EXHIBIT 1.1
4,000,000 STOCK
ESPERION THERAPEUTICS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
July __, 2003
XXXXXX BROTHERS INC.,
CITIGROUP GLOBAL MARKETS INC.
XXXXXXX & COMPANY, INC.
XX XXXXX SECURITIES CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
As Representatives of the Several
Underwriters Named in Schedule I
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Esperion Therapeutics, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule 1
hereto (the "Underwriters"), 4,000,000 shares (the "Firm Stock") of the
Company's common stock, par value $0.001 per share (including the Rights (as
defined in Section 1(g)) attached hereto) (the "Common Stock").
In addition, the Company proposes to grant to the Underwriters
an option to purchase up to an additional 434,000 shares of the Common Stock and
certain Stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders") also propose to grant to the Underwriters an option to purchase
an additional 166,000 shares of the Common Stock on the terms and for the
purposes set forth in Section 3 (such 166,000 additional shares, in aggregate,
being referred to hereinafter as the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3, and an amendment
thereto, with respect to the Stock has (i) been prepared by the Company
in conformity with the requirements of the United States Securities Act
of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rule and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with
the Commission under the Securities Act and (iii) become effective
under the Securities Act. Copies of such registration statement have
been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including any documents
incorporated by reference therein at such time and all information
contained in the final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations in accordance with Section
6(a) hereof and deemed to be a part of the registration statement as of
the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules
and Regulations; and "Prospectus" means such final prospectus, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, as of the
date of such amendment or supplement, and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any document filed under the
United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the
Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after
the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in
2
all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus prior to the completion of
this offering, when such documents become effective or are filed with
Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain 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.
(d) The Company and each of its subsidiaries, Esperion AB and
Esperion LUV Development, Inc. (each a "Subsidiary," and collectively,
the "Subsidiaries"), have been duly incorporated and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification (except where the failure to be so qualified or in good
standing would not have, individually or in the aggregate, a material
adverse effect on the prospects, financial condition, stockholders'
equity or results of operations of the Company and its Subsidiaries
taken as a whole (a "Material Adverse Effect")), and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged; and none of the
Subsidiaries is a "significant subsidiary", as such term is defined in
Rule 405 of the Rules and Regulations.
(e) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The unissued shares of the Stock to be issued and sold by
the Company to the Underwriters hereunder have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the description thereof
incorporated by reference in the Prospectus.
(g) The Rights Agreement, as amended on November 26, 2002 and
July 29, 2003, by and between the Company and StockTrans, Inc. (the
"Rights Agreement") has been duly authorized, executed and delivered
and is enforceable against the Company in accordance with its terms. No
Distribution Date (as defined in the Rights Agreement) has occurred,
and no event or series of related events has occurred that, with lapse
of time, would result in the
3
occurrence of a Distribution Date. The Rights Agreement conforms to the
descriptions thereof incorporated by reference into the Prospectus.
(h) This Agreement has been duly authorized, executed and
delivered by the Company.
(i) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a material breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound
or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its Subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of their properties or
assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange
Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated hereby.
(j) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been satisfied) to require the Company to
file a registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(k) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(l) Neither the Company nor any of its Subsidiaries has
sustained, since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any material change in the capital stock or
long-term debt of the Company or any of its Subsidiaries or any
material adverse
4
change, or any development involving a prospective material adverse
change, in or affecting the prospects, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(m) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly
in all material respects the financial condition and results of
operations of the Company and its consolidated subsidiaries, at the
dates and for the periods indicated, in conformity with generally
accepted accounting principles.
(n) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company since the first quarter of 2002,
whose report appears in the Prospectus or is incorporated by reference
therein and who have delivered the initial letter referred to in
Section 9(h) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations. Xxxxxx Xxxxxxxx LLP,
who had certified certain financial statements of the Company prior to
the first quarter of 2002 and whose report is incorporated by reference
therein were independent public accountants as required by the
Securities Act and the Rules and Regulations.
(o) The Company and its Subsidiaries own no real property. The
Company and its Subsidiaries have good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or reflected in an exhibit to a document incorporated by
reference thereto or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed
to be made of such property by the Company and its Subsidiaries; and
all real property and buildings held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
(p) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar businesses in similar industries; except that their
directors' and officers' liability insurance was in an amount and
covering such risk as is customary for companies engaged in similar
businesses in similar industries at the time such insurance was
obtained.
(q) To the Company's knowledge, (a) neither the Company nor
any of its Subsidiaries is currently infringing or has infringed any
patent, trademark or copyright rights of others, (b) all trade secrets,
know how, technical processes and procedures developed and belonging to
the Company (or any of its Subsidiaries) which are material to the
business of the Company (or any of its Subsidiaries) as presently
conducted and which have not been patented have been kept confidential,
and (c) except as set forth in
5
the Prospectus, the Company and each of its Subsidiaries own or possess
the right to use, free and clear of claims or rights of others, all
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights,
licenses, trade secrets, customer lists, processes, and owned computer
software required for their respective businesses as presently
conducted or believe that they can acquire the same on reasonable
terms. Except as set forth or contemplated in the Prospectus, neither
the Company nor any of its Subsidiaries has received any notice of any
claim of conflict with any such rights of others, which individually or
in the aggregate, would have a Material Adverse Effect. To the
Company's knowledge, neither the Company nor any of its Subsidiaries is
using or has used any confidential information, trade secrets, or
computer software (not licensed to the Company) of any former employer
of any of its past or present employees.
(r) Except as set forth in the Prospectus, to the Company's
and each of its Subsidiaries' knowledge, they have all material
licenses, certificates, permits, consents, orders, approvals and
authorizations from U.S. and foreign government authorities, including,
without limitation, the United States Food and Drug Administration (the
"FDA") and any agency of any foreign government and any other foreign
regulatory authority exercising authority comparable to that of the FDA
(including any non-governmental entity whose approval or authorization
is required under foreign law comparable to that administered by the
FDA), for its investigational products, as described in the Prospectus,
that are necessary to the ownership of its property or to the conduct
of its business in the manner and to the extent now conducted.
(s) There are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which any
property or assets of the Company or any of its Subsidiaries is the
subject which, if determined adversely to the Company or any of its
Subsidiaries, might have a Material Adverse Effect; and to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(t) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(u) There are no contracts or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement or documents incorporated by reference into the
Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described in the Prospectus or filed as
exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations.
6
(v) No relationship, direct or indirect, exists between or
among the Company on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described or incorporated by reference in the
Prospectus, which is not so described.
(w) No labor disturbance by the employees of the Company
exists or, to the knowledge of the Company, is imminent which might be
expected to have a Material Adverse Effect.
(x) The Company is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"), except where such
non-compliance would not have a Material Adverse Effect; no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) to which the Company contributes or which
the Company maintains that could have a Material Adverse Effect; the
Company has not incurred and does not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or withdrawal
from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification,
except where the loss of such qualification would not have a Material
Adverse Effect.
(y) The Company has filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof
and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of its Subsidiaries which
has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
Subsidiaries, might have) a Material Adverse Effect.
(z) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, other than shares issued pursuant to employee benefit
plans, qualified stock option plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course
of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital
stock.
(aa) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under
the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its Subsidiaries, is
made known to the Company's principal executive officer and its
principal financial officer by others within the Company, particularly
during the periods in which the periodic reports required under the
Exchange Act are being prepared;
7
(ii) have been evaluated for effectiveness as of a date within 90 days
prior to the filing of the Company's most recent annual or quarterly
report filed with the Commission; and (iii) have been designed to
provide reasonable assurance of achieving their objectives and are
effective at the reasonable assurance level.
(bb) Based on the evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant deficiency
in the design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize and report
financial data or any material weaknesses in internal controls; or (ii)
any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls.
(cc) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(dd) The Company (i) makes and keeps materially accurate books
and records, (ii) assures that access to its assets is permitted only
in accordance with management's authorization and (iii) assures that
the reported accountability for its assets is compared with existing
assets at reasonable intervals.
(ee) Neither the Company nor any of its Subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property or assets
may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business.
(ff) Neither the Company nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its Subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(gg) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its Subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
Subsidiaries in
8
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which
would not have, or could not be reasonably likely to have, singularly
or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto
such property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any of its
Subsidiaries or with respect to which the Company or any of its
Subsidiaries have knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not
have or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect;
and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection.
(hh) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
(ii) Neither the Company nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its Subsidiaries has,
directly or indirectly through another person, encouraged, taken any
action designed to encourage, or participated in (i) the purchase or
sale by Xxxxx Xxxxxx, Durus Capital Management, LLC or Durus Capital
Management (NA) LLC or any of their affiliates (collectively, the
"Sacane Group") of shares of Common Stock between November 12, 2002 and
the date hereof or (ii) the failure of the Sacane Group to report any
such purchases or sales prior to July 29, 2003 as required by the
federal securities laws.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally and not jointly represents,
warrants and agrees that:
(a) The Selling Stockholder has, and immediately prior to the
First Delivery Date (as defined in Section 5 hereof) the Selling
Stockholder will have, on such date, good and valid title to the shares
of Option Stock to be sold by the Selling Stockholder hereunder
pursuant to Section 5 hereof, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares of
Option Stock and payment therefor pursuant hereto, good and valid title
to such shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed (or agreed to place) in
custody under a custody agreement (the "Custody Agreement") with the
Company, as custodian (the "Custodian"), for delivery under this
Agreement, certificates in negotiable form (with signature guaranteed
by a commercial bank or trust company having an office or correspondent
in the United States or a member firm of the New York or American Stock
Exchanges) representing the shares of Option Stock to be sold by the
Selling Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney") appointing
the Custodian and one or more other persons, as attorneys-in-fact, with
full power of substitution, and with full authority (exercisable by any
one or more of them) to execute and deliver this Agreement on such
Selling Stockholder's behalf and to take such other action as may be
necessary or desirable
9
to carry out the provisions hereof on behalf of the Selling
Stockholder, in accordance with the applicable Custody Agreement and
the applicable Power of Attorney.
(d) The Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement; the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of
the transactions contemplated hereby and thereby will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling
Stockholder is subject, nor will such actions result in any violation
of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder; and,
except for the registration of the Option Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Act and
applicable state securities laws in connection with the purchase and
distribution of the Option Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the Power of
Attorney or the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(e) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will not, when they become effective or are filed with the
Commission, as the case may be, and as of the applicable effective date
(as to the Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading with respect to
such Selling Stockholders; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter specifically for inclusion therein; provided, further, that
such Selling Stockholder shall have no liability under this Section
2(e) except to the extent that the untrue statement or omission is or
will be made in reliance upon and in conformity with information
concerning such Selling Stockholder furnished to the Company through
the Representatives in writing by or on behalf of such Selling
Stockholder specifically for inclusion therein.
(f) The Selling Stockholder has no knowledge that the
representations and warranties of the Company contained in Section 1
hereof are not materially true and correct, is familiar with the
Registration Statement and the Prospectus (as amended or supplemented)
and has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement, as of the effective date, or
the Prospectus (or any amendment or supplement thereto), as of the
applicable filing date, which has adversely affected or is reasonably
likely to adversely affect the business of the Company and is not
10
prompted to sell shares of Common Stock by any information concerning
the Company which is not set forth in the Registration Statement and
the Prospectus.
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 4,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set opposite that Underwriter's name in Schedule 1 hereto. The respective
purchase obligations of the Underwriters with respect to the Firm Stock
shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine, and in accordance with the Delaware General
Corporation Law and the Company's By-Laws and Certificate of Incorporation.
In addition, the Company grants to the Underwriters an option
to purchase up to 434,000 shares of Option Stock and the Selling Stockholders
grant to the Underwriters an option to purchase up to 166,000 shares of Option
Stock, each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholders name in Schedule 2 hereto and in proportion to the
respective amounts set forth in Schedule 2. To the extent that the Underwriters
purchase fewer then the total number of shares of Option Stock offered
hereunder, the Underwriters shall purchase a pro rata number of shares of Option
Stock from each of the Company and each Selling Stockholder based on the total
number of shares of Option Stock that they each have agreed to sell pursuant to
the option granted in this Section 3. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
increments.
The Company agrees, in the event of a default or a failure on
the part of the Selling Stockholders to deliver any or all of the shares of
Option Stock, in addition to any other remedies which may be available to the
Underwriters under this Agreement, to issue and sell to the Underwriters,
subject to the terms and conditions of this Agreement, in addition to the
4,000,000 shares of Firm Stock and 434,000 shares of Option Stock pursuant to
this Section 3, up to an additional 166,000 shares of Option Stock.
The price of both the Firm Stock and any Option Stock shall be
$_________ per share.
The Company and the Selling Stockholders shall not be
obligated to deliver any of the Stock to be delivered on any Delivery Date (as
hereinafter defined), as the case may be, except upon payment for all the Stock
to be purchased on such Delivery Date as provided herein.
11
4. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of
the Firm Stock, the several Underwriters propose to offer the Firm Stock for
sale upon the terms and conditions set forth in the Prospectus.
5. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the office of Xxxxxx Xxxxx & Xxxxxxx
LLP, 0000 Xxxxxxxxxxxx Xxxxxx, XX, Xxxxxxxxxx, XX 00000, at 10:00 A.M., New York
City time, on the third full business day following the date of this Agreement
or at such other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Firm Stock shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company and the Selling Stockholders
by the Representatives. Such notice shall set forth the aggregate number of
shares of Option Stock as to which the option is being exercised, the names in
which the shares of Option Stock are to be registered, the denominations in
which the shares of Option Stock are to be issued and the date and time, as
determined by the Representatives, when the shares of Option Stock are to be
delivered; provided, however, that this date and time shall not be earlier than
the First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised. The date and
time the shares of Option Stock are delivered are sometimes referred to as a
"Second Delivery Date" and the First Delivery Date and any Second Delivery Date
are sometimes each referred to as a "Delivery Date".
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement among the
Representatives, the Company and the Selling Stockholders) at 10:00 A.M., New
York City time, on such Second Delivery Date. On such Second Delivery Date, the
Company, and the Custodian, on behalf of each of the Selling Stockholders, shall
deliver or cause to be delivered the certificates representing the Option Stock
to the Representatives for the account of each Underwriter against payment to or
upon the order of the Company and each such Selling Stockholder by wire transfer
in immediately available funds of the respective portion of the purchase price
payable to the Company and such Selling Stockholder. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a
12
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to such Second Delivery Date.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Underwriters and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
prior to the last Delivery Date except as permitted herein; to advise
the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement and the
computation of per share earnings and excluding documents incorporated
by reference into the Registration Statement), and (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale
of the Stock or
13
any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct such
statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant
to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the
consent of the Representatives to the filing, which consent shall not
be unreasonably withheld;
(f) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter), to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its
Subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158);
(g) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may reasonably request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction or to
take any similar actions;
(h) For a period of 90 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other
14
employee compensation plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights), or sell or grant
options, rights or warrants with respect to any shares of Common Stock
or securities convertible into or exchangeable for Common Stock (other
than the grant of options pursuant to option plans existing on the date
hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, which consent shall not
be unreasonably withheld;
(i) Prior to the Effective Date, to apply for the inclusion of
the Stock on the Nasdaq National Market System and to use its best
efforts to complete that listing, subject only to official notice of
issuance, prior to the First Delivery Date;
(j) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(k) To take such steps as shall be reasonably necessary to
prevent the Company and any Subsidiary from becoming an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission thereunder.
7. Further Agreements of the Selling Stockholders. Each of
the Selling Stockholders, severally and not jointly, agree:
(a) That the Option Stock to be sold by the Selling
Stockholder hereunder, which is represented by the certificates held in
custody for the Selling Stockholder, is subject to the interest of the
Underwriters and the other Selling Stockholders thereunder, that the
arrangements made by the Selling Stockholder for such custody are to
that extent irrevocable, and that the obligations of the Selling
Stockholder hereunder shall not be terminated by any act of the Selling
Stockholder, by operation of law, by the death or incapacity of any
individual Selling Stockholder or the occurrence of any other event.
(b) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person) or Form W-9 (if the Selling Stockholder is a United States
person.)
8. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; provided, that any and all capital gain or income
taxes attributable to the sale of the Stock by any Selling Stockholder shall
remain the sole responsibility of such Selling Stockholder; (b) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
15
all as provided in this Agreement; (d) the costs of distributing this Agreement
among the Underwriters, and any other necessary related documents in connection
with the offering, purchase, sale and delivery of the stock; (e) the costs of
delivering and distributing the Custody Agreements and the Powers of Attorney;
(f) the filing fees incident to securing any required review by the National
Association of Securities Dealers, Inc. of the terms of sale of the Stock; (g)
any applicable listing or other necessary fees; (h) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 6(h); and (i) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 8 and in Section 13 the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, their own costs and expenses associated with the "road show," any
transfer taxes on the Stock which they may sell and the expenses of advertising
any offering of the Stock made by the Underwriters provided, that the Company
and the Underwriters will share equally the costs and expenses of the airplane
used in the road show.
Each of the Selling Stockholders severally and not jointly
agrees with each Underwriter to pay all reasonable fees and expenses incident to
the performance of its obligations under this Agreement that are not otherwise
specifically provided herein, including but not limited to (i) fees and expenses
of counsel and advisors to the Selling Stockholder and (ii) commission, wiring
fees and taxes incident to the sale and delivery of the Option Stock to be sold
by the Selling Stockholder to the Underwriters hereunder. This paragraph shall
not affect or modify any separate, valid agreement relating to the allocation of
payment of expenses between the Company on the one hand and any Selling
Stockholder on the other hand.
9. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of its and their obligations hereunder, and to each
of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in the reasonable opinion
of Xxxxxxx XxXxxxxxx LLP, counsel for the Underwriters, is material or
omits to state a fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal
16
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company and each of the Selling
Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(d) Xxxxxx, Xxxxx & Xxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the Representatives and dated such Delivery Date, in form
and substance reasonably satisfactory to the Underwriters, to the
effect that:
(i) The Company and each of its Subsidiaries have
been duly incorporated and are validly existing as
corporations in good standing under the laws of their
respective jurisdictions of incorporation, are duly qualified
to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their
respective businesses requires such qualification (except
where the failure to be so qualified or in good standing would
not have, individually or in the aggregate, a Material Adverse
Effect) and have all power and authority necessary to own or
hold their respective properties and conduct the businesses in
which they are engaged;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of
capital stock of each Subsidiary have been duly and validly
authorized and issued and are fully paid, non-assessable and
are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other
instrument known to such counsel;
(iv) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its Subsidiaries is a party or of which any property or
assets of the Company or any of its Subsidiaries is the
subject which, if determined adversely to the Company or any
of its Subsidiaries, might have a Material Adverse Effect;
and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(v) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in
such opinion, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date specified
therein and,
17
to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceeding for that purpose is pending or threatened by
the Commission;
(vi) The Registration Statement and the Prospectus
and any further amendments or supplements thereto made by the
Company prior to such Delivery Date (other than the financial
statements and notes thereto and related schedules,
information about internal control over financial reporting
and other financial data included therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act
and the Rules and Regulations, the documents incorporated by
reference in the Prospectus and any further amendment or
supplement to any such incorporated document made by the
Company prior to such Delivery Date (other than the financial
statements and notes thereto and related schedules,
information about internal control over financial reporting
and other financial data included therein, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder;
(vii) To such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated by reference into the
Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statement or incorporated therein
by reference as permitted by the Rules and Regulations;
(viii) This Agreement has been duly authorized,
executed and delivered by the Company;
(ix) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to
which any of the property or assets of the Company or any of
its Subsidiaries is subject and which is filed as an exhibit
to the Company's reports filed under the Exchange Act, nor
will such actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its
Subsidiaries or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets; and, except
for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state
18
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the
transactions contemplated hereby; and
(x) To such counsel's knowledge, there are no
contracts, agreements or understandings between the Company
and any person granting such person the right (other than
rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the District of Columbia and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware. Such counsel shall also have
furnished to the Representatives a written statement, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company on a regular basis, has
acted as counsel to the Company in connection with previous financing
transactions and has acted as counsel to the Company in connection with
the preparation of the Registration Statement, and (y) based on the
foregoing, no facts have come to the attention of such counsel which
lead it to believe that (I) the Registration Statement (other than the
financial statements and notes thereto and related schedules,
information about internal control over financial reporting and other
financial data included therein, as to which such counsel need express
no opinion), as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (other than the financial statements
and notes thereto and related schedules, information about internal
control over financial reporting and other financial data included
therein, as to which such counsel need express no opinion) contains any
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by reference in
the Prospectus or any further amendment or supplement to any such
incorporated document made by the Company prior to such Delivery Date
(other than the financial statements and notes thereto and related
schedules, information about internal control over financial reporting
and other financial data included therein, as to which such counsel
need express no opinion), when they became effective or were filed with
the Commission, as the case may be, contained, in the case of a
registration statement which became effective under the Securities Act,
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or, in the case of other documents
which were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or
19
omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus.
(e) Xxxxxx & Xxxxxxx LLP shall have furnished to the
Representatives its written opinion, as intellectual property counsel
to the Company, addressed to the Underwriters and dated such Delivery
Date, substantially in the form attached hereto as Exhibit 1.
(f) Holland & Knight LLP shall have furnished to the
Representatives its written opinion, as intellectual property counsel
to the Company, addressed to the Underwriters and dated such Delivery
Date, substantially in the form attached hereto as Exhibit 2.
(g) The Representatives shall have received from Xxxxxxx
XxXxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(h) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a
letter, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof (i) confirming
that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is
given in the Prospectus, as of a date not more than five days prior to
the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(i) At the time of execution of this Agreement, the
Representatives shall have received from Xxxxxxx X. Xxxxxxxx, Chief
Financial Officer of the Company, a "CFO letter" addressed to the
Underwriters and dated the date of hereof, substantially in the form
attached hereto as Exhibit 3.
(j) With respect to the letter of Xxxxxxx X. Xxxxxxxx referred
to in Section 9(i) and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial CFO letter"), the
Company shall have furnished to the Representatives a letter (the
"bring-down CFO letter") of Xxxxxxx X. Xxxxxxxx, addressed to the
Underwriters and dated such Delivery Date (i) stating, as of the date
of the bring-down CFO letter, his conclusions and findings with respect
to the financial information and other matters covered by the initial
CFO letter and (ii) confirming in all material respects his conclusions
and findings set forth in the initial CFO letter.
20
(k) With respect to the letter of PricewaterhouseCoopers LLP
referred to in Section 9(h) and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial
letter"), the Company shall have furnished to the Representatives a
letter (the "bring-down letter") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters
covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(l) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its President or a Vice
President and its chief financial officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct in all material
respects as of such Delivery Date; the Company has complied in
all material respects with all its agreements contained
herein; and the conditions set forth in Sections 9(a) and 9(n)
have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
amendment to the Registration Statement or the Prospectus
which has not been so set forth.
(m) On the Second Delivery Date each Selling Stockholder shall
have furnished to the Representatives a certificate, dated the Second
Delivery Date, stating that:
(i) The representations, warranties and agreements of
the Selling Stockholder in Section 2: (A) if qualified in
Section 2 as to materiality or material adverse effect, are
true and correct and (B) in all other cases, are true and
correct in all material respects, in both cases as of the
Second Delivery Date; and
(ii) The Selling Stockholder has complied in all
material respects with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Second Delivery Date.
(n) (i) Neither the Company nor any of its Subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by
21
reference in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus or (ii) since such date there shall not have been any
material change in the capital stock or long-term debt of the Company
or any of its Subsidiaries, otherwise than as set forth in the
Prospectus, or any change, or any development involving a prospective
change, in or affecting the management, financial position,
stockholders' equity or results of operations of the Company and its
Subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions, including without
limitation as a result of terrorist activities after the date hereof,
or the effect of international conditions on the financial markets in
the United States shall be such, as to make it, in the judgment of a
majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(p) The Nasdaq National Market System shall have approved the
Stock for inclusion, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Stock), to which that Underwriter, officer, employee or controlling
person may become subject, under the
22
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A)
in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any
written or electronically transmitted materials or information provided
to investors by, or with the approval of, the Company in connection
with the marketing of the offering of the Stock ("Marketing
Materials"), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically), (ii)
the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
amendment or supplement thereto, or in any Marketing Materials any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable under this clause (iii) to the extent that
it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or
willful misconduct), and shall reimburse each Underwriter and each such
officer, employee or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action within 60 days of the
presentation of an invoice for any expenses incurred; provided,
however, that the Company and shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any
such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of
the information specified in Section 10(f); provided, further, that the
Company shall not be liable to any Underwriter or person controlling
such Underwriter under the indemnity agreement in this Section 10(a) to
the extent that such loss, claim, damage or liability of such
Underwriter or person controlling such Underwriter results from the
fact that such Underwriter sold Stock to a person, and there was not
sent or given to such person, at or prior to the written confirmation
of such sale to such person, to the extent required by law, a copy of
the Prospectus dated the Effective Date (the "Final Prospectus") and
the loss, claim, damage or liability of such Underwriter or person
controlling such Underwriter results from an untrue statement or
omission of a material fact contained in the Preliminary Prospectus
previously delivered to such person which was corrected in the Final
Prospectus. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to
any officer, employee or controlling person of that Underwriter.
23
(b) The Selling Stockholders, severally in proportion to the
number of shares of Option Stock to be sold by each of them hereunder
and not jointly, shall indemnify and hold harmless each Underwriter,
its officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock),
to which that Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be
stated therein or necessary to make the statements therein not
misleading, but in each case, only to the extent that the untrue
statement, alleged untrue statement, omission or alleged material
omission was made in reliance upon and in conformity with written
information concerning such Selling Stockholder furnished to the
Company by or on behalf of that Selling Stockholder specifically for
inclusion therein, and shall reimburse each Underwriter, its officers
and employees and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter, its officers and
employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that the Selling Stockholders shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any such
amendment or supplement in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of
the information specified in Section 10(f). The foregoing indemnity
agreement is in addition to any liability which the Selling
Stockholders may otherwise have to any Underwriter or any officer,
employee or controlling person of that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each Selling Stockholder, and
the Company's officers and employees, each of its directors, and each
person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the
Company, any Selling Stockholder, or any such director, officer,
employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or
in any amendment or supplement thereto, or (B) in any Marketing
Materials or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or in any amendment or supplement thereto, or in any Marketing
Materials any material fact required to be stated therein or necessary
to make the statements therein not misleading,
24
but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company by or on behalf of that
Underwriter specifically for inclusion therein, and shall reimburse the
Company, any Selling Stockholder and any such director, officer,
employee or controlling person for any legal or other expenses
reasonably incurred by the Company, such Selling Stockholder, or any
such director, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
any Underwriter may otherwise have to the Company, the Selling
Stockholders, or any such director, officer, employee or controlling
person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 10 notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 10 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 10. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 10 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representatives shall have
the right to employ counsel to represent jointly the Representatives
and those other Underwriters and their respective officers, employees
and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the
Underwriters against the Company or any Selling Stockholder under this
Section 10 if, in the reasonable judgment of the Representatives,
either (1) there is an actual or potential conflict between the
position of the Company and the Underwriters, (2) there may be defenses
available to the Underwriters that are different from, or in addition
to, those available to the Company, or (3) the Company has failed to
assume the defense of such action and employ counsel reasonably
satisfactory to the Underwriters, in any of which events, the fees and
expenses of such separate counsel shall be paid by the Company or the
Selling Stockholders. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release
25
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding, or (ii) be liable for any settlement of any
such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with the consent of the
indemnifying party or if there be a final judgment of the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 10(a), 10(b) or 10(c) in respect of
any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other from the offering of the Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other with respect to the statements
or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company and the Selling Stockholders on the one hand and the total
underwriting discounts and commissions received by the Underwriters
with respect to the shares of the Stock purchased under this Agreement
on the other hand bear to the total gross proceeds from the offering of
the shares of the Stock under this Agreement, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company,
the Selling Stockholders or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10(e), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public
26
exceeds the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section
10(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) The Underwriters severally confirm and the Company and the
Selling Stockholders acknowledge that the statements with respect to
the public offering of the Stock by the Underwriters set forth on the
cover page of, the legend concerning over-allotments on the inside
front cover page of and the concession and reallowance figures
appearing under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement
and the Prospectus.
11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 3. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 13.
As used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.
27
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or the Selling
Stockholders for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
12. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company and the Selling Stockholders prior to delivery of and payment for the
Firm Stock if, prior to that time, any of the events described in Sections 9(n)
or 9(o), shall have occurred or if the Underwriters shall decline to purchase
the Stock for any reason permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the
Company or any Selling Stockholder shall fail to tender the Stock for delivery
to the Underwriters by reason of any failure, refusal or inability on the part
of the Company or the Selling Stockholders 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 or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including reasonable
fees and disbursements of one counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company and the Selling Stockholders shall pay the full undisputed
amounts of invoices to the Representatives within 60 days of presentation of
such invoice. If this Agreement is terminated pursuant to Section 11 by reason
of the default of one or more Underwriters, neither the Company nor the Selling
Stockholders shall be obligated to reimburse any defaulting Underwriter on
account of those expenses.
14. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 9(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000;
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: General Counsel
(Fax:000-000-0000);
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at
the address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any other party hereto by
28
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. and the Company and the Underwriters shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Selling Stockholders by the Custodian.
15. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective successors and personal
representatives. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company and the Selling
Stockholders contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Underwriters contained in Section 10(b) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement, the Selling Stockholders and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 15, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
16. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholders and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
17. Definition of the Term "Business Day". For purposes of
this Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday
or Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
19. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
20. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
29
If the foregoing correctly sets forth the agreement among the
Company, the Selling Stockholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
[For electronic filings made under XXXXX, underwriters counsel
is requested to maintain one set of manually signed signature pages.]
Very truly yours,
ESPERION THERAPEUTICS, INC.
By:
-----------------------------------
The Selling Stockholders named
in Schedule 2 to this Agreement
By:
-----------------------------------
Attorney-in-Fact
Accepted:
XXXXXX BROTHERS INC.
CITIGROUP GLOBAL MARKETS INC.
XXXXXXX & COMPANY, INC.
XX XXXXX SECURITIES CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
For themselves and as Representatives
of the several Underwriters named in
Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By:
----------------------------------
Authorized Representative
By: CITIGROUP GLOBAL MARKETS INC.
By:
----------------------------------
Authorized Representative
By: XXXXXXX & COMPANY, INC.
30
By:
----------------------------------
Authorized Representative
By: XX XXXXX SECURITIES CORPORATION
By:
----------------------------------
Authorized Representative
By: U.S. BANCORP XXXXX XXXXXXX, INC.
By:
----------------------------------
Authorized Representative
31
SCHEDULE 1
Number of
Underwriters Shares
------------ ------
Xxxxxx Brothers Inc............................................. 1,642,000
Citigroup Global Markets Inc.................................... 913,000
Xxxxxxx & Company, Inc.......................................... 365,000
XX Xxxxx Securities Corporation................................. 365,000
U.S. Bancorp Xxxxx Xxxxxxx Inc.................................. 365,000
Xxxxxx X. Xxxxx & Co. Incorporated ............................. 50,000
CIBC World Markets Corp. ....................................... 50,000
Xxxxxx Xxxxxxxxxx Xxxxx LLC..................................... 50,000
RBC Xxxx Xxxxxxxx Inc. ......................................... 50,000
Xxxxx & Company, Incorporated................................... 30,000
Chatsworth Securities LLC....................................... 30,000
Xxxxxxxxxx & Co. Inc. .......................................... 30,000
Fortis Securities Inc. ......................................... 30,000
Sands Brothers & Co., Ltd. ..................................... 30,000
---------
Total 4,000,000
=========
Sched. 1 - 1
SCHEDULE 2
Number of
Shares
Name and Address of Selling Stockholder of Option Stock
--------------------------------------- ---------------
Xxxxxx X. More (1) 20,000
Xxxxx X. Xxxxxx, Ph.D. (1) 95,000
Xxxxxxx X. Xxxxxxxx (1) 26,500
Xxxxx X. Xxxxxx, Ph.D. (1) 6,000
Xxxx-Xxxxx X. Dasseux, Ph.D. (1) 14,000
Xxxxx X. Xxxxxx (1) 1,500
Xxxxxxx X. Xxxxxxxxxxx (1) 3,000
Total 166,000
-------
----------
(1) The address of each of the beneficial owners is c/o Esperion
Therapeutics, Inc., 0000 X. Xxxxx Xxxxxx, 000 XXX Xxxxx, Xxx Xxxxx,
Xxxxxxxx 00000.
Sched. 2 - 1
EXHIBIT 1
OPINION OF XXXXXX & XXXXXXX LLP
INTELLECTUAL PROPERTY COUNSEL TO THE COMPANY
This opinion is delivered in connection with the Underwriting
Agreement, dated July ___, 2003 (the "Underwriting Agreement") relating to the
offering of 4,000,000 Stock, par value $0.001 each, of the Company, pursuant to
the registration statement on Form S-3 filed with the Securities and Exchange
Commission (File No. 333-106988) on July __, 2003. Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Underwriting Agreement.
Whenever our opinions herein are qualified by the phrase, "to
the best of our knowledge," such language means that based upon the actual
knowledge of attorneys presently within our firm (i.e., not including matters as
to which such attorneys could be deemed to have constructive knowledge and not
including knowledge of attorneys outside of Xxxxxx & Xxxxxxx LLP, who, at any
time, may have had responsibility for matters of the Company and its
Subsidiaries) and all knowledge that would have been gained upon the reasonable
investigation of our files.
We have read the Registration Statement and the Prospectus,
including particularly the portions of the Registration Statement and the
Prospectus referring to the patents, patent applications, trademarks, trademark
applications, designs and design applications as set forth in Appendix A,
attached hereto (the patents, patent applications, trademarks, trademark
applications, designs and design applications described in Appendix A shall be
collectively referred to as the "IP Rights")
Based on the foregoing, we are of the opinion that:
1. As to the statements in the Registration Statement and any
further amendment thereto made by the Company prior to the Delivery Date and in
the Prospectus or any further amendment or supplement thereto made by the
Company prior to the Delivery Date under the captions "Risk Factors - If we fail
to secure and enforce patents and other intellectual property rights underlying
our product candidates and technology, we may be unable to develop our product
candidates or compete effectively," "Risk Factors - If our licensing
arrangements with third parties are breached or terminated, we may lose rights
to commercialize our product candidates," "Risk Factors - We may face
significant expense and liability as a result of litigation or other proceedings
relating to patents and other intellectual property rights of third parties,
which could reduce our available capital," "Business - Intellectual Property,"
and "Business - License Arrangements and Collaborations," insofar as such
statements constitute matters of U.S. patent, trademark, copyright or design
laws or legal conclusions for which we are or have been retained by the Company,
to the best of our knowledge, are accurate in all material respects and complete
statements or summaries of the matters set forth therein.
2. As to the statements in the annual report on Form 10-K for
the fiscal year ended December 31, 2002 made by the Company under the captions
"Factors Affecting Our Future Prospects - If we fail to secure and enforce
patents and other intellectual property rights underlying our product candidates
or compete effectively," "Factors Affecting Our Future Prospects - If our
licensing arrangement with third parties are breached or terminated, we may lose
rights to commercialize our product candidates," "Factors Affecting Our Future
Prospects - We may face significant expense and liability as a result of
litigation or other proceedings relating to patents and other intellectual
property rights of others," and "Business - Intellectual Property and License
Agreements," insofar as such statements constitute matters of U.S. patent,
trademark, copyright or design laws or legal conclusions for which we are or
have been retained by the Company, to the best of our knowledge, are accurate in
all material respects and complete statements or summaries of the matters set
forth therein.
3. To the best of our knowledge, (i) the Registration
Statement and any further amendment thereto, and any information incorporated
therein by reference, made by the Company prior to the Delivery Date, at the
time such Registration Statement or amendment became effective, did not contain
an untrue statement of a material fact with respect to the IP Rights or omit to
state a material fact relating to the IP Rights required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Prospectus and
any further amendment or supplement thereto made by the Company prior to the
Delivery Date, as of its date, did not contain an untrue statement of a material
fact with respect to the IP Rights or omit to state a material fact relating to
the IP Rights required to be stated therein or necessary to make the statements
therein not misleading, and (iii) at the Delivery Date, the Registration
Statement, the Prospectus and any further amendment or supplement thereto made
by the Company prior to the Delivery Date did not contain an untrue statement of
a material fact with respect to the IP Rights or omit to state a material fact
relating to the IP Rights required to be stated therein or necessary to make the
statements therein not misleading.
4. To the best of our knowledge, except to the extent
described in the Prospectus, the Company is the sole owner, co-owner or
exclusive licensee of the IP Rights listed in Appendix A, attached hereto.
5. To the best of our knowledge, except as described in the
Registration Statement and other than the prosecution of pending patent
applications, there is no pending action, suit proceeding or claim challenging
the validity or scope of any of the IP Rights listed in Appendix A, attached
hereto.
6. To the best of our knowledge, the Company has taken such
steps as are required, including the payment of all necessary maintenance fees,
to maintain the enforceability of the IP Rights and to maintain the pendency of
the Patent Applications, Trademark Applications and Design Applications,
specified in Appendix A, attached hereto.
Yours faithfully,
2
EXHIBIT 2
OPINION OF HOLLAND & KNIGHT LLP
INTELLECTUAL PROPERTY COUNSEL TO THE COMPANY
This opinion is delivered in connection with the Underwriting
Agreement, dated July ___, 2003 (the "Underwriting Agreement") relating to the
offering of 4,000,000 Stock, par value $.001 each, of the Company, pursuant to
the registration statement on Form S-3 filed with the Securities and Exchange
Commission (File No. 333-106988) on July __, 2003. Unless otherwise defined
herein, capitalized terms used herein shall have the meanings ascribed to them
in the Underwriting Agreement.
Whenever our opinions herein are qualified by the phrase, "to
the best of our knowledge," such language means that based upon the actual
knowledge of attorneys presently within our firm and all knowledge that would
have been gained upon the reasonable investigation of our files.
We have read the Registration Statement and the Prospectus,
including particularly the portions of the Registration Statement and the
Prospectus referring to the patents, patent applications, trademarks, trademark
applications, designs and design applications as set forth in Appendix A,
attached hereto (the patents, patent applications, trademarks, trademark
applications, designs and design applications described in Appendix A shall be
collectively referred to as the "IP Rights").
Based on the foregoing, we are of the opinion that:
1. As to the statements in the Registration Statement and any
further amendment thereto made by the Company prior to the Delivery Date and in
the Prospectus or any further amendment or supplement thereto made by the
Company prior to the Delivery Date under the captions "Risk Factors - If we fail
to secure and enforce patents and other intellectual property rights underlying
our product candidates and technology, we may be unable to develop our product
candidates or compete effectively," "Risk Factors - If our licensing
arrangements with third parties are breached or terminated, we may lose rights
to commercialize our product candidates," "Risk Factors - We may face
significant expense and liability as a result of litigation or other proceedings
relating to patents and other intellectual property rights of third parties,
which could reduce our available capital," "Business - Intellectual Property,"
and "Business - License Arrangements and Collaborations," insofar as such
statements constitute matters of U.S. patent, trademark, copyright or design
laws or legal conclusions with respect thereto, are accurate in all material
respects and complete statements or summaries of the matters set forth therein.
(SPECIFY WHICH PRODUCTS ARE COVERED)
2. As to the statements in the annual report on form 10-K for
the fiscal year ended December 31, 2002 made by the Company under the captions
"Factors Affecting Our Future Prospects - If we fail to secure and enforce
patents and other intellectual property rights underlying our product candidates
and technologies, we may
be unable to develop our product candidates or compete effectively," "Factors
Affecting Our Future Prospects - If our licensing arrangements with third
parties are breached or terminated, we may lose rights to commercialize our
product candidates," "Factors Affecting Our Future Prospects - We may face
significant expense and liability as a result of litigation or other proceedings
relating to patents and other intellectual property rights of others," and
"Business - Intellectual Property and License Agreements," insofar as such
statements constitute matters of U.S. patent, trademark, copyright or design
laws or legal conclusions with respect thereto, are accurate in all material
respects and complete statements or summaries of the matters set forth therein.
3. To the best of our knowledge, (i) the Registration
Statement and any further amendment thereto, and any information incorporated
therein by reference, made by the Company prior to the Delivery Date, at the
time such Registration Statement or amendment became effective, did not contain
an untrue statement of a material fact with respect to the IP Rights or omit to
state a material fact relating to the IP Rights required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Prospectus and
any further amendment or supplement thereto made by the Company prior to the
Delivery Date, as of its date, did not contain an untrue statement of a material
fact with respect to the IP Rights or omit to state a material fact relating to
the IP Rights required to be stated therein or necessary to make the statements
therein not misleading, and (iii) at the Delivery Date, the Registration
Statement, the Prospectus and any further amendment or supplement thereto made
by the Company prior to the Delivery Date did not contain an untrue statement of
a material fact with respect to the IP Rights or omit to state a material fact
relating to the IP Rights required to be stated therein or necessary to make the
statements therein not misleading.
4. Except to the extent described in the Prospectus, the
Company is listed in the records of the United State Patent and Trademark Office
and in the records of the appropriate foreign offices as the holder of holder of
record of the IP Rights. To the best of our knowledge, except to the extent
described in the Prospectus, the Company is the sole owner of the IP Rights. To
the best of our knowledge, except as described in the Registration Statement,
there is no pending or threatened action, suit proceeding or claim challenging
the validity or scope of any of the IP Rights.
5. To the best of our knowledge, the Company has taken such
steps as are required, including the payment of all necessary maintenance fees,
to maintain the enforceability of the IP Rights and to maintain the pendency of
the Patent Applications, Trademark Applications and Design Applications,
specified in Appendix A, attached hereto.
Yours faithfully,
2
EXHIBIT 3
ESPERION THERAPEUTICS, INC
CHIEF FINANCIAL OFFICER CERTIFICATE
On April 18, 2002, Esperion Therapeutics, Inc., a Delaware
corporation (the "Company"), removed Xxxxxx Xxxxxxxx LLP ("Xxxxxxxx") as the
Company's independent public accountants and retained PricewaterhouseCoopers LLP
as the Company's new independent public accountants for the fiscal year 2002.
This change was made upon the recommendation of the audit committee of the
Company's board of directors and with the approval of the Company's board of
directors and was based on the continuing uncertainty regarding Xxxxxxxx'x
future. This certificate is being delivered in my capacity as Chief Financial
Officer of the Company, in connection with the offering by the Company of
4,000,000 shares of the Company's common stock (the "Common Stock"), and based
upon our prior preparation and review of the Company's financial records and
schedules undertaken by myself or members of my staff who are responsible for
the Company's financial and accounting matters, I hereby certify that:
Nothing has come to my attention that would lead me to believe
that the consolidated balance sheet of the Company and Subsidiaries as
of December 31, 2001, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the two
years in the period ended December 31, 2001 and the period from
inception to December 31, 2001, incorporated by reference in the
Prospectus of the Company, dated [July ____, 2003] (the "Prospectus")
related to the offering of the Common Stock do not present fairly the
financial position of the Company and Subsidiaries at December 31,
2001, and the results of their operations and cash flows for each of
the two years in the period ended December 31, 2001 and the period from
inception to December 31, 2001 in conformity with generally accepted
accounting principles.
Dated as of this _____ day of July 2003.
---------------------------------
Chief Financial Officer
