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EXHIBIT 1.1
Avigen, Inc.
4,000,000 shares of Common Stock, par value of $.001
[Form of Underwriting Agreement]
New York, New York
March __, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
ING Barings LLC
As Representatives of
the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Avigen, Inc., a corporation organized under the laws of Delaware
(the "Company"), proposes to sell to the several underwriters named in Schedule
I hereto (the "Underwriters"), for whom you (the "Representatives") are acting
as representatives, 4,000,000 shares of Common Stock, par value of $.001 (the
"Common Stock") of the Company (said shares to be issued and sold by the Company
being hereinafter called the "Underwritten Securities"). The Company also
proposes to grant to the Underwriters an option to purchase up to 600,000
additional shares of Common Stock to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus 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
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement, or the issue date of any Preliminary Prospectus
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or the Prospectus, as the case may be, deemed to be incorporated therein by
reference. Certain terms used herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(1) The Company meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission a registration
statement (file number 333- ) on Form S-3, including a related
preliminary prospectus, for registration under the Act of the offering
and sale of the Securities. The Company may have filed one or more
amendments thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will next file
with the Commission one of the following: either (1) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of final prospectus) or
(2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be included
in such registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other such required
information and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(2) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein) and on any
date on which Option Securities are purchased, if such date is not the
Closing Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not include
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; provided,
however, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration Statement,
or the Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to the Company by or on
behalf of
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any Underwriter through the Representatives specifically for inclusion
in the Registration Statement or the Prospectus (or any supplement
thereto).
(3) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or be in good
standing could not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company (a "Material Adverse Effect"); (1)
(4) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are duly
listed, and admitted and authorized for trading, subject to official
notice of issuance, on the Nasdaq National Market; the certificates for
the Securities comply with the requirements of Delaware law; the holders
of outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities and,
except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding.
(5) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required.
(6) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(7) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(8) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions
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contemplated herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(9) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, (i) the charter
or by-laws of the Company, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties.
(10) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement, except
for such rights as have been effectively waived.
(11) The historical financial statements and schedules of the
Company included in the Prospectus and the Registration Statement
present fairly in all material respects the financial condition, results
of operations and cash flows of the Company as of the dates and for the
periods indicated, comply as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption "Prospectus Summary
-- Summary Financial Data" and "Selected Financial Data" in the
Prospectus and Registration Statement fairly present, on the basis
stated in the Prospectus and the Registration Statement, the information
included therein.
(12) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the knowledge of the Company
after due inquiry, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this Agreement or
the consummation by the Company of any of the transactions contemplated
by the Company hereby or (ii) could reasonably be expected to have a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
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(13) The Company owns or leases all such properties as are
necessary to the conduct of its operations as presently conducted.
(14) The Company is not in violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement
or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its properties, as applicable.
(15) Ernst & Young LLP, who have audited certain financial
statements of the Company and delivered their report with respect to the
audited consolidated financial statements and schedules included in the
Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published rules
and regulations thereunder.
(16) There are no transfer taxes or other similar fees or
charges under federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company
or sale by the Company of the Securities.
(17) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto))
and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine
or penalty that is currently being contested in good faith or as would
not have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto).
(18) To the Company's knowledge, after due inquiry, no labor
problem or dispute with the employees of the Company exists or is
threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers, contractors or customers, that could have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
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(19) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent in the businesses in which it is engaged; all policies of
insurance insuring the Company's businesses, assets, employees, officers
and directors are in full force and effect; the Company is in compliance
with the terms of such policies and instruments in all material
respects; and there are no claims by the Company under any such policy
or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; the Company has not been
refused any insurance coverage sought or applied for; and the Company
has no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(20) The Company possess all licenses, certificates, permits and
other authorizations issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct its businesses, and the
Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be expected to
have a Material Adverse Effect whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(21) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(22) The Company has not taken, directly or indirectly, any
action that has constituted or that was designed to or might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(23) The Company is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received and is in compliance with
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all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct its businesses and (iii) has
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not have,
individually or in the aggregate, a Material Adverse Effect, whether or
not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). The Company has not been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(24) In the ordinary course of its business, the Company
periodically reviews 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, the Company has reasonably concluded that such
associated costs and liabilities would not have, singly or in the
aggregate, a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(25) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations. The Company has not
incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
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(26) The Company owns, possesses, licenses or has other rights
to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the "Intellectual
Property") necessary for the conduct of the Company's business as now
conducted or as proposed in the Prospectus to be conducted. Except as
set forth in the Prospectus under the caption "Business--Patents and
Intellectual Property," (a) there are no rights of third parties to any
such Intellectual Property; (b) there is no infringement by third
parties of any such Intellectual Property; (c) there is no pending or,
to the Company's knowledge after due inquiry, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (d) there is no
pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
the Company is unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no pending or, to the Company's
knowledge after due inquiry, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights
of others, and the Company is unaware of any other fact which would form
a reasonable basis for any such claim; (f) to the knowledge of the
Company after due inquiry, there is no U.S. patent or published U.S.
patent application which contains claims that dominate or may dominate
any Intellectual Property described in the Prospectus as being owned by
or licensed to the Company or that interferes with the issued or pending
claims of any such Intellectual Property; and (g) to the knowledge of
the Company after due inquiry, there is no prior art of which the
Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable
which has not been disclosed to the U.S. Patent and Trademark Office.
(27) The statements contained in the Prospectus under the
captions "Risk Factors -- Our success is dependent upon our ability to
effectively protect our patents and proprietary rights, which we may not
be able to do", "Risk Factors - Other persons may assert rights in our
proprietary technology, which would be costly to contest or settle" and
"Business -- Patents and Licenses," insofar as such statements summarize
legal matters, agreements, documents, or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements,
documents or proceedings.
(28) The Company has such permits, licenses, franchises,
authorizations and clearances ("Permits") of governmental or regulatory
authorities, including, without limitation, the Food and Drug
Administration (the "FDA") of the U.S. Department of Health and Human
Services and/or any committee thereof, as are necessary to own, lease
and operate its properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be
set forth
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in the Prospectus, except where such failure to receive such Permits
would not, individually or in the aggregate, have a Material Adverse
Effect or except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto); subject to such qualifications as
may be set forth in the Prospectus, the Company has fulfilled and
performed all its material obligations with respect to the Permits, and
no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any Permit, subject
in each case to such qualification as may be set forth in the
Prospectus. Except as is set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), none of the Permits contains any
restriction that is materially burdensome to the Company.
(29) Except as set forth in or contemplated in the Registration
Statement and the Prospectus (exclusive of any supplement thereto), the
clinical, pre-clinical and other studies and tests conducted by or on
behalf of or sponsored by the Company or in which the Company or the
Company's products under development have participated that are
described in the Prospectus or the results of which are referred to in
the Prospectus were and, if still pending, are being conducted in
accordance with standard medical and scientific research procedures. The
descriptions of the results of such studies and tests are accurate and
complete in all material respects and fairly present the data derived
from such studies and tests, and the Company has no knowledge of any
other studies or tests the results of which are inconsistent with or
otherwise call into question the results described or referred to in the
Prospectus. Except as set forth in or contemplated in the Registration
Statement and the Prospectus (exclusive of any supplement thereto), the
Company has operated and currently is in compliance in all material
respects with all applicable FDA rules, regulations and policies. Except
as set forth in or contemplated in the Registration Statement and the
Prospectus (exclusive of any supplement thereto), the Company has not
received any notices or other correspondence from the FDA or any other
governmental agency requiring the termination, suspension or
modification of any clinical or pre-clinical studies or tests that are
described in the Prospectus or the results of which are referred to in
the Prospectus.
(30) The Company does not have any "significant subsidiaries" as
such term is defined by Rule 1-02 of Regulation S-X.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from
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the Company, at a purchase price of $ per share, the amount of the
Underwritten Securities set forth opposite such Underwriter's name in Schedule
I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
an aggregate of 600,000 Option Securities at the same purchase price per share
as the Underwriters shall pay for the Underwritten Securities. Said option may
be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
March __, 2000, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned
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upon receipt of, supplemental opinions, certificates and letters confirming as
of such date the opinions, certificates and letters delivered on the Closing
Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. The Company agrees with the several Underwriters
that:
(1) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will promptly
advise the Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (5) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(2) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary
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to amend the Registration Statement or supplement the Prospectus to
comply with the Act or the Exchange Act or the respective rules
thereunder, the Company promptly will (1) notify the Representatives of
such event, (2) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (3) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(3) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(4) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(5) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the offering;
provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities,
in any jurisdiction where it is not now so subject.
(6) The Company will not, without the prior written consent of
Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to
cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of
the Company) directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common
Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for
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a period of 90 days after the date of the Underwriting Agreement,
provided, however, that the Company may issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution
Time and the Company may issue Common Stock issuable upon the conversion
of securities or the exercise of warrants outstanding at the Execution
Time.
(7) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(1) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later
than (i) 6:00 PM New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to
3:00 PM New York City time on such date or (ii) 9:30 AM on the Business
Day following the day on which the public offering price was determined,
if such determination occurred after 3:00 PM New York City time on such
date; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(2) The Company shall have requested and caused Xxxxxx Godward
LLP, counsel for the Company, to have furnished to the Representatives
their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(1) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to
own or lease, as the case may be, and to operate its properties
and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires
such qualification;
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(2) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Prospectus; the outstanding shares of Common
Stock have been duly and validly authorized and issued; the
Securities have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be fully paid and
nonassessable; the Securities are duly listed, and approved for
trading, subject to official notice of issuance on the Nasdaq
National Market; the certificates for the Securities are in
valid and sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or
other rights to subscribe for the Securities; and, except as set
forth in the Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company
are outstanding;
(3) to the knowledge of such counsel after due inquiry, there is
no pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or its property of a character
required to be disclosed in the Registration Statement which is
not adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed
as required; and the statements included or incorporated by
reference in the Prospectus under the heading "Business --
Government Regulation", insofar as such statements summarize
legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings;
(iv) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and any
supplements thereto, pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b);
to the knowledge of such counsel after due inquiry, no stop
order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and the
Prospectus (other than the financial statements and other
financial information contained therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; and such
counsel has no reason to believe that on the Effective Date or
the date the Registration Statement was last deemed amended the
Registration Statement contained any untrue statement of a
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material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading or that the Prospectus as of its date and on the
Closing Date included or includes any untrue statement of a
material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in
each case, other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion);
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of
1940, as amended;
(vii) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is required
in connection with the transactions contemplated herein, except
such as have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities
by the Underwriters in the manner contemplated in this Agreement
and in the Prospectus and such other approvals (specified in
such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities, nor
the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of or imposition
of any lien, charge or encumbrance upon any property or assets
of the Company pursuant to, (i) the charter or by-laws of the
Company, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which its property
is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company of any
court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or any of its properties; and
(ix) no holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Delaware or the Federal
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laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom
they believe to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(3) The Representatives shall have received from Cravath, Swaine
& Xxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(4) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(1) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as if made on the
Closing Date and 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 the Closing Date;
(2) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the knowledge of the
Company after due inquiry, threatened; and
(3) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus
(exclusive of any supplement thereto), there has been no
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
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(5) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review in accordance with Statement on
Auditing Standards No. 71 of the unaudited interim financial information
of the Company for the six-month period ended December 31, 1999, and as
at December 31, 1999, stating in effect that:
(1) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted by
the Commission;
(2) on the basis of a reading of the latest unaudited financial
statements made available by the Company; their limited review,
in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial
information for the six-month period ended December 31, 1999 and
as at December 31, 1999; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and audit committee of the Company; and
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company as to transactions and events subsequent to June 30,
1999, nothing came to their attention which caused them to
believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement
and the Prospectus do not comply as to form in all
material respects with applicable accounting
requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to
financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited financial statements included
or incorporated by reference in the Registration
Statement and the Prospectus;
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(2) with respect to the period subsequent to December
31, 1999, there were any changes, at a specified date
not more than five days prior to the date of the letter,
in the deficit accumulated during the development stage
or capital stock of the Company or decreases in the
stockholders' equity of the Company or decreases in
working capital of the Company as compared with the
amounts shown on the December 31, 1999, consolidated
balance sheet included or incorporated by reference in
the Registration Statement and the Prospectus, or for
the period from January 1, 2000, to such specified date
there were any decreases, as compared with the
corresponding period in the preceding quarter in
revenues or Interest Income of the Company, except in
all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary
by the Representatives; or
(3) the information included or incorporated by
reference in the Registration Statement and Prospectus
in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information) is not in conformity with the applicable
disclosure requirements of Regulation S-K; and
(3) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from
the general accounting records of the Company) set forth in the
Registration Statement and the Prospectus and in Exhibit 12 to
the Registration Statement, including the information set forth
under the captions "Summary -- Summary Financial Data" and
"Selected Financial Data" in the Prospectus, the information
included or incorporated by reference in Items 1, 2, 6, 7 and 11
of the Company's Annual Report on Form 10-K, incorporated by
reference in the Registration Statement and the Prospectus, and
the information included in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q, incorporated by reference in the
Registration Statement and the Prospectus, [insert any
applicable 8-K reference] agrees with the accounting records of
the Company, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
The Company shall have received from Ernst & Young LLP a report
or reports with respect to a review of unaudited interim financial information
of the Company
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for the six month period ending December 31, 1999, in accordance with Statement
on Accounting Standards No. 71.
(6) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change
specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or
(ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(7) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(8) The Securities shall have been approved for trading on the
Nasdaq National Market, and satisfactory evidence of such actions shall
have been provided to the Representatives.
(9) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from the individuals listed on Schedule II hereto, addressed to
the Representatives.
(10) You shall have received on the Closing Date an opinion of
[insert patent firm references], patent counsel for the Company, dated
the Closing Date and addressed to you, that:
(1) to the knowledge of such counsel after due inquiry, the
Company owns or has obtained licenses for all applications
relating to the Intellectual Property described in the
Prospectus as being owned or used by or licensed to the Company;
(2) to the knowledge of such counsel after due inquiry, except
as described in the Prospectus, (A) there are no rights of third
parties to any Intellectual Property described in the Prospectus
as being owned by or licensed to the Company or that is
necessary for the conduct of its business; (B) there is no
infringement by third parties of any such Intellectual Property;
(C) there is no pending or threatened action, suit, proceeding
or claim by
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others challenging the rights of the Company in or to such
Intellectual Property, and such counsel is unaware of any facts
which would form a reasonable basis for any such claim; (D)
there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of such
Intellectual Property, and such counsel is unaware of any facts
which would form a reasonable basis for any such claim; (E)
there is no pending or threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other
proprietary right of others, and such counsel is unaware of any
facts which would form a reasonable basis for any such claim;
(F) there is no patent or patent application which contains
claims that dominate or may dominate any Intellectual Property
described in the Prospectus as being owned or used by or
licensed to the Company or that is necessary for the conduct of
its business or that interferes with the issued or pending
claims of any such Intellectual Property; and (G) there is no
prior art that may render any patent held by the Company invalid
or any patent application held by the Company unpatentable which
has not been disclosed to the U.S. Patent and Trademark Office;
and
(3) [the statements in: (A) the Prospectus under the captions
"Risk Factors -- Our success is dependent upon our ability to
effectively protect our patents and proprietary rights, which we
may not be able to do", "Risk Factors -- Other persons may
assert rights in our proprietary technology, which would be
costly to contest or settle", "Business -- Patents and Licenses"
and other references therein to patent and licensing matters,
and (B) the Annual Report of the Company on Form 10-K for the
fiscal year ended June 30, 1999 under the caption "Business --
Patents and Licenses," and other references therein to patent
and licensing matters, insofar as such statements summarize
legal matters, agreements, documents, or proceedings discussed
therein, are accurate and fair summaries of such legal matters,
agreements, documents or proceedings.]
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
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The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & Xxxxx, counsel for the
Underwriters, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, on
the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Barney Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are 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, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may
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otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page regarding delivery of the Securities, and,
under the heading "Underwriting", (i) the eighth, ninth and tenth paragraphs,
related to stabilization, syndicate covering transactions and penalty bids and
(ii) the sentences related to concessions and reallowances in the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) 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 the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) 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 the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
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(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the
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amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if at any time
prior to such time (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or the Nasdaq National Market, (ii) a banking
moratorium shall have been declared either by federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement 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
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Xxxxxx Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Barney
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
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New York, 10013, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to Xxxx Xxxxxxx, Ph.D., Avigen, Inc., President
and Chief Executive Officer (fax no.: (000) 000-0000) and confirmed to it at
0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, attention of Xxxx
Xxxxxxx, Ph.D.
13. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated. 1.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Alameda, California.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
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"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
Avigen, Inc.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
ING Barings LLC
By: Xxxxxxx Xxxxx Barney Inc.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
For themselves and the other several Underwriters, if any, named in Schedule I
to the foregoing Agreement.
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EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER OF AVIGEN, INC.]
Avigen, Inc.
Public Offering of Common Stock
, 20
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
ING Barings LLC
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between Avigen,
Inc., a Delaware corporation (the "Company"), and each of you as representatives
of a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $.001 par value (the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into
the Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer, sell, contract to sell, pledge or
otherwise dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) directly or indirectly, including the filing (or participation in the
filing of) a registration statement with the Securities and Exchange Commission
in respect of, or establish or increase a put equivalent position or liquidate
or decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder with respect to,
any shares of capital stock of the Company or any securities convertible into,
or exercisable or exchangeable for such capital stock, or publicly
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announce an intention to effect any such transaction, for a period of 90 days
after the date of the Underwriting Agreement, other than shares of Common Stock
disposed of as bona fide gifts approved by Xxxxxxx Xxxxx Barney Inc.
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR
MAJOR STOCKHOLDER]
[NAME AND ADDRESS OF OFFICER,
DIRECTOR OR MAJOR STOCKHOLDER]
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SCHEDULE I
Number of Underwritten
Securities to be
Underwriters Purchased
------------ ---------
Xxxxxxx Xxxxx Xxxxxx Inc.............
CIBC World Markets Corp..............
ING Barings LLC......................
---------
---------
Total................. 4,000,000
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SCHEDULE II
[TO COME]
