valid and enforceable by
and against the Company in accordance with its terms. Neither the
Company, nor to the Company's knowledge, any other party is in default
in the observance or performance of any term or obligation to be
performed by it under any such agreement, and no event has occurred
which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the
aggregate, would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any term,
covenant or condition, by the Company of any other agreement or
instrument to which the Company is a party or by which it or its
properties or business may be bound or affected which default or event,
individually or in the aggregate, would have a Material Adverse Effect.
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(k) The Company is not in violation of any term or provision of
its charter or by-laws or of any franchise, license, permit, judgment,
decree, order, statute, rule or regulation, where the consequences of
any such violation, individually or in the aggregate, would have a
Material Adverse Effect.
(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and
sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company pursuant to the
terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or any of its
properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the
Company or violate any provision of the charter or by-laws of the
Company, except for such consents or waivers which have already been
obtained and are in full force and effect.
(m) The Company's authorized and outstanding capital stock
conforms in all material respects to the description thereof contained
under the caption "Capitalization" in the Prospectus. The certificates
evidencing the Shares are in due and proper legal form and have been
duly authorized for issuance by the Company. All of the issued and
outstanding shares of Common Stock have been duly and validly issued and
are fully paid and nonassessable. There are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any
shares of Common Stock of the Company or any such rights pursuant to its
Certificate of Incorporation or by-laws or, except for any rights which
do not apply to the transactions contemplated hereby and which will
expire on the Firm Shares Closing Date, any agreement or instrument to
or by which the Company is a party or bound. The Shares, when issued and
sold pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable and none of them will be issued in violation of
any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is
no commitment, plan or arrangement to issue, any share of stock of the
Company or any security convertible into, or exercisable or exchangeable
for, such stock. The Common Stock and the Shares conform in all material
respects to all statements in relation thereto contained under the
heading "Description of Capital Stock" in the Registration Statement and
the Prospectus.
(n) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such holder
during the period ending 180 days after the date of this Agreement,
except for such rights as have been waived. Each five percent
stockholder, director and executive officer of the Company, and each
person listed on Schedule __ attached hereto, has delivered to the
Representatives such person's enforceable written lock-up agreement in
the form attached to this Agreement ("Lock-Up Agreement").
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(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares by
the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(p) The Company is not involved in any labor dispute nor, to the
knowledge of the Company, is any such dispute threatened, which dispute
would have a Material Adverse Effect. The Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
principal suppliers or contractors which would have a Material Adverse
Effect. The Company is not aware of any threatened or pending litigation
between the Company and any of its executive officers which, if
adversely determined, could have a Material Adverse Effect and, to the
knowledge of the Company, no such officer has a present intention to
leave the employment of the Company.
(q) No transaction has occurred between or among the Company and
any of its officers or directors or five percent stockholders or any
affiliate or affiliates of any such officer or director or five percent
stockholder that is required to be described in and is not described in
the Registration Statement and the Prospectus.
(r) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might
reasonably be expected to constitute, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of any of the Shares.
(s) The Company has filed all Federal, state, local and foreign
tax returns which are required to be filed through the date hereof, or
has received extensions thereof, and has paid all taxes shown on such
returns and all assessments received by it to the extent that the same
are material and have become due. There are no tax audits or
investigations pending, which if adversely determined would have a
Material Adverse Effect; nor are there any material proposed additional
tax assessments against the Company.
(t) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market System, subject to official Notice of
Issuance. A registration statement has been filed on Form 8-A pursuant
to Section 12 of the Exchange Act, which registration statement complies
in all material respects with the Exchange Act.
(u) The books, records and accounts of the Company accurately
and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the
Company. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in
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accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles and to maintain asset accountability, (iii) access to assets
is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(v) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which it is engaged or propose to engage
after giving effect to the transactions described in the Prospectus; all
policies of insurance and fidelity or surety bonds insuring the Company
or any of its subsidiaries or the Company's or its subsidiaries'
respective businesses, assets, employees, officers and directors are in
full force and effect; the Company and each of its subsidiaries are in
compliance with the terms of such policies and instruments in all
material respects; and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect. The Company has not been denied any insurance
coverage which it has sought or for which it has applied.
(w) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
(x) There are no affiliations with the NASD among the Company's
officers, directors or, to the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representatives.
(y) (i) The Company is in compliance in all material respects
with all rules, laws and regulation relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment ("Environmental Law") which are applicable to its business;
(ii) the Company has not received any notice from any governmental
authority or third party of an asserted claim under Environmental Laws;
(iii) the Company has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and is in compliance with all terms and conditions of any such
permit, license or approval; (iv) to the Company's knowledge, no facts
currently exist that will require the Company to make future material
capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, leased or occupied by the Company
has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated as a
contaminated site under applicable state
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or local law. The Company has not been named as a "potentially
responsible party" under the CER, CLA 1980.
(z) In the ordinary course of its business, the Company has
periodically conducted a reasonable due diligence investigation of the
effect of Environmental Laws on the business, operations and properties
of the Company to identify and evaluate associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such investigation, the Company has
reasonably concluded that such associated costs and liabilities would
not, individually or in the aggregate, have a Material Adverse Effect.
(aa) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as
described in the Prospectus in the Section titled "Use of Proceeds,"
will not be subject to registration as an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(bb) The Company or any other person associated with or acting
on behalf of the Company including, without limitation, any director,
officer, agent or employee of the Company has not, directly or
indirectly, while acting on behalf of the Company (i) used any corporate
funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) made any unlawful payment
to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate funds; (iii)
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment in connection with the
business of the Company.
(cc) (i) The Company has no reason to believe that the Year 2000
Problem has had or will have a Material Adverse Effect on the business
or operations of the Company. The Year 2000 Problem, as used herein,
means computer or other technological problems resulting from the
transition from December 31, 1999 to January 1, 2000.
(dd) Neither the Company nor any other person associated with or
acting on behalf of the Company, including, without limitation, any
director, officer, agent or employee of the Company has offered or
caused the Underwriters to offer any of the Shares to any person
pursuant to the Friends and Family Program with the specific intent to
unlawfully influence (i) a customer or supplier of the Company to alter
the customer's or supplier's level or type of business with the Company
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
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(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and
no order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Commission and the
Representatives.
(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section
5(d) shall be true and correct when made and on and as of each Closing
Date as if made on such date. The Company shall have performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by it at or before
such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company to the
effect that (i) the signers of such certificate have carefully examined
the Registration Statement, the Prospectus and this Agreement and that
the representations and warranties of the Company in this Agreement are
true and correct on and as of such Closing Date with the same effect as
if made on such Closing Date and the Company has performed all covenants
and agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by it at or prior to such Closing
Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their
knowledge, no proceedings for that purpose have been instituted or are
pending under the Securities Act.
(e) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
Ernst & Young LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Securities
Act and the Rules;
(ii) on the basis of a reading of the amounts included
in the Registration Statement and the Prospectus under the
headings "Summary Financial Information"
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and "Selected Financial Data," carrying out certain procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters of the Company as to
transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the
Registration Statement and the Prospectus, nothing came to their
attention which caused them to believe that:
(A) the amounts in "Summary Financial
Information," and "Selected Financial Data" included in
the Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited [and
unaudited financial statements] from which such amounts
were derived; or
(B) with respect to the Company, there were, at
a specified date not more than three business days prior
to the date of the letter, any increases in the current
liabilities and long-term liabilities of the Company or
any decreases in net income or in working capital or the
stockholders' equity in the Company, as compared with
the amounts shown on the Company's audited balance sheet
for the fiscal year ended _________________ and the ____
months ended __________________ included in the
Registration Statement;
(iii) they have performed certain other procedures as
may be permitted under Generally Acceptable Auditing Standards
as a result of which they determined that certain information of
an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from
the general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and reasonably
specified by the Representatives agrees with the accounting
records of the Company; and
(iv) based upon the procedures set forth in clauses (ii)
and (iii) above and a reading of the amounts included in the
Registration Statement under the headings "Summary Financial and
Other Data" and "Selected Financial Data" included in the
Registration Statement and Prospectus and a reading of the
financial statements from which certain of such data were
derived, nothing has come to their attention that gives them
reason to believe that the "Summary Financial and Other Data"
and "Selected Financial Data" included in the Registration
Statement and Prospectus do not comply as to the form in all
material respects with the applicable accounting requirements of
the Securities Act and the Rules or that the information set
forth therein is not fairly stated in relation to the financial
statements included in the Registration Statement or Prospectus
from which certain of such data were derived are not in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and
Prospectus.
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References to the Registration Statement and the
Prospectus in this paragraph (e) are to such documents as
amended and supplemented at the date of the letter.
(f) The Representatives shall have received on each Closing Date
from Xxxxxx Godward LLP, counsel for the Company, an opinion, addressed
to the Representatives and dated such Closing Date, and stating in
effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware. To the best of such counsel's knowledge, the
Company has no subsidiary and does not control, directly or
indirectly, any corporation, partnership, joint venture,
association or other business organization. The Company is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its
businesses makes such qualification necessary, except for such
jurisdictions where the failure to so qualify, individually or
in the aggregate, would not have a Material Adverse Effect.
(ii) The Company has all requisite corporate power to
own, lease and license its assets and properties and conduct its
business as now being conducted and as described in the
Registration Statement and the Prospectus and to enter into,
deliver and perform this Agreement and to issue and sell the
Shares, other than those required under the state and foreign
Blue Sky laws.
(iii) The Company has authorized and issued capital
stock as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization"; the certificates
evidencing the Shares are in due and proper legal form and have
been duly authorized for issuance by the Company; all of the
outstanding shares of Common Stock of the Company have been duly
and validly authorized and issued and are fully paid and
nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares when issued and
sold pursuant to this Agreement will be duly and validly issued,
outstanding, fully paid and nonassessable and to the best of
such counsel's knowledge, none of them will have been issued in
violation of any preemptive or other similar right. To the best
of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, and except for any
rights which do not apply to the transactions contemplated
hereby and which will expire on the Firm Shares Closing Date,
there are no preemptive or other rights to subscribe for or to
purchase or any restriction upon the voting or transfer of any
securities of the Company pursuant to the Company's Certificate
of Incorporation or by-laws or other governing documents or any
agreements or other instruments to which the Company is a party
or by which it is bound. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and
the Prospectus, there is no outstanding option, warrant or other
right calling for the issuance of, and no commitment, plan or
arrangement to issue, any share of stock of the Company or any
security convertible into, exercisable for, or exchangeable for
stock of the Company.
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respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iv) This Agreement has been duly and validly
authorized, executed and delivered by the Company and this
Agreement constitutes the legal, valid and binding obligation of
the Company [enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles.]
(v) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation,
the issuance and sale by the Company of the Shares) will give
rise to a right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or any event
which with notice or lapse of time, or both, would constitute a
default) under, or require consent or waiver under, or result in
the execution or imposition of any lien, charge, claim, security
interest or encumbrance upon any properties or assets of the
Company pursuant to the terms of any indenture, mortgage, deed
trust, note or other agreement or instrument [of which such
counsel is aware and to which the Company is a party] or by
which it or any of its properties or businesses is bound, or
violate, to the best of such counsel's knowledge, any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation or violate any provision of the charter or by-laws of
the Company.
(vi) No consent, approval, authorization or order of any
court or governmental agency or regulatory body is required for
the execution, delivery or performance of this Agreement by the
Company or the consummation of the transactions contemplated
hereby or thereby, except such as have been obtained under the
Securities Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters.
(vii) To the best of such counsel's knowledge, there is
no litigation or governmental or other proceeding or
investigation, before any court or before or by any public body
or board pending or threatened against, or involving the assets,
properties or businesses of, the Company which would have a
Material Adverse Effect.
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(viii) The Registration Statement and the Prospectus and
each amendment or supplement thereto (except for the financial
statements and schedules and other financial and statistical
data included therein, as to which such counsel expresses no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules.
(ix) The Registration Statement is effective under the
Securities Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are threatened, pending or contemplated.
Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made
in the manner and within the time period required by such Rule
424(b).
(x) The Shares have been approved, upon issuance as
contemplated by this Agreement, for quotation on the Nasdaq
National Market.
(xi) The capital stock of the Company conforms in all
material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
(xii) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials. Such counsel shall not be obligated to opine as to any
opinions of other counsel or laws other than the laws of the State of
California, the General Corporation Law of the State of Delaware and the Federal
laws of the United States.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the Representatives and their counsel, and representatives of
the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel has not verified and
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as specified in the foregoing opinion), on
the basis of the foregoing, no facts have come to the attention of such counsel
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other statistical and financial data, as to which such
counsel need express no belief) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements
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therein not misleading, or that the Prospectus as amended or supplemented
(except with respect to the financial statements, notes and schedules thereto
and other statistical and financial data, as to which such counsel need make no
statement) on the date thereof contained any untrue statement of a material fact
or omitted 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.
(g) The Representatives shall have received on each Closing Date
from Xxxxxx & Xxxxxx LLP, special patent counsel to the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
in substantially the form attached hereto as Exhibit 5(g).
(h) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives,
and their counsel and the Underwriters shall have received from
XxXxxxxxx, Will & Xxxxx a favorable opinion, addressed to the
Representatives and dated such Closing Date, with respect to the Shares,
the Registration Statement and the Prospectus, and such other related
matters, as the Representatives may reasonably request, and the Company
shall have furnished to XxXxxxxxx, Will & Xxxxx such documents as they
may reasonably request for the purpose of enabling them to pass upon
such matters.
(i) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person described in
Section 4(n).
(j) The Company shall have furnished or caused to be furnished
to the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall
prepare the Prospectus in a form approved by the Representatives
and file such Prospectus pursuant to Rule 424(b) under the
Securities Act within the prescribed time period and will
provide evidence satisfactory to you of such timely filing.
(ii) The Company shall promptly advise the
Representatives in writing (i) when any amendment to the
Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment of the Registration
Statement or the Prospectus or for any additional information,
(iii) of the prevention or suspension of the use of any
preliminary prospectus or the Prospectus or of the issuance by
the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of
any proceeding for that purpose and (iv) of the receipt by the
Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such
purpose. The Company shall not
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file any amendment of the Registration Statement or supplement
to the Prospectus unless the Company has furnished the
Representatives a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its
best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and
the Rules, any event occurs as a result of which the Prospectus
as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if
it shall be necessary to amend or supplement the Prospectus to
comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to
the second sentence of paragraph (ii) of this Section 6(a), an
amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 of
the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of
the Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all
amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act
or the Rules, as many copies of any preliminary prospectus and
the Prospectus and any amendments thereof and supplements
thereto as the Representatives may reasonably request.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the
Shares for offer and sale in connection with the offering under
the laws of such jurisdictions as the Representatives may
designate and shall maintain such qualifications in effect so
long as required for the distribution of the Shares; provided,
however, that the Company shall not be required in connection
therewith, as a condition thereof, to qualify as a foreign
corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as
doing business in any jurisdiction in which it is not now so
required.
(vii) Without the prior written consent of CIBC World
Markets Corp., for a period of 180 days after the date of this
Agreement, the Company and each of its individual directors and
executive officers shall not issue, sell or register with the
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Commission (other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to the
Registration Statement and the issuance of shares pursuant to
the Company's existing stock plans or bonus plan as described in
the Registration Statement and the Prospectus. In the event that
during this period, (i) any shares are issued pursuant to the
Company's existing stock plans or bonus plan that are
exercisable during such 180 day period or (ii) any registration
is effected on Form S-8 or on any successor form relating to
shares that are exercisable during such 180 period, the Company
shall obtain the written agreement of such grantee or purchaser
or holder of such registered securities that, for a period of
180 days after the date of this Agreement, such person will not,
without the prior written consent of CIBC World Markets Corp.,
offer for sale, sell, distribute, grant any option for the sale
of, or otherwise dispose of, directly or indirectly, or exercise
any registration rights with respect to, any shares of Common
Stock (or any securities convertible into, exercisable for, or
exchangeable for any shares of Common Stock) owned by such
person.
(viii) On or before completion of the offering of the
Shares, the Company shall make all filings required under
applicable securities laws and by the Nasdaq National Market
(including any required registration under the Exchange Act).
(ix) The Company will apply the net proceeds to the
Company from the offering of the Shares in the manner set forth
under "Use of Proceeds" in the Prospectus.
(x) [The Company will comply with all applicable
securities laws and other applicable laws, rules and regulations
in each foreign jurisdiction in which the Directed Shares are
offered in connection with the Friends and Family Program.]
(xi) [The Company will ensure that the Directed Shares
will be restricted, to the extent required by the NASD or the
NASD rules, from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement. The
Representatives will notify the Company as to which Participants
will need to be so restricted. The Company shall direct the
transfer agent to place stop transfer restrictions upon such
securities for such period of time.]
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each preliminary
prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus, and the printing, filing and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration
or qualification of the Shares for offer and
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sale under the securities or Blue Sky laws of the various jurisdictions
referred to in Section 6(a)(vi), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky
memoranda, if any; (iv) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of
each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use
in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the NASD in connection with its review of the terms of the
public offering and reasonable fees and disbursements of counsel for the
Underwriters in connection with such review; (vi) inclusion of the
Shares for quotation on the Nasdaq National Market; and (vii) all
transfer taxes, if any, with respect to the sale and delivery of the
Shares by the Company to the Underwriters [(viii) payments to counsel
for costs incurred by the Underwriters in connection with the Friends
and Family Program and payment of any stamp duties, similar taxes or
duties or other taxes, if any, incurred by the Underwriters in
connection with the Friends and Family Program.] Subject to the
provisions of Section 9 hereof, the Underwriters agree to pay, whether
or not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel for
the Underwriters.
(c) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the
Option Shares Closing Date, any rumor, publication or event relating to
or affecting the Company shall occur as a result of which in the
Representatives' opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or amendment of
the Prospectus and any integrated prospectus), the Company will, after
notice from the Representatives advising the Company to the effect set
forth above, forthwith prepare, consult with the Representatives
concerning the substance of, and disseminate a press release or other
public statement, reasonably satisfactory to the Representatives,
responding to or commenting on such rumor, publication or event.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus
or any amendment thereof or supplement thereto, or arise out of or are
based upon any omission or
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alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
in whole or in part upon any breach of the representations and
warranties set forth in Section 4 hereof, (iii) in whole or in part upon
any failure of the Company to perform any of its obligations hereunder
or under law or (iv) any untrue statement of any material fact contained
in any audio or visual materials prepared by the Company or based upon
written information furnished by or on behalf of the Company, including
(without limitation) slides, videos, films, tape recordings used in
connection with the marketing of the Shares, including (without
limitation) statements communicated to securities analysts employed by
the Underwriters; provided, however, that such indemnity shall not inure
to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter if
such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by the Representatives on behalf of any Underwriter
specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
Notwithstanding the foregoing, with regard to any preliminary
prospectus, the benefit of this Section 7(a) will not accrue to any
Underwriter from whom the person asserting the loss purchased the shares
if such person was not delivered the final prospectus by such
Underwriter (when such Underwriter was delivered the final prospectus in
a timely manner by the Company.
The Company agrees to indemnify and hold harmless the
Representatives and each person, if any, who controls any Representative
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages, expenses
and liabilities (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted) (i) arising
out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any material prepared by or with the
consent of the Company for distribution to Participants in connection
with the Friends and Family Program or arising out of or based upon any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) arising out of or based upon the failure of any
Participant to pay for and accept delivery of Directed Shares otherwise
reserved for such Participant pursuant to the Friends and Family
Program, and (iii) related to, arising out of, or in connection with the
Friends and Family Program, other than losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of
the Representatives.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company, and
each officer of the Company who signs the Registration Statement, to the
same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or
any amendment
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thereof or supplement thereto, contained in the (i) concession and
reallowance figures appearing under the caption "Underwriting" and (ii)
the stabilization information contained under the caption "Underwriting"
in the Prospectus; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any controlling person,
director or officer thereof) shall be limited to the net proceeds
received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 7(a) or 7(b)
shall be available to any party who shall fail to give notice as
provided in this Section 7(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (ii) the indemnified party shall
have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to
those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action,
suit, proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 7(a) or
7(b) is due in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or
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any claims asserted, but after deducting any contribution received by any person
entitled hereunder to contribution from any person who may be liable for
contribution) to which the indemnified party may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Underwriters from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company, as set forth in the table on the
cover page of the Prospectus, bear to (y) the underwriting discounts received by
the Underwriters, as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact related to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter (except as may be provided in the
Agreement Among Underwriters) be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 8. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section 8, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent, which consent shall not be unreasonably withheld.
The Underwriter's obligations to contribute pursuant to this Section 8 are
several in proportion to their respective underwriting commitments and not
joint.
9. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time:
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(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted, or
in the opinion of the Representatives will in the future materially
disrupt, the securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or
crisis the effect of which on the financial markets of the United States
is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such a
material adverse change in general financial, political or economic
conditions or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of
the Representatives, inadvisable or impracticable to market the Shares;
(iv) if trading in the Shares has been suspended by the Commission or
trading generally on the New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for securities shall
have been fixed, or maximum ranges for prices for securities have been
required, by said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc., or any other governmental or
regulatory authority; or (v) if a banking moratorium has been declared
by any state or Federal authority; or (vi) if, in the judgment of the
Representatives, there has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 hereof shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, the Company shall be under no liability to any Underwriter,
and no Underwriter shall be under any liability to the Company, except
that (y) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part of
the Company to comply with the terms or to fulfill any of the conditions
of this Agreement, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the reasonable fees and disbursements
of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or
refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement,
shall be relieved of liability to the Company or to the other
Underwriters for damages occasioned by its failure or refusal.
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
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(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event shall
the maximum number of Shares that any Underwriter has agreed to purchase
pursuant to Section 1 hereof be increased pursuant to this Section 10 by
more than one-ninth of such number of Shares without the written consent
of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to two additional business days
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a
period of not more than five business days in order that necessary
changes and arrangements (including any necessary amendments or
supplements to the Registration Statement or Prospectus) may be effected
by the Representatives and the Company. If the number of Shares to be
purchased on such Closing Date by such defaulting Underwriter or
Underwriters shall exceed 10% of the Shares that all the Underwriters
are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements
pursuant to this Section within the period stated for the purchase of
the Shares that the defaulting Underwriters agreed to purchase, this
Agreement shall terminate with respect to the Shares to be purchased on
such Closing Date without liability on the part of any nondefaulting
Underwriter to the Company and without liability on the part of the
Company, except in both cases as provided in Sections 6(b), 7, 8 and 9.
Notwithstanding the foregoing, if any default occurs with respect to the
Option Shares Closing Date, this Agreement will not terminate with
respect to the Firm Shares purchased prior to such time. The provisions
of this Section 10 shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters
arising out of such default. A substitute underwriter hereunder shall
become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company, or its officers,
and of the Underwriters set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 hereof shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
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have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx Xxxxxx, with a copy to
XxXxxxxxx, Will & Xxxxx, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx, Esq. and (b) if to the Company,
to its agent for service as such agent's address appears on the cover page of
the Registration Statement with a copy Xxxxxx Godward LLP, 0000 Xxxxxxxxx Xxxxx,
Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxxx X. Xxxx, Esq.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
VIROLOGIC, INC.
By:
---------------------------------
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
ING BARINGS LLC
PRUDENTIAL SECURITIES INCORPORATED
Acting severally on behalf of itself
and as representative of the several
Underwriters named on Schedule I
attached hereto
By: CIBC WORLD MARKETS CORP.
By:
--------------------------------
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- --------------
CIBC World Markets Corp.
ING Barings LLC
Prudential Securities Incorporated
--------------
TOTAL
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EXHIBIT 5(h) TO UNDERWRITING AGREEMENT
LEGAL OPINION OF XXXXXX & XXXXXX LLP
STATEMENTS:
We have acted as patent counsel to the Company with respect to the
patent matters reflected on Schedule A attached hereto (the "Relevant
Patent Matters").
We have read the Registration Statement and the Prospectus, including in
particular the portions of the Registration Statement and the Prospectus
under the captions "Risk Factors - The intellectual property underlying
our PhenoSense technology may not be adequate, allowing third parties to
use our PhenoSense technology and thus reducing our ability to compete
in the market" and "Business - Background, Our Solution, Our Strategy
and Patents and Proprietary Rights" (such portions being referred to
herein, collectively, as the "Technology Portions").
OPINIONS:
1. The statements in the Technology Portions are accurate and fairly
present the matters of law and legal conclusions stated therein.
2. Nothing has come to our attention which has caused us to believe that
the Technology Portions contain any untrue statement of a material
fact with respect to the patent position of the Company, or omit to
state any material fact relating to the patent position of the
Company.
3. Nothing has come to our attention which has caused us to believe that
(a) any patent application referred to in the Relevant Patent Matters
was not properly prepared and filed, in accordance with all
applicable legal and procedural requirements, or is not in good
standing, (b) the issued patent (the "Issued Patent") referred to in
the Relevant Patent Matters was not properly obtained, in accordance
with all applicable legal and procedural requirements, or is not in
good standing, (c) that any invention described in any patent
application or the issued patent is not held by the Company, or (d)
any [relevant] prior art has not been disclosed promptly to the
appropriate governmental agency.
4. To our knowledge, the Company has not received any notice asserting
any ownership rights contrary to those of the Company in any of the
Relevant Patent Matters.
5. To our knowledge, the Company has not received any notice challenging
the validity or enforceability of any Relevant Patent Matter.
6. To our knowledge, the Company has not received any notice of
infringement of, or conflict with, rights or claims of others with
respect to any patent, trademark, service xxxx, trade name, copyright
or know-how.
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7. To our knowledge, other than proceedings (except re-examination,
reissue or interference proceedings) of the various patent and
trademark offices, there are no legal or governmental proceedings
pending relating to any patent, patent application, trade secret,
trademark, service xxxx or other proprietary information or materials
of the Company and, to our knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.
