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EXHIBIT 1.1
[6,000,000] SHARES
ARRAY BIOPHARMA INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November __, 2000
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Array BioPharma Inc., a Delaware corporation (the "Company"),
proposes to sell [6,000,000] shares (the "Firm Stock") of the Company's Common
Stock, par value $0.001 per share (the "Common Stock"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"Underwriters") an option to purchase up to an additional [800,000] shares of
the Common Stock and certain stockholders of the Company named in Schedule 2
hereto (the "Selling Stockholders") also propose to grant to the Underwriters an
option to purchase up to an additional [100,000] shares of the Common Stock, on
the terms and for the purposes set forth in Section 3 (such [100,000] additional
shares being referred to hereinafter as the "Option Stock"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholders by the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the
Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the
Stock has (i) been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the rules
and regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any,
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was declared effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective under
the Securities Act and any prospectus filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus in the form first used to confirm sales
of Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statement and any amendment thereto) 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 as of the
applicable filing date (as to the Prospectus and any amendment or supplement
thereto) 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; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification (except
where the failure to qualify or be in good standing in such other jurisdiction
would not result in a material adverse effect on the financial condition,
results of operations, stockholders' equity, management, general affairs,
business or prospects of the Company (a "Material Adverse Effect")and has all
power and authority necessary to own or hold its properties and to conduct the
business in which it is engaged; and the Company has no subsidiaries.
(d) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus.
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(e) The shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder and the shares of the Stock to be sold by
the Selling Stockholders to the Underwriters hereunder have been duly and
validly authorized and, when issued and delivered against payment therefor in
accordance with this Agreement, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the description thereof contained
in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument which has been filed
as an exhibit to the Registration Statement, or (ii) any other indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject (except where such conflicts,
breaches, violations or defaults would not have a Material Adverse Effect); nor
will such actions result in any violation of the provisions of the charter or
by-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of their properties or assets; and except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and applicable state securities
laws in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(h) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act, except pursuant to the Amended and Restated Investors Rights
Agreement and all amendments thereto, which have been filed as exhibits to the
Registration Statement, except pursuant to the Amended and Restated Investors
Rights Agreement and all amendments thereto, which have been filed as exhibits
to the Registration Statement.
(i) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period preceding
the date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
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(j) The Company has not sustained, since the date of the
latest audited financial statements included in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the Company, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved.
(l) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 9(f) hereof, are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(m) The Company has good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by it, in each case free and clear of all liens, encumbrances and defects,
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company; and all assets
held under lease by the Company are held by it under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such assets by the
Company.
(n) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of its business
and the value of its properties and as is customary for companies engaged in a
similar business in a similar industry.
(o) The Company owns or possesses adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, know-how,
manufacturing processes, formulae, trade secrets, licenses and rights in any
thereof and any other intangible property and assets (herein called the
"Proprietary Rights") necessary to conduct its business in the manner described
in the Prospectus. The Company takes security measures to provide adequate trade
secret protection in its non-patented technology. Except as disclosed in the
Prospectus, the Company has not received any notice of infringement or conflict
with asserted rights of others with respect to any Proprietary Rights which
could result in any Material Adverse Effect on the Company, and except as
described in the Prospectus, no action, suit, arbitration, or legal,
administrative or other proceeding, or investigation is pending, or, to the
knowledge of the Company, is threatened, which involves any Proprietary Rights.
The Proprietary Rights of the Company referred to in the
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Prospectus do not, to the best knowledge of the Company, infringe or conflict
with any right or valid and enforceable patent of any third party, or any
discovery, invention, product or process which is the subject of a patent
application filed by any third party, which could have a material adverse effect
on the Company. The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any Federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any arbitrator, nor, except as described in the
Prospectus, has it entered into or is a party to any contract which restricts or
impairs the use of any such Proprietary Rights in a manner which would have a
material adverse effect on the use of any of the Proprietary Rights. The Company
has complied, in all material respects, with its respective contractual
obligations relating to the protection of the Proprietary Rights used pursuant
to licenses. To the best knowledge of the Company, no person is infringing on or
violating the Proprietary Rights owned or used by the Company.
(p) There are no legal or governmental proceedings pending to
which the Company is a party or of which any property or assets of the Company
is the subject which, if determined adversely to the Company might have a
Material Adverse Effect; and to the best of the Company's knowledge, no such
proceedings are threatened by governmental authorities or by others.
(q) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(r) No relationship, direct or indirect, exists between or
among the Company, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company, on the other hand, which is required to
be described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent, which might be expected
to have a Material Adverse Effect.
(t) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
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(u) The Company has filed all Federal, state and local income
and franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined adversely
to the Company which has had (nor does the Company have any knowledge of any tax
deficiency which, if determined adversely to the Company might have) a Material
Adverse Effect.
(v) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(x) The Company (i) is not in violation of its charter or
by-laws, (ii) is not in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject and (iii) is not in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be subject
or has failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(y) Neither the Company nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Company has
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the Company (or, to
the knowledge of the Company, any of its predecessors in interest) at, upon or
from any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance,
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rule, regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property
or into the environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to or caused
by the Company or with respect to which the Company has knowledge, except for
any such spill, discharge, leak, emission, injection, escape, dumping or release
which would not have or would not be reasonably likely to have, singularly or in
the aggregate with all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases, a Material Adverse Effect; and the terms
"hazardous wastes", "toxic wastes", "hazardous substances" and "medical wastes"
shall have the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.
(aa) The Company is not, and, as of any Delivery Date (as
hereinafter defined) after giving effect to the purchase of the Shares from the
Company by the Underwriters and the application of the net proceeds therefrom as
described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(bb) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those obtained,
is required in connection with the offering of up to [ ] shares of the Firm
Stock, which Xxxxxx Brothers Inc. has agreed to reserve for sale to the
Company's employees and persons having business relationships with the Company.
(cc) None of the Directed Shares (as defined in Section 4)
distributed in connection with the Directed Share Program (as defined in Section
4) will be offered or sold outside of the United States.
SECTION 2. Representations, Warranties and Agreements of the
Selling Stockholders Each Selling Stockholder severally represents, warrants and
agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling Stockholder
will have, good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such shares and payment therefor
pursuant hereto, good and valid title to such shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Stockholders, the "Custody Agreements")
with Computershare Trust Company, Inc., as custodian (the "Custodian"), for
delivery under this Agreement, certificates in negotiable form (with signature
guaranteed by a commercial bank or trust company having an office or
correspondent in the United States or a member firm of the New York or American
Stock Exchanges) representing the shares of Stock to be sold by the Selling
Stockholder hereunder.
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(c) The Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney" and, together with
all other similar agreements executed by the other Selling Stockholders, the
"Powers of Attorney") appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and deliver this Agreement
and to take such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement, the Power
of Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling Stockholder is
subject nor will such actions result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property or assets of the
Selling Stockholder; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable state
securities laws in connection with the purchase and distribution of the Stock by
the Underwriters. No consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement, the Power of Attorney
or the Custody Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they became effective or were filed with the Commission, as the
case may be, do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein, in light of the circumstances under which they
were made, not misleading and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) do not and will 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; provided that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(f) The Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not materially true and correct, is familiar with the Registration Statement and
the Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration
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Statement, as of the effective date, or the Prospectus (or any amendment or
supplement thereto), as of the applicable filing date, which has adversely
affected or may adversely affect the business of the Company and is not prompted
to sell shares of Common Stock by any information concerning the Company which
is not set forth in the Registration Statement and the Prospectus.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of shares of the Stock.
SECTION 3. Purchase of the Stock by the Underwriters On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell [ ] shares
of the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option
to purchase up to [_____] shares of Option Stock and the Selling Stockholders
grant to the Underwriters an option to purchase up to [ ] shares of Option
Stock, each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholders name in Schedule 2 hereto. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
increments.
The Company agrees, in the event of a default or a failure on
the part of the Selling Stockholders to deliver any or all of the shares of
Option Stock, in addition to any other remedies which may be available to the
Underwriters under this Agreement, to issue and sell to the Underwriters,
subject to the terms and conditions of this Agreement, a number of shares of
Option Stock up to the total amount of the shares of Option Stock set forth in
this Section 3.
The price of both the Firm Stock and any Option Stock shall be
$[ ] per share.
The Company and the Selling Stockholders shall not be
obligated to deliver any of the Stock to be delivered on any Delivery Date (as
hereinafter defined), except upon payment for all the Stock to be purchased on
such Delivery Date as provided herein.
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SECTION 4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
It is understood that approximately [300,000] shares of the
Firm Stock ("Directed Shares") will initially be reserved by the Underwriters
for offer and sale to employees and persons having business relationships with
the Company ("Directed Share Participants") upon the terms and conditions set
forth in the Prospectus and in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. Under no circumstances will
Xxxxxx Brothers Inc. or any Underwriter be liable to the Company or to any
Directed Share Participant for any action taken or omitted to be taken in good
faith in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share Participant on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
The Company agrees to pay all fees and disbursements incurred
by the Underwriters in connection with the Directed Share Program, including
counsel fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares,
the Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Xxxxxx Brothers Inc. and the other Underwriters from and against any
loss, claim, damage, expense, liability or action which (i) arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) arises out of the failure of any Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, claims, damages or liabilities (or expenses
relating thereto) that are finally judicially determined to have resulted
directly from the bad faith or gross negligence of Xxxxxx Brothers Inc.
SECTION 5. Delivery of and Payment for the Stock. Delivery of
and payment for the Firm Stock shall be made at the offices of Xxxxx & Xxxxxxx
L.L.P., 0000 Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, at 10:00 A.M., New
York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are sometimes
referred to as the "First Delivery Date." On the First Delivery Date, the
Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be
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of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company and the Selling Stockholders
by the Representatives. Such notice shall set forth the aggregate number of
shares of Option Stock as to which the option is being exercised, the names in
which the shares of Option Stock are to be registered, the denominations in
which the shares of Option Stock are to be issued and the date and time, as
determined by the Representatives, when the shares of Option Stock are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the shares of Option Stock are delivered are sometimes referred to as a
"Second Delivery Date" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives, the Company and the Selling Stockholders) at 10:00 A.M., New
York City time, on such Second Delivery Date. On such Second Delivery Date, the
Company and the Selling Stockholders shall deliver or cause to be delivered the
certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Selling
Stockholders of the purchase price by wire transfer in immediately available
funds. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder. Upon delivery, the Option Stock shall be registered
in such names and in such denominations as the Representatives shall request in
the aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company and the Selling
Stockholders shall make the certificates representing the Option Stock available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
SECTION 6. Further Agreements of the Company. The Company
agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
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under the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus, except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its reasonable best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
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(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date,
to furnish to the Representatives copies of all materials furnished by the
Company to its stockholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, qualified stock option plans or other employee,
consultant or director compensation plans existing on the date hereof or
pursuant to currently outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other than the
grant of options pursuant to option plans existing on the date hereof), or (2)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc. on behalf of the Underwriters; and to cause each officer and
director of the Company and stockholders of the Company who collectively own at
least [95%] of the Common Stock outstanding as of the date of this Agreement,
assuming the conversion or exercise of all convertible securities, stock options
and warrants of the Company outstanding as of the date of this Agreement to
furnish to the Representatives, prior to the First Delivery Date, a letter or
letters, substantially in the form of Exhibit A hereto, pursuant to which each
such person shall agree not to, directly or indirectly, (x) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than as a result of the
conversion of securities existing as of the date hereof and such securities
following the conversion would be
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subject to the 180 day lock-up required by this paragraph (i)) or (y) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (x) or (y) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc. on behalf
of the Underwriters;
(j) To apply for the inclusion of the Stock on the NASDAQ
National Market, and to use its best efforts to complete that listing, subject
only to official notice of issuance and evidence of satisfactory distribution,
prior to the First Delivery Date;
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(l) In connection with the Directed Share Program, to ensure
that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. or the rules of such
association from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of the effectiveness of the
Registration Statement, and Xxxxxx Brothers Inc. will notify the Company as to
which Directed Share Participants will need to be so restricted. At the request
of Xxxxxx Brothers Inc., the Company will direct its transfer agent to place
stop transfer restrictions upon such securities for such period of time; and
(m) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus.
SECTION 7. Further Agreements of the Selling Stockholders.
Each Selling Stockholder agrees:
(a) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock) except to the extent that
such disposition results from the exercise or conversion of a security such that
such security following such conversion be subject to the 180 day lock-up
required by this paragraph (a) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case without the
prior written consent of Xxxxxx Brothers Inc. on behalf of the Underwriters.
(b) That the Stock to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody for the
Selling Stockholder, is subject to the interest of the Underwriters and the
other Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable, and that the
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obligations of the Selling Stockholder hereunder shall not be terminated by any
act of the Selling Stockholder, by operation of law, by the death or incapacity
of any individual Selling Stockholder or, in the case of a trust, by the death
or incapacity of any executor or trustee or the termination of such trust, or
the occurrence of any other event.
(c) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States person)
or Form W-9 (if the Selling Stockholder is a United States person).
SECTION 8. Expenses. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Stock and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, all as provided in this Agreement; (d) the costs of producing and
distributing this Agreement and any other related documents in connection with
the offering, purchase, sale and delivery of the Stock; (e) the filing fees
incident to securing the review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Stock; (f) any applicable listing or
other fees; (g) the fees and expenses (not in excess, in the aggregate, of
$10,000) of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 6(h) and of preparing, printing and
distributing a Blue Sky Memorandum (including reasonable related fees and
expenses of counsel to the Underwriters); (h) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, incident to the Directed Stock Program described in Section 4; (i)
the costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Stock, including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show and (j) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 8 and in Section 13, the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Stock which they may sell and the
expenses of advertising any offering of the Stock made by the Underwriters.
SECTION 9. Conditions of Underwriters' Obligations. The
respective obligations of the Underwriters on each Delivery Date hereunder are
subject to the accuracy, when made and on such Delivery Date, of the
representations and warranties of the Company contained herein, to the
performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration
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Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and any
request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration Statement and
the Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(c) Xxxxx & Xxxxxxx L.L.P. shall have furnished to the
Representatives their written opinion, as counsel to the Company, addressed to
the Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that (or as otherwise agreed
to by the Representatives):
(i) The Company and each of its subsidiaries have
been duly incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification and have
all power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid,
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(iii) The shares of the Stock being delivered on such
Delivery Date to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor will be duly
and validly issued, fully paid and non-assessable;
(iv) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
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subsidiaries, might have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries; and, to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(vi) The Registration Statement was declared
effective under the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the Rules and Regulations specified in such
opinion on the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(vii) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the Company prior to
such Delivery Date (except for the financial statements and financial schedules
and other financial and statistical data included therein, as to which such
counsel need express no belief) comply as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Prospectus
under the captions [to come,] "Description of Capital Stock" and ["Certain U.S.
Federal Income Tax Consequences to U.S. Holders,"] insofar as they describe
federal statutes, rules and regulations, constitute a fair summary thereof;
(ix) To the best of such counsel's knowledge, there
are no contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(x) This Agreement has been duly authorized, executed
and delivered by the Company;
(xi) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company pursuant to this Agreement, and
the execution, delivery and compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; and, except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent,
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approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, except for such consents, approvals,
authorizations, orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to the
best of such counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act;
(xiii) The Company is in compliance in all material
respects with all presently applicable provisions of ERISA; no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any liability; the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Code; and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification;
(xiv) There has been no storage, disposal,
generation, manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material
adverse effect on the general affairs, management, consolidated financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries;
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(xv) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended;
(xvi) The Company is listed in the records of the
Patent and Trademark Office as the sole holder of record of each of the patent
applications listed under the heading "U.S. Patent Applications Submitted by the
Company" on Schedule 3 hereof (the "U.S. Applications"). Such counsel knows of
no claims of third parties to any ownership interest or lien with respect to any
of the U.S. Applications. To such counsel's knowledge, none of the U.S.
Applications has been rejected;
(xvii) The Company is listed in the records of the
appropriate foreign office as the sole holder of record of each of the foreign
patent applications listed under the heading "Non-U.S. Patent Applications
Submitted by the Company" on Schedule 4 hereof (the "Non-U.S. Applications")
(collectively, the U.S. Applications and the Non-U.S. Applications are referred
to herein as the "Applications"). Such counsel knows of no claims of third
parties to any ownership interest or lien with respect to any of the Non-U.S.
Applications. To such counsel's knowledge, none of the Non-U.S. Applications has
been rejected;
(xviii) Such counsel is not aware of any facts that
would lead such counsel to conclude that any patent issued in respect of an
Application would be invalid;
(xix) Such counsel is not aware of any material
defects of form in the preparation or filing of the Applications on behalf of
the Company. The Applications are being diligently pursued by the Company;
(xx) The statements under the Prospectus captions
"Risk Factors--The intellectual property rights we rely on to protect the
technology underlying our products and techniques may be inadequate to prevent
third parties from using our technology or developing competing products and
services based on very similar technology, and could reduce our ability to
compete in the market," "Risk Factors--Our success depends in part on our
ability to operate without infringing or misappropriating the intellectual
property rights of others, which may result in costly intellectual property
lawsuits," "Business--Technology Platform," "Business--Our Products and
Services" and "Business--Intellectual Property" (collectively, the "Intellectual
Property Portion") in the Registration Statement and the Prospectus, and any
amendments or supplements thereto, insofar as such statements constitute a
summary of the Applications, are in all material respects accurate summaries and
fairly summarize in all material respects the legal matters, documents and
proceedings relating to the Applications;
(xxi) Such counsel is not aware that any valid patent
is infringed by the activities of the Company or by the manufacture, use or sale
of any product, device, instrument, drug or other material made and used
according to the Applications;
(xxii) Such counsel knows of no pending or threatened
action, suit, proceeding or claim by others that the Company is infringing or
otherwise violating any patents or trade secrets;
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(xxiii) Such counsel is not aware of any pending or
threatened actions, suits, proceedings or claim by others challenging the
validity or scope of the Applications; and
(xxiv) Such counsel is not aware of any infringement
on the part of any third party of the Applications, trade secrets, know-how or
other proprietary rights of the Company.
In rendering such opinion, such counsel may state that their
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of the State of New York and the General Corporation Law of
the State of Delaware. Such opinion shall also be to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statement and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead them to believe that the
Registration Statement (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to which
such counsel need express no belief) as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (except as stated above) contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as set forth in clause (viii) above).
(d) In connection with the Second Delivery Date, the counsel
for each of the Selling Stockholders shall have furnished to the Representatives
its written opinion, as counsel to each of the Selling Stockholders, addressed
to the Underwriters and dated the Second Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that (or as
otherwise agreed to by the Representatives):
(i) Each Selling Stockholder has full right, power
and authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this Agreement,
the Power of Attorney and the Custody Agreement by each Selling Stockholder and
the consummation by each Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any statute,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which any Selling Stockholder is a party or
by which any Selling Stockholder is bound or to which any of the property or
assets of any Selling Stockholder is subject, nor will such actions result in
any violation of any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
such Selling Stockholder or the property or assets of such Selling Stockholder;
and, except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state [or foreign] securities
laws in connection with the purchase and distribution of the Stock by the
Underwriters,
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no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of Attorney or the Custody
Agreement by any Selling Stockholder and the consummation by any Selling
Stockholder of the transactions contemplated hereby and thereby;
(ii) This Agreement has been duly executed and
delivered by or on behalf of each Selling Stockholder;
(iii) A Power-of-Attorney and a Custody Agreement
have been duly executed and delivered by each Selling Stockholder and constitute
valid and binding agreements of each Selling Stockholder, enforceable in
accordance with their respective terms;
(iv) Immediately prior to the Second Delivery Date,
each Selling Stockholder had good and valid title to the shares of Stock to be
sold by each such Selling Stockholder under this Agreement, free and clear of
all liens, encumbrances, equities or claims, and full right, power and authority
to sell, assign, transfer and deliver such shares to be sold by such Selling
Stockholder hereunder; and
(v) Good and valid title to the shares of Stock to be
sold by each Selling Stockholder under this Agreement, free and clear of all
liens, encumbrances, equities or claims, has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the United States
of America, the laws of New York and (ii) in rendering the opinion in Section
9(d)(iv) above, rely upon a certificate of each Selling Stockholder in respect
of matters of fact as to ownership of and liens, encumbrances, equities or
claims on the shares of Stock sold by such Selling Stockholder, provided that
such counsel shall furnish copies thereof to the Representatives and state that
it believes that both the Underwriters and it are justified in relying upon such
certificate. Such counsel shall also have furnished to the Representatives a
written statement, addressed to the Underwriters and dated the Second Delivery
Date, in form and substance satisfactory to the Representatives, to the effect
that (x) such counsel has acted as counsel to each Selling Stockholder on a
regular basis and has acted as counsel to each Selling Stockholder in connection
with the preparation of the Registration Statement, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that the Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact relating to any Selling Stockholder or
omitted to state such a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact relating to any Selling
Stockholder or omits to state such a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing opinion
and statement may be qualified by a statement to the effect that such counsel
does not assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus.
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(e) The Representatives shall have received from Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter or letters,
in form and substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are independent
public accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(g) With respect to the letter or letters of Ernst & Young LLP
referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letters"), the
Company shall have furnished to the Representatives a letter (the "bring-down
letter") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 9(a) and 9(j) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the Effective Date,
the Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
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misleading, and (B) since the Effective Date, no event has occurred which should
have been set forth in a supplement or amendment to the Registration Statement
or the Prospectus.
(i) In connection with the Second Delivery Date, each Selling
Stockholder (or the Custodian or one or more attorneys-in-fact on behalf of the
Selling Stockholders) shall have furnished to the Representatives on the Second
Delivery Date a certificate, dated the Second Delivery Date, signed by, or on
behalf of, the Selling Stockholder (or the Custodian or one or more
attorneys-in-fact) stating that the representations, warranties and agreements
of the Selling Stockholder contained herein are true and correct as of the
Second Delivery Date and that the Selling Stockholder has complied with all
agreements contained herein to be performed by the Selling Stockholder at or
prior to the Second Delivery Date.
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Prospectus (A) any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or (B) since such date there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (A) or (B), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(l) The National Market System shall have approved the Stock
for inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
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All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to Xxxxxx & Xxxxxxx, counsel for the Underwriters.
SECTION 10. Indemnification and Contribution.
(a) The Company and the Selling Stockholders, jointly and
severally, shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Stock), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or (B) in any
materials or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Selling
Stockholders shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 10(e), provided, further, that the foregoing
indemnity with respect to any Preliminary Prospectus shall not inure to the
benefit of the Underwriters from whom the person asserting any such loss, claim,
damage or liability purchased Stock which is subject thereof if the Underwriters
were provided copies of the Preliminary Prospectus and such person did not
receive a copy of the Prospectus (or the Prospectus as supplemented) at or prior
to
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the confirmation of the sale of such Stock to such person in any case where such
delivery is required by the Securities Act and the untrue statement or omission
of a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus supplemented). The foregoing indemnity agreement
is in addition to any liability which the Company or the Selling Stockholders
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter. Notwithstanding the foregoing, the aggregate
liability of any Selling Stockholder pursuant to this Section 10(a) shall be
limited to an amount equal to the total proceeds received by such Selling
Stockholder from the Underwriters for the sale of the Shares sold by such
Selling Stockholder hereunder.
The Company agrees to indemnify and hold harmless Xxxxxx
Brothers Inc. (including its officers and employees) and each person, if any,
who controls Xxxxxx Brothers Inc. within the meaning of the Securities Act
("Xxxxxx Brothers Entities"), from and against any loss, claim, damage or
liability or any action in respect thereof to which any of the Xxxxxx Brothers
Entities may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon
(i) the failure of any Directed Share Participant to pay for and accept delivery
of the Directed Share sold pursuant to the Directed Stock Program which,
immediately following the effectiveness of the Registration Statement, was
subject to a properly confirmed agreement to purchase or (ii) the Directed Stock
Program, provided that, the Company shall not be responsible under this
subparagraph (ii) for any loss, claim, damage, liability or action that is
finally judicially determined to have resulted from the gross negligence or
willful misconduct of the Xxxxxx Brothers Entities. The Company and the Selling
Stockholders shall reimburse the Xxxxxx Brothers Entities promptly upon demand
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the meaning
of the Securities Act, and each Selling Stockholder from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer, employee or controlling
person or Selling Stockholder may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (ii)
the omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or on
behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer, employee or controlling
person or Selling Stockholder for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are
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incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person or Selling Stockholder.
(c) Promptly after receipt by an indemnified party under this
Section 10 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 10, 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 10 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 10.
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 10 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 Representatives shall have the right to employ a single national counsel and
local 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 10 if, in the reasonable judgment of the Representatives, it is
advisable for the Representatives and those Underwriters, officers, employees
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company. Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 10(a) hereof in respect of such claim or
action, then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the fees and expenses of not more than
one separate firm (in addition to any local counsel) for the Xxxxxx Brothers
Entities for the defense of any loss, claim, damage, liability or action arising
out of the Directed Stock Program. 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 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.
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(d) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 10(a) or 10(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock 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 and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement on the other hand bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that it would
not be just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 10(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 13(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 10(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the
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cover page of, the legend concerning over-allotments on the inside front cover
page of and in the "Underwriting" section and the concession and reallowance
figures appearing under the caption "Underwriting" 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.
SECTION 11. Defaulting Underwriters. If, on either Delivery
Date, any Underwriter defaults in the performance of its obligations under this
Agreement, the remaining non-defaulting Underwriters shall be obligated to
purchase the Stock which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number of
shares of the Firm Stock set opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm
Stock set opposite the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 3.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections 8
and 13. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 11, purchases the
Shares which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the Stock
of a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
SECTION 12. Termination. The obligations of the Underwriters
hereunder may be terminated by the Representatives by notice given to and
received by the Company prior to delivery of and payment for the Firm Stock if,
prior to that time, any of the events described in Sections 9(j) or 9(k), shall
have occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
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SECTION 13. Reimbursement of Underwriters' Expenses. If the
Company shall fail to tender the Stock for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the Underwriters' obligations hereunder required to be fulfilled by
the Company (including, without limitation, with respect to the transactions) is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and, upon demand, the Company shall pay the full amount thereof to
the Representatives. If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, the Company shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
SECTION 14. Notices, Etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: 000-000-0000), with a copy, in the case of any notice pursuant to Section
8(c), to the Director of Litigation, Office of the General Counsel, Xxxxxx
Brothers Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxx Xxxxxx, Chief Executive Officer (Fax:
(000) 000-0000); and
(c) if to the Selling Stockholders, shall be delivered or sent
by mail, telex or facsimile transmission to the address of that Selling
Stockholder set forth on the signature page hereof;
provided, however, that any notice to an Underwriter pursuant to Section 10(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
SECTION 15. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Company, the Selling Stockholders and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Company and the Selling Stockholders contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 10(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have
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signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 15, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
SECTION 16. Survival. The respective indemnities,
representations, warranties and agreements of the Company, the Selling
Stockholders and the Underwriters contained in this Agreement or made by or on
behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Stock and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
SECTION 17. Definition of the Terms "Business Day" and
"Subsidiary." For purposes of this Agreement, (a) "business day" means each
Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close and (b) "subsidiary" has the meaning set forth in Rule
405 of the Rules and Regulations.
SECTION 18. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of New York.
SECTION 19. Counterparts. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
SECTION 20. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between
the Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
ARRAY BIOPHARMA INC.
By
-------------------------
Name:
-------------------------
Title:
-------------------------
-------------------------------
XXXXX XXXX, PH.D.
-------------------------------
XXXXXXX XXXXXXXX, PH.D.
Accepted:
XXXXXX BROTHERS INC.
DEUTSCHE BANC SECURITIES INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
-------------------------
Authorized Representative
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SCHEDULE 1
NUMBER OF SHARES OF
U.S. UNDERWRITERS FIRM STOCK TO BE PURCHASED
----------------------------------------------- --------------------------
Xxxxxx Brothers Inc............................
Deutsche Banc Securities Inc. .................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated...........
[Names of other U.S. Underwriters]
Total
==========================
33
SCHEDULE 2
NUMBER OF SHARES OF
SELLING STOCKHOLDERS OPTION STOCK TO BE SOLD
----------------------------------------------- ---------------------------
Total
===========================
34
SCHEDULE 3
U.S. APPLICATIONS
35
SCHEDULE 4
NON-U.S. APPLICATIONS
36
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
DEUTSCHE BANC ALEX. XXXXX
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the
several underwriters
c/x XXXXXX BROTHERS INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Brothers Inc. ("Xxxxxx
Brothers"), and Deutsche Banc Alex. Xxxxx and Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated, as representatives (the "Representatives") of the several
underwriters (the "Underwriters"), propose to enter into an underwriting
agreement (the "Underwriting Agreement") with Array BioPharma, Inc., a Delaware
corporation (the "Company") providing for the initial public offering by the
Underwriters, including the Representatives, of shares of common stock (the
"Common Stock") of the Company (the "Initial Public Offering").
In consideration of the Underwriter's agreement to purchase
and undertake the Initial Public Offering of Common Stock, and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
undersigned hereby irrevocably agrees that, without the prior written consent of
Xxxxxx Brothers, the undersigned will not, directly or indirectly, (1) offer for
sale, sell, pledge, or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock
(including, without limitation, shares of Common Stock that may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission (the "SEC") and shares of
Common Stock that may be issued upon exercise of any option or warrant) or
securities convertible into or exchangeable for Common Stock owned by the
undersigned on the date of execution of this Lock-Up Letter Agreement or on the
date of completion of the Initial Public Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 180 days from the
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effective date of the Registration Statement on Form S-1 filed with the SEC in
connection with the Initial Public Offering.
Notwithstanding the foregoing, the undersigned may transfer
the Common Stock (i) as a bona fide gift or gifts, provided that the donee or
donees thereof agree to be bound by the restrictions set forth herein, (ii) to
any trust or partnership for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust or the general partner of the partnership agrees to be bound by the
restrictions set forth herein, and provided further that any such transfer shall
not involve a disposition for value, or (iii) with the prior written consent of
Xxxxxx Brothers on behalf of the Underwriters. For purposes of this Lock-Up
Letter Agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. In addition,
notwithstanding the foregoing, if the undersigned is a corporation, the
corporation may transfer the capital stock of the Company to any wholly-owned
subsidiary of such corporation; provided, however, that in any such case, it
shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding such capital stock subject
to the provisions of this Lock-Up Letter Agreement and there shall be no further
transfer of such capital stock except in accordance with this Lock-Up Letter
Agreement, and provided further that any such transfer shall not involve a
disposition for value. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent and registrar
against the transfer of the Common Stock except in compliance with the foregoing
restrictions.
The undersigned further agrees not to cause, or request that
the Company cause, a registration statement covering any shares of Common Stock
to be filed by the Company for a period of 180 days from the effective date of
the above-referenced Registration Statement, pursuant to rights under any
registration rights agreement or otherwise, without the prior written consent of
Xxxxxx Brothers.
In furtherance of the foregoing, the Company and its Transfer
Agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company does not proceed with
the Initial Public Offering by February 28, 2001, we will be released from our
obligations under this Lock-Up Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Initial Public Offering in reliance on this
Lock-Up Letter Agreement.
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The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
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Signature
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Print Name
Dated: , 2000
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