EXHIBIT 1.1
_______________ SHARES
INHIBITEX, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
DATED ____________________
_____________, 19__
Xxxxxx Xxxxxx Partners LLC
Lazard Freres & Co., LLC
Xxxxxx Xxxxxxx Corp.
As Representatives of the several Underwriters
c/o Thomas Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introduction. Inhibitex, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule A
hereto (the "UNDERWRITERS") an aggregate of ____________ shares of Common Stock,
par value $0.001 per share, of the Company (the "FIRM SHARES").
The Company also proposes to issue and sell to the several Underwriters
not more than an additional ____________ shares of its Common Stock, par value
$0.001 per share (the "ADDITIONAL SHARES"), if and to the extent that you shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of common stock granted to the Underwriters in Section 3
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES". The shares of Common Stock, par value $0.001 per
share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". Xxxxxx
Xxxxxx Partners LLC, Lazard Freres & Co., LLC and Xxxxxx Xxxxxxx Corp. have
agreed to act as representatives of the several Underwriters (in such capacity,
the "REPRESENTATIVES") in connection with the offering and sale of the Shares.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-1 (file no. 333-113243),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS". If the Company has filed a registration
statement to register additional shares of Common Stock pursuant to Rule 462(b)
under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any
reference herein to the term "REGISTRATION STATEMENT" shall be deemed to include
such Rule 462 Registration Statement. All references in this Agreement to the
Registration Statement, the Rule 462 Registration Statement, a preliminary
prospectus, the Prospectus, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("XXXXX").
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(i) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission and each preliminary
prospectus, at the time of filing thereof, 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 the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in or
omissions from any preliminary prospectus in reliance upon, and in
conformity with, written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof.
(ii) As of the time the Registration Statement (or any
post-effective amendment thereto, including a registration statement (if
any) filed pursuant to Rule 462(b) under the Securities Act increasing the
size of the offering registered under the Securities Act) is or was
declared effective by the Commission, upon the filing or first delivery to
the Underwriters of the Prospectus (or any supplement to the Prospectus
(including any term sheet meeting the requirements of Rule 434 under the
Securities Act)) and at the Closing Date and Option Closing Date (as
hereinafter defined), (A) the Registration Statement and Prospectus (in
each case, as so amended and/or supplemented) conformed or will conform in
all material respects to the requirements of the Securities Act, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and (C) the Prospectus (as so supplemented) did not or
will not include 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 in which they are or
were made, not misleading; except that the foregoing shall not apply to
statements in or omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company by you, or
by any Underwriter through you, specifically for use in the preparation
thereof. If the Registration Statement has been declared effective by the
Commission, no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceeding for that purpose has been
initiated or, to the Company's knowledge, threatened by the Commission.
(iii) The financial statements of the Company, together with the
related notes, set forth in the Registration Statement and Prospectus
comply in all material respects with the requirements of the Securities
Act and present fairly the financial condition of the Company as of the
dates indicated and the results of operations and changes in cash flows
for the periods therein specified in conformity with generally accepted
accounting principles in the United States consistently applied throughout
the periods involved. No other financial statements or schedules are
required to be included in the Registration Statement or Prospectus. To
the Company's knowledge, Ernst & Young LLP, which has expressed its
opinion with respect to the financial statements and schedules filed as a
part of the Registration Statement and included in the Registration
Statement and Prospectus, is an independent public accounting firm within
the meaning of the Securities Act and the rules and regulations
promulgated thereunder and such accountants are not in violation of the
auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002 (the
"XXXXXXXX-XXXXX ACT") with respect to its relationship to the Company.
(iv) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation. The Company has the corporate power and authority to own
its properties and conduct its business as currently being carried on and
as described in the Registration Statement and Prospectus, and is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have a material
adverse effect upon the business, prospects, properties, operations,
condition (financial or otherwise) or results of operations of the Company
("MATERIAL ADVERSE EFFECT").
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(v) Except as set forth or contemplated in the Prospectus,
subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, or declared or paid any dividends or made
any distribution of any kind with respect to its capital stock, and there
has not been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares
upon the exercise of outstanding options or warrants and except as set
forth or contemplated in the Prospectus), or any material change in the
short-term or long-term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of
the Company, or any material adverse change business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company ("MATERIAL ADVERSE CHANGE").
(vi) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened or contemplated, any action,
suit or proceeding to which the Company is a party or of which any
property or assets of the Company is the subject before or by any court or
governmental agency, authority or body, or any arbitrator, which,
individually or in the aggregate, would result in any Material Adverse
Change.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (A) any statute, any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its property
is subject, (B) the Company's charter or by-laws, or (C) any order, rule,
regulation or decree of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities by
the Company, except such as may be required under the Securities Act, the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or state
or foreign securities or blue sky laws and for the clearance by the
National Association of Securities Dealers, Inc. of the underwriting terms
and arrangements; and the Company has the corporate power and authority to
enter into this Agreement and to authorize, issue and sell the Securities
as contemplated by this Agreement.
(viii) All of the issued and outstanding shares of capital stock of
the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights
to subscribe for or purchase securities that have not been waived in
writing and the holders thereof are not subject to personal liability by
reason of being such holders; the Securities which may be sold hereunder
by the Company have been duly authorized and, when issued, delivered and
paid for in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being such
holders; and the capital stock of the Company, including the Common Stock,
conforms to the description thereof in the Registration Statement and
Prospectus. Except as otherwise stated in the Registration Statement and
Prospectus,
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there are no preemptive rights or other rights to subscribe for or to
purchase (other than options under employee benefit plans described in the
Prospectus or outstanding warrants as set forth in the Prospectus), or any
restriction upon the voting or transfer of, any shares of Common Stock
pursuant to the Company's charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company is
bound. Neither the filing of the Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any shares of Common
Stock or other securities of the Company. Except as described in the
Registration Statement and the Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire
from the Company any shares of the capital stock of the Company. The
Company has an authorized and outstanding capitalization as set forth in
the Registration Statement and the Prospectus as of the date set forth
herein.
(ix) The Company holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any governmental
or self-regulatory body required for the conduct of its business and all
such franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect; and the Company is in compliance in all respects with all
applicable federal, state, local and foreign laws, regulations, orders and
decrees.
(x) The Company has good and valid title to all property (whether
real or personal) described in the Registration Statement and Prospectus
as being owned by it, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects except such as are
described in the Registration Statement and the Prospectus or those that
would not, either individually or in the aggregate, result in a Material
Adverse Change. The property held under lease by the Company is held by it
under valid, subsisting and enforceable leases with only such exceptions
with respect to any particular lease as do not interfere in any material
respect with the conduct of the business of the Company.
(xi) Except as set forth in the Registration Statement and
Prospectus, the Company owns or possesses adequate rights to use all
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets and rights necessary for the conduct of its
business as currently carried on and as described in the Registration
Statement and Prospectus; other than those the absence of which would not
have a Material Adverse Effect; except as set forth in the Registration
Statement and Prospectus, no name which the Company uses and no other
aspect of the business of the Company will involve or give rise to any
infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets or other similar rights of others material to
the business or prospects of the Company and the Company has not received
any notice alleging any such infringement or fee. Except as disclosed in
the Prospectus, there is no claim being made against the Company regarding
patents, patent rights or licenses, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights. Except as disclosed
in the Prospectus, the Company do not in the conduct of its business as
now or proposed to be conducted as described in the Prospectus infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application
filed by any third party, known to the Company, which such infringement or
conflict is reasonably likely to result in a Material Adverse Change.
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(xii) The Company is not (A) in violation of its charter or by-laws
or (B) in breach of or otherwise in default, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or any
other contract, lease or other instrument to which it is subject or by
which it may be bound, or to which any of the property or assets of the
Company is subject, except in the case of (B) as would not result in a
Material Adverse Effect.
(xiii) The Company has timely filed all federal, state, local and
foreign income and franchise tax returns required to be filed and is not
in default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company is contesting in good faith or except those returns or taxes with
respect to which the failure to timely file or pay, as the case may be,
would not have a Material Adverse Effect. The Company is not aware of any
tax deficiency that has been or might be asserted or threatened against
the Company that could result in a Material Adverse Change.
(xiv) The Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and
sale of the Securities other than any preliminary prospectus, Prospectus
or other materials permitted by the Securities Act to be distributed by
the Company.
(xv) The Securities have been approved for listing on the Nasdaq
National Market upon official notice of issuance and, on the date the
Registration Statement became or becomes effective, the Company's
Registration Statement on Form 8-A or other applicable form under the
Exchange Act, became or will become effective.
(xvi) The Company, directly or indirectly, owns no capital stock or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xvii) 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 in the United States and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(xviii) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
(xix) Neither the Company nor, to the Company's knowledge, any of
its affiliates is presently doing business with the government of Cuba or
with any person or affiliate located in Cuba.
(xx) The Company carries insurance in such amounts and covering such
risks as are generally deemed adequate and customary for companies of a
similar development stage engaged in similar businesses in similar
industries including, but not limited to, policies covering real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of
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vandalism, general liability and directors and Officers liability. The
Company has not been denied any insurance coverage which it has sought or
for which it has applied.
(xxi) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company," as such
term is defined in the Investment Company Act of 1940, as amended.
(xxii) The Company is in compliance with all applicable provisions
of the Xxxxxxxx-Xxxxx Act and related rules and regulations promulgated by
the Commission or the Nasdaq National Market that are effective.
(xxiii) To the Company's knowledge, no labor disturbance by the
employees of the Company exists or is imminent; and the Company is not
aware of any existing or imminent labor disturbance by the employees of
any of its principal suppliers, including without limitation,
subcontractors and third party manufacturers that might be expected to
result in a Material Adverse Change.
(xxiv) Except for [_______] 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 and sale by the
Company of the Securities.
(xxv) There are no business relationships or related-party
transactions involving the Company or any other person required to be
described in the Prospectus which have not been described as required.
(xxvi) Except as otherwise disclosed in the Prospectus, neither the
Company nor , to the Company's knowledge, any employee or agent of the
Company, has made any contribution or other payment to any official of, or
candidate for, any federal, state or foreign office in violation of any
law or of the character required to be disclosed in the Prospectus.
(xxvii) Except as otherwise disclosed in the Prospectus, (i) the
Company is in compliance with all rules, laws and regulations relating to
the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Laws") that are
applicable to its business, except where the failure to comply would not
result in a Material Adverse Change, (ii) the Company has received no
notice from any governmental authority or third party of an asserted claim
under Environmental Laws, which claim is required to be disclosed in the
Registration Statement and the Prospectus, (iii) the Company is not
currently aware that it will be required to make future material capital
expenditures to comply with Environmental Laws and (iv) no property which
is owned, leased or occupied by the Company has been designated as a
Superfund site pursuant to the Comprehensive Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or
otherwise designated as a contaminated site under applicable state or
local law.
(xxviii) For purposes of this Agreement, an "Employee Benefit Plan"
is an "employee benefit plan" (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
"ERISA")) , which is maintained by the Company. Except as otherwise
disclosed in the Prospectus, each Employee Benefit Plan is in compliance
in all material respects with ERISA. No "reportable
6
event" (within the meaning of Section 4043 of ERISA), which would have a
Material Adverse Effect on the Company has occurred with respect to any
Employee Benefit Plan subject to Title IV of ERISA. No Employee Benefit
Plan, if terminated, would have any "amount of unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA). The Company has
not incurred any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any Employee Benefit Plan or (ii)
Section 412, 4971, 4975 or 4980B of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder
(collectively, the "Code"), which would have a Material Adverse Effect on
the Company. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification
Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Underwriters shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby.
2. Reserved.
3. Purchase and Sale Agreements.
3.1. Firm Shares. The Company hereby agrees to sell the Firm Shares
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company at $______ a share (the "PURCHASE PRICE") the number of Firm Shares set
forth in Schedule A hereto opposite the name of such Underwriter.
3.2. Additional Shares. On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Underwriters the Additional Shares, and the
Underwriters shall have a one-time right to purchase, severally and not jointly,
up to _______________ Additional Shares at the Purchase Price. If you, on behalf
of the Underwriters, elect to exercise such option, you shall so notify the
Company in writing not later than thirty (30) days after the date of this
Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten (10) business days after
the date of such notice. Additional Shares may be purchased as provided in
Section 4 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are to
be purchased, each Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of Firm Shares
set forth in Schedule A hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.
3.3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable.
4. Payment and Delivery.
4.1. Firm Shares. Payment for the Firm Shares to be sold by the
Company shall be made to the Company in immediately available funds against
delivery of such Firm Shares for the respective
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accounts of the several Underwriters at 10:00 a.m., New York City time, on
____________, _____,1 or at such other time on the same or such other date, not
later than _________, _____,2 as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the "CLOSING DATE".
4.2. Additional Shares. Payment for any Additional Shares shall be
made to the Company in immediately available funds in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3(b) or at such other time on the same or on such
other date, in any event not later than _______, _____,3 as shall be designated
in writing by you. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE".
4.3. Delivery of Certificates. Certificates for the Firm Shares and
Additional Shares shall be in definitive form and registered in such names and
in such denominations as you shall request in writing not later than one (1)
full business day prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments thereto
to become effective as promptly as possible; the Company will notify you
promptly of the time when the Registration Statement or any post-effective
amendment to the Registration Statement has become effective or any
supplement to the Prospectus (including any term sheet within the meaning
of Rule 434 under the Securities Act) has been filed and of any request by
the Commission for any amendment or supplement to the Registration
Statement or Prospectus or additional information; if the Company has
elected to rely on Rule 430A under the Securities Act, the Company will
prepare and file a Prospectus (or term sheet within the meaning of Rule
434 under the Securities Act) containing the information omitted therefrom
pursuant to Rule 430A under the Securities Act with the Commission within
the time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, under the
Securities Act; if the Company has elected to rely upon Rule 462(b) under
the Securities Act to increase the size of the offering registered under
the Securities Act, the Company will prepare and file a registration
statement with respect to such increase with the Commission within the
time period required by, and otherwise in accordance with the provisions
of, Rule 462(b); the Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the
Registration Statement or Prospectus (including any term sheet within the
meaning of Rule 434 under the Securities Act) that, in your reasonable
opinion, may be necessary or advisable in connection with the distribution
of the Shares by the Underwriters; and the Company will not file any
amendment or supplement to the Registration
----------------------
(1) Insert date three (3) business days (T+3) or, in the event the
offering is priced after 4:30 p.m. Eastern Time (and T+4 settlement is
deemed to apply to secondary sales), four (4) business days after the date
of the Underwriting Agreement.
(2) Insert date five (5) business days after the date inserted in
accordance with note 18 above.
(3) Insert date ten (10) business days after the expiration of the
over-allotment option.
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Statement or Prospectus (including any term sheet within the meaning of
Rule 434 under the Securities Act) of which you shall not previously have
been advised or which you shall reasonably object after being so advised
by notice to the Company.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement,
of the suspension of the qualification of the Shares for offering or sale
in any jurisdiction, or of the initiation or threatening of any proceeding
for any such purpose; and the Company will promptly use its reasonable
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such a stop order should be issued.
(iii) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 under the Securities Act) relating to
the Shares is required to be delivered under the Securities Act, the
Company will comply in all material respects with all requirements imposed
upon it by the Securities Act, as now and hereafter amended, so far as
necessary to permit the continuance of sales of or dealings in the Shares
as contemplated by the provisions hereof and the Prospectus. If during
such period any event occurs that in the judgment of the Company or in the
opinion of counsel for the Underwriters is required to be set forth in the
Prospectus in order to make the statements therein not misleading in the
light of the circumstances then existing, or if during such period it is
necessary to amend the Registration Statement or supplement the Prospectus
to comply with the Securities Act, the Company will promptly notify you
and will amend the Registration Statement or supplement the Prospectus (at
the expense of the Company) so as to make the statements in the Prospectus
not misleading.
(iv) The Company shall take or cause to be taken all necessary
action to qualify the Shares for sale under the securities laws of such
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the distribution of the
Shares, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any state.
(v) The Company will furnish to you, without charge, three signed
copies of the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 5(vi) below, as many copies of the Prospectus
and any supplements and amendments thereto or to the Registration
Statement as you may reasonably request.
(vi) During a period of three years commencing with the date hereof,
the Company will furnish to the Representatives, and to each Underwriter
who may so request in writing, copies of all periodic and special reports
furnished to the stockholders of the Company and non-confidential all
information, documents and reports filed with the Commission, the National
Association of Securities Dealers, Inc., the Nasdaq National Market or any
securities exchange (other than any such information, documents and
reports that are filed with the Commission electronically via XXXXX or any
successor system).
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(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15 months
after the end of the Company's current fiscal quarter, an earnings
statement (which need not be audited) covering a 12-month period beginning
after the effective date of the Registration Statement that shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 under
the Securities Act.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is terminated,
will pay or cause to be paid (i) all expenses (including transfer taxes
allocated to the respective transferees) incurred in connection with the
delivery to the Underwriters of the Shares, (ii) all expenses and fees
(including, without limitation, fees and expenses of the Company's
accountants and counsel but, except as otherwise provided below, not
including fees of the Underwriters' counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Shares, each Preliminary Prospectus,
the Prospectus, and any amendment thereof or supplement thereto, and the
printing, delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda (covering the states and other
applicable jurisdictions), (iii) all filing fees and reasonable fees and
disbursements of the Underwriters' counsel incurred in connection with the
qualification of the Shares for offering and sale by the Underwriters or
by dealers under the securities or blue sky laws of the states and other
jurisdictions which you shall designate, provided that all such fees and
disbursements shall not exceed $15,000, (iv) the fees and expenses of any
transfer agent or registrar, (v) the filing fees incident to any required
review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares, (vi) listing fees, if any, (vii) the
costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the Shares,
including without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants (other
than consultants engaged by the Underwriters) engaged in connection with
road show presentations, travel and lodging costs of the officers of the
Company and any such consultants; provided, however, that travel and
lodging costs not attributable solely to the Company (i.e., shared travel
costs such as a chartered aircraft) shall be shared equally by the Company
and the Underwriters and (viii) all other costs and expenses incident to
the performance of its obligations hereunder that are not otherwise
specifically provided for herein; provided, however, that the Underwriters
shall bear the cost of travel and lodging for the Underwriters in
connection with the investor presentations on any road show undertaken in
connection with the marketing of the Shares. If the sale of the Shares
provided for herein is not consummated by reason of action by the Company
pursuant to Section 9(a) hereof which prevents this Agreement from
becoming effective, or by reason of any failure, refusal or inability on
the part of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, the
Company will reimburse the several Underwriters for all out-of-pocket
disbursements (including reasonable fees and disbursements of counsel)
incurred by the Underwriters in connection with their investigation,
preparing to market and marketing the Shares or in contemplation of
performing their obligations hereunder. The Company shall not in any event
be liable to any of the Underwriters for loss of anticipated profits from
the transactions covered by this Agreement.
(ix) The Company intends to apply the net proceeds from the sale of
the Shares to be sold by it hereunder for the purposes set forth in the
Prospectus and will report the application of the proceeds therefrom as
may be required in accordance with Rule 463 under the Securities Act.
10
(x) The Company will not, without the prior written consent of
Xxxxxx Xxxxxx Partners LLC, from the date of execution of this Agreement
and continuing to and including the date 180 days after the date of the
Prospectus (the "Lock-Up Period") offer for sale; sell; contract to sell;
pledge; grant any option for the sale of; or otherwise issue or dispose
of, directly or indirectly (or publicly disclose the intention to make any
such offer, sale, pledge, grant, issuance or other disposition), any
Common Stock or any securities convertible into or exchangeable for, or
any options or rights to purchase or acquire, Common Stock, except as
described in the Prospectus, to the Underwriters pursuant to this
Agreement, to directors, employees or consultants of the Company pursuant
to the 2004 Stock Incentive Plan, the 2002 Non-Employee Directors Stock
Option Plan, the Amended and Restated 1998 Equity Ownership Plan and the
Employee Stock Purchase Plan (the "Plans") and to holders of outstanding
warrants. The Company agrees not to accelerate the vesting of any option
or warrant or the lapse of any repurchase right prior to the expiration of
the Lock-Up Period other than pursuant to provisions in place at the date
hereof or unless all securities of the Company owned by such person are
subject to the restrictions set forth in this paragraph.
(xi) The Company either has caused to be delivered to you or will
cause to be delivered to you prior to the effective date of the
Registration Statement a letter from each of the Company's directors,
officers, and shareholders and optionholders beneficially owning 1% or
greater of the Common Stock, stating that such person agrees that they
will not, without your prior written consent or pursuant to certain
limited exceptions contained in such letter, offer for sale, sell,
contract to sell or otherwise dispose of, as set forth in such letter, any
shares of Common Stock or rights to purchase Common Stock, except to the
Underwriters pursuant to this Agreement, for a period of 180 days after
commencement of the public offering of the Shares by the Underwriters (the
"Lock-Up Agreement"). The Company will enforce the terms of each Lock-Up
Agreement and issue stop-transfer instructions to the transfer agent for
the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement.
(xii) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item 701 of
Regulation S-K under the Securities Act which have not been so disclosed
in the Registration Statement.
(xiii) The Company will file promptly all reports and any definitive
proxy or information statement required to be filed by the Company with
the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities.
(xiv) The Company will maintain such controls and other procedures,
including without limitation those required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act and the applicable regulations thereunder, that are
designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms, including without
limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the
Company's management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as
appropriate to allow timely
11
decisions regarding required disclosure, and to ensure that material
information relating to Company is made known to them by others within
those entities.
(xv) The Company will comply with all effective applicable
provisions of the Xxxxxxxx-Xxxxx Act and related rules and regulations
promulgated by the Commission or the Nasdaq National Market.
6. Conditions to the Underwriters' Obligations. The obligations of
the Company to sell the Shares to the several Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the following conditions:
6.1. Effective Registration Statement. The Registration Statement
shall have become effective not later than [__________] (New York City time) on
the date hereof.
6.2. Rule 462 Registration Statement. If the Company elects to rely
upon Rule 462(b), the Company shall file a Rule 462 Registration Statement with
the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462 Registration
Statement or give irrevocable instructions for the payment of such fee pursuant
to Rule 111(b) under the Securities Act.
6.3. Prospectus Filed with Commission. The Company shall have filed
the Prospectus with the Commission (including the information required by Rule
430A under the Securities Act) in the manner and within the time period required
by Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective.
6.4. No Stop Order. No stop order suspending the effectiveness of
the Registration Statement, any Rule 462 Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or, to the knowledge
of the Company, threatened by the Commission.
6.5. No NASD Objection. The NASD shall have raised no objection to
the fairness and reasonableness of the underwriting terms and arrangements.
6.6. Reserved.
6.7. No Material Adverse Change. There shall not have occurred any
change, or any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company, taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
6.8. Officer's Certificate. The Underwriters shall have received on
the Closing Date a certificate, dated the Closing Date and signed by the Chief
Executive Officer or President of the Company, to the effect set forth in
Sections 6.4 and 6.7 above and to the effect that: (i) the representations and
warranties of the Company contained in this Agreement are true and correct as of
the Closing Date and (ii) the Company has complied with all of the agreements
and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date and (iii) the signers of said
certificate have carefully
12
examined the Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto (including any term sheet within the meaning of
Rule 434 under the Securities Act), and (A) such documents contain all
statements and information required to be included therein, the Registration
Statement, or any amendment thereof, does 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, and the Prospectus,
as amended or supplemented, does not include any untrue statement of 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, (B)
since the effective date of the Registration Statement, there has occurred no
event required to be set forth in an amended or supplemented prospectus which
has not been so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the ordinary
course of business, or declared or paid any dividends or made any distribution
of any kind with respect to its capital stock, and except as disclosed in the
Prospectus, there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or any material
change in the short-term or long-term debt, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock,
of the Company, or any Material Adverse Change or any development involving a
prospective Material Adverse Change (whether or not arising in the ordinary
course of business), and (D) except as stated in the Registration Statement and
the Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the Company
is a party before or by any court or governmental agency, authority or body, or
any arbitrator, which might result in any Material Adverse Change.
6.9. Opinion of Company Counsel. The Underwriters shall have
received on the Closing Date an opinion of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP,
counsel for the Company, dated the Closing Date, the form of which is attached
hereto as Exhibit A. The opinion shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
6.10. Opinion of Underwriters Counsel. The Underwriters shall have
received on the Closing Date an opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP,
counsel for the several Underwriters, dated such Closing Date and addressed to
you, with respect to the formation of the Company, the validity of the Shares,
the Registration Statement, the Prospectus and other related matters as you
reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
6.11. Accountant's Comfort Letter. The Underwriters shall have
received a letter of Ernst & Young, LLP, dated such Closing Date and addressed
to you, confirming that they are independent public accountants within the
meaning of the Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2-01 of Regulation S-X
of the Commission and are registered as a public accounting firm with the Public
Company Accounting oversight board, and stating, as of the date of such letter
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not earlier than the date hereof), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter.
6.12. Lock-Up Agreements. The "lock-up" agreements, each
substantially in the form of Exhibit C hereto, between you and certain
shareholders, officers and directors of the Company, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Date.
13
6.13. Opinions of Patent Counsel. On each Closing Date, there shall
have been finished to you, as Representatives of the several Underwriters, the
opinions of Xxxxxx & Xxxxxxxx PLLC outside market counsel to the Company and
Xxxxx Xxxxx, in-house patient counsel to the Company dated as of such Closing
Date and addressed to you, each substantially in the form attached hereto as
Exhibits B-1 and B-2, respectively.
6.14. Additional Documents. On the Closing Date, the Representatives
and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction of each of the above conditions
on or prior to the Option Closing Date and to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as contemplated by Section 5(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky or legal investment memorandum, provided that all such fees and
disbursements shall not exceed $15,000, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriters incurred in connection
with the review and qualification of the offering of the Shares by the NASD, (v)
all fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and all costs
and expenses incident to listing the Shares on the Nasdaq National Market, (vi)
the cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, provided, however, that travel and lodging
costs not attributable solely to the Company (i.e., shared travel costs such as
a chartered aircraft) shall be shared equally by the Company and the
Underwriters, and (ix) all other costs and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not otherwise
made in this Section, provided, however, that the Underwriters shall bear the
cost of travel and lodging for the Underwriters
14
in connection with the investor presentations on any road show undertaken in
connection with the marketing of the Shares. It is understood, however, that
except as provided in this Section, Section 8 entitled "Indemnity and
Contribution", and the last paragraph of Section 11 below, the Underwriters will
pay all of their costs and expenses, including fees and disbursements of their
counsel and any advertising expenses connected with any offers they may make.
8. Indemnity and Contribution.
8.1. Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter 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, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or 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, except (i) insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein and (ii) that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage or
liability purchased Shares, or any person controlling such Underwriter, if
copies of the Prospectus were timely delivered to the Underwriter pursuant to
Section 5 and a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Underwriter to such person, if required by law
so to have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense.
8.2. Indemnification by the Underwriters. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company 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, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or 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, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
8.3. Indemnification Procedures. In case any proceeding (including
any governmental investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this Section 8, such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom such
15
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party 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 party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party 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 party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and (ii) the fees and expenses
of more than one separate firm (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxx Xxxxxx Partners. In the case of any such separate firm for the Company,
and such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
8.4. Contribution Agreement. To the extent the indemnification
provided for in this Section 8 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties 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 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 in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of the Shares (net of underwriting discounts and commissions but before
deducting expenses) received by the
16
Company and the total underwriting discounts and commissions 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 Underwriters' respective obligations to contribute pursuant to this Section
8 are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
8.5. Contribution Amounts. The Company and the Underwriters agree
that it would not be just or equitable if contribution pursuant to this Section
8 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 8.4. The
amount paid or payable by an indemnified party 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 reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by 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 remedies provided for in this Section 8 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.
8.10. Survival of Provisions. The indemnity and contribution
provisions contained in this Section 8 and the representations, warranties and
other statements of the Company contained 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 the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Shares.
9. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the 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, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (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, Delaware or California shall have been declared by
either federal or New York, Delaware or California 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 your judgment, is
material and adverse, or (v) in the judgment of the Representatives, there shall
have occurred any material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in
17
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company, taken as a
whole, and (b) in the case of any of the events specified in clauses 10(a)(i)
through 10(a)(v), such event, individually or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Defaulting Underwriters. If, on the Closing Date or the Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail
or refuse to purchase Shares that it has 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 the Shares to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the number of Firm Shares set forth opposite their respective names in
Schedule A bears to the aggregate number of Firm Shares set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
you 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 this Agreement be increased pursuant to this Section 11 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, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement 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, but in no event for longer than seven (7) 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. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. 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.
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, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
13. Headings; Table of Contents. The headings of the sections of
this Agreement and the table of contents have been inserted for convenience of
reference only and shall not be deemed a part of this Agreement.
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14. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Representatives:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: _____________________
with a copy to:
Xxxxxx Xxxxxx Partners LLC
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company:
Inhibitex, Inc.
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: [____________]
Attention: CEO
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
15. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 11 hereof, and to the benefit of the officers and directors and
controlling persons referred to in Section 8, and in each case their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors,, shall not include any purchaser of the Shares as such from
any of the Underwriters merely by reason of such purchase.
16. Partial Unenforceability. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
18. Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("RELATED PROCEEDINGS") may be instituted in
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the federal courts of the United States of America located in the City and
County of San Francisco or the courts of the State of California in each case
located in the City and County of San Francisco (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the exclusive jurisdiction
(except for proceedings instituted in regard to the enforcement of a judgment of
any such court (a "RELATED JUDGMENT"), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of
any process, summons, notice or document by mail to such party's address set
forth above shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or other proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such suit,
action or other proceeding brought in any such court has been brought in an
inconvenient forum.
19. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgement, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
20. Entire Agreement. 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.
21. Amendments. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
22. Sophisticated Parties. Each of the parties hereto acknowledges
that it is a sophisticated business person who was adequately represented by
counsel during negotiations regarding the provisions hereof, including, without
limitation, the indemnification and contribution provisions of Section 8, and is
fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Section 8 hereto fairly allocate the risks
in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in
the Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act and
the Exchange Act.
[Remainder of page intentionally left blank]
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If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
INHIBITEX, INC.
By:
--------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxx Partners LLC
Lazard Freres & Co., LLC
Xxxxxx Xxxxxxx Corp.
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule A hereto.
By: Xxxxxx Xxxxxx Partners LLC
By:
----------------------------
Name:
Title:
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SCHEDULE A
UNDERWRITER NUMBER OF FIRM SHARES
TO BE PURCHASED
Xxxxxx Xxxxxx Partners LLC
Lazard Freres & Co., LLC
Xxxxxx Xxxxxxx Corp.
[NAMES OF OTHER UNDERWRITERS]
Total
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