Exhibit 1.2
CV THERAPEUTICS, INC.
2,500,000 Shares of Common Stock
Underwriting Agreement
December 3, 2001
X.X. Xxxxxx Securities Inc.
As Representative of the several underwriters
listed in Schedule I hereto
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CV Therapeutics, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters") for whom you are acting as representative (the
"Representative") an aggregate of 2,500,000 shares of Common Stock, par value
$.001 per share, of the Company (the "Underwritten Shares") and, for the sole
purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
375,000 shares of Common Stock of the Company (the "Option Shares"). The
Underwritten Shares and the Option Shares are herein referred to as the
"Shares". The shares of Common Stock of the Company to be outstanding after
giving effect to the sale of the Shares are herein referred to as the "Common
Stock".
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, File No. 333-53202, including a prospectus, relating to the Shares.
The registration statement as amended to the date of this Agreement is referred
to in this Agreement as the "Registration Statement". The term "Base Prospectus"
means the prospectus included in the Registration Statement. The Company has
filed with, or transmitted for filing to, or shall promptly hereafter file with
or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Shares pursuant to Rule
424 under the Securities Act. The term "Prospectus" means the Prospectus
Supplement together with the Base Prospectus. If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration Statement"), then any reference herein to the
term "Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Any reference in this Agreement to the Registration
Statement, any supplemental prospectus (including the Pro-
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spectus Supplement) or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act, as of the effective date of the Registration Statement
or the date of such supplemental prospectus or the Prospectus, as the case may
be, and any reference to "amend", "amendment" or "supplement" with respect to
the Registration Statement, any supplemental prospectus or the Prospectus shall
be deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") that are deemed to
be incorporated by reference therein.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Underwritten
Shares to the several Underwriters as hereinafter provided,
and each Underwriter, upon the basis of the representations
and warranties herein contained, but subject to the terms and
conditions hereinafter stated, agrees to purchase, severally
and not jointly, from the Company the respective number of
Underwritten Shares set forth opposite such Underwriter's name
in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) at a purchase price per share of $52.50 (the
"Purchase Price").
In addition, the Company agrees to issue and sell the Option
Shares to the several Underwriters as hereinafter provided, and the
Underwriters, on the basis of the representations and warranties herein
contained, but subject to the terms and conditions hereinafter stated, shall
have the option to purchase, severally and not jointly, from the Company up to
an aggregate of 375,000 Option Shares at the Purchase Price, for the sole
purpose of covering over-allotments (if any) in the sale of Underwritten Shares
by the several Underwriters.
If any Option Shares are to be purchased, the number of Option
Shares to be purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares being
purchased as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representative in its
sole discretion shall make.
The Underwriters may exercise the option to purchase the
Option Shares at any time (but not more than once) on or before the thirtieth
day following the date of this Agreement, by written notice from the
Representative to the Company. Such notice shall set forth the aggregate number
of Option Shares as to which the option is being exercised and the date and time
when the Option Shares are to be delivered and paid for which may be the same
date and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing
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Date nor later than ten full Business Days (as hereinafter defined) after the
date of such notice (unless such time and date are postponed in accordance with
the provisions of Section 9 hereof). Any such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. The Company understands that the Underwriters intend (i) to
make a public offering of the Shares as soon as in the
judgment of the Representative is advisable after the parties
hereto have executed and delivered this Agreement and (ii)
initially to offer the Shares upon the terms set forth in the
Prospectus.
3. Payment for the Shares shall be made by wire transfer in
immediately available funds to the account specified by the
Company to the Representative, in the case of the Underwritten
Shares, at 10:00 a.m. EST on December 7, 2001, or at such
other time on the same or such other date, not later than the
fifth Business Day thereafter, as the Representative and the
Company may agree upon in writing or, in the case of the
Option Shares, on the date and time specified by the
Representative in the written notice of the Underwriters'
election to purchase such Option Shares. The time and date of
such payment for the Underwritten Shares are referred to
herein as the "Closing Date" and the time and date for such
payment for the Option Shares, if other than the Closing Date,
are referred to herein as the "Additional Closing Date". As
used herein, the term "Business Day" means any day other than
a day on which banks are permitted or required to be closed in
New York City.
Payment for the Shares to be purchased on the Closing Date or
the Additional Closing Date, as the case may be, shall be made against delivery
to the Representative for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representative shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The issuance and
delivery of the Shares shall be executed electronically on the Closing Date or
the Additional Closing Date, as the case may be.
4. The Company represents and warrants to each Underwriter
that:
(a) the Company meets the requirements for use of
Form S-3 under the Securities Act; no order
preventing or suspending the use of any prospectus
has been issued by the Commission, and each
supplemental prospectus filed as part of the
Registration Statement as originally filed or as part
of any amendment thereto, or filed pursuant to Rule
424 under the Securities Act, complied when so filed
in all material respects
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with the Securities Act and did not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading; provided that this representation and
warranty shall not apply to any statements in or
omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity
with information relating to any Underwriter or the
distribution of the Shares furnished to the Company
in writing by such Underwriter through the
Representative expressly for use therein;
(b) no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceeding for that purpose has been instituted or,
to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company
shall have filed or furnished, as the case may be,
any amendments or supplements thereto, including the
Prospectus Supplement) comply, or will comply, as the
case may be, in all material respects with the
Securities Act and did not and will not, as of the
applicable effective date as to the Registration
Statement and any amendment thereto and as of the
date of the Prospectus and any amendment or
supplement thereto (including the Prospectus
Supplement), contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary to make
the statements therein not misleading, and the
Prospectus, as amended or supplemented, if
applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue
statement of a material fact or omit to state a
material fact necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading; provided that the
foregoing representations and warranties shall not
apply to statements in or omissions from the
Registration Statement or the Prospectus made in
reliance upon and in conformity with information
relating to any Underwriter or the distribution of
the Shares furnished to the Company in writing by
such Underwriter through the Representative expressly
for use therein;
(c) the documents incorporated by reference in the
Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in
all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder, and none of such documents contained any
untrue statement of a material fact or omitted to
state any
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material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading; and any further documents so filed and
incorporated by reference in the Prospectus during
the Distribution Period (as hereinafter defined),
when such documents become effective or are filed
with Commission, as the case may be, will conform in
all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission
thereunder and will not contain any untrue statement
of a material fact or omit to state any material fact
required to be stated therein or necessary to make
the statements therein not misleading.
(d) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation,
is duly qualified to do business and is in good
standing as a foreign corporation in each
jurisdiction in which its ownership or lease of
property or the conduct of its business requires such
qualification, and has all power and authority
necessary to own or hold its properties and to
conduct the business in which it is engaged, except
where the failure to so qualify or have such power or
authority would not have, singularly or in the
aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations,
business or prospects of the Company (a "Material
Adverse Effect"). The Company does not own or
control, directly or indirectly, any corporations,
associations or other entities.
(e) This Agreement has been duly authorized, executed
and delivered by the Company.
(f) The Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and
validly authorized and, when issued and delivered
against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable
and free of any preemptive or similar rights and will
conform to the description thereof contained in the
Prospectus.
(g) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued
shares of capital stock of the Company, including the
Shares when issued and delivered in accordance with
this Agreement, have been duly and validly authorized
and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus.
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(h) The execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the
terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which
the Company is a party or by which the Company is
bound or to which any of the property or assets of
the Company is subject, nor will such actions result
in any violation of the provisions of the charter or
by-laws of the Company or any statute or any order,
rule or regulation of any court or governmental
agency or body having jurisdiction over the Company
or any of its properties or assets.
(i) Except for the registration of the Shares under
the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable
state securities laws and rules and regulations of
the National Association of Securities Dealers, Inc.
("NASD") in connection with the purchase and
distribution of the Shares by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any such court or
governmental agency or body is required for the
execution, delivery and performance of this Agreement
by the Company and the consummation of the
transactions contemplated hereby.
(j) Ernst & Young LLP, who have expressed their
opinions on the audited financial statements and
related schedules included or incorporated by
reference in the Registration Statement and the
Prospectus are independent public accountants as
required by the Securities Act.
(k) The financial statements, together with the
related notes and schedules, included or incorporated
by reference in the Prospectus and in the
Registration Statement fairly present the financial
position and the results of operations and changes in
financial position of the Company at the respective
dates or for the respective periods therein
specified. Such statements and related notes and
schedules have been prepared in accordance with
generally accepted accounting principles applied on a
consistent basis except as may be set forth in the
Prospectus.
(l) The Company has not sustained, since the date of
the latest audited financial statements included or
incorporated by reference in the Prospectus, any
material loss or interference with its business from
fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute
or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Prospectus;
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and, since such date, there has not been any material
change in the capital stock or long-term debt of the
Company or any material adverse change, or any
development involving a prospective material adverse
change, in or affecting the business, general
affairs, management, financial position,
stockholders' equity or results of operations of the
Company (a "Material Adverse Change"), otherwise than
as set forth or contemplated in the Prospectus.
(m) Except as set forth in the Prospectus, there is
no legal or governmental proceeding pending to which
the Company is a party or of which any property or
assets of the Company is the subject which,
singularly or in the aggregate, if determined
adversely to the Company, might have a Material
Adverse Effect or would prevent or adversely affect
the ability of the Company to perform its obligations
under this Agreement; and to the best of the
Company's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others.
(n) The Company (i) is not in violation of its
charter or by-laws, (ii) is not in default in any
respect, and no event has occurred which, with notice
or lapse of time or both, would constitute such a
default, in the due performance or observance of any
term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party
or by which it is bound or to which any of its
property or assets is subject and (iii) is not in
violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to
which it or its property or assets may be subject
except, with respect to clauses (ii) and (iii), any
violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(o) The Company possesses such permits, licenses,
approvals, consents and other authorizations
(including licenses, pharmacy licenses, accreditation
and other similar documentation or approvals of any
local health departments) (collectively,
"Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies
or bodies, including, without limitation, the United
States Food and Drug Administration ("FDA"),
necessary to conduct the business now operated by it;
the Company is in compliance with the terms and
conditions of all such Governmental Licenses and all
applicable FDA rules and regulations, guidelines and
policies, except where the failure so to comply could
not reasonably be expected to, singularly or in the
aggre-
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gate, result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and
effect, except where the invalidity of such
Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect
could not reasonably be expected to result in a
Material Adverse Effect; and the Company has not
received any notice of proceedings relating to the
revocation or modification of any such Governmental
Licenses which, singularly or in the aggregate, if
the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to result in a
Material Adverse Effect.
(p) The Company owns or possesses adequate patents,
patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or
confidential information, systems or procedures),
trademarks, service marks, trade names or other
intellectual property, including, without limitation,
all of the intellectual property described in the
Prospectus as being owned or licensed by the Company
(collectively, "Intellectual Property"), necessary to
carry on the business now operated by it. Except as
set forth in the Prospectus (exclusive of any
amendments thereto after the date hereof), no valid
U.S. patent is, or to the knowledge of the Company
would be, infringed by the activities of the Company
in the manufacture, use, offer for sale or sale of
any product or component thereof as described in the
Prospectus. The patent applications (the "Patent
Applications") filed by or on behalf of the Company
described in the Prospectus have been properly
prepared and filed on behalf of the Company; except
as set forth in the Prospectus (exclusive of any
amendments thereto after the date hereof) each of the
Patent Applications and patents (the "Patents")
described in the Prospectus is assigned or licensed
to the Company, and, except as set forth in the
Prospectus (exclusive of any amendments thereto after
the date hereof), no other entity or individual has
any right or claim in any Patent, Patent Application
or any patent to be issued therefrom; and, to the
knowledge of the Company, each of the Patent
Applications discloses potentially patentable subject
matter. There are no actions, suits or judicial
proceedings pending relating to patents or
proprietary information to which the Company is a
party or of which any property of the Company is
subject and the Company has not received any notice
and is not otherwise aware of any infringement of or
conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or
circumstances which could render any Intellectual
Property invalid or inadequate to protect the
interest of the Company therein, and which
infringement or conflict (if the subject of any
unfavorable decision, ruling
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or finding) or invalidity or inadequacy, singly or in
the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
(q) The human clinical trials conducted by the
Company or in which the Company has participated
relating to ranolazine and CVT-510 and CVT-3146 that
are described in the Prospectus, or the results of
which are referred to in the Prospectus, if any, are
the only human clinical trials currently being
conducted by or on behalf of the Company, and, to the
best of the Company's knowledge, such studies and
tests were and, if still pending, are being,
conducted in accordance with experimental protocols,
procedures and controls pursuant to accepted
professional scientific standards; the descriptions
of the results of such studies, tests and trials
contained in the Prospectus, if any, are accurate and
complete in all material respects. The Company has no
knowledge of any other studies or tests, the results
of which call into question the results of the
clinical trials described in the Prospectus. The
Company has not received any notices or
correspondence from the FDA or any other governmental
agency requiring the termination, suspension or
modification of any clinical trials conducted by, or
on behalf of, the Company or in which the Company has
participated that are described in the Prospectus, if
any, or the results of which are referred to in the
Prospectus. All human clinical trials previously
conducted by or on behalf of the Company while
conducted by or on behalf of the Company, were
conducted in accordance with experimental protocols,
procedures and controls pursuant to accepted
professional scientific standards; the descriptions
of the results of such studies, tests and trials
contained in the Prospectus, if any, are accurate and
complete in all material respects.
(r) The Company is not and, after giving effect to
the offering of the Shares and the application of the
proceeds thereof as described in the Prospectus, will
not become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended
(the "Investment Company Act") and the rules and
regulations of the Commission thereunder.
(s) Neither the Company nor any of its officers,
directors or affiliates has taken or will take,
directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted
in, or which might in the future reasonably be
expected to cause or result in, stabilization or
manipulation of the price of any security of the
Company.
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(t) The Company has good and marketable title in fee
simple to, or has valid rights to lease or otherwise
use, all items of real or personal property which are
material to the business of the Company, in each case
free and clear of all liens, encumbrances, claims and
defects that may result in a Material Adverse Effect.
(u) No labor disturbance by the employees of the
Company exists or, to the best of the Company's
knowledge, is imminent which might be expected to
have a Material Adverse Effect. The Company is not
aware that any key employee or significant group of
employees of the Company plans to terminate
employment with the Company.
(v) No "prohibited transaction" (as defined in
Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the
"Code")) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been
waived) has occurred with respect to any employee
benefit plan which could have a Material Adverse
Effect; each employee benefit plan is in compliance
in all material respects with applicable law,
including ERISA and the Code; the Company has not
incurred and does not expect to incur liability under
Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan"; and each
"pension plan" (as defined in ERISA) for which the
Company would have any liability that is intended to
be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has
occurred, whether by action or by failure to act,
which could cause the loss of such qualifications.
(w) There has been no storage, generation,
transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of
toxic or other wastes or other hazardous substances
by, due to, or caused by the Company (or, to the best
of the Company's knowledge, any other entity for
whose acts or omissions the Company is or may be
liable) upon any of the property now or previously
owned or leased by the Company, or upon any other
property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree
or permit or which would, under any statute or any
ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give
rise
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to any liability, except for any violation or
liability which would not have, singularly or in the
aggregate with all such violations and liabilities, a
Material Adverse Effect; there has been no disposal,
discharge, emission or other release of any kind onto
such property or into the environment surrounding
such property of any toxic or other wastes or other
hazardous substances with respect to which the
Company has knowledge, except for any such disposal,
discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate
with all such discharges and other releases, a
Material Adverse Effect.
(x) The Company (i) has filed all necessary federal,
state and foreign income and franchise tax returns or
has duly requested extensions thereof, (ii) has paid
all federal, state, local and foreign taxes due and
payable for which it is liable, except to the extent
that any such taxes are being contested in good faith
and by appropriate proceedings, and (iii) does not
have any tax deficiency or claims outstanding or
assessed or, to the best of the Company's knowledge,
proposed against it which, in each of the cases
described in clauses (i), (ii) and (iii), could
reasonably be expected to have a Material Adverse
Effect.
(y) The Company is subject to and in compliance with
the reporting requirements of Section 13 or Section
15(d) of the Exchange Act. The Common Stock is
registered pursuant to Section 12(g) of the Exchange
Act and is listed on the Nasdaq National Market, and
the Company has taken no action designed to, or
likely to have the effect of, terminating the
registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq
National Market, nor has the Company received any
notification that the Commission or the NASD is
contemplating terminating such registration or
listing.
(z) The Company carries, or is covered by, insurance
in such amounts and covering such risks as is
adequate for the conduct of its businesses and the
value of its properties and as is customary for
companies engaged in similar businesses in similar
industries.
(aa) The Company maintains a system of internal
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
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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.
(bb) The minute books of the Company have been made
available to the Underwriters and counsel for the
Underwriters, and such books (i) contain a complete
summary of all meetings and actions of the directors
and stockholders of the Company since the time of its
respective incorporation through the date of the
latest meeting and action, and (ii) accurately in all
material respects reflect all transactions referred
to in such minutes.
(cc) There is no franchise, lease, contract,
agreement or document required by the Securities Act
to be described in the Prospectus or to be filed as
an exhibit to the Registration Statement which is not
described or filed or incorporated by reference
therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or
documents contained or incorporated by reference in
the Registration Statement are accurate and fair
descriptions of such documents in all material
respects.
(dd) No relationship, direct or indirect, exists
between or among the Company on the one hand, and the
directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is
required to be described in the Prospectus and which
is not so described.
(ee) No person or entity has the right to require
registration of shares of Common Stock or other
securities of the Company because of the filing or
effectiveness of the Registration Statement, except
for persons and entities who have expressly waived
such right or who have been given proper notice and
have failed to exercise such right within the time or
times required under the terms and conditions of such
right.
(ff) The Company does not own any "margin securities"
as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System (the
"Federal Reserve Board"), and none of the proceeds of
the sale of the Shares will be used, directly or
indirectly, for the purpose of purchasing or carrying
any margin security, for the purpose of reducing or
retiring any indebtedness which was originally
incurred to purchase or carry any margin security or
for any other purpose which might cause any of the
Shares to be considered a "purpose credit" within the
meanings of Regulation T, U or X of the Federal
Reserve Board.
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(gg) The Company is not a party to any contract,
agreement or understanding with any person that would
give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder's fee
or like payment in connection with the offering and
sale of the Shares.
(hh) No forward-looking statement (within the meaning
of Section 27A of the Securities Act and Section 21E
of the Exchange Act) contained in the Prospectus has
been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
(ii) The Company has not distributed and, prior to
the later of (i) the Closing Date and (ii) the
completion of the distribution of the Shares, will
not distribute any written offering material in
connection with the offering and sale of the Shares
other than the Registration Statement or any
amendment thereto, or the Prospectus or any amendment
or supplement thereto, or other materials, if any,
permitted by the Securities Act.
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to file the final Prospectus with the Commission
within the time period specified by Rule 424(b) under
the Securities Act and to file promptly all reports
and any definitive proxy or information statements
required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a
prospectus is required in connection with the
offering or sale of the Shares; and to furnish copies
of the Prospectus to the Underwriters in New York
City prior to 10:00 a.m., New York City time, on the
Business Day next succeeding the date of this
Agreement in such quantities as the Representative
may reasonably request;
(b) to deliver, at the expense of the Company, to the
Representative signed copies of the Registration
Statement (as originally filed) and each amendment
thereto, in each case including exhibits and
documents incorporated by reference therein, and to
each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each
amendment thereto, in each case without exhibits but
including the documents incorporated by reference
therein and, during the period mentioned in paragraph
(e) below, to each of the Underwriters as many copies
of the Prospectus (including all amendments and
supple-
- 14 -
ments thereto) and documents incorporated by
reference therein as the Representative may
reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus during the
Distribution Period, to furnish to the Representative
a copy of the proposed amendment or supplement for
review and not to file any such proposed amendment or
supplement to which the Representative reasonably and
timely object;
(d) to advise the Representative promptly, and to
confirm such advice in writing, of any of the
following occurrences during the Distribution Period:
(i) when any amendment to the Registration Statement
has been filed or becomes effective, (ii) when any
supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the
Representative with copies thereof, (iii) of any
request by the Commission for any amendment to the
Registration Statement or any amendment or supplement
to the Prospectus or for any additional information,
(iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the
Registration Statement or of any order preventing or
suspending the use of the Prospectus or any
supplemental prospectus or the initiation or, to the
Company's knowledge, threatening of any proceeding
for that purpose, (v) of the occurrence of any event,
as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of
a material fact or omit to state any material fact
necessary in order to make the statements therein, in
light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, and (vi) of
the receipt by the Company of any notification with
respect to any suspension of the registration or
qualification of the Shares for offer and sale in any
jurisdiction or the initiation or, to the Company's
knowledge, threatening of any proceeding for such
purpose, and to use its best efforts to prevent the
issuance of any such stop order, or of any order
preventing or suspending the use of the Prospectus or
any supplemental prospectus, or of any order
suspending any such registration or qualification of
the Shares, or notification of any such order thereof
and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) if, during such period of time after the first
date of the public offering of the Shares a
prospectus relating to the Shares is required by law
to be delivered in connection with sales by the
Underwriters or any dealer (the "Distribution
Period"), any event shall occur as a result of which
it is necessary to amend or supplement the Prospectus
in order to
- 15 -
make the statements therein, in light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with
applicable law, the Company shall use its best
efforts forthwith to prepare and furnish, at the
expense of the Company, to the Underwriters and to
the dealers (whose names and addresses the
Representative will furnish to the Company) to which
Shares may have been sold by the Representative on
behalf of the Underwriters and to any other dealers
upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements
in the Prospectus as so amended or supplemented will
not, in light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading
or so that the Prospectus will comply with law; (f)
to endeavor to register or qualify the Shares for
offer and sale under the securities or blue sky laws
of such jurisdictions as the Representative shall
reasonably request and to continue such registration
or qualification in effect so long as reasonably
required for distribution of the Shares; provided
that the Company shall not be required to file a
general consent to service of process in any such
jurisdiction or to qualify as a foreign corporation
in any jurisdiction in which it is not so qualified;
(g) to make generally available to its security
holders, including holders of the Shares, as soon as
practicable an earnings statement covering a period
of at least twelve months beginning not later than
the first fiscal quarter of the Company occurring
after the date hereof, which shall satisfy the
provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder; provided, however,
that to the extent such earnings statement is
publicly available via XXXXX, such earnings statement
shall be deemed to have been made generally
available;
(h) so long as the Shares are outstanding, to furnish
to the Representative copies of all reports or other
communications (financial or other) furnished to
holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the
Commission or any national securities exchange;
provided, however, that to the extent such reports
and financial statements are publicly available via
XXXXX, such copies need not be furnished;
(i) for a period of 90 days from the date of the
Prospectus, not to directly or indirectly (i) offer,
pledge, announce the intention to sell,
- 16 -
sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, 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 or (ii) enter into any
swap, option, future, forward or other agreement that
transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock,
whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise
without the prior written consent of X.X. Xxxxxx
Securities Inc., which shall not be unreasonably
withheld, other than (i) the Shares to be sold
hereunder (ii) any shares of Common Stock of the
Company issued upon the conversion of any convertible
debentures or convertible preferred stock or the
exercise of options, warrants and rights outstanding
on the date of the Prospectus, (iii) options or
rights granted or stock issued and sold under
existing employee stock purchase or option plans or
the issuance of any rights thereunder by the Company,
(iv) pursuant to the Company's equity line of credit
under the Amended and Restated Common Stock Purchase
Agreement, dated as of August 7, 2000, between the
Company and Acqua Wellington North American Equities
Fund, Ltd., or (v) pursuant to the First Amended and
Restated Investor Rights Agreement, dated July 19,
2000, between the Company and Xxxxx Fargo Bank
Minnesota, N.A.;
(j) to use the net proceeds received by the Company
from the sale of the Shares pursuant to this
Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) to use its best efforts to list, subject to
notice of issuance, the Shares on the Nasdaq National
Market (the "Nasdaq National Market"); and
(l) whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is
terminated, to pay or cause to be paid all reasonable
costs and expenses incident to the performance of its
obligations hereunder, including without limiting the
generality of the foregoing, all costs and expenses
(i) incident to the preparation, issuance, execution
and delivery of the Shares, (ii) incident to the
preparation, printing and filing under the Securities
Act of the Registration Statement, the Prospectus and
any supplemental prospectus (including in each case
all exhibits, amendments and supplements thereto),
(iii) incurred in connection with the registration or
qualification of the
- 17 -
Shares under the securities or blue sky laws of such
jurisdictions in the United States as the
Representative may reasonably designate (including
fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing
of the Shares on the Nasdaq National Market, (v)
expenses related to any filing with the NASD (vi) in
connection with the printing (including word
processing and duplication costs) and delivery of
this Agreement, any blue sky survey and the
furnishing to the Underwriters and dealers of copies
of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided,
(vii) any expenses incurred by the Company in
connection with a "road show" presentation to
potential investors, (viii) the cost of preparing
stock certificates and (ix) the cost and charges of
any transfer agent and any registrar; provided that,
except as otherwise provided herein, the Underwriters
shall pay their own costs and expenses including the
fees and expenses of their counsel and any transfer
taxes on the Shares which they may sell and the
expenses of advertising any offering of the Shares
made by the Underwriters.
6. The several obligations of the Underwriters hereunder to
purchase the Shares on the Closing Date or the Additional
Closing Date, as the case may be, are subject to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) no stop order suspending the effectiveness of the
Registration Statement or any post-effective
amendment shall be in effect, and no proceedings for
such purpose shall be pending before or, to the
Company's knowledge, threatened by the Commission;
the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by
the rules and regulations under the Securities Act
and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been
complied with to the satisfaction of the
Representative;
(b) the representations and warranties of the Company
contained herein are true and correct in all material
respects on and as of the Closing Date or the
Additional Closing Date, as the case may be, as if
made on and as of the Closing Date or the Additional
Closing Date, as the case may be, and the Company
shall have complied in all material respects with all
agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the
Closing Date or the Additional Closing Date, as the
case may be;
- 18 -
(c) since the respective dates as of which
information is given in the Prospectus the Company
has not issued or reacquired any long-term debt and
there has not been any Material Adverse Change,
otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the judgment of
the Representative makes it impracticable or
inadvisable to proceed with the public offering or
the delivery of the Shares on the Closing Date or the
Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the
Prospectus; and the Company has not sustained since
the date of the latest audited financial statements
included or incorporated by reference in the
Prospectus any material loss or interference with its
business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth
or contemplated in the Prospectus which would
reasonably be expected to result in a Material
Adverse Effect;
(d) the Representative shall have received on and as
of the Closing Date or the Additional Closing Date,
as the case may be, a certificate of two executive
officers of the Company, one of which with specific
knowledge about the Company's financial matters,
satisfactory to the Representative to the effect set
forth in subsections (a) through (c) (with respect to
the respective representations, warranties,
agreements and conditions of the Company) of this
Section 6 and to the further effect that there has
not occurred any Material Adverse Change, from that
set forth or contemplated in the Registration
Statement;
(e) Xxxxxx & Xxxxxxx, counsel for the Company, shall
have furnished to the Underwriters their written
opinion, dated the Closing Date or the Additional
Closing Date, as the case may be, in form and
substance satisfactory to the Representative, in
substantially the form attached hereto as Exhibit A.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of Delaware and California, to the extent
such counsel deems proper and to the extent specified in such opinion,
if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of the
Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. The opinion of such counsel
for the Company shall state
- 19 -
that the opinion of any such other counsel upon which they relied is in
form satisfactory to such counsel and, in such counsel's opinion, the
Underwriters and they are justified in relying thereon. With respect to
the matters to be covered in subparagraph (ix) above, counsel may state
that their opinion and belief is based upon their participation in the
preparation of the Registration Statement and the Prospectus and any
amendment or supplement thereto and review and discussion of the
contents thereof including the documents incorporated by reference
therein but is without independent check or verification except as
specified.
The opinion of Xxxxxx & Xxxxxxx described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(f) XxXxxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx, special
patent counsel for the Company, shall each have
furnished to the Underwriters their written opinion,
dated the Closing Date or the Additional Closing
Date, as the case may be, in form and substance
satisfactory to the Representative, in substantially
the form attached hereto as Exhibit B:
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company.
The opinion of XxXxxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx described
above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(g) Xxxxxx Xxxxx Suvari, General Counsel for the
Company, shall have furnished to the Underwriters her
written opinion, dated the Closing Date or the
Additional Closing Date, as the case may be, in form
and substance satisfactory to the Representative, in
substantially the form attached hereto as Exhibit C.
The opinion of Xxxxxx Xxxxx Suvari described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein.
(h) on the date of this Agreement and also on the
Closing Date or Additional Closing Date, Ernst &
Young LLP shall have furnished to the Underwriters
letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you,
containing statements and information of the type
customarily included in accountants' "comfort
letters" to underwriters with respect to the
financial statements and certain financial
information contained in the Registration Statement
and the Prospectus;
- 20 -
(i) the Underwriters shall have received on and as of
the Closing Date or Additional Closing Date, as the
case may be, an opinion of Xxxxxx Xxxxxx & Xxxxxxx,
counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Shares, the
Registration Statement, the Prospectus and other
related matters as the Representative may reasonably
request, and such counsel shall have received such
papers and information as they may reasonably request
to enable them to pass upon such matters;
(j) the Shares to be delivered on the Closing Date or
Additional Closing Date, as the case may be, shall
have been approved for listing on the Nasdaq National
Market, subject only to official notice of issuance;
(k) on or prior to the Closing Date or Additional
Closing Date, as the case may be, the Company shall
have furnished to the Representative such further
certificates and documents as the Representative
shall reasonably request;
(l) the "lock-up" agreements, each substantially in
the form of Exhibit D hereto, between you on the one
hand and each of the executive officers and directors
of the Company, on the other hand, relating to sales
and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you
on or before the date hereof, shall be in full force
and effect on the Closing Date or Additional Closing
Date, as the case may be.
7. The Company agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists
such Underwriter in the distribution of the Shares and each
person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without
limitation, the legal fees and other expenses reasonably
incurred in connection with any suit, action or proceeding or
any claim asserted) insofar as such losses, claims, damages or
liabilities are (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto) or (ii) caused by any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, provided in any case that
the Company shall not be liable to the extent that such
losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or
- 21 -
omission made in reliance upon and in conformity with
information relating to any Underwriter or the distribution of
the Shares furnished to the Company in writing by such
Underwriter through the Representative expressly for use
therein.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to information relating to such Underwriter or the
distribution of the Shares furnished to the Company in writing by such
Underwriter through the Representative expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the
reasonable fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm (in addition to any
local counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Underwriters, each affiliate of any Underwriter which assists such Underwriter
in the distribution of the Shares and such control persons of Underwriters shall
be designated in writing by X.X. Xxxxxx Securities Inc. and any such separate
firm for the Company, its directors, its officers who sign the Registration
Statement and such control persons of the Company shall be designated in writing
by the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent (not to be unreasonably
withheld), but if settled with such consent or if there be a final judgment for
the plaintiff in any such action, the Indemnifying Person agrees to indemnify
- 22 -
and hold harmless any Indemnified Person from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
Indemnifying Person 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 45 days after receipt by such Indemnifying Person of the
aforesaid request and (ii) such Indemnifying Person shall not have reimbursed
the Indemnified Person in accordance with such request prior to the date of such
settlement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first or second
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, 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 shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts received by the Underwriters, in each case as set forth
in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. 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 the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purposes) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately
- 23 -
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. 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 7 are several in proportion to the
respective number of Shares set forth opposite their names in Schedule I hereto,
and not joint.
The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any other person controlling
the Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement
(or the obligations of the several Underwriters with respect
to the Option Shares) may be terminated in the absolute
discretion of the Representative, by notice given to the
Company, if after the execution and delivery of this Agreement
and prior to the Closing Date (or, in the case of the Option
Shares, prior to the Additional Closing Date) (i) trading
generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange
or the American Stock Exchange or the Nasdaq National Market
(ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market,
(iii) a general moratorium on commercial banking activities in
New York shall have been declared by either federal or New
York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the
judgment of the Representative, is material and adverse and
which, in the judgment of the Representative, makes it
impracticable to market the Shares being delivered at the
Closing Date or the Additional Closing Date,
- 24 -
as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon execution and
delivery hereof by the parties hereto.
If on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they have agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Underwritten Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representative
may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter or Underwriters shall fail or refuse
to purchase Shares which it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date, and arrangements satisfactory to the Representative and the
Company for the purchase of such Shares are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Shares, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date (or, in the case of the Option Shares, the Additional Closing Date), but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part
of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations
cannot be fulfilled (through no fault or failure of the
Underwriters), the Company agrees to reimburse the
Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all
out-of-pocket ex-
- 25 -
penses (including the fees and expenses of its counsel)
reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated hereunder and upon
demand the Company shall pay the full amount thereof to the
Representative.
11. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, each affiliate of
any Underwriter which assists such Underwriter in the
distribution of the Shares, directors and officers of the
Company any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed
to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. No purchaser of
Shares from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by
the Representative alone on behalf of the Underwriters, and
any such action taken by the Representative alone shall be
binding upon the Underwriters. All notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the
Underwriters shall be given to the Representative, c/o X.X.
Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (telefax: 212-648-5552); Attention: Syndicate
Department. Notices to the Company shall be given to it at
0000 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000; Attention:
General Counsel (telefax: 000-000-0000) with a copy to Xxxx X.
Xxxxxxxxx, Xxxxxx & Xxxxxxx, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000 (telefax: 650-463-2600).
13. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall
constitute one and the same instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF
15. 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.
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16. 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. In
this Agreement, the masculine, feminine and neuter genders and
the singular and plural include one another. This Agreement
may be amended or modified, and the observance of any term of
this Agreement may be waived, only by a writing signed by the
Company and the Representative.
[Signature Pages Follow]
If the foregoing is in accordance with your understanding,
please sign and return four counterparts hereof.
Very truly yours,
CV THERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Name: Xxxxx X. Xxxxx, M.D., Ph.D.
Title: Chairman and CEO
Accepted as of the date first written above:
X.X. XXXXXX SECURITIES INC.
Acting on behalf of itself and
the Underwriters listed
in Schedule I hereto.
By: X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
SCHEDULE I
Number of Shares
Underwriter To Be Purchased
----------- ---------------
X.X. Xxxxxx Securities Inc....................................................... 812,500
Xxxxxxxxx Xxxxxxxx, Inc.......................................................... 812,500
Bear, Xxxxxxx & Co. Inc.......................................................... 160,000
CIBC World Markets Corp.......................................................... 160,000
Xxxxxx Xxxxxxx & Co. Incorporated................................................ 160,000
XX Xxxxx Securities Corporation.................................................. 160,000
U.S. Bancorp Xxxxx Xxxxxxx Inc................................................... 160,000
First Albany Corporation......................................................... 75,000
Total............................................ 2,500,000
EXHIBIT A
[Form of Opinion of Xxxxxx & Xxxxxxx]
1. The Company is a corporation, and is validly existing and
in good standing under the DGCL, with corporate power and
authority to own its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
Based on certificates from public officials, we confirm that
the Company is qualified to do business in the State of
California.
2. The Shares to be issued and sold by the Company pursuant to
the Underwriting Agreement have been duly authorized by all
necessary corporate action of the Company and, when issued to
and paid for by you and the other Underwriters in accordance
with the terms of the Underwriting Agreement, will be validly
issued, fully paid and non-assessable and free of preemptive
rights arising from the Governing Documents.
3. The execution, delivery and performance of the Underwriting
Agreement has been duly authorized by all necessary corporate
action of the Company, and the Underwriting Agreement has been
duly executed and delivered by the Company.
4. The execution and delivery of the Underwriting Agreement
and the issuance and sale of the Shares by the Company
pursuant to the Underwriting Agreement on the date hereof do
not:
(i) violate the Company's Governing Documents; or
(ii) violate the DGCL or any federal or California
statute, rule or regulation applicable to the Company; or
(iii) require any consents, approvals,
authorizations, registrations, declarations or filings by the
Company under the DGCL or any federal or California statute,
rule or regulation applicable to the Company, except such as
have been obtained under the Act and such as may be required
under state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters.
No opinion is expressed in this paragraph 4 as to the
application of Section 548 of the Federal Bankruptcy Code and
comparable provisions of state law, or under other
- 2 -
laws customarily excluded from such opinions, including federal
securities laws (certain aspects of which are expressly addressed
elsewhere herein), state securities laws, antifraud laws, antitrust or
trade regulation laws or ERISA or similar laws.
5. The Registration Statement has become effective under the
Act. To the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been
issued under the Act and no proceedings therefor have been
initiated by the Commission. Any required filing of the
Prospectus and the Prospectus Supplement pursuant to Rule 424
under the Act has been made in accordance with Rule 424 and
430A under the Act.
6. The Registration Statement, as of the date it was declared
effective, and the Prospectus, as of the date of the
Prospectus Supplement, complied as to form in all material
respects with the requirements for registration statements on
Form S-3 under the Act and the rules and regulations of the
Commission thereunder; it being understood, however, that we
express no opinion with respect to the financial statements,
schedules, other financial data, or exhibits included in,
incorporated by reference in, or omitted from, the
Registration Statement or the Prospectus. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, we have assumed that the statements made therein
are correct and complete.
7. The statements in the Prospectus under the caption
"Description of Common Stock," insofar as they purport to
constitute a summary of the terms of the Common Stock, and
under the caption "Underwriting," insofar as they purport to
describe or summarize certain provisions of the agreements,
statutes or regulations referred to therein, are accurate
descriptions or summaries in all material respects.
8. The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
In addition, we have participated in conferences with officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, and your representatives, at which the
contents of the Registration Statement, the Prospectus, the Incorporated
Documents and related matters were discussed and, although we are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained or incorporated by reference in the
Registration Statement, the Prospectus or the Incorporated Documents and have
not made any independent check or verification thereof, during the course of
such participation, no facts came to our attention that caused us to believe
that the Registration Statement, at the time it became effective, or the
Incorporated Documents, as of the date of their respective filing, contained an
un-
- 3 -
true 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 (including the Incorporated Documents), as of the date of
the Prospectus Supplement or as of the date hereof, contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; it being understood that we express no belief with
respect to the financial statements, schedules, other financial data, or
exhibits included or incorporated by reference in, or omitted from, the
Registration Statement or the Prospectus.
EXHIBIT B
[Form of Opinion of XxXxxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx]
We have reviewed certain portions of the Registration Statement (File
No. 333-5202) of the Company filed with the Securities and Exchange Commission
on January 4, 2001 (the "Registration Statement") and the Prospectus of the
Company dated January 16, 2001 (the "Prospectus") and the documents incorporated
by reference therein, including the statements in the Company's Annual Report on
Form 10-K for the period ended December 31, 2000 under the caption "Patents and
Proprietary Technology" and in the sections of the Form 10-K for the period
ended December 31, 2000, and/or the Form 10-Q for the period ended June 30,
2001, under the captions:
- "Risk Factors - Our business depends on attracting and retaining
collaborators and licensors,"
- "Risk Factors - We may be unable to effectively protect our intellectual
property,"
- "Risk Factors - If we are unable to attract and retain collaborators,
licensors and licensees, the development of our products could be
delayed and our future capital requirements could increase
substantially,"
- "Risk Factors - If we are unable to effectively protect our intellectual
property, we may be unable to complete development of any products and
we may be put at a competitive disadvantage; and if we are involved in
an intellectual property rights dispute, we may not prevail and may be
subject to significant liabilities or required to license rights from a
third party,"
- "Business - Collaborations and Licenses," and
- "Business - Patents and Proprietary Technology"
(collectively, the "Patents Paragraphs"). Insofar as the statements contained in
the Patent Paragraphs are related to any Intellectual Property owned, licensed,
or otherwise employed by the Company, they are accurate and complete and fairly
presented in the information set forth therein. We are not opining on and have
not verified accuracy and/or completeness of any other statements in the
Registration Statement and Prospectus.
-2-
We have no reason to believe that the information contained or
incorporated by referenced in the Registration Statement, in the Prospectus at
the time the Prospectus was filed, at the time any amended or supplemented
Prospectus was filed or at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statement therein, in the light of the
circumstances under which they were made, not misleading.
Based on and strictly subject to the foregoing, we are of the opinion that:
(i) To the extent of our knowledge, the Company owns, or possesses
rights to all Intellectual Property currently employed by them in
connection with the business now operated by them except where the failure
to own or possess or otherwise be able to acquire such Intellectual
Property could not, singly or in the aggregate, have a Material Adverse
Effect (as defined in the Underwriting Agreement).
(ii) Based upon a review of the third party rights made known to us
and discussions with scientific personnel of the Company, we are not aware
of any valid United States or foreign patent, that is or would be
infringed by the activities of the Company in the manufacture, use or sale
of any presently proposed product, the technologies employed by the
Company or the method of their use in any presently proposed product, each
as described in the Prospectus and as such are related to the foregoing
technology and products.
(iii) We have reviewed the Company patent applications which are
identified in the Patent Schedule included with this letter, and in our
opinion the Company's patent applications have been properly prepared and
filed, and are being diligently pursued by the Company, and the inventions
described in the Company patent applications are owned by, have been
assigned to or are licensed to the Company.
(iv) To our knowledge except as disclosed in the Prospectus no party
or individual has any right or claim in any of the inventions, patents or
patent applications listed in the Patent Schedule and to the best of our
knowledge each of the Company's patent applications discloses patentable
subject matter.
-3-
(v) To the best of our knowledge, the Company is not infringing or
otherwise violating any Intellectual Property of others, unless otherwise
disclosed in the Prospectus. To the best of our knowledge, the Company has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any Intellectual Property.
(vi) We know of no legal or governmental proceedings that are
pending or, to the best of our knowledge, that are threatened, relating to any
Intellectual Property, except (A) as disclosed in the Prospectus or (B) which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, could have a Material Adverse Effect. Furthermore, we believe that
the Company is entitled to seek an extension of the term of the Ranolazine
patent (U.S. Patent No. 4,567,264) that can extend the patent term for up to
five years beyond its current expiration date pursuant to the Xxxxx-Xxxxxx Act.
EXHIBIT C
[Form of Opinion of Xxxxxx Xxxxxx General Counsel for the Company]
1. The issuance and sale of the Shares by the Company pursuant to the
Underwriting Agreement will not result in the breach of or any default
under any indentures, notes, loan agreements, mortgages, deeds of
trust, security agreements and other written agreements and instruments
creating, evidencing or securing indebtedness of the Company for
borrowed money that are listed as exhibits to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 or the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2001, June 30, 2001 or September 30, 2001 (collectively, the
"Material Agreements").
2. To the best of my knowledge, the Company (i) is not in violation of
its certificate of incorporation or bylaws, (ii) is not in default, and
no event has occurred, which, with notice or lapse of time or both,
would constitute a default, in the due performance or observance of any
term, covenant or condition contained in any of the Material
Agreements, and (iii) is not in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject and has obtained such licenses,
permits, certificates, franchises or other governmental authorizations
or permits necessary to the ownership of its property or to the conduct
of its business, except, in the case of clauses (ii) and (iii), for
those defaults, violations or failures which, either individually or in
the aggregate, would not have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Company.
3. To the best of my knowledge, there are no legal or governmental
proceedings involving the Company required to be described in the
Prospectus that are not described as required.
4. The statements in the Prospectus, insofar as such statements purport
to describe or summarize applicable provisions of the Federal Food,
Drug, and Cosmetic Act and the regulations promulgated thereunder, are
accurate and complete in all material respects and fairly present the
information set forth therein.
5. The Company has obtained such licenses, permits, approvals, and
authorizations required by the FDA that are necessary for the conduct
of the
- 2 -
business of the Company as it is currently conducted and described in
the Prospectus and to my knowledge such authorizations are in effect.
6. I am not aware of any lawsuit or regulatory proceeding, pending or
threatened, brought by or before the FDA, in which the Company is or
would be the defendant or respondent, nor am I aware of any adverse
judgment, decree or order currently in effect that has been issued by
the FDA against the Company.
EXHIBIT D
[Form of Lock-Up Agreement]
X.X. XXXXXX SECURITIES INC.
As Representative of the
Underwriters to be named in Schedule I to
the Underwriting Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CV Therapeutics, Inc. - Common Stock Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with CV Therapeutics, Inc., a Delaware corporation (the "Company"),
providing for the public offering (the "Public Offering") by the Underwriters to
be named in Schedule I to the Underwriting Agreement (the "Underwriters"), of
Common Stock, $.001 par value per share (the "Common Stock"), of the Company.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to purchase
and make the Public Offering of the Common Stock, and for other good and
valuable consideration receipt of which is hereby acknowledged, the undersigned
hereby agrees that, without the prior written consent of X.X. Xxxxxx Securities
Inc. on behalf of the Underwriters, which shall not be unreasonably withheld,
the undersigned will not, during the period ending 90 days after the date of the
prospectus relating to the Public Offering (the "Prospectus"), (1) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock
(including, but not limited to, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and securities which may
be issued upon exercise of a stock option or warrant) other than as a bona fide
gift or bona fide gifts, provided, however, that the recipient of such bona fide
gift or bona fide gifts shall execute a copy of and be bound by the terms of,
this Agreement, or (2) enter into any swap, option, future, forward or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of the Common Stock including, but not limited to, any security
convertible into or exercisable or exchangeable for Common Stock, whether any
such transaction described in clause (1) or (2) above is
- 2 -
to be settled by delivery of Common Stock or such other securities, in cash or
otherwise. In addition, the undersigned agrees that, without the prior written
consent of X.X. Xxxxxx Securities Inc. on behalf of the Underwriters, which
shall not be unreasonably withheld, it will not, during the period ending 90
days after the date of the Prospectus, make any demand for or exercise any right
with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
The foregoing paragraph shall not apply to the sale or other
transfer of up to an aggregate of 250,000 shares of Common Stock held by
officers and directors of the Company signing a lock-up agreement in connection
with the Public Offering, the allocation of such shares among such officers and
directors to be determined by the Company in its sole discretion.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting
Agreement does not become effective, or if the Underwriting Agreement (other
than the provisions thereof which survive termination) shall terminate or be
terminated prior to payment for and delivery of the Common Stock to be sold
thereunder, this Lock-Up Agreement shall terminate and be of no further force or
effect, and the undersigned shall be released from all obligations under this
Lock-Up Agreement.
The undersigned understands that the Underwriters propose to
enter into the Underwriting Agreement and to proceed with the Public Offering in
reliance upon this Lock-Up Agreement.
- 3 -
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
Very truly yours,
By:
-----------------------------------
Name:
Title:
Accepted as of the date first set forth above:
X.X. XXXXXX SECURITIES INC.
Acting on behalf of itself and the Underwriters to
be named in Schedule I to the Underwriting Agreement
By: X.X. XXXXXX SECURITIES INC.
By:
----------------------------------------------
Name:
Title:
