Exhibit 1.1
ADOLOR CORPORATION
6,000,000 Shares
Common Stock
$.0001 Par Value
UNDERWRITING AGREEMENT
, 2000
UNDERWRITING AGREEMENT
, 2000
Warburg Dillon Read LLC
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Pacific Growth Equities, Inc.,
as Managing Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Adolor Corporation, a Delaware corporation (the Company), proposes to
issue and sell to the underwriters named in Schedule A annexed hereto (the
Underwriters) an aggregate of 6,000,000 shares (the Firm Shares) of Common
Stock, $.0001 par value (the Common Stock), of the Company. In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
900,000 shares of Common Stock (the Additional Shares). The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
Shares. The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the Act), with the Securities and Exchange Commission (the
Commission) a registration statement on Form S-1 (File No. 333-96333) including
a prospectus, relating to the Shares. The Company has furnished to you, for use
by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (each thereof being herein called a Preliminary Prospectus)
relating to the Shares. Except where the context otherwise requires, the
registration statement, as amended when it becomes effective, including all
documents filed as a part thereof, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430(A) under the Act and also including any
registration statement filed pursuant to Rule 462(b) under the Act, is herein
called the Registration Statement, and the prospectus, in the form filed by the
Company with the Commission pursuant to Rule 424(b) under the Act on or before
the second business day after the date hereof (or such earlier time as may be
required under the Act) or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time it became
effective, is herein called the Prospectus.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
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representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to
purchase from the Company the aggregate number of Firm Shares set forth opposite
the name of such Underwriter in Schedule A attached hereto in each case at a
purchase price of $ per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions
of the Firm Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
You have advised us that, at the Company's request, the Underwriters
have reserved for sale at the initial public offering price up to of the
Firm Shares (the Reserved Shares) for the officers, directors, employees,
clients, business associates and other persons related to or affiliated with the
foregoing (the Participants) as part of the distribution of the Firm Shares by
the Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. (NASD) and all other applicable laws, rules and regulations. To
the extent that such Reserved Shares are not orally confirmed for purchase by
such Participants by the end of the first business day after the date of this
Agreement, such Reserved Shares may be offered to the public as part of the
public offering contemplated hereby.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); provided, however, that the additional time of purchase shall not be
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earlier than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
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Firm Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company (DTC) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00
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* As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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A.M., New York City time, on ,2000 (unless another time shall be
agreed to by you and the Company or unless postponed in accordance with the
provisions of Section 8 hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the time of purchase. Certificates
for the Firm Shares shall be delivered to you in definitive form in such names
and in such denominations as you shall specify on the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the time of purchase.f
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify no later than the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the additional time of purchase.
3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary
Prospectus, or instituting proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act; and when the Registration
Statement becomes effective, the Registration Statement and the Prospectus
will fully comply in all material respects with the provisions of the Act,
and the Registration Statement 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, and the
Prospectus 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, in light of the circumstances under which they were
made, not misleading; any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
have been so described or filed; provided, however, that the Company makes
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no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters and furnished in
writing by or on behalf of any Underwriter through you to the Company
expressly for use in the Registration Statement or the Prospectus; and the
Company has not distributed any offering material in connection with the
offering or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or any other materials, if any,
permitted by the Act;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth under the heading entitled "Actual" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of
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purchase and the additional time of purchase, as the case may be, the
Company shall have an authorized capitalization as set forth under the
heading entitled "Pro Forma As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization," all of the issued
and outstanding shares of capital stock including Common Stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any preemptive
right, resale right, right of first refusal or similar right; there are no
authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of
the Company other than those accurately described in the Prospectus; the
description of the Company's stock option, stock bonus and other stock
plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights;
(c) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the operations, business, prospects, properties,
financial condition or results of operations of the Company (a Material
Adverse Effect); and the Company is in compliance in all material respects
with the laws, orders, rules, regulations and directives issued or
administered by such jurisdictions; the Company has no subsidiaries (as
defined in the rules and regulations under the Act); the Company does not
own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in
any firm, partnership, joint venture, association or other entity; complete
and correct copies of the certificate of incorporation and of the bylaws of
the Company and all amendments thereto have been delivered to you, and
except as set forth in the exhibits to the Registration Statement no
changes therein will be made subsequent to the date hereof and prior to the
Closing Date;
(e) the Common Stock has been approved for quotation on the National
Association of Securities Dealers Automated Quotation (Nasdaq) National
Market, subject only to official notice of issuance;
(f) the Company is not in breach of, or in default under (nor has
any event occurred which with notice, lapse of time, or both would result
in any breach of, or constitute a default under), its charter or by-laws or
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company is a
party
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or by which it or any of its properties is bound, and the execution,
delivery and performance of this Agreement, the issuance and sale of the
Shares and the consummation of the transactions contemplated hereby will
not conflict with, or result in any breach of or constitute a default under
(nor constitute any event which with notice, lapse of time, or both would
result in any breach of, or constitute a default under), any provisions of
the charter or by-laws, of the Company or under any provision of any
material license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any material lease,
contract or other agreement or instrument to which the Company is a party
or by which it or its respective properties may be bound or affected, or
under any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company;
(g) this Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms (except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to enforcement of creditors' rights generally, and
general equitable principles relating to the availability of remedies, and
except as rights to indemnity or contribution may be limited by federal or
state securities laws and the public policy underlying such laws);
(h) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus and the certificates for the Shares
are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders;
(i) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable;
(j) no approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the issuance and
sale of the Shares or the consummation by the Company of the transactions
as contemplated hereby other than registration of the Shares under the Act
and any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD;
(k) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of
capital stock of the Company upon the issue and sale of the Shares to the
Underwriters hereunder, nor does any person have preemptive rights, co-sale
rights, rights of first refusal or other rights to purchase any of the
Shares other than those that have been expressly waived prior to the date
hereof;
(l) to the best knowledge of the Company, KPMG LLP, whose report on
the audited financial statements of the Company is filed with the
Commission as part of the
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Registration Statement and Prospectus, are independent public accountants
as required by the Act;
(m) the Company has all necessary licenses, authorizations, permits,
consents and approvals and has made all necessary filings required under
any federal, state, local or foreign law, regulation or rule, and has
obtained all necessary licenses, authorizations, permits, consents and
approvals from other persons, in order to conduct its business; the Company
is not in violation of, or in default under, any such license,
authorization, permit, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable
to the Company the effect of which could have a Material Adverse Effect;
(n) all executed agreements or copies of executed agreements filed
as exhibits to the Registration Statement to which the Company is a party
or by which it is or may be bound or to which any of its assets, properties
or businesses is or may be subject have been duly and validly authorized,
executed and delivered by the Company and, assuming such agreements are the
legal, valid, binding and enforceable agreements of the other parties
thereto, constitute the legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to enforcement of
creditors' rights generally, and general equitable principles relating to
the availability of remedies, and except as rights to indemnity or
contribution may be limited by federal or state securities laws and the
public policy underlying such laws); the descriptions in the Registration
Statement of contracts and other documents are accurate in all material
respects and fairly present the information required to be shown with
respect thereto by the Act and the rules and regulations thereunder, legal
or governmental proceedings, all contracts or other documents which are
required by the Act or the rules and regulations thereunder to be described
in the Registration Statement or filed as exhibits to the Registration
Statement have been so described or filed as required, and the exhibits
which have been filed are complete and correct copies of the documents of
which they purport to be copies;
(o) there are no actions, suits, claims, investigations or
proceedings pending or, to the best of the Company's knowledge, threatened
to which the Company or any of its officers is a party or of which any of
its properties is subject at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board, body,
authority or agency which could result in a judgment, decree or order
having a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby;
(p) the financial statements and the related notes and schedules
thereto included in the Registration Statement and the Prospectus present
fairly the financial position of the Company as of the dates indicated and
the results of operations and cash flows of the Company for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; no other financial statements or supporting
schedules are required to be included in the Registration Statement or the
Prospectus; the
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selected financial information set forth in the Registration Statement and
the Prospectus under the captions "Summary Financial Data," Capitalization"
and "Selected Financial Data" fairly present the information set forth
therein on a basis consistent with the financial statements included in the
Registration Statement and the Prospectus;
(q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development which, in the Company's
reasonable judgment, is likely to cause a material adverse change, in the
operations, business, prospects, properties or assets described or referred
to in the Registration Statement, or the results of operations, condition
(financial or otherwise), business or operations of the Company, (ii) any
transaction which is material to the Company, except transactions in the
ordinary course of business, (iii) any obligation, direct or contingent,
which is material to the Company incurred by the Company, except
obligations incurred in the ordinary course of business, (iv) any change in
the capital stock or outstanding indebtedness of the Company or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company; the Company does not have any material contingent
obligation which is not disclosed in the Registration Statement;
(r) the Company has obtained the agreement of each of its directors
and officers and certain of its stockholders designated by you not to sell,
offer to sell, contract to sell, hypothecate, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock for a period of 180 days after the
date of the Prospectus;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the Investment Company Act);
(t) except as set forth in the Prospectus: (i) the Company owns or
possesses valid and enforceable licenses for all inventions, patents,
patent applications, trademarks (registered or unregistered), trademark
applications, tradenames, copyrights, manufacturing processes, formulae,
trade secrets, know-how, and other intangible property and assets necessary
to the conduct of its business now conducted as described in the Prospectus
(collectively, Intellectual Property) and the Company does not know of any
facts which would form a reasonable basis for a claim that the Company does
not own or possess valid and enforceable licenses for all Intellectual
Property necessary to the conduct of its business proposed to be conducted
as described in the Prospectus; (ii) the expiration of any Intellectual
Property would not result in a Material Adverse Effect; (iii) the Company
has no knowledge that it lacks or will be unable to obtain any rights or
licenses to use any of the Intellectual Property; (iv) the Company does not
know of any third parties who have or will be able to establish rights to
any of the Intellectual Property; (v) to the best of the Company's
knowledge, there is no infringement by third parties of any of the
Intellectual Property; (vi) there is no pending or, to the best of the
Company's knowledge, threatened action, suit, proceeding or claim by others
challenging
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the Company's right of title or other interest in or to any Intellectual
Property, and the Company does not know of any facts which would form a
reasonable basis for any such claim; (vii) there is no pending, or, to the
best of the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity and scope of any Intellectual
Property, and the Company does not know of any facts which would form a
reasonable basis for any such claim; (viii) there is no pending or, to the
best of the Company's knowledge, threatened action, suit, proceeding or
claim by others that the Company or any of its products or processes
infringe or otherwise violate any patent, trademark, copyright, trade
secret or other proprietary right of others, and the Company is unaware of
any facts which would form a reasonable basis for any such claim; (ix) to
the best of the Company's knowledge, there are no grounds for an
interference proceeding before the United States Patent and Trademark
Office (USPTO) in relation to any of the patents or patent applications
currently owned by the Company; (x) to the best of the Company's knowledge,
there are no facts which would bar the grant of a patent from each of the
patent applications within the Intellectual Property; (xi) there is no
pending or, to the best of the Company's knowledge, threatened action,
suit, proceeding or claim by any current or former employee, consultant or
agent of the Company seeking either ownership rights to any invention or
compensation from the Company for any invention made by such employee,
consultant or agent in the course of his/her employment with the Company,
nor, to the best of the Company's knowledge, can any such action, suit,
proceeding or claim, if instituted, be sustained; and (xii) there is no act
or omission by the Company or its agents or representatives of which the
Company has knowledge that may render any patent or patent application
within the Intellectual Property unpatentable, unenforceable or invalid;
(u) the Prospectus fairly and accurately describes in all material
respects the Company's rights with respect to the Intellectual Property;
(v) except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission;
(w) the Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(x) the Company has not at any time during the last five years (i)
made any unlawful contribution to any candidate for foreign office, or
failed to disclose fully any contribution in violation of law, or (ii) made
any payment to any foreign, United States or state governmental officer or
official, or other person charged with similar public or
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quasi-public duties, other than payments required or permitted by the laws
of the United States;
(y) the Company has good and marketable title to all the properties
and assets reflected as owned in the financial statements referred to in
Section 3(p) above (or elsewhere in the Prospectus), in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except such as do not materially and adversely
affect the value of such property and do not materially interfere with the
use made or proposed to be made of such property by the Company; the real
property, improvements, equipment and personal property held under lease by
the Company are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements, equipment
or personal property by the Company;
(z) the Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid all taxes required to be paid
by it and, if due and payable, any related or similar assessment, fine or
penalty levied against it; the Company has made adequate charges, accruals
and reserves in the applicable financial statements referred to in Section
3(p) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the
Company has not been finally determined; the Company is not aware of any
tax deficiency that has been or might be asserted or threatened against the
Company that could result in a Material Adverse Effect;
(aa) there are no transfer taxes or other similar fees or charges
under federal law or any material transfer taxes or other similar fees or
charges under the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance and sale by the Company of the Shares;
(bb) the Company is insured by recognized, financially sound and
reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies
covering real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and earthquakes, general
liability, products liability and directors and officers liability; the
Company has no reason to believe that it will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Effect; the Company has not been
denied any insurance coverage which it has sought or for which it has
applied;
(cc) to the best of Company's knowledge, no labor disturbance by the
employees of the Company exists or is imminent; and the Company is not
aware of any existing or imminent labor disturbance by the employees of any
of its principal suppliers, licensees, collaboration partners, consultants
or subcontractors that might be expected to result in a Material Adverse
Effect;
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(dd) (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment (Environmental Laws)
which are applicable to its business, except where the failure to comply
would not result in a Material Adverse Effect, (ii) the Company has
received no notice from any governmental authority or third party of an
asserted claim under Environmental Laws, which claim is required to be
disclosed in the Registration Statement and the Prospectus, (iii) the
Company is not currently aware that it will be required to make future
material capital expenditures to comply with Environmental Laws and (iv) no
property which is owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. (S) 9601, et
seq.), or otherwise designated as a contaminated site under applicable
state or local law;
(ee) the Company and any "employee benefit plan" (as defined under
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, ERISA))
established or maintained by the Company or its ERISA Affiliates (as
defined below) are in compliance in all material respects with ERISA; ERISA
Affiliate means, with respect to the Company, any member of any group of
organizations described in Sections 414(b),(c),(m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the Code) of which the Company is a member; no
"reportable event" (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any "employee benefit plan" established
or maintained by the Company or any of its ERISA Affiliates; no "employee
benefit plan" established or maintained by the Company or any of its ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfounded benefit liabilities" (as defined under ERISA); neither
the Company nor any of its ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii)
Sections 412, 4971, 4975 or 4980B of the Code; each "employee benefit plan"
established or maintained by the Company or any of its ERISA Affiliates
that is intended to be qualified under Section 401(a) of the Code is so
qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification;
(ff) the Company has filed with the U.S. Food and Drug Administration
(the FDA), and all applicable state and local regulatory bodies, for and
received approval of all registrations, applications, licenses, requests
for exemptions, permits and other regulatory authorizations, necessary to
conduct the Company's business as of the date hereof as it is described in
the Registration Statement and the Prospectus; the Company is in compliance
with all such registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations, and all applicable
FDA, state and local rules, regulations, guidelines and policies,
including, without limitation, applicable FDA, state and local rules,
regulations and policies relating to good manufacturing practice (GMP) and
good laboratory practice (GLP); the Company has no reason to believe that
any party granting any such registration, application, license, request for
exemptions, permit or other regulatory authorization is considering
limiting, suspending or revoking the same and knows of no basis for any
such limitation, suspension or revocation;
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(gg) the human clinical trials, animal studies and other preclinical
tests conducted by the Company or in which the Company has participated
that are described in the Registration Statement and Prospectus or the
results of which that are referred to in the Registration Statement or
Prospectus, and such studies and tests conducted on behalf of the Company,
were and, if still pending, are, being conducted in accordance with
experimental protocols, procedures and controls generally used by qualified
experts in the preclinical or clinical study of new drugs or diagnostics as
applied to comparable products to those being developed by the Company; the
descriptions of the results of such studies, test and trials contained in
the Registration Statement and Prospectus are accurate and complete in all
material respects, and the Company has no knowledge of any other trials,
studies or tests, the results of which the Company believes reasonably call
into question the clinical trial results described or referred to in the
Registration Statement and Prospectus; and the Company has not received any
notices or correspondence from the FDA or any other governmental agency
requiring the termination, suspension or modification of any animal
studies, preclinical tests or clinical trials conducted by or on behalf of
the Company or in which the Company has participated that are described in
the Registration Statement or Prospectus or the results of which are
referred to in the Registration Statement or Prospectus;
(hh) no consent approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is
required in connection with the offering of the Reserved Shares in any
jurisdiction where the Reserved Shares are being offered;
(ii) the Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the distribution of the Reserved
Shares with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type
of business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its products;
(jj) Except as disclosed in the Prospectus or as would not be
expected to cause a Material Adverse Effect, each hardware, software and
firmware product used in or developed by or for the Company in its business
(collectively, the Software) will accurately process date data (including,
but not limited to, calculating, comparing and sequencing) from, into and
between the twentieth and twenty-first centuries, including, without
limitation, leap year calculations, without a decrease in the functionality
of the Software. The Software is designed to be used prior to, during and
after the calendar year 2000 A.D. and will operate during each such time
period without breach of this Section (jj). Without limiting the generality
of the foregoing, the Software (i) will not abnormally end or provide
invalid or incorrect results as a result of correctly entered date data,
specifically including date data which represents or references different
centuries or more than one century; (ii) has been designed to ensure date
data century recognition, calculations which accommodate same century and
multi-century formulas and date values, and date data interface values that
reflect the century; and (iii) provides that all date-related user
interface functionalities and data fields include the indication of
century; and
12
(kk) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
Any certificate signed by an officer of the Company and delivered to
the Representatives or to counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
set forth therein.
4. Certain Covenants of the Company. The Company hereby agrees:
--------------------------------
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except service of process with respect to
the offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon
as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; in case any Underwriter
is required to deliver a prospectus within the nine-month period referred
to in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare promptly upon request, but at the expense
of such Underwriter, such amendment or amendments to the Registration
Statement and such prospectuses as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if
Rule 430A under the Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Act (which the Company agrees
to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of the Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of the Registration Statement, to make every reasonable
effort to obtain the lifting or removal of such order as soon as possible;
to advise you promptly of any
13
proposal to amend or supplement the Registration Statement or Prospectus
and to file no such amendment or supplement to which you shall object in
writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the date
of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares, and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send
to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other information as you
may reasonably request regarding the Company;
(h) to advise the Underwriters promptly of the happening of any
event known to the Company within the time during which a Prospectus
relating to the Shares is required to be delivered under the Act which, in
the judgment of the Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not include an
untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and, during such time, to
prepare and furnish, at the Company's expense, to the Underwriters promptly
such amendments or supplements to such Prospectus as may be necessary to
reflect any such change and to furnish you a copy of such proposed
amendment or supplement before filing any such amendment or supplement with
the Commission;
(i) to the extent not included in any report filed pursuant to
paragraph (g) above, to make generally available to its security holders,
and to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period of
twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) of the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but not later
than , 2001;
(j) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and of cash flow of the Company
for such fiscal year, accompanied by a copy of the certificate or report
thereon of nationally recognized independent certified public accountants);
14
(k) to furnish to you four (4) signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(l) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company
which have been read by the Company's independent certified public
accountants, as stated in their letter to be furnished pursuant to Section
6(b) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus and
to include in the Company's reports filed with the Commission such
information with respect to the sale of the Shares and the application of
the proceeds therefrom as may be required under Rule 463 under the Act;
(n) to pay all costs, expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters
except as set forth under Section 5 hereof and (iii), (iv) and (vi) below)
in connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and any amendments
or supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Shares,
(iii) the producing, word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Powers of Attorney
and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to
the Underwriters and (except closing documents) to dealers (including costs
of mailing and shipment), (iv) the qualification of the Shares for offering
and sale under state laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of
the Shares on any securities exchange or qualification of the Shares for
quotation on Nasdaq and any registration thereof under the Exchange Act,
(vi) any filing for review of the public offering of the Shares by the
NASD, including the distribution of the Reserved Shares and (vii) the
performance of the Company's other obligations hereunder; and
(o) not to sell, offer or agree to sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable or
exercisable for Common Stock or warrants or other rights to purchase Common
Stock or permit the registration under the Act of any shares of Common
Stock, except for the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement and except for issuances of Common
Stock upon the exercise of outstanding options, warrants and debentures,
for a period of 180
15
days after the date hereof, without the prior written consent of Warburg
Dillon Read, LLC.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Dechert
Price & ▇▇▇▇▇▇, counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form satisfactory to ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) the Company is duly qualified to do business in the
Commonwealth of Pennsylvania and in _______________________;
(iii) the Company has the corporate power and authority to enter
into the Underwriting Agreement and to issue, sell and deliver the
Shares to the Underwriters as provided in the Underwriting Agreement;
this Agreement has been duly authorized, executed and delivered by the
Company;
(iv) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be validly issued
and will be fully paid and non-assessable and free of (A) any
preemptive rights arising under the Restated Certificate or the
Delaware General Corporation Law or (B) to our knowledge, similar
rights that entitle or will entitle any person to acquire any
16
shares of capital stock of the Company upon the issuance and sale of the Shares
by the Company;
(v) the Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued and are
fully paid, nonassessable and free of statutory and contractual preemptive
rights, resale rights, rights of first refusal and similar rights; the Shares
when issued will be free of statutory and contractual preemptive rights; the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders;
(vi) the Company does not own or control, directly or indirectly, any
corporation, association or other entity;
(vii) the capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained in the Registration
Statement and Prospectus;
(viii) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act;
(ix) the Registration Statement has become effective under the Act and,
to the best of such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by such Rule 424;
(x) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares and consummation by the Company of the transactions as contemplated
hereby other than registration of the Shares under the Act (except such counsel
need express no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters);
(xi) the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice, lapse of
time, or both, would result in any breach of, or constitute a default under),
any provisions of the charter or by-laws of the Company or under any provision
of any material license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any material lease, contract or
17
other agreement or instrument to which the Company is a party or by which it or
any of its properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Company;
(xii) to the best of such counsel's knowledge, the Company is not in
violation of its charter or by-laws or in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would result in
any breach of, or constitute a default under), any license, indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence of indebtedness,
or any lease, contract or other agreement or instrument to which the Company is
a party or by which it or its properties may be bound or affected or under any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company;
(xiii) to the best of such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are required to
be filed as exhibits to the Registration Statement or to be summarized or
described in the Prospectus which have not been so filed, summarized or
described;
(xiv) to the best of such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or contemplated
to which the Company is subject or of which any of its properties is subject at
law or in equity or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency which
are required to be described in the Prospectus but are not so described;
(xv) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or a "promoter" or
"principal underwriter" for, a "registered investment company," as such terms
are defined in the Investment Company Act of 1940, as amended;
(xvi) the Common Stock has been approved for quotation on the Nasdaq
National Market, upon issuance as contemplated by the Underwriting Agreement;
(xvii) the statements set forth under the caption "Description of Capital
Stock" in the Prospectus, insofar as such statements purport to summarize
certain provisions of the capital stock of the Company, provide a fair summary
of such provisions in all material respects; the statements set forth under the
captions "Risk Factors --Anti-takeover provisions in our charter documents and
under Delaware law may make an acquisition of us, which may be beneficial to our
stockholders, more difficult" and "--If our stockholders sell substantial
amounts of our common stock after this offering, the market price of our common
stock may fall;" "Management--Employee Benefit Plans;" "Certain Transactions;"
and "Shares Eligible for Future Sale" in the Prospectus, and in the Registration
Statement under Item 15, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, provide a fair
18
summary of such legal matters, documents and proceedings in all material
respects; the description in the Registration Statement and the Prospectus of
the Restated Certificate and the By-laws fairly presents the information
required to be presented by the Securities Act and the applicable rules and
regulations thereunder in all material respects;
(xviii) to the best of such counsel's knowledge, except as described in
the Prospectus, no holder of any securities of the Company or any other person
has the right, contractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any of the
Shares or the right to have any Common Stock or other securities of the Company
included in the Registration Statement or the right, as a result of the filing
of the Registration Statement, to require the Company to register under the
Securities Act any shares of Common Stock or other securities of the Company,
and any registration rights in connection with the offering contemplated by the
Registration Statement have been waived;
[(xix) to the best of such counsel's knowledge, the Company has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any Material Adverse Effect on the Company;]
(xx) the issuance and sale of the Company's Series G Preferred Stock in
the private placement completed on or about January __, 2000 was exempt from the
registration requirements of the Act;
(xxi) such counsel have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus were discussed and,
although such counsel is not passing upon and does not assume responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (v), (vii) and (xvii) above), on the basis of the foregoing
nothing has come to the attention of such counsel that causes them to believe
that the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of purchase or
additional time of purchase, as the case may be, contained an untrue statement
of a material fact or omitted to
19
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statement or
Prospectus.
(b) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of [Company FDA
counsel], special FDA counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in form
satisfactory to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters,
stating that such counsel are familiar with the FDA regulatory matters of the
Company and its business and have read the Registration Statement and the
Prospectus, including particularly, the portions of the Registration Statement
and the Prospectus relating to such matters included under the captions "Risk
Factors - Because obtaining necessary regulatory approvals to market our
products [in the United States and foreign jurisdictions] is uncertain, we
cannot predict whether or when we will be able to commercialize our products;"
and "Business - Government Regulation;" (the Regulatory Disclosure Sections)
and:
(i) there are no enforcement actions pending against the Company
or any of its officers or directors by the FDA and, to such counsel's
knowledge, no such actions are threatened;
(ii) the statements in the Registration Statement and Prospectus
under the Regulatory Disclosure Sections, insofar as such statements
purport to summarize applicable provisions of the Federal Food, Drug, and
Cosmetic Act, as amended (the FDC Act) and the regulations promulgated
thereunder, have been reviewed by such counsel and are accurate summaries
in all material respects of the provisions purported to be summarized under
such captions in the Registration Statement and Prospectus;
(iii) as to the statements made in the Regulatory Disclosure
Section, nothing has come to the attention of such counsel which leads them
to believe that, at the time the Registration Statement became effective
and at all times subsequent thereto up to and on the time of purchase or
the additional time of purchase, as the case may be, the Regulatory
Disclosure Sections of the Registration Statement and any amendment or
supplement thereto contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or at the time of purchase
or the additional time of purchase, as the case may be, the Regulatory
Disclosure Sections of the Registration Statement, the Prospectus and any
amendment or supplement thereto (except as aforesaid), on the date hereof,
contains any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
20
(c) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of ___________,
patent counsel for the Company, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form satisfactory to
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, stating that:
(i) The statements in the Prospectus relating to U.S. patent
matters, under the captions "RISK FACTORS -- If we cannot adequately
protect our patent and proprietary rights, our business will suffer" and
["BUSINESS -- Patents and Proprietary Rights"], insofar as such statements
constitute matters of law, legal conclusions, or summaries of legal matters
or proceedings, are correct in all material respects and present fairly the
facts and information purported to be shown.
(ii) With respect to the Patents and Patent Applications referred
to in the Registration Statement, and the License Agreements referred to in
the Registration Statement which are listed in Schedule I to such opinion,
the sections of the Registration Statement entitled "RISK FACTORS -- If we
cannot adequately protect our patent and proprietary rights, our business
will suffer" and ["BUSINESS --Patents and Proprietary Rights", at the time
the Registration Statement became effective, did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(iii) With respect to the Patents and Patent Applications, and the
License Agreements referred to in the Prospectus which are listed in
Schedule I to such opinion, the sections of the Prospectus entitled "RISK
FACTORS -- If we cannot adequately protect our patent and proprietary
rights, our business will suffer" and ["BUSINESS --Patents and Proprietary
Rights"], as of its date and as of the Closing Date (as defined in the
Underwriting Agreement), do not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
(iv) To the best of such counsel's knowledge, except as described
in the Prospectus, and with the exception of proceedings before the PTO,
there are no pending, or threatened, legal or governmental proceedings
relating to any of the Patents and Patent Applications.
(v) To the best of such counsel's knowledge, the License
Agreements listed in Schedule I to such opinion grant the Company rights in
the patents and/or patent applications, as applicable referred to in the
Prospectus which are listed in Schedule I to such opinion, and such License
Agreements are validly binding and enforceable under federal case law
relating to the licensing of patent rights.
21
(vi) To the best of such counsel's knowledge, the Company owns
each of the Patents and Patent Applications.
(vii) To the best of such counsel's knowledge, no security
interests have been recorded in the PTO with respect to any of the
Patents and Patent Applications.
(viii) To the best of such counsel's knowledge, no liens have
been recorded against the Company with respect to any of the Patents
and Patent Applications.
(ix) To the best of such counsel's knowledge, except as
described in the Prospectus, and except for any rights reserved to the
United States Government, no third party has any rights to any of the
Patents and Patent Applications that are referred to in the Prospectus
and listed in Schedule I to such opinion.
(x) To the best of such counsel's knowledge, except as
described in the Prospectus, no interference has been declared or
provoked with respect to any of the Patents and Patent Applications.
(xi) To the best of such counsel's knowledge, the Company has
not received any notice challenging the validity or enforceability of
any of the Patents and Patent Applications.
(xii) While there can be no guarantee that any particular patent
application will issue as a patent, each of the U.S. Patent
Applications that are referred to in the Prospectus and listed in
Schedule I to such opinion, was property filed, and is being properly
and diligently prosecuted, in the PTO.
(xiii) For each U.S. patent application listed in Schedule I to
such opinion, all information known, to date, to be "material to
patentability", as defined in 37 C.F.R. (S) 1.56(b), has been
disclosed, or will be disclosed pursuant to 37 C.F.R. (S) 1.97, to the
PTO.
(xiv) Without any searches specifically having been conducted,
or having been required to have been conducted, for the purpose of
rendering such opinion, and while there can be no guarantee that any
particular patent application will issue as a patent, each of the U.S.
patent applications that are referred to in the Prospectus, discloses
patentable subject matter.
(xv) To the best of such counsel's knowledge, without any
searches having been conducted for the purpose of rendering this
opinion, no third party is infringing any of the Patents and Patent
Applications.
(xvi) To the best of such counsel's knowledge, no claim, which
is presently pending, has been asserted against the Company relating
to the potential
22
infringement of, or conflict with, any patents, trademarks,
copyrights, trade secrets, or proprietary rights, of others.
(xvii) To the best of such counsel's knowledge, the Company is
not infringing the intellectual property rights of any third party.
(d) You shall have received from KPMG, LLP letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by Warburg Dillon Read LLP.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated the
time of purchase or the additional time of purchase, as the case may be, as
to the matters referred to in subparagraphs (iii), (iv) and (ix) of
paragraph (a) of this Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which
the contents of the Registration Statement and Prospectus and related
matters were discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus (except as to matters referred to with respect to the Shares
under subparagraph (vii) of paragraph (a) of this Section 6), on the basis
of the foregoing (relying as to materiality to a large extent upon the
opinions of officers and other representatives of the Company), no facts
have come to the attention of such counsel which lead them to believe that
the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date or any supplement thereto
as of its date 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, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statement or
Prospectus.
(f) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you object in writing.
(g) The Registration Statement shall become effective, or if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act, at or before 5:00 P.M.,
New York City time, on the date of this Agreement, unless a later time (but
not later than 5:00 P.M., New York City time, on
23
the second full business day after the date of this Agreement) shall be agreed
to by the Company and you in writing or by telephone, confirmed in writing;
provided, however, that the Company and you and any group of Underwriters,
including you, who have agreed hereunder to purchase in the aggregate at least
50% of the Firm Shares may from time to time agree on a later date.
(h) Prior to the time of purchase or the additional time of purchase, as
the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall 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;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition or prospects
of the Company shall occur or become known and (ii) no transaction which is
material and unfavorable to the Company shall have been entered into by the
Company.
(j) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be and the conditions
set forth in paragraphs (h) and (i) of this Section 6 have been met.
(k) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and certain
stockholders of the Company designated by you to the effect that such persons
shall not sell, offer or agree to sell, contract to sell, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of Common Stock
of the Company or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to the Common Stock for
a period of 180 days after the date of the Prospectus without Warburg Dillon
Read's prior written consent.
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
24
(m) The Shares shall have been approved for quotation on Nasdaq,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(n) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall
not have occurred any downgrading, nor shall any notice or announcement
have been given or made of (i) any intended or potential downgrading or
(ii) any review or possible change that does not indicate an improvement,
in the rating accorded any securities of or guaranteed by the Company by
any "nationally recognized statistical rating organization," as that term
is defined in Rule 436(g)(2) under the Act.
7. Effective Date of Agreement; Termination. This Agreement shall
----------------------------------------
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, since the time of execution of this Agreement or the
respective dates as of which information is given in the Registration Statement
and Prospectus, (y) there has been any material adverse and unfavorable change,
financial or otherwise (other than as referred to in the Registration Statement
and Prospectus), in the operations, business, condition or prospects of the
Company which would, in your judgment or in the judgment of such group of
Underwriters, make it impracticable to market the Shares, or (z) there shall
have occurred any downgrading, or any notice shall have been given of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized statistical rating
organization", as that term is defined in Rule 436(g)(2) under the Act or, if,
at any time prior to the time of purchase or, with respect to the purchase of
any Additional Shares, the additional time of purchase, as the case may be,
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limitations
or minimum prices shall have been established on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such
25
sale is not carried out because the Company shall be unable to comply with any
of the terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 4(n),
5 and 9 hereof), and the Underwriters shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section 9
hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and
-------------------------------------
7, if any Underwriter shall default in its obligation to take up and pay for the
Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all non-
defaulting Underwriters pro rata in proportion to the aggregate number of Firm
Shares set opposite the names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
26
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim (i) arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company) or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or arises out of
or is based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading; (ii) arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in any material prepared by or
with the consent of the Company for distribution to Participants in connection
with the distribution of the Reserved Shares, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statement therein not misleading; (iii) arises out of
or is based upon the failure of any Participant to pay for and accept delivery
of Reserved Shares that the Participant has agreed to purchase; or (iv) relates
to, or arises out of, or in connection with, the distribution of the Reserved
Shares, other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of the Underwriters.
The foregoing indemnity with respect to any untrue statement contained
in or any omission from a Preliminary Prospectus shall not inure to the benefit
of the Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, liability, claim, damage or expense purchased
any of the Shares that are the subject thereof if the Company shall sustain the
burden of proving that such person was not sent or given a copy of the
Prospectus (or the Prospectus as amended or supplemented) at or prior to the
written confirmation of the sale of such Shares to such person and the untrue
statement contained or the omission from such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented).
27
If any action, suit or proceeding (together, a Proceeding) is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
-------- -------
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise. Such
Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without its written consent but if settled
with the written consent of the Company, the Company agrees to indemnify and
hold harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the
28
successors and assigns of all of the foregoing persons from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
-------- -------
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
29
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days' prior
notice of its intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, bear
to the aggregate public offering price of the Shares. The relative fault of
the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (c)
above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of
any damage which such Underwriter
30
has otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by
or on behalf of the Company, its directors or officers or any person who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement
or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of
the Shares, or in connection with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Warburg Dillon Read LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at Adolor
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ Attention:
Chief Executive Officer.
11. Governing Law; Construction. This Agreement and any claim,
---------------------------
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New York
without giving effect to any laws that would require the application of the laws
of a jurisdiction other than the State of New York. The Section headings in this
Agreement have been inserted as a matter of convenience of reference and are not
a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no Claim
--------------------------
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against Warburg Dillon Read LLC or any
indemnified party. Each of Warburg Dillon Read LLC and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
31
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts in the jurisdiction of which the Company is or may be
subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and
-------------------
is made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties in one
------------
or more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. Miscellaneous. Warburg Dillon Read LLC, an indirect, wholly
-------------
owned subsidiary of [ ], is not a bank and is separate from any affiliated
bank, including any U.S. branch or agency of Warburg Dillon Read LLC. Because
Warburg Dillon Read LLC is a separately incorporated entity, it is solely
responsible for its own contractual obligations and commitments, including
obligations with respect to sales and purchases of securities. Securities sold,
offered or recommended by Warburg Dillon Read LLC are not deposits, are not
insured by the Federal Deposit Insurance Corporation, are not guaranteed by a
branch or agency, and are not otherwise an obligation or responsibility of a
branch or agency.
32
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
ADOLOR CORPORATION
By:
-----------------------------
Title:
---------------------------
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
WARBURG DILLON READ LLC, on behalf of itself
and as representative of the Co-Managers
By:
---------------------------------
Name:
33
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
WARBURG DILLON READ LLC
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
PACIFIC GROWTH EQUITIES, INC.
-------------
Total
=============
34
