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EXHIBIT 1.1
ARQULE, INC.
[2,500,000] Shares
Common Stock
$0.01 Par Value
FORM OF
UNDERWRITING AGREEMENT
November ___, 2000
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UNDERWRITING AGREEMENT
November ___, 2000
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXX XXXXXX XXXXXXXX & CO., LLC
as Managing Underwriters
c/o UBS WARBURG LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
ArQule, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the underwriters named in SCHEDULE A annexed hereto
(collectively, the "Underwriters") an aggregate of [2,500,000] shares (the "Firm
Shares") of Common Stock, $0.01 par value per share (the "Common Stock"), of the
Company. In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the
Company up to an additional [375,000] shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the "Shares." The Shares are described in the
Prospectus that is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3, (File No. 333-48358)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act"). The Company has
furnished to you as the representatives (the "Representatives"), for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses and
the documents incorporated by reference therein (each thereof, including the
documents incorporated therein by reference, being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof or incorporated by reference
therein, and including any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430(A) under the Act and also including any registration statement filed
pursuant to Rule 462(b) under the Act, is herein called the Registration
Statement, and the prospectus, including all documents incorporated therein by
reference, in the form filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof
(or such earlier time as may be required under the Act) or, if no such filing is
required,
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the form of final prospectus included in the Registration Statement at the time
it became effective, is herein called the Prospectus.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares set forth opposite the name of such Underwriter
in SCHEDULE A annexed hereto, in each case at a purchase price of [$_____] per
Share. The Company is advised by you that the Underwriters intend (i) to make a
public offering of their respective portions of the Firm Shares as soon after
the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth
in the Prospectus. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them
(subject to such adjustment as you shall determine to avoid fractional shares),
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. You may exercise this option on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); PROVIDED, HOWEVER, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day(1) after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company (the "DTC")
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(1) As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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for the respective accounts of the Underwriters. Such payment and delivery shall
be made at 10:00 A.M., New York City time, on November ___, 2000 (unless another
time shall be agreed to by you and the Company or unless postponed in accordance
with the provisions of Section 8 hereof). The time at which such payment and
delivery are actually made is hereinafter sometimes called the time of purchase.
Certificates for the Firm Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify no later than the
second business day preceding the time of purchase. For the purpose of
expediting the checking of the certificates for the Firm Shares by you, the
Company agrees to make such certificates available to you for such purpose at
least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify no later than the second business day preceding the additional
time of purchase. For the purpose of expediting the checking of the certificates
for the Additional Shares by you, the Company agrees to make such certificates
available to you for such purpose at least one full business day preceding the
additional time of purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of the
Commission preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act; when the Registration Statement becomes effective, the
Registration Statement and the Prospectus will comply in all material respects
to the requirements of the Act, and the Registration Statement does not and will
not, as of the applicable effective date, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Prospectus does
not and will not as of the applicable filing date contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement have
been so described or filed; PROVIDED, HOWEVER, that the Company makes no
warranty or representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; the documents incorporated by
reference in the Prospectus, at the time they were filed with the Commission,
complied in all material respects with the requirements of the Exchange 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, in light of the circumstances under which they were made, not
misleading and the Company has not distributed any offering material in
connection with the
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offering or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or any other materials, if any, permitted
by the Act;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase and the
additional time of purchase, as the case may be, the Company shall have an
authorized capitalization as set forth under the heading entitled "As Adjusted"
in the section of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of Common Stock of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right. There are no shares of Preferred
Stock outstanding.
(c) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with full
power and authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign corporation
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
stockholders' equity, business, properties, assets, condition (financial or
otherwise), results of operation or prospects of the Company and the Subsidiary
(as hereinafter defined) taken as a whole (a "Material Adverse Effect"). The
Company has no subsidiaries other than ArQule Catalytics, Inc., a majority-owned
subsidiary incorporated in Delaware (the "Subsidiary"); the Subsidiary is not
actively engaged in any business; other than the Subsidiary, the Company does
not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any
firm, partnership, joint venture, association or other entity; complete and
correct copies of the certificates of incorporation and of the by-laws of the
Company and the Subsidiary and, in each case, all amendments thereto have been
delivered to you, and except as set forth in the exhibits to the Registration
Statement, no changes therein will be made subsequent to the date hereof and
prior to the time of purchase or, if later, the additional time of purchase; the
Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as currently conducted; the Subsidiary is duly qualified to do business
as a foreign entity in good standing in each jurisdiction where the ownership or
leasing of the properties or the conduct of its business requires such
qualification, except where the failure to so qualify could not have a Material
Adverse Effect; the authorized capital of the Subsidiary consists of [_____]
shares of common stock, [____] par value per share of which [____] are issued
and outstanding. All of the outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and [_________] shares are owned by the Company subject to no
security interest, other encumbrance or adverse claims; no options, warrants or
other rights to purchase, agreements
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or other obligations to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in the Subsidiary are
outstanding.
(e) the Company and the Subsidiary are in compliance in all material
respects with the laws, orders, rules and regulations issued or administered by
each jurisdiction in which they conduct their respective businesses;
(f) neither the Company nor the Subsidiary is in breach of, or in default
under (nor has any event occurred which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), its respective
certificate of incorporation or by-laws (each as in effect on the date hereof)
or, in a manner which could have a Material Adverse Effect, in the performance
or observance of a material obligation, agreement, covenant or condition
contained in any 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 the Subsidiary is a party or by
which either of them or any of their respective properties is bound, each such
agreement, contract or instrument is a legal, valid and binding agreement
enforceable in accordance with its respective terms, 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), any provisions of the charter or by-laws of the
Company or of the Subsidiary or 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 or the Subsidiary is a party or by which either of them or their
respective properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company or the Subsidiary or their respective properties;
(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
in accordance with its terms;
(h) the capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained in the Exchange Act
reports incorporated by reference into the Registration Statement and Prospectus
and the certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of being such
holders;
(i) the Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued and fully paid and non-assessable;
(j) 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 transaction as contemplated
hereby other than registration of the Shares
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under the Act and any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD");
(k) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any securities of the
Company owned or to be owned by such person as a result of the registration of
the Shares under the Act or the issue and sale of the Shares to the Underwriters
hereunder, nor does any person have any preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any of the Shares, in each
case other than those that have been expressly waived prior to the dates hereof;
(l) PricewaterhouseCoopers LLP, whose reports on the consolidated
financial statements of the Company and the Subsidiary are filed with the
Commission as part of the Registration Statement and Prospectus, are, and were
during the periods covered by such reports, independent accountants as required
by the Act;
(m) except with respect to compliance with Environmental Laws, which is
addressed in subsection (cc) of this Paragraph 3, each of the Company and the
Subsidiary 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, except where the failure to have such licenses, authorizations,
consents and approvals or made such filings could not have a Material Adverse
Effect; neither the Company nor the Subsidiary is in violation of, or in default
under, 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 the Subsidiary, except where such violation or
default could not have a Material Adverse Effect;
(n) 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;
(o) there are no actions, suits, claims, investigations or proceedings
pending or to the Company's knowledge threatened to which the Company or the
Subsidiary or any of their respective officers, directors or stockholders is a
party or of which any of the respective properties of the Company or the
Subsidiary is subject at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency that could result in a judgment, decree or order having a Material
Adverse Effect or delay or prevent consummation of the transactions contemplated
hereby;
(p) the consolidated audited and unaudited financial statements included
in the Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and the Subsidiary as of the dates indicated
and the consolidated results of operations and cash flows of the Company and the
Subsidiary for the periods specified; the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein; such financial statements and supporting schedules have been
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prepared in conformity with U.S. generally accepted accounting principles
applied on a consistent basis during the periods involved; no other financial
statements or supporting schedules are required to be included in the
Registration Statement; the financial data set forth in the Prospectus under the
captions "Prospectus Summary -- Summary consolidated financial data",
"Capitalization", "Selected financial data" and "Management's discussion and
analysis of financial condition and results of operations" fairly present the
information set forth therein on a basis consistent with that of the audited and
unaudited financial statements contained in the Registration Statement;
(q) 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 that, could cause a material adverse
change, in the stockholders' equity, business, properties, assets described or
referred to in the Registration Statement, or the business, properties, assets,
condition (financial or otherwise), results of operations or prospects of the
Company and the Subsidiary taken as a whole, (ii) any transaction which is
material to the Company or the Subsidiary, except transactions in the ordinary
course of business, (iii) any obligation, direct or contingent, which is
material to the Company and the Subsidiary taken as a whole, incurred by the
Company or the Subsidiary, except obligations incurred in the ordinary course of
business, (iv) any change in the capital stock of the Company or the Subsidiary,
(v) any change in any outstanding indebtedness of the Company or the Subsidiary
(other than indebtedness incurred in the ordinary course of business consistent
with past practice or (vi) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company. Neither the Company nor the
Subsidiary has any material contingent obligation which is not disclosed in the
Registration Statement;
(r) the Company has obtained the agreement of each of its directors and
officers, and the persons listed on SCHEDULE B hereto, not to sell, offer to
sell, contract to sell, hypothecate, grant any option to sell or otherwise
dispose of, directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 90 days after the date of the Prospectus;
(s) 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");
(t) except as described in the Registration Statement and Prospectus, the
Company owns, or has obtained valid and enforceable licenses for, or other
rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, copyrights and trade secrets described
in the Registration Statement and Prospectus as being owned or licensed by it,
that the Company reasonably believes are necessary for the conduct of its
business (collectively, "Intellectual Property") and which the failure to own,
license or have such rights could have a Material Adverse Effect. Except as
described in the Registration Statement and Prospectus, (i) the Company believes
that there are no third parties who have or will be able to establish rights to
any Intellectual Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to the Company; (ii) to the Company's
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knowledge, without investigation, there is no infringement by third parties of
any Intellectual Property; (iii) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to any Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim;
(iv) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by others that
the Company infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is unaware
of any facts which would form a reasonable basis for any such claim; (vi) to the
Company's knowledge, there is no patent or patent application which contains
claims that interfere with the issued or pending claims of any of the
Intellectual Property which could have a Material Adverse Effect; and (vii)
there is no prior art of which the Company is aware that may render any patent
application owned by the Company of the Intellectual Property unpatentable which
has not been disclosed to the U.S. Patent and Trademark Office which could have
a Material Adverse Effect. The Company has entered into valid and binding
confidentiality, non-disclosure and assignment of inventions agreements with all
current and former employees. The Company has also entered into confidentiality
agreements with all current and former consultants, vendors , collaborators and
other third parties with access to non-public information regarding the
Intellectual Property.
(u) the Company has filed with the U.S. Food and Drug Administration (the
"FDA"), and all applicable foreign, state and local regulatory bodies for, and
received approval of, all registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations necessary to conduct the
Company's business as it is described in the Registration Statement and
Prospectus; the Company is in compliance in all material respects with all such
registrations, applications, licenses, requests for exemptions, permits and
other regulatory authorizations, and all applicable FDA, foreign, state and
local rules, regulations, guidelines and policies; the Company has no reason to
believe that any party granting any such registration, application, license,
request for exemption, permit or other authorization is considering limiting,
suspending or revoking the same and knows of no basis for any such limitation,
suspension or revocation;
(v) the Company has good and marketable title (in fee simple in the case
of real property) to all the properties and assets reflected as owned in the
financial statements referred to in Section 4(p) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property or assets by
the Company. The real property, improvements, equipment and personal property
held under lease by the Company are held under valid leases, and the Company has
no notice of any claim of any sort that has been asserted by anyone adverse to
the rights of the Company under any of the leases or subleases referred to
above, or affecting or questioning the rights of the Company to the continued
possession of the leased or subleased premises under any such lease or sublease.
The Subsidiary owns no property, has no assets and is not party to any leases;
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(w) the Company and the Subsidiary have filed all necessary federal, state
and foreign income and franchise tax returns and have paid all taxes required to
be paid by either of them and, if due and payable, any related or similar
assessment, fine or penalty levied against either of them. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 4(p) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability of the
Company or the Subsidiary has not been finally determined;
(x) the Company is insured by nationally recognized, financially sound and
reputable institutions with policies in such amounts and with such deductibles
and covering such risks as are generally deemed adequate and customary for its
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company against theft, damage, destruction, acts
of vandalism and earthquakes. The Company has no reason to believe that it will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted or
as currently proposed to conducted and at a cost that would not have a Material
Adverse Effect. Neither the Company nor the Subsidiary has been denied any
insurance coverage which it has sought or for which it has applied;
(y) neither the Company nor any officer, director, employee, agent or
affiliate of the Company has taken directly or indirectly, any action designed
to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares; and the Company shall not take and shall not cause any such
person to take any such action;
(z) there are no business relationships or related-party transactions
involving the Company, the Subsidiary or any other person required to be
described in the Prospectus which have not been described as required;
(aa) neither the Company nor the Subsidiary nor any officer, director,
employee, agent or other person associated with or acting on behalf of the
Company or the Subsidiary, has used any corporate funds or made any contribution
or other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus;
(bb) the Company's Board of Directors has established an audit committee
and adopted an audit committee charter which in each case comply with the
requirements of the Act and the Exchange Act and the rules of the Nasdaq
National Market (as defined below); the Company maintains a system of accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's authorization; (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 on a basis consistent with the Company's past practices and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
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(cc) (i) neither the Company nor the Subsidiary is in violation of any
federal, state, local or foreign law or regulation relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of hazardous or toxic
materials, substances or wastes, chemicals, pollutants, contaminants, petroleum
and petroleum products (collectively, "Hazardous Materials"), or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), which violation includes, but is not limited to, failure
to obtain or noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or the Subsidiary or
the ownership, lease or sublease of the Woburn or Medford properties (the
"Properties") under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, except where such violation or noncompliance could
not have a Material Adverse Effect, nor has the Company or the Subsidiary
received any communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or the Subsidiary is
in violation of any Environmental Law, and the Company is not otherwise aware of
any such violation; (ii) there is no claim, action or cause of action filed with
any court or governmental authority, or to the Company's knowledge,
investigation alleging liability for investigatory costs, cleanup or other
remedial actions or costs, governmental responses costs, natural resources
damages, property damages, personal injuries, attorneys' fees or penalties
arising out of, based on or resulting from the presence, or release into the
environment or any indoor space, of any Hazardous Materials at or from any
location owned, leased or operated by the Company or the Subsidiary, now or in
the past (collectively, "Environmental Claims"), pending or, to the best of the
Company's knowledge, threatened against the Company or the Subsidiary or any
person or entity whose liability for any Environmental Claim the Company or the
Subsidiary has retained or assumed either contractually or by operation of law
which could have a Material Adverse Effect; (iii) the Company and the Subsidiary
have all permits, authorizations and approvals required under any applicable
Environmental Laws or under any lease or sublease of any of the Properties
(collectively "Permits"), and are each in compliance with their requirements,
except as disclosed in Schedule 3(cc), the representations in which are
incorporated herein by reference, and each of the Permits is in full force and
effect and neither the Company nor the Subsidiary knows of any reason why such
Permits would not be renewed in due course; and (iv) there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the storage, generation, manufacture, treatment,
use, refinement, release, emission, discharge, presence or disposal of any
Hazardous Materials, that could result in a violation of any Environmental Law
or that could form the basis of an Environmental Claim against the Company or
the Subsidiary or against any person or entity whose liability for any
Environmental Claim the Company or the Subsidiary has retained or assumed either
contractually or by operation of law, which could have a Material Adverse
Effect; and
(dd) the Company and the Subsidiary and any "employee benefit plan" (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company, the Subsidiary or their
"ERISA Affiliates" (as defined below) are in compliance in all material respects
with ERISA. "ERISA Affiliate" means, with respect to the Company or the
Subsidiary, any member of any group of organizations
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described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or the Subsidiary is a member. No "reportable
event" (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any "employee benefit plan" established or maintained by the
Company, the Subsidiary or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, the Subsidiary or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined under ERISA). Neither
the Company, the Subsidiary nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, the Subsidiary or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which could cause the loss of such qualification.
(ee) The Company is in compliance with the rules and regulations of the
Nasdaq National Market System (the "Nasdaq National Market") applicable to the
Company, the Common Stock listed on the Nasdaq National Market and the Shares.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
PROVIDED that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriters as soon as practicable after the
Registration Statement becomes effective, and thereafter from time to time to
furnish to the Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes contemplated by the
Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective and (ii) if Rule
430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus
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or for additional information with respect thereto, or of notice of institution
of proceedings for, or the entry of a stop order suspending the effectiveness of
the Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement or Prospectus including by filing any documents that
would be incorporated therein by reference and to file no such amendment or
supplement to which you shall object in writing;
(e) to file promptly all reports and any definitive proxy or information
statement required to be filed by the Company with the Commission in order to
comply with the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the Shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement pursuant
to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other Underwriters
for a period of five years from the date of this Agreement (i) copies of any
reports or other communications which the Company sends to its stockholders or
from time to time publishes or publicly disseminates, (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, (iii)
copies of documents or reports filed with any national securities exchange or
over-the-counter market on which any class of securities of the Company is
listed, and (iv) such other information as you may reasonably request regarding
the Company or the Subsidiary, in each case as soon as such communications,
documents or information becomes publicly available;
(h) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Act which could require the making
of any change in the Prospectus then being used, or in the information
incorporated therein by reference, so that the Prospectus would not include an
untrue statement of material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
are made, not misleading, and, during such time, to promptly prepare and
furnish, at the Company's expense, to the Underwriters such amendments or
supplements to such Prospectus as may be necessary to reflect any such change
and to furnish you a copy of such proposed amendment or supplement before filing
any such amendment or supplement with the Commission;
(i) to make generally available to its security holders, and to deliver to
you, an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of at least twelve months beginning
after the effective date of the Registration Statement (as defined in Rule
158(c) of the Act) as soon as is reasonably practicable after the termination of
such twelve-month period but not later than the forty-fifth
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(45th) day following the end of the fiscal quarter first occurring after the
first anniversary of the effective date of the registration statement;
(j) for so long as the Company is subject to the Exchange Act, to furnish
to its shareholders as soon as practicable after the end of each fiscal year an
annual report including a balance sheet and statements of income, shareholders'
equity and of cash flow of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of nationally recognized independent
certified public accountants;
(k) to furnish to you five original signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments thereto
and if requested one copy of all exhibits thereto and documents incorporated by
reference therein and sufficient conformed copies of the foregoing (other than
exhibits) for distribution of a copy to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not later
than two business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements, if any, of the Company and the
Subsidiary which have been read by the Company's independent certified public
accountants, as stated in their letter to be furnished pursuant to Section 8(c)
hereof;
(m) 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;
(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 (h) above, a copy of any document proposed to be filed pursuant to
Section 13, 14 or 15(d) of the Exchange Act;
(o) for a period of 90 days after the date hereof, without the prior
written consent of UBS Warburg LLC ("UBSW"), not to sell, offer or agree to
sell, contract to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities convertible
into or exchangeable or exercisable for Common Stock or warrants or other rights
to purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock or permit the registration under the Act
of any shares of Common Stock, except for the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement and except for issuances of
Common Stock upon the exercise of outstanding options and issuances of options
or shares under the Company's Amended and Restated 1994 Equity Incentive Plan,
Amended and Restated 1996 Employee Stock Purchase Plan and Amended and Restated
1996 Director Stock Option Plan in the ordinary course of business consistent
with past practices;
(p) to pay all expenses, fees and taxes (other than any transfer taxes and
fees and disbursements of counsel for the Underwriters except as set forth under
Section 5 hereof or (iii) or (iv) below) in connection with (i) the preparation
and filing of the Registration Statement, each Preliminary Prospectus, the
Prospectus, and any amendments or supplements
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thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (ii) the
issuance, sale and delivery of the Shares by the Company, (iii) printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements, any
Statements of Information if requested by you and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid and the preparation,
printing and furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers (including the legal fees and filing
fees and other disbursements of counsel to the Underwriters incurred in
connection therewith), (v) any listing of the Shares on any securities exchange
or qualification of the Shares for quotation on the Nasdaq National Market and
any registration thereof under the Exchange Act, (vi) the filing for review of
the public offering of the Shares by the NASD (including the legal fees and
filing fees and other disbursements of counsel to the Underwriters incurred in
connection therewith) and (vii) the performance of the Company's other
obligations hereunder.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to Section 7 hereof or the default by one or more of the Underwriters in its or
their respective obligations hereunder, the Company shall, in addition to paying
the amounts described in Section 4(q) hereof, reimburse the Underwriters for all
of their out-of-pocket expenses, including the fees and disbursements of their
counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxx & Dodge
LLP, counsel for the Company, addressed to the Underwriters, and dated the time
of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form satisfactory to
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ("Xxxxx Xxxxx"), counsel for
the Underwriters, stating that Xxxxx Xxxxx may rely on such opinion in rendering
its opinion described in Section 6(d) below and stating that:
(i) the Company is validly existing as a corporation in good standing
under the laws of the State of Delaware with full corporate power and authority
to own, lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein contemplated;
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(ii) the Subsidiary is validly existing as a corporation in good standing
under the laws of the State of Delaware with full corporate power and authority
to own, lease and operate its properties and to conduct its business;
(iii) this Agreement has been duly authorized, executed and delivered by
the Company;
(iv) the Shares have been duly authorized and, when issued and delivered to
and paid for by the Underwriters, will be validly issued and will be fully paid
and non-assessable;
(v) the Company has an authorized capitalization as set forth under the
line item "Stockholders' equity" under the heading "Capitalization" in the
Registration Statement and the Prospectus; the outstanding shares of capital
stock of the Company have been duly authorized and validly issued, and are fully
paid, nonassessable and free of preemptive rights; the Shares when issued will
be free of preemptive rights, rights of first refusal and similar rights created
by the Company; the certificates for the Shares are in due and proper form and
the holders of the Shares will not be subject to personal liability by reason of
being such holders;
(vi) all of the outstanding shares of capital stock of the Subsidiary have
been duly authorized and validly issued, are fully paid and nonassessable and
[_________] shares are owned of record by the Company and; to the best of such
counsel's knowledge, and except for a convertible promissory note dated April
1998, there are 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 Subsidiary outstanding;
(vii) the capital stock of the Company, including the Shares, conforms to
the description thereof incorporated by reference into the Registration
Statement and Prospectus;
(viii) the Company is eligible to use a registration statement on Form S-3;
the Registration Statement and the Prospectus (except as to the financial
statements and schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements of the
Act;
(ix) the Registration Statement has become effective under the Act and, to
the best of such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by such Rule 424;
(x) 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 and consummation by the Company of the transaction as contemplated hereby
other than registration of the Shares under the Act (except such counsel need
express no opinion as to any necessary qualification under the state securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters);
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(xi) the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice, lapse of
time, or both, would result in any breach of or constitute a default under), any
provisions of the charter or by-laws of the Company or the Subsidiary or under
any provision of any license, indenture, mortgage, deed of trust, bank loan,
credit agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument which is known to such counsel to which the
Company or the Subsidiary is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule covered by such opinion or any decree, judgment
or order, known to such counsel and applicable to the Company or the Subsidiary;
(xii) to the best of such counsel's knowledge, neither the Company nor the
Subsidiary is in violation of its certificate of incorporation or by-laws or is
in breach of, or in default in any material respects under (nor has any event
occurred which with notice, lapse of time, or both would result in any breach
of, or constitute a default under), any material license, indenture, mortgage,
deed of trust, bank loan or any other material agreement or instrument known to
such counsel to which the Company or the Subsidiary is a party or by which
either of them or their respective properties may be bound or affected or under
any federal, state, local or foreign law, regulation or rule covered by such
opinion or any decree, judgment or order, known to such counsel and applicable
to the Company or the Subsidiary;
(xiii) to the best of such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are required to
be filed as exhibits to the Registration Statement or to be summarized or
described in the Prospectus which have not been so filed, summarized or
described;
(xiv) to the best of such counsel's knowledge, there are no actions, suits,
claims, investigations or proceedings pending, threatened or contemplated to
which the Company or the Subsidiary is subject 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, board,
body, authority or agency which are required to be described in the Prospectus
but are not so described which would have a Material Adverse Effect;
(xv) the documents incorporated by reference in the Registration Statement
and Prospectus, when they were filed (or, if an amendment with respect to any
such document was filed when such amendment was filed) with the Commission,
complied as to form in all material respects with the Exchange Act (except as to
the financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein as to which such counsel need
express no opinion); in passing upon the form of such documents, we have not
independently verified and are not passing upon and have assumed the correctness
and completeness of, the statements made therein;
(xvi) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended;
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(xvii) such counsel has reviewed the description of the Company's business
in the Prospectus and the statements in the Prospectus under the headings "Risk
Factors--Anti-takeover provisions...", "Business--Collaborations",
"Business--Government Regulation", and Item 15 of the Registration Statement,
and insofar as such statements constitute matters of law, summaries of legal
matters, provisions of the Company's certificate of incorporation or by-laws or
other equivalent corporate governance documents, documents or legal proceedings,
or legal conclusions, they fairly present and summarize, in all material
respects, the matters referred to therein;
(xviii) such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus (except as and to the extent stated in subparagraphs (v), (vii) and
(xvii) above), on the basis of the foregoing nothing has come to the attention
of such counsel that causes them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at all times up
to and including the time of purchase or additional time of purchase, as the
case may be, 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, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no comment
with respect to the financial statements and schedules and other financial and
statistical data included in the Registration Statement or Prospectus).
(b) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of each of Xxxx
Xxxxxxxxxx & Sacks, PC, Fish & Xxxxxxxxxx PC and Xxxxxx & Xxxxxxx, LLP,
intellectual property counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in form
satisfactory to Xxxxx Xxxxx, counsel for the Underwriters in substantially the
form of EXHIBIT A-1 attached hereto.
(c) You shall have received from PricewaterhouseCoopers LLP, letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by UBSW.
(d) You shall have received at the time of purchase and at the additional
time of purchase, as the case may be, the favorable opinion of Xxxxx Xxxxx,
counsel for the Underwriters, dated the time of purchase or the additional time
of purchase, as the case may be, as to the matters referred to in subparagraphs
(iv) and (vii) (with respect to the Shares only) of paragraph (a) of this
Section 6.
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In addition, such counsel shall state that such counsel have participated
in conferences with officers and other representatives of the Company, counsel
for the Company, representatives of the independent public accountants of the
Company and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus and related matters were discussed and,
although such counsel 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 Prospectus on the basis of the foregoing, nothing has
come to the attention of such counsel which lead such counsel to believe that
the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement thereto as of its date
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,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(e) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall have been filed prior to the time the Registration Statement becomes
effective to which you have not previously consented to in writing.
(f) The Registration Statement shall become effective, or if Rule 430A
under the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New York City
time on the second full business day after the date of this Agreement unless a
later time shall be agreed to by the Company and you in writing; PROVIDED,
HOWEVER, that the Company and you and any group of Underwriters, including you,
who have agreed hereunder to purchase in the aggregate at least 50% of the Firm
Shares may from time to time agree on a later date.
(g) Prior to the time of purchase or the additional time of purchase, as
the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the stockholders' equity, business,
properties, assets, results of operation, condition (financial or otherwise) or
prospects of the Company and the Subsidiary taken as a
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whole shall occur or become known and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company or the
Subsidiary.
(i) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate executed by its
President and Chief Executive Officer and its Chief Financial Officer to the
effect that the representations and warranties of the Company as set forth in
this Agreement are true and correct as of each such date, that the Company has
performed such of its obligations under this Agreement as are to be performed at
or before the time of purchase and at or before the additional time of purchase,
as the case may be and the conditions set forth in paragraphs (g) and (h) of
this Section 6 have been met.
(j) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and executive officers of the Company and
the persons listed on EXHIBIT B to the effect that such persons shall not sell,
offer or agree to sell, contract to sell, grant any option to sell or otherwise
dispose of, directly or indirectly, any shares of Common Stock of the Company or
securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities of the
Company that are substantially similar to the Common Stock for a period of 90
days after the date of the Prospectus without UBSW's prior written consent.
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (a) there has been any material adverse change, financial or
otherwise (other than as specifically referred to in the Registration Statement
and Prospectus), in the stockholders' equity, business, properties, assets,
results of operation, condition (financial or otherwise) or prospects of the
Company and the Subsidiary taken as a whole, which would, in your judgment or in
the judgment of such group of Underwriters, make it impracticable or inadvisable
to market the Shares, or (b) trading in securities on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or (c) limitations or minimum prices shall have been established
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or (d) a banking moratorium shall have been declared either by
the United States or New York State authorities, or (e) the United States shall
have declared war, a national emergency or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the judgment
of
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such group of Underwriters, to make it impracticable or inadvisable to proceed
with the public offering or delivery of the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(q), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections 6 and
7, if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in SCHEDULE A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that they
will not sell any Firm Shares hereunder unless all of the Firm Shares are
purchased by the Underwriters (or by substituted Underwriters selected by you
with the approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in SCHEDULE A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all
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Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
("Underwriter Indemnified Persons") from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any Underwriter or any other Underwriting Indemnified
Person may incur under the Act, the Exchange Act, 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 the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed
to include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
either such Registration Statement or Prospectus or necessary to make the
statements made therein not misleading, except (i) 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 or on behalf of any
Underwriter through you to the Company expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or arises out of
or is based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in either such
Registration Statement or Prospectus or necessary to make such information not
misleading; and (ii) with respect to any Preliminary Prospectus or amended
Preliminary Prospectus, the indemnity agreement contained in this subsection
9(a) shall not inure to the benefit of any Underwriter Indemnified Persons (or
to the benefit of any person controlling such Underwriter Indemnified Person)
from whom the person asserting any such loss, damage, expense, liability or
claim purchased the Shares which are the subject of the loss, damage, expense,
liability or claim if the Prospectus corrected any such alleged untrue statement
or omission and if such Underwriter Indemnified Person failed to send or give a
copy of the Prospectus to such person at or prior to the written confirmation of
the sale of such Shares to such person.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any person who controls the
Company within the meaning of Section 15 of the Act, or Section 20 of the
Exchange Act from and against any loss, damage, expense, liability or claim
(including the reasonable cost of
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investigation) which, jointly or severally, the Company or any such person may
incur under the Act, the Exchange Act, or 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 or on behalf of such
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement or in the 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 Prospectus or necessary to make such information not misleading.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent it has
been materially prejudiced by such failure and, PROVIDED FURTHER, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 9.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED, HOWEVER, that
the Underwriters shall have the right to employ one counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 9 if, based on the advice of counsel to
the Representatives, a conflict may arise between the positions of the
Representatives and those Underwriters and Underwriter Indemnified Persons to be
jointly represented by separate counsel, on the one hand, and the positions of
the Company, on the other hand, in conducting the defense of any such action, or
if there may be legal defenses available to such indemnified persons that are
different from or in addition to those available to the Company, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in
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any such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Shares by the
Underwriters set forth on the cover page of, and the concession and reallowance
figures appearing under the caption "Underwriting" and the information in the
table under the second paragraph under the caption "Underwriters" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, 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 Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportion 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 Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, 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 claim or Proceeding.
(f) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or
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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
Underwriters' obligations to contribute pursuant to this Section 9 are several
in proportion to their respective underwriting commitments and not joint.
(g) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its directors and
officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange 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 Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the Shares.
The Company and each Underwriter agree promptly to notify each other
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests or notices shall be in writing and, if to the Underwriters, delivered
or sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000,
Attention: Syndicate Department, 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
Xxxxxxxxxxxx Xxx, Xxxxxx, XX 00000 Attention: President and Chief Executive
Officer. Any such statements, requests or notices shall take effect at the time
of receipt.
11. 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. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. 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 exclusive jurisdiction over the adjudication of such matters, and the
Company consents to the exclusive 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
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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.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such Section, and their respective successors, assigns,
heirs, representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one
or more counterparts that together shall constitute one and the same instrument.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. 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, and are not otherwise an
obligation or responsibility of a branch or agency. 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.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Company and the Underwriters, severally.
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Very truly yours,
ARQULE, INC.
By:
---------------------------------
Xx. Xxxxxxx X. Xxxx
President and Chief Executive Officer
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in SCHEDULE A
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXX XXXXXX XXXXXXXX & CO., LLC
By: UBS WARBURG LLC
By:
--------------------------------
Title:
By
--------------------------------
Title:
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SCHEDULE A
Number of
UNDERWRITER FIRM SHARES
----------- -----------
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
XXXXXX XXXXXX XXXXXXXX & CO., LLC
-----------
Total..............................................
===========
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SCHEDULE 3(cc)
The Company has received from the Massachusetts Water Resources Authority
(MWRA) Notices of Noncompliance or Violation ("NONs") for the Medford facility
from August 12, 1998 through July 29, 1999, for reporting violations and for
exceeding its permit discharge limits for methylene chloride. The Company
submitted a letter of explanation to MWRA on December 17, 1999 addressing the
most recent NON issued on July 29, 1999. No further NONs have been issued to the
Company and the Company is now in full compliance with MWRA permit conditions at
both its Medford and Woburn facilities and with the NONs. Despite MWRA's
unwillingness to send a resolution notice, based on discussions with MWRA, the
Company understands that MWRA is satisfied with the Company's responses to the
various NONs and no further action by MWRA is anticipated.
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EXHIBIT A-1
-----------
FORM OF INTELLECTUAL PROPERTY OPINION
___________ shall state that they served as special counsel to the Company with
respect to patents and proprietary rights, and shall opine that:
1. To the best of such counsel's knowledge and belief, the
statements in the Registration Statement and the Prospectus under the captions
________________ are accurate and complete statements or summaries of the
matters therein set forth. Nothing has come to such counsel's attention that
causes them to believe that the above-described portions of the Registration
Statement at the time such Registration Statement became effective contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus or any supplement thereto, at the date of such Prospectus
or such supplement, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
2. To the best of such counsel's knowledge and belief, (a) there are
no legal or governmental proceedings pending relating to patent rights, trade
secrets, trademarks, service marks or other proprietary information or materials
of the Company, and (b) no such proceedings are threatened or contemplated by
governmental authorities or others.
3. Such counsel does not know of any contracts or other documents,
relating to the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials, of a character required to be filed
as an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus, that are not filed or described as
required.
4. To the best of such counsel's knowledge and belief, (a) the
Company is not infringing or otherwise violating any patents, trade secrets,
trademarks, service marks or other proprietary information or materials of
others, and (b) there are no infringements by others of any of the Company's
patents, trade secrets, trademarks, service marks or other proprietary
information or materials which in such counsel's judgment could affect
materially the use thereof by the Company.
5. Such counsel has no knowledge of any facts that would preclude
the Company from having valid license rights or clear title to the patents
referenced in the Prospectus. Such counsel has no knowledge that the Company
lacks or will be unable to obtain any rights or licenses to use all patents and
other material intangible property and assets necessary to conduct the business
now conducted or proposed to be conducted by the Company as described in the
Prospectus, except as described in the Prospectus. Counsel is unaware of any
facts that form a basis for a finding of unenforceability or invalidity of any
of the Company's patents and other material property and assets.
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6. Such counsel is not aware of any material fact with respect to
the patent applications of the Company presently on file that (a) would preclude
the issuance of patents with respect to such applications, or (b) would lead
such counsel to conclude that such patents, when issued, would not be valid and
enforceable in accordance with applicable regulations.
7. Though such counsel has not verified the accuracy or completeness
of the statements contained in the Prospectus, nothing has come to the attention
of such counsel that causes them to believe that, such Registration Statement,
at the time the Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or at
the time of purchase, or additional time of purchase, as the case may be, the
Prospectus under the caption "Business -- Patents and Proprietary Rights",
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Such counsel may state that, in rendering their opinion, they have
relied on certain factual representations of the Company and that they have not
independently verified the accuracy and completeness of such representations.
A-2
