2,500,000 Shares
LJL BioSystems, Inc.
Common Stock
Underwriting Agreement
dated _____________, 1998
TABLE OF CONTENTS
PAGE
Section 1. Representations and Warranties of the Company . . . . . . . . . 2
(a) Compliance with Registration Requirements. . . . . . . . . . . . . . 2
(b) Offering Materials Furnished to Underwriters . . . . . . . . . . . . 2
(c) Distribution of Offering Material By the Company . . . . . . . . . . 3
(d) The Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . 3
(e) Authorization of the Common Shares . . . . . . . . . . . . . . . . . 3
(f) No Applicable Registration or Other Similar Rights . . . . . . . . . 3
(g) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . 3
(h) Independent Accountants. . . . . . . . . . . . . . . . . . . . . . . 3
(i) Preparation of the Financial Statements. . . . . . . . . . . . . . . 4
(j) Incorporation and Good Standing of the Company . . . . . . . . . . . 4
(k) Capitalization and Other Capital Stock Matters . . . . . . . . . . . 4
(l) Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . 5
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required . . . . . . . . . . . . . . . . 5
(n) No Material Actions or Proceedings . . . . . . . . . . . . . . . . . 5
(o) Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . 5
(p) All Necessary Permits, etc . . . . . . . . . . . . . . . . . . . . . 6
(q) Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . . 6
(r) Tax Law Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 6
(s) Company Not an "Investment Company". . . . . . . . . . . . . . . . . 6
(t) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(u) No Price Stabilization or Manipulation . . . . . . . . . . . . . . . 7
(v) Related Party Transactions . . . . . . . . . . . . . . . . . . . . . 7
(w) No Unlawful Contributions or Other Payments. . . . . . . . . . . . . 7
(x) Company's Accounting System. . . . . . . . . . . . . . . . . . . . . 7
(y) Compliance with Environmental Laws . . . . . . . . . . . . . . . . . 7
(z) Periodic Review of Costs of Environmental Compliance . . . . . . . . 8
(aa) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 8
i.
Section 2. Purchase, Sale and Delivery of the Common Shares . . . . . . . 9
(a) The Firm Common Shares . . . . . . . . . . . . . . . . . . . . . . . 9
(b) The First Closing Date . . . . . . . . . . . . . . . . . . . . . . . 9
(c) The Optional Common Shares; the Second Closing Date. . . . . . . . . 9
(d) Public Offering of the Common Shares . . . . . . . . . . . . . . . .10
(e) Payment for the Common Shares. . . . . . . . . . . . . . . . . . . .10
(f) Delivery of the Common Shares. . . . . . . . . . . . . . . . . . . .10
(g) Delivery of Prospectus to the Underwriters . . . . . . . . . . . . .11
Section 3. Additional Covenants of the Company . . . . . . . . . . . . . .11
(a) Representatives' Review of Proposed Amendments and Supplements . . .11
(b) Securities Act Compliance. . . . . . . . . . . . . . . . . . . . . .11
(c) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
(d) Copies of any Amendments and Supplements to the Prospectus . . . . .12
(e) Blue Sky Compliance. . . . . . . . . . . . . . . . . . . . . . . . .12
(f) Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . .12
(g) Transfer Agent . . . . . . . . . . . . . . . . . . . . . . . . . . .12
(h) Earnings Statement . . . . . . . . . . . . . . . . . . . . . . . . .12
(i) Periodic Reporting Obligations . . . . . . . . . . . . . . . . . . .12
(j) Agreement Not To Offer or Sell Additional Securities . . . . . . . .13
(k) Future Reports to the Representative . . . . . . . . . . . . . . . .13
(l) Agreement Not To Waive Lock-Up Provisions. . . . . . . . . . . . . .13
Section 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . .13
Section 5. Conditions of the Obligations of the Underwriters . . . . . . .14
(a) Accountants' Comfort Letter. . . . . . . . . . . . . . . . . . . . .14
(b) Compliance with Registration Requirements; No Stop Order;
No Objection from NASD . . . . . . . . . . . . . . . . . . . . . . .15
(c) No Material Adverse Change . . . . . . . . . . . . . . . . . . . . .15
(d) Opinions of Counsel for the Company. . . . . . . . . . . . . . . . .15
(e) Opinion of Counsel for the Underwriters. . . . . . . . . . . . . . .15
ii.
(f) Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . .16
(g) Bring-down Comfort Letter. . . . . . . . . . . . . . . . . . . . . .16
(h) Lock-Up Agreement from Certain Stockholders of the Company . . . . .16
(i) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . .16
Section 6. Reimbursement of Underwriters' Expenses . . . . . . . . . . . .17
Section 7. Effectiveness of this Agreement . . . . . . . . . . . . . . . .17
Section 8. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .17
(a) Indemnification of the Underwriters. . . . . . . . . . . . . . . . .17
(b) Indemnification of the Company, its Directors and Officers . . . . .18
(c) Notifications and Other Indemnification Procedures . . . . . . . . .19
(d) Settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 9. Contribution . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 10. Default of One or More of the Several Underwriters . . . . . .22
Section 11. Termination of this Agreement . . . . . . . . . . . . . . . . .22
Section 12. Representations and Indemnities to Survive Delivery . . . . . .23
Section 13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Section 14. Successors . . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 15. Partial Unenforceability . . . . . . . . . . . . . . . . . . .24
Section 16. Governing Law Provisions . . . . . . . . . . . . . . . . . . .24
(a) Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . . . . .24
(b) Waiver of Immunity . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 17. General Provisions . . . . . . . . . . . . . . . . . . . . . .25
iii.
UNDERWRITING AGREEMENT
______________, 1998
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXXXX & XXXXX LLC
XXXXX XXXXX XXXXXX & COMPANY, LLC
As Representatives of the several Underwriters
c/o NATIONSBANC XXXXXXXXXX SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
INTRODUCTORY. LJL BioSystems, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of Two Million Five Hundred
Thousand (2,500,000) shares (the "Firm Common Shares") of its Common Stock,
par value $.001 per share (the "Common Stock"). In addition, the Company has
granted to the Underwriters an option to purchase up to an additional Three
Hundred Seventy Five Thousand (375,000) shares (the "Optional Common Shares")
of Common Stock, as provided in Section 2. The Firm Common Shares and, if
and to the extent such option is exercised, the Optional Common Shares are
collectively called the "Common Shares". Nationsbanc Xxxxxxxxxx Securities
LLC ("NMS"), Xxxxxxxxx & Xxxxx LLC and Xxxxx Xxxxx Xxxxxx & Company, LLC have
agreed to act as representatives of the several Underwriters (in such
capacity, the "Representatives") in connection with the offering and sale of
the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-43529), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including any
information deemed to be a part thereof at the time of effectiveness pursuant
to Rule 430A or Rule 434 under the Securities Act, is called the
"Registration Statement". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
Registration Statement", and from and after the date and time of filing of
the Rule 462(b) Registration Statement the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. Such prospectus, in
the form first used by the Underwriters to confirm sales of the Common
Shares, is called the "Prospectus"; provided, however, if the Company has,
with the consent of NMS, elected to rely upon Rule 434 under the Securities
Act, the term "Prospectus" shall mean the Company's prospectus subject to
completion (each, a "preliminary prospectus") dated February 6, 1998 (such
preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and filed
by the Company with the Commission under Rules
1.
434 and 424(b) under the Securities Act and all references in this Agreement
to the date of the Prospectus shall mean the date of the Term Sheet. All
references in this Agreement to the Registration Statement, the Rule 462(b)
Registration Statement, a preliminary prospectus, the Prospectus or the Term
Sheet, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX").
The Company hereby confirms its agreements with the Underwriters as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents, warrants and covenants to each Underwriter as follows:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company
has complied with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement is in effect
and no proceedings for such purpose have been instituted or are pending or,
to the best knowledge of the Company, are contemplated or threatened by the
Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale
of the Common Shares. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto, at the time
it became effective and at all subsequent times thereto up to and at the
First Closing Date (as defined below) and, as applicable, the Second Closing
Date (as defined below), complied and will comply in all material respects
with the Securities Act and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, as amended or supplemented, as of its date and at all subsequent
times thereto up to and at the First Closing Date and, as applicable, the
Second Closing Date, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in the
two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or any
amendments or supplements thereto, made in reliance upon and in strict
conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein. There
are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
(b) OFFERING MATERIALS FURNISHED TO UNDERWRITERS. The Company
has delivered to the Representatives three (3) complete manually signed
copies of each filing of the Registration Statement and of each consent and
certificate of experts filed as a part thereof. The Company has delivered
conformed copies of the Registration Statement (without exhibits)
2.
and preliminary prospectuses and the Prospectus, as amended or supplemented,
in such quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(c) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The
Company has not distributed and will not distribute, prior to the later of
the Second Closing Date (as defined below) and the completion of the
Underwriters' distribution of the Common Shares, any offering material in
connection with the offering and sale of the Common Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
(d) THE UNDERWRITING AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, except as rights
to indemnification or contribution hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(e) AUTHORIZATION OF THE COMMON SHARES. The Common Shares to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement, will be validly issued,
fully paid and nonassessable.
(f) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There
are no persons with registration or other similar rights to have any equity
or debt securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement except for such
rights as have been duly waived.
(g) NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
in the Prospectus, subsequent to the respective dates as of which information
is given in the Prospectus: (i) there has been no material adverse change,
or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects, whether or not arising from transactions
in the ordinary course of business, of the Company (any such change is called
a "Material Adverse Change"); (ii) the Company has not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not
in the ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company on any class of capital stock or repurchase or
redemption by the Company of any class of capital stock.
(h) INDEPENDENT ACCOUNTANTS. Price Waterhouse LLP, who have
expressed their opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement
and included in the Prospectus, are independent public accountants as
required by the Securities Act.
3.
(i) PREPARATION OF THE FINANCIAL STATEMENTS. The financial
statements filed with the Commission as a part of the Registration Statement
and included in the Prospectus present fairly the consolidated financial
position of the Company as of and at the dates indicated and the results of
their operations and cash flows for the periods specified. The supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein. Such financial statements and
supporting schedules have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No
other financial statements or supporting schedules are required to be
included in the Registration Statement. The financial data set forth in the
Prospectus under the captions "Prospectus Summary--Summary Financial
Information", "Selected Financial Data" and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of the
financial statements contained in the Registration Statement.
(j) INCORPORATION AND GOOD STANDING OF THE COMPANY. The
Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in the State of
California and each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions (other than the State of
California) where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.
The Company owns no equity interest in, directly or indirectly, any
corporation, association or other entity.
(k) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The
authorized, issued and outstanding capital stock of the Company is as set
forth in the Prospectus under the caption "Capitalization" (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in
the Prospectus or upon exercise of outstanding options described in the
Prospectus, which issuances have been communicated in writing to the
Representatives). The Common Stock (including the Common Shares) conforms in
all material respects to the description thereof contained in the Prospectus.
All of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights
to purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company other than those accurately
described in the Prospectus. The description of the Company's stock option,
stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
4.
(l) STOCK EXCHANGE LISTING. The Common Shares have been
approved for listing on the Nasdaq National Market subject only to official
notice of issuance.
(m) NON-CONTRAVENTION OF EXISTING INSTRUMENTS; NO FURTHER
AUTHORIZATIONS OR APPROVALS REQUIRED. The Company is not in violation of its
charter or by-laws or is in default (or, with the giving of notice or lapse
of time, would be in default) ("Default") under any indenture, mortgage, loan
or credit agreement, note, contract, franchise, lease or other instrument to
which the Company is a party or by which it may be bound, or to which any of
the property or assets of the Company is subject (each, an "Existing
Instrument"), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change. The Company's execution,
delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in any
violation of the provisions of the charter or by-laws of the Company, (ii)
will not conflict with or constitute a breach of, or Default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to, or require the consent of any
other part to, any Existing Instrument, except for such conflicts, breaches,
Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in
any violation of any law, administrative regulation or administrative or
court decree applicable to the Company. No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency, is required for the Company's
execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by the Prospectus, except such as have
been obtained or made by the Company and are in full force and effect under
the Securities Act, applicable state securities or blue sky laws and from the
National Association of Securities Dealers, Inc. (the "NASD").
(n) NO MATERIAL ACTIONS OR PROCEEDINGS. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or affecting the Company, (ii)
which have as the subject thereof any officer or director of, or property
owned or leased by, the Company or (iii) relating to environmental or
employment discrimination matters, where in any such case (A) there is a
reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company and (B) any such action, suit or
proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of
the transactions contemplated by this Agreement. No material labor dispute
with the employees of the Company, or with the employees of any principal
supplier of the Company, exists or, to the best of the Company's knowledge,
is threatened or imminent.
(o) INTELLECTUAL PROPERTY RIGHTS. Except as described in the
Prospectus, the Company owns or possesses all trademarks, trade names, patent
rights, copyrights, licenses, approvals, trade secrets and other similar
rights (collectively, "Intellectual Property Rights") necessary to conduct
its businesses as now conducted and as proposed to be conducted as described
in the Prospectus; and the expected expiration of any of such Intellectual
Property Rights would not result in a Material Adverse Change. Except as
described in the
5.
Prospectus, the Company has not at any time violated or infringed or, by
conducting its business as proposed, would violate or infringe the
Intellectual Property Rights of others, which violation or infringement, if
the subject of an unfavorable decision, would result in a Material Adverse
Change. The Company has not at any time received any notice or other
communication (in writing or otherwise) of any actual, alleged, possible or
potential violation or infringement of the Intellectual Property Rights of
others. To the best of the knowledge of the Company, no other person is
violating or infringing, and no Intellectual Property Rights owned or used by
any other person violate, infringe or conflict with, any Intellectual
Property Rights owned or used by the Company.
(p) ALL NECESSARY PERMITS, ETC. The Company possesses such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary
to conduct its business, the lack of which could result in a Material Adverse
Change, and the Company has not received any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could result in a
Material Adverse Change.
(q) TITLE TO PROPERTIES. The Company has good and marketable
title to all the properties, real and personal, and assets reflected as owned
in the financial statements referred to in Section 1 (i) above, in each case
free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except those, if any, reflected in such
financial statements such as do not materially and adversely affect the value
of such property and do not materially interfere with the use made or
proposed to be made of such property by the Company. The real property,
improvements, equipment and personal property held under lease by the Company
are held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by
the Company.
(r) TAX LAW COMPLIANCE. The Company has filed all necessary
federal, state and foreign income and franchise tax returns and has paid all
taxes required to be paid by it and, if due and payable, any related or
similar assessment, fine or penalty levied against it. The Company has made
adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 1(i) above in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company has not been finally determined.
(s) COMPANY NOT AN "INVESTMENT COMPANY". The Company is not,
and after receipt of payment for the Common Shares will not be, an
"investment company" within the meaning of Investment Company Act of 1940, as
amended (the "Investment Company Act") and will conduct its business in a
manner so that it will not become subject to the Investment Company Act.
(t) INSURANCE. The Company is insured by recognized,
financially sound and reputable institutions with policies in such amounts
and with such deductibles and
6.
covering such risks as are generally deemed adequate and customary for its
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company against theft, damage, destruction,
acts of vandalism and earthquakes. The Company has no reason to believe that
it will not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
now conducted and at a comparable cost. The Company has not been denied any
insurance coverage which it has sought or for which it has applied.
(u) NO PRICE STABILIZATION OR MANIPULATION. The Company has
not taken and will not take, directly or indirectly, any action designed to
or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Common Shares or otherwise.
(v) RELATED PARTY TRANSACTIONS. There are no business
relationships or related-party transactions involving the Company or any
other person required to be described in the Prospectus which have not been
described as required.
(w) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. The Company
nor, to the best of the Company's knowledge, any employee or agent of the
Company, has made any contribution or other payment to any official of, or
candidate for, any federal, state or foreign office in violation of any law
or of the character required to be disclosed in the Prospectus.
(x) COMPANY'S ACCOUNTING SYSTEM. The Company maintains a
system of accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(y) COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as would not,
individually or in the aggregate, result in a Material Adverse Change (i) the
Company is not in violation of any federal, state, local or foreign law or
regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including
without limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environment Concern
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental
authorizations required for the operation of the business of the Company
under
7.
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company received any written communication, whether from
a governmental authority, citizens group, employee or otherwise, that alleges
that the Company is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental
authority, no investigation with respect to which the Company has received
written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal
injuries, attorneys' fees or penalties arising out of, based on or resulting
from the presence, or release into the environment, of any Material of
Environmental Concern at any location owned, leased or operated by the
Company, now or in the past (collectively, "Environmental Claims"), pending
or, to the best of the Company's knowledge, threatened against the Company or
any person or entity whose liability for any Environmental Claim the Company
has retained or assumed either contractually or by operation of law; and
(iii) to the best of the Company's knowledge, there are no past or present
actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably could
result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Company or against any person or
entity whose liability for any Environmental Claim the Company has retained
or assumed either contractually or by operation of law.
(z) PERIODIC REVIEW OF COSTS OF ENVIRONMENTAL COMPLIANCE. In
the ordinary course of its business, the Company conducts a periodic review
of the effect of Environmental Laws on the business, operations and
properties of the Company, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital
or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its
established reserves, the Company has reasonably concluded that such
associated costs and liabilities would not, individually or in the aggregate,
result in a Material Adverse Change.
(aa) ERISA COMPLIANCE. The Company and any "employee benefit
plan" (as defined under the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, or its
"ERISA Affiliates" (as defined below) are in compliance in all material
respects with ERISA. "ERISA Affiliate" means, with respect to the Company,
any member of any group of organizations described in Sections 414(b),(c),(m)
or (o) of the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereunder (the "Code") of which the Company is
a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, or any of its ERISA Affiliates. No
"employee benefit plan" established or maintained by the Company, or any of
its ERISA Affiliates, if such "employee benefit plan" were terminated, would
have any "amount of unfunded benefit liabilities" (as defined under ERISA).
Neither the Company, nor any of its
8.
ERISA Affiliates has incurred or reasonably expects to incur any liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B
of the Code. Each "employee benefit plan" established or maintained by the
Company, or any of its ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification.
Any certificate signed by an officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters set forth therein.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE COMMON SHARES.
(a) THE FIRM COMMON SHARES. The Company agrees to issue and sell to the
several Underwriters the Firm Common Shares upon the terms herein set forth.
On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Underwriters agree, severally and not jointly, to purchase from the
Company the respective number of Firm Common Shares set forth opposite their
names on Schedule A. The purchase price per Firm Common Share to be paid by
the several Underwriters to the Company shall be $[___] per share.
(b) THE FIRST CLOSING DATE. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made
at the offices of NMS, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx (or
such other place as may be agreed to by the Company and the Representative)
at 6:00 a.m. San Francisco time, on [___], or such other time and date not
later than 10:30 a.m. San Francisco time, on [___] as the Representatives
shall designate by notice to the Company (the time and date of such closing
are called the "First Closing Date"). The Company hereby acknowledges that
circumstances under which the Representatives may provide notice to postpone
the First Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus or
a delay as contemplated by the provisions of Section 10.
(c) THE OPTIONAL COMMON SHARES; THE SECOND CLOSING DATE. In addition, on
the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of Three Hundred Seventy Five
Thousand (375,000) Optional Common Shares from the Company at the purchase
price per share to be paid by the Underwriters for the Firm Common Shares.
The option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of
the Firm Common Shares. The option granted hereunder may be exercised at any
time (but not more than once) upon notice by the Representative to the
Company which notice may be given at any time within 30 days from the date of
this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Common Shares as to which the Underwriters are exercising the
option, (ii) the names and denominations in which
9.
the certificates for the Optional Common Shares are to be registered and
(iii) the time, date and place at which such certificates will be delivered
(which time and date may be simultaneous with, but not earlier than, the
First Closing Date; and in such case the term "First Closing Date" shall
refer to the time and date of delivery of certificates for the Firm Common
Shares and the Optional Common Shares). Such time and date of delivery, if
subsequent to the First Closing Date, is called the "Second Closing Date" and
shall be determined by the Representative and shall not be earlier than three
nor later than five full business days after delivery of such notice of
exercise. If any Optional Common Shares are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Common Shares (subject to such adjustments to eliminate fractional
shares as the Representative may determine) that bears the same proportion to
the total number of Optional Common Shares to be purchased as the number of
Firm Common Shares set forth on Schedule A opposite the name of such
Underwriter bears to the total number of Firm Common Shares. The
Representative may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
(d) PUBLIC OFFERING OF THE COMMON SHARES. The Representatives hereby
advise the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the
Common Shares as soon after this Agreement has been executed and the
Registration Statement has been declared effective as the Representatives, in
their sole judgment, have determined is advisable and practicable.
(e) PAYMENT FOR THE COMMON SHARES. Payment for the Common Shares shall be
made at the First Closing Date (and, if applicable, at the Second Closing
Date) by wire transfer of immediately available funds to the order of the
Company.
It is understood that the Representatives have been authorized, for their
own account and the accounts of the several Underwriters, to accept delivery
of and receipt for, and make payment of the purchase price for, the Firm
Common Shares and any Optional Common Shares the Underwriters have agreed to
purchase. NMS, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by the Representatives by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Underwriter, but
any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(f) DELIVERY OF THE COMMON SHARES. The Company shall deliver, or cause
to be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing
Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company
shall also deliver, or cause to be delivered, to the Representatives for the
accounts of the several Underwriters, certificates for the Optional Common
Shares the Underwriters have agreed to purchase at the First Closing Date or
the Second Closing Date, as the case may be, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Common Shares shall be in
definitive form and registered in such names and denominations as the
Representatives shall have requested at least
10.
two full business days prior to the First Closing Date (or the Second Closing
Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or the Second Closing Date, as
the case may be) at a location in New York City as the Representatives may
designate. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Underwriters.
(g) DELIVERY OF PROSPECTUS TO THE UNDERWRITERS. Not later than 12:00
p.m. on the second business day following the date the Common Shares are
released by the Underwriters for sale to the public, the Company shall
delivery or cause to be delivered copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY. The Company further
covenants and agrees with each Underwriter as follows:
(a) REPRESENTATIVES' REVIEW OF PROPOSED AMENDMENTS AND
SUPPLEMENTS. During such period beginning on the date hereof and ending on
the later of the First Closing Date or such date, as in the opinion of
counsel for the Underwriters, the Prospectus is no longer required by law to
be delivered in connection with sales by an Underwriter or dealer (the
"Prospectus Delivery Period"), prior to amending or supplementing the
Registration Statement (including any registration statement filed under Rule
462(b) under the Securities Act) or the Prospectus, the Company shall furnish
to the Representatives for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which NMS reasonably objects.
(b) SECURITIES ACT COMPLIANCE. After the date of this
Agreement, the Company shall promptly advise the Representatives in writing
(i) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (ii) of the time and date of
any filing of any post-effective amendment to the Registration Statement or
any amendment or supplement to any preliminary prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing
or suspending the use of any preliminary prospectus or the Prospectus, or of
any proceedings to remove, suspend or terminate from listing or quotation the
Common Stock from the Nasdaq National Market or any other securities exchange
upon which the it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any
time, the Company will use its best efforts to obtain the lifting of such
order at the earliest possible moment. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS AND OTHER
SECURITIES ACT MATTERS. If, during the Prospectus Delivery Period, any event
shall occur or
11.
condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus
to comply with law, the Company agrees to promptly prepare (subject to
Section 3(A)(a) hereof), file with the Commission and furnish at its own
expense to the Underwriters and to dealers, amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the Prospectus
is delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS.
The Company agrees to furnish the Representatives, without charge, during
the Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Representatives may request.
(e) BLUE SKY COMPLIANCE. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of)
the or state securities or blue sky laws or Canadian provincial securities
laws of those jurisdictions designated by the Representatives, shall comply
with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Common
Shares. The Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not currently qualified or where
it would be subject to taxation as a foreign corporation. The Company will
advise the Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance of any
order suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(f) USE OF PROCEEDS. The Company shall apply the net proceeds
from the sale of the Common Shares sold by it in the manner described under
the caption "Use of Proceeds" in the Prospectus.
(g) TRANSFER AGENT. The Company shall engage and maintain, at
its expense, a registrar and transfer agent for the Common Stock.
(h) EARNINGS STATEMENT. As soon as practicable, the Company
will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering
the twelve-month period ending [___] that satisfies the provisions of Section
11(a) of the Securities Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the
Commission and the Nasdaq National Market all reports and documents required
to be filed under the Exchange Act. Additionally, the
12.
Company shall file with the Commission all reports containing such
information as may be required under Rule 463 under the Securities Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES.
During the period of 180 days following the date of the Prospectus, the
Company will not, without the prior written consent of NMS (which consent
may be withheld at the sole discretion of NMS), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants
to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other than as
contemplated by this Agreement with respect to the Common Shares); provided,
however, that the Company may issue shares of its Common Stock or options to
purchase its Common Stock, or Common Stock upon exercise of options, pursuant
to any stock option, stock bonus or other stock plan or arrangement described
in the Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such 180
day period without the prior written consent of NMS (which consent may be
withheld at the sole discretion of the NMS).
(k) FUTURE REPORTS TO THE REPRESENTATIVE. During the period of
five years hereafter the Company will furnish to the Representative at 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000 Attention:__________ (i) as soon
as practicable after the end of each fiscal year, copies of the Annual Report
of the Company containing the balance sheet of the Company as of the close of
such fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form
8-K or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
(l) AGREEMENT NOT TO WAIVE LOCK-UP PROVISIONS. The Company
will not, without the prior written consent of NMS (which consent may be
withheld in the sole discretion of NMS), waive any obligation of any
shareholder of the Company under any agreement to refrain from, directly or
indirectly, selling, offering to sell, contracting or granting any option to
sell, pledging, transferring or establishing an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise disposing of or transferring, or announcing the offering of, any
Common Shares, options or warrants to acquire Common Shares or securities
exchangeable or exercisable for or convertible into Common Shares of Common
Stock (other than as contemplated by this Agreement with respect to the
Shares) during the period of 180 days following the date of the Prospectus.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its
obligations hereunder and in
13.
connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution
of the Registration Statement (including financial statements, exhibits,
schedules, consents and certificates of experts), each preliminary prospectus
and the Prospectus, and all amendments and supplements thereto, and this
Agreement, (vi) all filing fees, attorneys' fees and expenses incurred by the
Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any
part of the Common Shares for offer and sale under the state securities or
blue sky laws or the provincial securities laws of Canada, and, if requested
by the Representatives, preparing and printing a "Blue Sky Survey" or
memorandum, and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (vii) the filing fees incident
to, and the reasonable fees and expenses of counsel for the Underwriters in
connection with, the NASD's review and approval of the Underwriters'
participation in the offering and distribution of the Common Shares, (viii)
the fees and expenses associated with including the Common Shares on the
Nasdaq National Market, and (ix) all other fees, costs and expenses referred
to in Item 13 of Part II of the Registration Statement. Except as provided in
this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters
shall pay their own expenses, including the fees and disbursements of their
counsel.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date, shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the First Closing
Date as though then made and, with respect to the Optional Common Shares, as
of the Second Closing Date as though then made, to the timely performance by
the Company of its covenants and other obligations hereunder, and to each of
the following additional conditions:
(a) ACCOUNTANTS' COMFORT LETTER. On the date hereof, the
Representative shall have received from Price Waterhouse LLP independent
public accountants for the Company, a letter dated the date hereof addressed
to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters, delivered
according to Statement of Auditing Standards No. 72 (or any successor
bulletin), with respect to the audited and unaudited financial statements and
certain financial information contained in the Registration Statement and the
Prospectus (and the Representatives shall have received an additional three
(3) conformed copies of such accountants' letter for each of the several
Underwriters).
14.
(b) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER;
NO OBJECTION FROM NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by Rule
424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective amendment
shall have become effective; or, if the Company elected to rely upon Rule 434
under the Securities Act and obtained the Representatives' consent thereto,
the Company shall have filed a Term Sheet with the Commission in the manner
and within the time period required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect
and no proceedings for such purpose shall have been instituted or threatened
by the Commission; and
(iii) the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements.
(c) NO MATERIAL ADVERSE CHANGE. For the period from and after
the date of this Agreement and prior to the First Closing Date and, with
respect to the Optional Common Shares, the Second Closing Date, in the
judgment of the Representatives there shall not have occurred any Material
Adverse Change.
(d) OPINIONS OF COUNSEL FOR THE COMPANY.
(i) On each of the First Closing Date and the Second
Closing Date the Representative shall have received the favorable opinion of
Venture Law Group counsel for the Company, dated as of such Closing Date, the
form of which is attached as Exhibit A (and the Representative shall have
received an additional three (3) conformed copies of such counsel's legal
opinion for each of the several Underwriters).
(ii) On each of the First Closing Date and the Second
Closing Date the Representative shall have received the favorable opinion of
Kolisch, Hartwell, Dickinson, XxXxxxxxx & Xxxxxx, patent counsel for the
Company, dated as of such Closing Date, the form of which is attached as
Exhibit B (and the Representative shall have received an additional three (3)
conformed copies of such counsel's legal opinion for each of the several
Underwriters).
(e) OPINION OF COUNSEL FOR THE UNDERWRITERS. On each of the
First Closing Date and the Second Closing Date the Representative shall have
received the favorable opinion of Xxxxxx Godward LLP counsel for the
Underwriters, dated as of such Closing Date, with respect to certain matters
set forth in Exhibit A (and the Representatives shall have
15.
received an additional three (3) conformed copies of such counsel's legal
opinion for each of the several Underwriters).
(f) OFFICERS' CERTIFICATE. On each of the First Closing Date
and the Second Closing Date the Representative shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set
forth in subsections (b)(ii) and (c) of this Section 5, and further to the
effect that:
(i) for the period from and after the date of this
Agreement and prior to such Closing Date, there has not occurred any Material
Adverse Change;
(ii) the representations and warranties of the Company
set forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(g) BRING-DOWN COMFORT LETTER. On each of the First Closing
Date and the Second Closing Date the Representative shall have received from
Price Waterhouse LLP, independent public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the
Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the First
Closing Date or Second Closing Date, as the case may be (and the
Representatives shall have received an additional three (3) conformed copies
of such accountants' letter for each of the several Underwriters).
(h) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE
COMPANY. On the date hereof, the Company shall have furnished to the
Representative an agreement in the form of Exhibit C hereto from each
director, officer, and each beneficial owner of Common Shares (as defined and
determined according to Rule 13d-3 under the Exchange Act, except that a one
hundred eighty day period shall be used rather than the sixty day period set
forth therein), and such agreement shall be in full force and effect on each
of the First Closing Date and the Second Closing Date.
(i) ADDITIONAL DOCUMENTS. On or before each of the First
Closing Date and the Second Closing Date, the Representatives and counsel for
the Underwriters shall have received such information, documents and opinions
as they may reasonably require for the purposes of enabling them to pass upon
the issuance and sale of the Common Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained.
16.
If any condition specified in this Section 5 is not
satisfied when and as required to be satisfied, this Agreement may be
terminated by the Representatives by notice to the Company at any time on or
prior to the First Closing Date and, with respect to the Optional Common
Shares, at any time prior to the Second Closing Date, which termination shall
be without liability on the part of any party to any other party, except that
Section 4, Section 6, Section 8 and Section 9 shall at all times be effective
and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this Agreement is
terminated by the Representative pursuant to Section 5 or Section 11, or if
the sale to the Underwriters of the Common Shares on the First Closing Date
is not consummated because of any refusal, inability or failure on the part
of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representatives and the
other Underwriters (or such Underwriters as have terminated this Agreement
with respect to themselves), severally, upon demand for all out-of-pocket
expenses that shall have been reasonably incurred by the Representatives and
the Underwriters in connection with the proposed purchase and the offering
and sale of the Common Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT.
This Agreement shall not become effective until the later of (i) the
execution of this Agreement by the parties hereto and (ii) notification by
the Commission to the Company and the Representatives of the effectiveness of
the Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any
party by notice to each of the other parties hereto, and any such termination
shall be without liability on the part of (a) the Company to any Underwriter,
except that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Section 4 hereof, (b) of any
Underwriter to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS. The Company agrees
to 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 and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject (including in its capacity as a
"qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the NASD), under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement
or alleged untrue statement of a material fact contained in the
17.
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A or Rule 434 under the
Securities Act, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iv) in
whole or in part upon any failure of the Company to perform its obligations
hereunder or under law; or (v) 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 Common 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 any matter covered by clause (i) or (ii)
above, provided that the Company shall not be liable under this clause (v) to
the extent that a court of competent jurisdiction shall have determined by a
final judgment that such loss, claim, damage, liability or actio resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its bad faith or willful misconduct; and to
reimburse each Underwriter and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by NMS) as
such expenses are reasonably incurred by such Underwriter or such controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in strict
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit
of any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of the Common Shares to such
person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities tat the Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND
OFFICERS. Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act,
against any loss, claim, damage, liability or expense, as incurred, to which
the
18.
Company, or any such director, officer or controlling person may become
subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the
written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, any
preliminary prospectus, the Prospectus (or any amendment or supplement
thereto), in reliance upon and in strict conformity with written information
furnished to the Company by the Representatives expressly for use therein;
and to reimburse the Company, or any such director, officer or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The Company hereby acknowledges
that the only information that the Underwritrs have furnished to the Company
expressly for use in the Registration Statement, any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) are the statements
set forth (A) as the second to last paragraph on the inside front cover page
of the Prospectus concerning stabilization and passive market making by the
Underwriters and (B) in the table in the first paragraph and as the second,
fifth, ninth and tenth paragraphs under the caption "Underwriting" in the
Prospectus; and the Underwriters confirm that such statements are correct.
The indemnity agreement set forth in this Section 8(b) shall be in addition
to any liabilities that each Underwriter may otherwise have.
(c) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES.
Promptly after receipt by an indemnified party under this Section 8 of notice
of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not
relieve the indemnifying party it from any liability which it may have to any
indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 8 or to the extent it is not prejudiced
as a proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly
with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action
or that there may be legal defenses available to it and/or other indemnified
parties which are different from or
19.
additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of such
indemnifying party's election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel (together with
local counsel), approved by the indemnifying party (NMS in the case of
Section 8(b) and Section 9), representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action, in each of which cases the fees and expenses of counsel shall be
at the expense of the indemnifying party.
(d) SETTLEMENTS. The indemnifying party under this Section 8
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
30 days after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry
of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding.
SECTION 9. CONTRIBUTION.
If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities
or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party,
as incurred, as a result of any losses, claims, damages, liabilities or
expenses referred to therein (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and
the Underwriters, on the other hand, from the offering of the Common Shares
pursuant
20.
to this Agreement or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the statements or
omissions in the Registration Statement, any preliminary prospectus or the
Prospectus (or any supplement or amendment thereto) or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, in connection with the
offering of the Common Shares pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from the
offering of the Common Shares pursuant to this Agreement (before deducting
expenses) received by the Company, and the total underwriting discount
received by the Underwriters, in each case as set forth on the front cover
page of the Prospectus (or, if Rule 434 under the Securities Act is used, the
corresponding location on the Term Sheet) bear to the aggregate initial
public offering price of the Common Shares as set forth on uch cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in Section 8(c), any legal
or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set
forth in Section 8(c) with respect to notice of commencement of any action
shall apply if a claim for contribution is to be made under this Section 9;
provided, however, that no additional notice shall be required with respect
to any action for which notice has been given under Section 8(c) for purposes
of indemnification.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Common Shares
underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective underwriting commitments as set forth opposite
their names in Schedule A. For purposes of this Section 9, each officer and
21.
employee of an Underwriter and each person, if any, who controls an
Underwriter within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
with the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as the Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any
one or more of the several Underwriters shall fail or refuse to purchase
Common Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase does not exceed 10%
of the aggregate number of the Common Shares to be purchased on such date,
the other Underwriters shall be obligated, severally, in the proportions that
the number of Firm Common Shares set forth opposite their respective names on
Schedule A bears to the aggregate number of Firm Common Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of
the non-defaulting Underwriters, to purchase the Common Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, on the First Closing Date or the Second Closing
Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Common Shares and the aggregate number of Common Shares
with respect to which such default occurs exceeds 10% of the aggregate number
of Common Shares to be purchased on such date, and arrangements satisfactory
to the Representative and the Company for the purchase of such Common Shares
are not made within 48 hours after such default, this Agreement shall
terminate without liability of any party to any other party except that the
provisions of Section 4, Section 8 and Section 9 shall at all times be
effective and shall survive such termination. In any such case either NMS
or the Company shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date, this Agreement may be terminated by the Representatives by notice given
to the Company if at any time (i) trading or quotation in any of the
Company's securities shall have been suspended or limited by the Commission
or by the Nasdaq Stock Market, or trading in securities generally on either
the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD;
(ii) a general banking moratorium shall have been declared by any of federal,
New York, Delaware or California authorities; (iii) there shall
22.
have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market
the Common Shares in the manner and on the terms described in the Prospectus
or to enforce contracts for the sale of securities; (iv) in the judgment of
the Representatives there shall have occurred any Material Adverse Change; or
(v) the Company shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity, whether or not covered by insurance,
of such character as in the judgment of the Representatives is so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Common Shares on the terms and in the
manner contemplated in the Prospectus. Any termination pursuant to this
Section 11 shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4
and 6 hereof, (b) any Underwriter to the Company or (c) of any party hereto
to any other party except that the provisions of Section 8 and Section 9
shall at all times be effective and shall survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Common Shares sold hereunder and any
termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to the Representatives:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
with a copy to:
NationsBanc Xxxxxxxxxx Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
23.
If to the Company:
LJL BioSystems, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx X. Xxxxxx
With a copy to:
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx, Esq.
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers
and directors and controlling persons referred to in Section 8 and Section 9,
and in each case their respective successors, and personal representatives,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Common Shares as such
from any of the Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(a) CONSENT TO JURISDICTION. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City and County of San
Francisco or the courts of the State of California in each case located in
the City and County of San Francisco (collectively, the "Specified Courts"),
and each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such
24.
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to
such party's address set forth above shall be effective service of process
for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in
the United States irrevocably appoints CT Corporation System, which currently
maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service
of process or other legal summons for purposes of any such suit, action or
proceeding that may be instituted in any state or federal court in the City
and County of San Francisco.
(b) WAIVER OF IMMUNITY. With respect to any Related
Proceeding, each party irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or
otherwise) from jurisdiction, service of process, attachment (both before and
after judgment) and execution to which it might otherwise be entitled in the
Specified Courts, and with respect to any Related Judgment, each party waives
any such immunity in the Specified Courts or any other court of competent
jurisdiction, and will not raise or claim or cause to be pleaded any such
immunity at or in respect of any such Related Proceeding or Related Judgment,
including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
SECTION 17. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written
or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may
be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The Table of Contents and the
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the
parties hereto further acknowledges that the provisions of Sections 8 and 9
hereto fairly allocate the risks in light of the ability of the parties to
investigate the Company, its affairs and its business in order to assure that
adequate disclosure has been made in the Registration Statement, any
preliminary prospectus and the Prospectus (and any amendments and supplements
thereto), as required by the Securities Act and the Exchange Act.
25.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
LJL BIOSYSTEMS, INC.
By:________________________________
Xxx X. Xxxxxx
President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the Representatives in San Francisco, California as of the date
first above written.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
XXXXXXXXX & XXXXX LLC
XXXXX XXXXX XXXXXX & COMPANY, LLC
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:________________________________
Managing Director
26.
SCHEDULE A
NUMBER OF
FIRM COMMON
SHARES
UNDERWRITERS TO BE PURCHASED
NationsBanc Xxxxxxxxxx Securities LLC . . . . . . . . . . . . . . . [____]
.
Xxxxxxxxx & Xxxxx LLC . . . . . . . . . . . . . . . . . . . . . . . [____]
Xxxxx Xxxxx Xxxxxx & Company, LLC . . . . . . . . . . . . . . . . . [____]
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000
27.
EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of California and in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for
such jurisdictions (other than the State of California) where the failure to
so qualify or to be in good standing would not, individually or in the
aggregate, result in a Material Adverse Change.
(iv) The authorized, issued and outstanding capital stock of the Company
(including the Common Stock) conform to the descriptions thereof set forth in
the Prospectus. All of the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and, to the
best of such counsel's knowledge, have been issued in compliance with the
registration and qualification requirements of federal and state securities
laws. The form of certificate used to evidence the Common Stock is in due
and proper form and complies with all applicable requirements of the charter
and by-laws of the Company and the General Corporation Law of the State of
Delaware. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
and exercised thereunder, set forth in the Prospectus accurately and fairly
presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(v) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe
for or purchase securities of the Company arising (i) by operation of the
charter or by-laws of the Company or the General Corporation Law of the State
of Delaware or (ii) to the best knowledge of such counsel, otherwise.
(vi) The Underwriting Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
thereunder may be limited by applicable law and except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally or
by general equitable principles.
28.
(vii) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant
to the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.
(viii) Each of the Registration Statement and the Rule 462(b)
Registration Statement, if any, has been declared effective by the Commission
under the Securities Act. To the best knowledge of such counsel, no stop
order suspending the effectiveness of either of the Registration Statement or
the Rule 462(b) Registration Statement, if any, has been issued under the
Securities Act and no proceedings for such purpose have been instituted or
are pending or are contemplated or threatened by the Commission. Any
required filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) under the Securities Act has been made in the manner and within the
time period required by such Rule 424(b).
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus including any document incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
the Prospectus including any document incorporated by reference therein, as
of their respective effective or issue dates (other than the financial
statements and supporting schedules included or incorporated by reference
therein or in exhibits to or excluded from the Registration Statement, as to
which no opinion need be rendered) comply as to form in all material respects
with the applicable requirements of the Securities Act and the Exchange Act.
(x) The Common Shares have been approved for listing on the Nasdaq
National Market.
(xi) The statements (i) in the Prospectus under the captions "Risk
Factors--Availability of Preferred Stock for Issuance; Anti-Takeover
Provisions", "Risk Factors--Shares Eligible for Future Sale and Potential
Adverse Effect on Market Price", "Description of Capital Stock", "Certain
Relationships and Related Transactions", "Management--Stock Plans", "Shares
Eligible for Future Sale", and (ii) in Item 14 and Item 15 of the
Registration Statement, insofar as such statements constitute matters of law,
summaries of legal matters, the Company's charter or by-law provisions,
documents or legal proceedings, or legal conclusions, has been reviewed by
such counsel and fairly present and summarize, in all material respects, the
matters referred to therein.
(xii) To the best knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or threatened which are
required to be disclosed in the Registration Statement, other than those
disclosed therein.
(xiv) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits
thereto; and the descriptions thereof and references thereto are correct in
all material respects.
29.
(xv) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of
the Underwriting Agreement and consummation of the transactions contemplated
thereby and by the Prospectus, except as required under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
(xvi) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder
(other than performance by the Company of its obligations under the
indemnification section of the Underwriting Agreement, as to which no opinion
need be rendered) (i) have been duly authorized by all necessary corporate
action on the part of the Company; (ii) will not result in any violation of
the provisions of the charter or by-laws of the Company; (iii) will not
constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any material Existing Instrument; (iv) to the best knowledge
of such counsel, will not result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company.
(xvii) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.
(xviii) Except as disclosed in the Prospectus to the best knowledge of
such counsel, there are no persons with registration or other similar rights
to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by the
Underwriting Agreement, except for such rights as have been duly waived.
(xix) To the best knowledge of such counsel, the Company is not in
violation of its charter or by-laws or any law, administrative regulation or
administrative or court decree applicable to the Company or is in Default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any material Existing Instrument, except in each such
case for such violations or Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus, and any
supplements or amendments thereto, and related matters were discussed and,
although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus (other than as
specified above), and any supplements or amendments thereto, on the basis of
the foregoing, nothing has come to their attention which would lead them to
believe that either the Registration Statement or any amendments thereto, at
the time the Registration Statement or such amendments became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date or
at the First Closing Date or the Second
30.
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
statistical data derived therefrom, included in the Registration Statement or
the Prospectus or any amendments or supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, the General Corporation Law of the
State of California or the federal law of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion (which shall
be dated the First Closing Date or the Second Closing Date, as the case may
be, shall be satisfactory in form and substance to the Underwriters, shall
expressly state that the Underwriters may rely on such opinion as if it were
addressed to them and shall be furnished to the Representatives) of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters; provided, however, that such
counsel shall further state that they believe that they and the Underwriters
are justified in relying upon such opinion of other counsel, and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
31.
EXHIBIT B
Opinion of Kolisch, Hartwell, Dickinson, XxXxxxxxx & Xxxxxx, Patent
Counsel for the Company, to be delivered pursuant to Section 5(d) of the
Underwriting Agreement:
Such counsel are familiar with the technology used by the Company in
its business and the manner of its use thereof and have read the portions of
the Registration Statement and the Prospectus contained under the captions
"Risk Factors - Intellectual Property Risks" and "Business - Intellectual
Property."
(i) Such counsel have no reason to believe that the information
contained in the Registration Statement and the Prospectus under the captions
"Risk Factors -Intellectual Property Risks" and "Business - Intellectual
Property" (a) contains any untrue statement of a material fact or (b) omits
to state any material fact required to be stated in such sections or
necessary to make the statements therein not misleading;
(ii) to the best of such counsel's knowledge, there are no legal or
governmental proceedings pending, except for pending patent applications,
relating to patent rights, trade secrets, trademarks, service marks or other
proprietary information or materials of the Company, and to the best of such
counsel's knowledge no such proceedings are threatened or contemplated by
governmental authorities or others;
(iii) to the best of such counsel's knowledge, the Company is not
infringing or otherwise violating any patents, trade secrets, trademarks,
service marks or other proprietary information or materials, of others, and
to the best of such counsel's knowledge there are no infringements by others
of any of the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials which in the judgment of such
counsel could affect materially the use thereof by the Company; and
(iv) to the best of such counsel's knowledge, except as disclosed in the
Registration Statement and the Prospectus, such counsel do not know of any
patent, trade secret, trademark, service xxxx or other proprietary
information, which to the best of such counsel's knowledge, is necessary to
conduct the business now being conducted by the Company, as described in the
Registration Statement and the Prospectus, and which is not already owned or
licensed by the Company.
1.
EXHIBIT C
LOCK-UP AGREEMENT
[DATE]
NationsBanc Xxxxxxxxxx Securities LLC
Xxxxxxxxx & Xxxxx LLC
Xxxxx Xxxxx Xxxxxx & Company, LLC
as Representatives of the several Underwriters
c/o NationsBanc Xxxxxxxxxx Securities LLC 000 Xxxxxxxxxx Xxxxxx Xxx Xxxxxxxxx,
XX 00000
RE: LJL BIOSYSTEMS, INC. PUBLIC OFFERING
The undersigned understands that you, as representatives (the
"Representatives") of the several underwriters (the "Underwriters"), propose
to enter into an underwriting agreement with LJL BioSystems, Inc. (the
"Company") providing for the public offering (the "Public Offering") by the
Underwriters of shares of Common Stock of the Company pursuant to a
Registration Statement (the "Registration Statement") to be filed by the
Company with the Securities and Exchange Commission (the "Commission").
In consideration of the Underwriters' agreement to purchase and undertake the
Public Offering of the Company's Common Stock, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
undersigned agrees that, without the prior written consent of NationsBanc
Xxxxxxxxxx Securities, Inc., it will not, for a period of 180 days subsequent
to the date of the final Prospectus for the Public Offering (the "Lock-Up
Period"), (1) offer, pledge, sell, contract to sell (including, without
limitation, any short sale), sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase, establish an open "put equivalent position" within the meaning
of Rule 16a-l(h) under the Securities Exchange Act of 1934, as amended, or
otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock owned directly by the undersigned or with
respect to which the undersigned has or acquires beneficial ownership within
the meaning of the rules and regulations of the Commission (collectively, the
"Undersigned's Shares") or (2) enter into any swap or similar agreement that
transfers, in whole or in part, the economic risk of ownership of the Common
Stock, whether any such transaction described in clause (1) above or this
clause (2) is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (3) publicly announce the undersigned's
intention to do any of the foregoing.
Notwithstanding the foregoing, if the undersigned is an individual, he or she
may transfer any securities of the Company either during his or her lifetime
or on death by gift, will or intestacy to his or her immediate family or to a
trust, the beneficiaries of which are exclusively the
C-1.
undersigned and/or a member or members of his or her immediately family:
provided, however, that in each such case described in this paragraph the
transferee agrees in writing to be bound by the provisions of this agreement.
For purposes of this agreement, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor.
The undersigned now has and except as contemplated by the preceding
paragraph, for the duration of the Lock-Up Period will have, good and
marketable title to the Undersigned's Shares, free and clear of all liens,
claims and encumbrances.
The undersigned hereby acknowledges that this agreement is valid and binding
notwithstanding any prior agreements relating to this matter and further
agrees and consents to the entry of stop-transfer instructions with the
Company's transfer agent against the transfer of shares of Common Stock held
by the undersigned except in compliance with this agreement. The undersigned
also understands that the Company and the Underwriters will proceed with the
Public Offering in reliance on this agreement.
With respect to the Public Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of any
Common Stock owned either of record or beneficially by the undersigned,
including any rights to receive notice of the Public Offering.
This agreement is irrevocable and will be binding on the undersigned and the
successors, heirs, person representatives, and assigns of the undersigned. In
the event the Registration Statement is not declared effective by the
Commission by June 30, 1998, this agreement will terminate and be of no
further force or effect.
Very truly yours,
______________________________________________
Signature
______________________________________________
Please Print Name
______________________________________________
Please Print Title, if applicable
______________________________________________
Additional Signature(s), if stock jointly held
C-2.
