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GELTEX PHARMACEUTICALS, INC.
2,500,000 Shares
Common Stock
FORM OF UNDERWRITING AGREEMENT
March ___, 1998
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
As Representatives of
Several Underwriters
▇/▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
GelTex Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (herein collectively called the "Underwriters") an aggregate of 2,500,000
shares of the Company's common stock, par value $.01 per share (herein called
the "Common Stock"). The foregoing shares of Common Stock (herein called the
"Firm Shares") are to be sold to the Underwriters, acting severally and not
jointly, in such amounts as are set forth in Schedule I hereto opposite the
respective names of such Underwriters. The Company also proposes to grant to the
Underwriters an option to purchase up to 375,000 shares of Common Stock (herein
called the "Option Shares" and with the Firm Shares herein collectively called
the "Shares"). The Common Stock is more fully described in the Registration
Statement and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Shares by the several Underwriters for whom you are acting as
Representatives.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-45151), including the related preliminary prospectus, for the registration
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Shares. The Company and the proposed offering meet the conditions for the use of
Form S-3. The Registration
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Statement has been declared effective under the Securities Act, and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. Copies of such Registration Statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission),
heretofore filed by the Company with the Commission have been delivered to you.
Any reference herein to the Registration Statement, any Pre-Effective
Prospectus or the Prospectus shall be deemed to include the documents
incorporated therein by reference, and any supplements or amendments thereto
filed with the Commission after the date of filing of the Prospectus under Rules
424(b) or 430A and prior to the termination of the offering of the Shares by the
Underwriters. Any reference herein to the Registration Statement, any
Pre-Effective Prospectus, the Prospectus or any amendment or supplement to any
of the foregoing, shall be deemed to include the respective copies thereof filed
with the Commission on the Commission's Electronic Data Gathering, Analysis and
Retrieval.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement, including all exhibits and financial statements,
any registration statement filed by the Company pursuant to Rule 462(b) of the
Securities Act and all information omitted therefrom in reliance upon Rule 430A
of the Commission and contained in the Prospectus referred to below, in the form
in which it became effective and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the "Effective
Date"), shall also mean (from and after the effectiveness of such amendment)
such registration statement as so amended. The term "Prospectus" as used in this
Agreement shall mean (a) the prospectus relating to the Shares first filed by
the Company with the Commission pursuant to Rule 424(b) and Rule 430A of the
Commission or (b) the term sheet or abbreviated term sheet filed by the Company
with the Commission pursuant to Rule 424(b)(7) together with the last
preliminary prospectus included in the Registration Statement filed prior to the
time it became effective or filed pursuant to Rule 424(a) under the Securities
Act that is delivered by the Company to the Underwriters for delivery to
purchasers of the Shares, except that if any revised Prospectus shall be
provided to the several Underwriters by the Company for use in connection with
the offering of the Shares which Prospectus differs from the Prospectus on file
at the Commission at the time the Registration Statement became effective, the
term "Prospectus" shall refer to such revised Prospectus from and after the time
it is first provided to the several Underwriters for such use. The term
"Pre-Effective Prospectus" as used in this Agreement shall mean each prospectus
(subject to completion) included in the Registration Statement prior to the time
the Registration Statement became effective. The Company has caused to be
delivered to you copies of each Pre-Effective Prospectus and has consented to
the use of such copies for the purposes permitted by the Securities Act.
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The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Representatives deem advisable after the
Registration Statement becomes effective.
2. Representations and Warranties of the Company. The Company represents
and warrants to the several Underwriters as follows:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, has full
corporate power and authority to own or lease its properties and conduct its
businesses as described in the Registration Statement and as being conducted and
is duly qualified or licensed to transact business in all jurisdictions in which
the character of the property owned or leased or the nature of the business
transacted by it requires such qualification (except where the failure to be so
qualified would not have a material adverse effect on the business, properties,
operations, financial conditions, income or business prospects of the Company as
presently being conducted). The Company has no "significant subsidiaries" as
defined in Rule 1-02 of the Commission's Regulation S-X.
(b) The Company now holds, and at the First Closing Date (as
hereinafter defined) will hold, all material licenses, certificates and permits
from state, Federal, and other regulatory authorities that are necessary for the
conduct of its business as it is presently conducted, except where the failure
to hold such licenses, certificates and permits would not have a material
adverse effect on the business, properties, operations, financial condition,
income or business prospects of the Company; the Company is not in violation of
its corporate charter or by-laws, or in default in the performance or observance
of any provision of any obligation, agreement, covenant, or condition contained
in a bond, debenture, mortgage, loan agreement, joint venture, or other material
agreement or instrument to which the Company is a party or by which the Company
or any of its properties may be bound, or in violation of any law, order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality, or court, domestic or foreign, except where such violation
would not have a material adverse effect on the business, properties,
operations, financial condition, income or business prospects of the Company as
presently being conducted.
(c) Except as disclosed in the Prospectus, the Company owns, or
possesses adequate rights to use, all patents, patent rights, inventions, trade
secrets, know-how, proprietary techniques, including processes and substances,
trademarks, service marks, trade names and copyrights described or referred to
in the Prospectus as owned or used by it or which is necessary for the conduct
of its business as it is presently conducted, except where the failure to own or
possess, such patents, patent rights, inventions, trade secrets, know-how,
proprietary techniques, including processes
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and substances, trademarks service marks, trade names and copyrights would not
have a material adverse effect on the business, properties, operations,
financial condition or income of the Company. Except as disclosed in the
Prospectus, the Company has not received notice of infringement of or conflict
with asserted rights of others with respect to any patents, patent rights,
inventions, trade secrets, know-how, proprietary techniques, including processes
and substances, trademarks, service marks, tradenames or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially adversely affect the business, properties, operations,
financial condition, income or business prospects of the Company as presently
being conducted or as proposed to be conducted.
(d) This Agreement has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement enforceable against the Company
in accordance with its terms, except (i) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies, and (ii) to the extent that indemnification provisions herein may be
limited by applicable federal or state securities laws; the execution, delivery
and performance of this Agreement and the consummation of the transactions
herein contemplated will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, (i) any material indenture,
mortgage, deed or trust, loan agreement, bond debenture, note agreement, or
other material evidence of indebtedness, lease, contract or other agreement or
instrument to which the Company is a party or by which the property of the
Company is bound, (ii) the corporate charter or by-laws of the Company, or (iii)
any statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or over the properties of the
Company; and no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Company of
the transactions herein contemplated, except such as may be required under the
Securities Act or under applicable state securities laws.
(e) Except as set forth in the Prospectus, there is not any action,
suit or proceeding, at law or in equity, against the Company by a private
litigant, by any Federal, state, or other commission, board or agency, or any
proceedings before any administrative agency pending or, to the knowledge of the
Company, threatened, wherein any unfavorable decision, ruling or finding could
adversely affect the business, properties, operations, financial condition,
income or business prospects of the Company as presently being conducted, or
prevent consummation of the transactions contemplated hereby.
(f) The capitalization of the Company is as set forth in the "Actual"
column under the caption "Capitalization" in the Registration Statement and the
Prospectus, it being understood that the information therein regarding shares
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outstanding is as of December 31, 1997. The outstanding shares of Common Stock
of the Company have been duly authorized and validly issued and are fully-paid
and non-assessable. The Shares have been duly and validly authorized, and when
issued and paid for on the First Closing Date and the Option Closing Date (each
as hereinafter defined) will be duly and validly issued, fully paid and
non-assessable; there are no preemptive rights or other rights to subscribe for
or to purchase, or any restriction upon the voting or transfer of the Shares;
and there are no outstanding options, warrants or other rights, granted to or by
the Company to purchase shares of Common Stock or other securities of the
Company other than as described in the Prospectus other than options granted
pursuant to employee and director plans after the date as of which information
with respect thereto is given in the Prospectus. No holder of shares of Common
Stock or other securities of the Company has the right (other than a right which
has been waived) (i) to have any securities owned by such holder included in the
Registration Statement or (ii) to require registration of any securities owned
by such holder under the Securities Act at any time prior to and including the
date 90 days following the Effective Date. No further approval or authority of
the stockholders or the Board of Directors of the Company will be required for
the issuance and sale of the Shares as contemplated herein. A registration
statement relating to the Common Stock has been declared effective by the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the Common Stock is duly registered thereunder. The
Company's Common Stock is listed on the Nasdaq National Market, and the Company
has received no notice of any proceeding having the purpose or effect of
discontinuing such listing. The Company has filed a notification form relating
to the issuance of the shares with the National Association of Securities
Dealers, Inc. ("NASD") in accordance with the NASD By-laws. The Company knows of
no reason or set of facts which is likely to result in the termination of
inclusion of the Common Stock in the Nasdaq National Market or the inability of
the Shares to continue to be included in the Nasdaq National Market.
(g) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, operations, financial condition,
income or business prospects of the Company, whether or not arising from
transactions in the ordinary course of business, other than as set forth in the
Registration Statement and the Prospectus, and since such dates, the Company has
not entered into any material transaction not referred to in the Registration
Statement and the Prospectus that would be required to be disclosed therein.
(h) To the best of the Company's knowledge, the Commission has not
issued an order preventing or suspending the use of any Pre-Effective Prospectus
or the Prospectus, nor has it instituted proceedings for that purpose and each
Pre-Effective Prospectus, at the time of filing thereof, did not contain any
untrue statement of a
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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. The Registration Statement, the
Pre-Effective Prospectus and the Prospectus comply, and on the First Closing
Date and the Option Closing Date will comply, in all material respects with the
provisions of the Securities Act and the rules and regulations of the Commission
thereunder. There are no contracts or documents of the Company which would be
required to be filed as exhibits to the Registration Statement by the Securities
Act or by the rules and regulations of the Commission which have not been filed
as exhibits to the Registration Statement. The documents incorporated by
reference in the Prospectus when they became effective or were filed with the
Commission conformed in all respects to the requirements of the Exchange Act or
the Securities Act and the rules and regulations thereunder. On the Effective
Date and at all times subsequent thereto up to and including the First Closing
Date and the Option Closing Date, neither the Registration Statement nor any
amendment thereto, and neither the Pre-Effective Prospectus or the Prospectus,
nor any supplement thereto, contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (in the case
of the Registration Statement at any time other than the Effective Date and the
Pre-Effective Prospectus and the Prospectus, in light of the circumstances under
which they were made) not misleading; provided, however, that none of the
representations and warranties in this subsection (h) shall apply to statements
in or omissions from the Registration Statement, the Pre-Effective Prospectus or
the Prospectus made in reliance upon and in conformity with the information set
forth in Section 4 hereof.
(i) The financial statements of the Company, together with related
notes thereto incorporated by reference in the Registration Statement, the
Pre-Effective Prospectus and the Prospectus, present fairly in all material
respects the financial position and the results of operations of the Company, at
the indicated dates and for the indicated periods. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of results for such period have been made. The
summary and selected financial data included in the Registration Statement and
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements included therein.
(j) The Company has good and marketable title to all the properties and
assets reflected as owned by it in the financial statements (or as described as
owned by it in the Registration Statement) hereinabove described subject to no
liens, mortgages, pledges, charges or encumbrances of any kind except those
reflected in such financial statements (or as described in the Registration
Statement) or which are not material in amount. The Company occupies its leased
properties under valid and
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binding leases conforming to the description thereof set forth in the
Registration Statement.
(k) All material leases, contracts and agreements referred to in or
filed as exhibits to the Registration Statement to which the Company is a party,
or by which the Company is bound, are in full force and effect or have expired
or terminated in accordance with their terms or have been superseded by leases,
contracts or agreements referred to in the Registration Statement or
subsequently filed as exhibits to the Registration Statement.
(l) The Company has filed all Federal, state and foreign tax returns
which have been required to be filed (or have obtained any required extensions
in connection therewith) and has paid all taxes indicated by said returns and
all assessments received by it to the extent that such taxes have become due and
are not being contested in good faith, except where the failure to file such
returns would not have a material adverse effect on the business, properties,
operations, financial condition, income or business prospects of the Company.
The Company has no knowledge of any tax deficiency which has been or might be
asserted against it which would materially and adversely affect the business or
properties of the Company. To the knowledge of the Company, all tax liabilities
are adequately provided for on the books of the Company.
(m) Each approval, consent, order, authorization, designation,
declaration, or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated has been obtained or made and is in full force and effect, except
such steps as may be required by the National Association of Securities Dealers,
Inc. (herein called the "NASD") or as may be necessary to qualify the Shares for
public offering by the Underwriters under the state securities laws or filing
requirements under Rule 424(b) or Rule 430A.
(n) To the Company's knowledge, Ernst & Young LLP, who have certified
certain of the financial statements included in the Registration Statement, are
independent public accountants as required by the Securities Act and the rules
and regulations thereunder.
(o) The Company is not, and does not intend to conduct its business in
a manner in which it would become, an "investment company" as defined in Section
3(a) of the Investment Company Act of 1940, as amended (herein called the
"Investment Company Act").
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(p) Neither the Company, nor to the Company's knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on the Nasdaq National Market in accordance with Rule
10b-6A under the Exchange Act.
3. Purchase of the Shares by the Underwriters.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell the Firm Shares to the several Underwriters,
and each of the Underwriters agrees to purchase from the Company, the respective
aggregate number of the Firm Shares set forth opposite its name in Schedule I
hereto. In making this Agreement, each Underwriter is contracting severally and
not jointly; except as provided in Sections 3(b) and 3(c) of this Agreement, the
agreement of each Underwriter is to purchase only the respective number of
shares of the Firm Shares specified in Schedule I. The purchase price of the
Shares to be paid by the several Underwriters shall be $_____ per share, being
an amount equal to the public offering price less $_____per share.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of Shares agreed to be purchased by such Underwriter or
Underwriters, the Company shall immediately give notice thereof to the other
Underwriters, and such non-defaulting Underwriters shall have the right within
24 hours after the receipt by such Underwriters of such notice to purchase in
such other proportions as they may mutually agree, all or any part of the Shares
which such defaulting Underwriter or Underwriters agreed to purchase; provided,
however, that if the non-defaulting Underwriters fail to make such purchases
with respect to such Shares, the number of such Shares which a non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb all of the remaining
Shares. Notwithstanding the foregoing, the non-defaulting Underwriters shall not
be obligated to purchase the Shares which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such Shares exceeds
10% of the total number of shares which the Underwriters have agreed to purchase
hereunder. If the total number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase shall not be purchased or absorbed in accordance
with the two preceding sentences, the Company shall have the right, in addition
to any other right or remedies it may have, within 24 hours next succeeding the
24-hour period
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above referred to, to make arrangements with other underwriters for the purchase
of such Shares on the terms herein set forth. The term "Underwriter" shall
include any such substituted underwriter. In any such case where the number of
Shares to be purchased by the defaulting Underwriters exceeds 10% of the total
number of Shares to be purchased hereunder, either the non-defaulting
Underwriters or the Company shall have the right to postpone the First Closing
Date or Option Closing Date, as the case may be, determined as provided in
Section 5, for not more than seven (7) business days after the date originally
fixed as the First Closing Date or Option Closing Date, as the case may be,
pursuant to Section 5, in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made. If
the aggregate number of shares to be purchased by the defaulting Underwriter(s)
exceeds 10% of the total number of shares which the Underwriters have agreed to
purchase hereunder and neither the non-defaulting Underwriters nor the Company
shall make arrangements within the 24-hour periods stated above for the purchase
of all of the Shares which the defaulting Underwriter(s) 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 the non-defaulting
Underwriters and without any liability on the part of the non-defaulting
Underwriters to the Company. Nothing in this Section 3(b), and no action taken
hereunder, shall relieve the defaulting Underwriter or Underwriters from
liability in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, the Option Shares from the Company at the same price per share as
the Underwriters shall pay for the Firm Shares, as set forth in Section 3(a).
Said option may be exercised only to cover over-allotments in the sale of the
Firm Shares by the Underwriters. The option may be exercised in whole or in part
at any time (but not more than once) on or before the thirtieth (30th) day after
the date of the Prospectus, upon written or fax notice by you to the Company
setting forth the aggregate number of the Option Shares as to which the several
Underwriters are exercising the option. Delivery of certificates for the Option
Shares, and payment therefore, shall be made as provided in Section 5 hereof.
The number of Option Shares to be purchased by each Underwriter shall be the
same percentage of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares, as adjusted
by you in such manner as you deem advisable to avoid fractional shares.
4. Offering by Underwriters. The first sentence of the last paragraph on
the cover page of the Prospectus, the statement with respect to stabilization
and passive market making set forth on the inside front cover page of the
Prospectus and the information under "Underwriting" in the Registration
Statement, any Pre-Effective
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Prospectus, and the Prospectus relating to the Shares filed by the Company
(insofar as such information relates to the Underwriters), including the
concession and reallowance amounts appearing in the third paragraph thereof,
constitutes the only information furnished by the Underwriters to the Company
for inclusion in the Registration Statement, any Pre-Effective Prospectus, and
the Prospectus, and you represent and warrant to the Company that the statements
made therein are correct and complete and comply with the rules and regulations
of the Commission under the Securities Act.
5. Delivery of and Payment for the Shares.
(a) Delivery of certificates for the Firm Shares and the Option Shares
(if the option granted by Section 3(c) hereof shall have been exercised not
later than 10:00 a.m., New York City time, on the date two (2) business days
preceding the First Closing Date), and payment therefor, shall be made at the
offices of ▇▇▇▇▇ & Company, Financial Square, New York, New York at 10:00 a.m.,
New York City time, on the fourth (4th) business day after the date of this
Agreement, unless otherwise required by the Commission pursuant to Rule 15c6-1
of the Exchange Act or at such time on such other day not later than seven (7)
full business days after such fourth (4th) business day as shall be agreed upon
in writing by the Company and you. The date and hour of such delivery and
payment (which may be postponed as provided in Section 3(b) hereof) are herein
called the "First Closing Date."
(b) If the option granted by Section 3(c) hereof shall be exercised
after 10:00 a.m., New York City time, on the date two (2) business days
preceding the First Closing Date, delivery of certificates for the shares of
Option Shares, and payment therefor, shall be made at the offices of ▇▇▇▇▇ &
Company, Financial Square, New York, New York at 10:00 a.m., New York City time,
on the third (3rd) business day after the exercise of such option. The date and
hour of such delivery and payment are herein called the "Option Closing Date."
(c) Payment for the Shares purchased from the Company shall be made to
the Company or its order in New York, New York by one or more certified or
official bank check or checks in New York Clearing House (next-day) funds or, at
the Company's election, by wire transfer of immediately available funds to an
account designated by the Company. Such payment shall be made upon delivery of
certificates for the Shares to you for the respective accounts of the several
Underwriters against receipt therefor signed by you. Certificates for the Shares
to be delivered to you shall be registered in such name or names and shall be in
such denominations as you may request at least three business days before the
First Closing Date, in the case of Firm Shares, and at least 24 hours prior to
the purchase thereof in the case of the Option Shares. Such certificates will be
made available to the Underwriters for inspection, checking and packaging at the
offices of the agent for ▇▇▇▇▇ & Company not less than
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one full business day prior to the First Closing Date or, in the case of the
Option Shares, by 3:00 p.m., New York City time, on the business day preceding
the Option Closing Date.
It is understood that each of you, individually and not on behalf of
the other Underwriters, may (but shall not be obligated to) make payment to the
Company for shares to be purchased by any underwriter whose check shall not have
been received by you on the First Closing Date or any later date on which Option
Shares are purchased for the account of such other Underwriter. Any such payment
by you shall not relieve such Underwriter from any of its obligations hereunder.
6. Further Agreements of the Company. The Company hereby covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A and
(ii) not file any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of the
Commission.
(b) The Company will promptly notify each Underwriter in the event of
(i) the request by the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceedings for that purpose, (iv) 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 any action by the NASD suspending or
terminating the inclusion of the Shares on the Nasdaq National Market, or (v)
the receipt by the Company of notice of the initiation or threat of any
proceedings for such purpose. The Company will make every reasonable effort to
prevent the issuance of such a stop order and, if such an order shall at any
time be issued, to obtain the withdrawal thereof at the earliest possible
moment.
(c) The Company will (i) on or before the First Closing Date, deliver
to each of you a copy of the signed copy of the Registration Statement as
originally filed and each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a copy of the signed copy of each post-effective amendment, if any, to the
Registration Statement (together with, in each case, all exhibits thereto unless
previously furnished to you), (ii) deliver to each of you additional conformed
copies of each of the foregoing (but without exhibits), (iii) deliver
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to each of you, at such office or offices you may designate, as many copies of
the Prospectus as you may reasonably request, and (iv) thereafter from time to
time during the period in which a prospectus is required by law to be delivered
by an Underwriter or dealer, likewise send to each of you as many additional
copies of the Prospectus and as many copies of any supplement to the Prospectus
and of any amended Prospectus, filed by the Company with the Commission, as you
may reasonably request for the purposes contemplated by the Securities Act. The
foregoing delivery requirements shall include any document filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus.
(d) If at any time during the period in which a Prospectus is required
by law to be delivered by any Underwriter or dealer any event relating to or
affecting the Company, or of which the Company shall be advised in writing by
you, shall occur as a result of which it is necessary, in the reasonable opinion
of counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser of the
Shares, the Company will forthwith prepare and file with the Commission a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. The Company
authorizes the Underwriters and all dealers to whom any of the shares may be
sold by the Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Shares in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company will
submit to you, for your approval after reasonable notice thereof, such approval
not to be unreasonably withheld or delayed, a copy of any post-effective
amendment to the Registration Statement proposed to be filed or a copy of any
document proposed to be filed under the Exchange Act before the termination of
the offering of the Shares by the Underwriters.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Shares for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a Prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so
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qualified or to take any action which would subject it to taxation as doing
business in a jurisdiction where it is not now doing business. The Company will,
from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in effect
for so long a period (not in excess of 180 days after the commencement of the
public offering of the shares by the Underwriters) as you may reasonably request
for distribution of the Shares.
(g) During a period of two years commencing with the date hereof, the
Company will furnish to each of you and, upon request, to each of the other
Underwriters copies of all periodic and special reports furnished to
stockholders of the Company and of all reports filed with the Commission under
Section 13(a) or 15(d) of the Exchange Act
(h) Not later than the 45th day following the end of the fiscal quarter
first occurring after the first anniversary of the "effective date of the
registration statement" (as defined in Rule 158(c) under the Securities Act),
the Company will make generally available to its security holders in the manner
contemplated by Rule 158(b) under the Securities Act an earning statement in
accordance with Section 11(a) of the Securities Act and the rules and
regulations thereunder.
(i) The Company agrees to pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, including
all costs and expenses incident to (i) the preparation, printing and filing with
the Commission and the NASD of the Registration Statement, any Pre-Effective
Prospectus and the Prospectus (including, without limitation the fees and
expenses of the Company's accountants and counsel), (ii) the furnishing to the
Underwriters of copies of any Pre-Effective Prospectus and of the several
documents required by Section 6(c) to be so furnished, (iii) the preparation,
printing and filing of all supplements and amendments to the Prospectus referred
to in Section 6(d), (iv) the furnishing to the Underwriters of the reports and
information referred to in Section 6(g), (v) the printing and issuance of stock
certificates, including the transfer agent's fees, (vi) the reproduction of this
Agreement and related documents delivered to the Underwriters and (vii) the
costs of listing the Shares on the Nasdaq National Market.
(j) The Company agrees to reimburse you for blue sky fees and related
disbursements (including costs of reproducing memoranda for the Underwriters)
paid by or for the account of the Underwriters or their counsel under state
securities or blue sky laws and for fees and related disbursements (including
reasonable legal fees and disbursements of counsel) in connection with such
filings as may be required by the NASD with respect to the offering contemplated
hereby.
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(k) The Company agrees that, without the prior written consent of ▇▇▇▇▇
& Company on behalf of the Representatives and the Underwriters, the Company
will not sell, offer, contract to sell, grant any option to purchase or
otherwise dispose of any shares of Common Stock or any securities convertible
into or exchangeable for or warrants to purchase Common Stock for a period of 90
days after the Effective Date, other than (i) the shares to be sold to the
Underwriters pursuant to this Agreement, (ii) shares of Common Stock issued upon
the exercise of options granted under the Company's 1992 Equity Incentive Plan
(the "Option Plan") or under the Company's 1995 Director Stock Option Plan (the
"Director Plan") or upon the exercise of warrants previously issued, (iii)
shares of Common Stock issued under the Company's 1995 Employee Stock Purchase
Plan ("ESPP") and (iv) options to purchase Common Stock granted under the Option
Plan, Director Plan or ESPP. For purposes of this Section 6(k) a sale, offer,
option or disposition shall be deemed to include any sale to an institution
which can, following such sale, sell Common Stock to the public in reliance on
Rule 144A, but shall not include a sale, offer, option or disposition under
circumstances where the holder may not, for a period of at least 90 days after
the commencement of the public offering of the Shares by the Underwriters, sell
the shares of Common Stock acquired by the holder to the public.
(l) The Company shall cause each officer and director of the Company,
and each stockholder of the Company listed on Schedule II hereto that has not
furnished to you such a letter or letters prior to the date of this Agreement,
to furnish to you, on the date of this Agreement, a letter or letters, in form
and substance satisfactory to counsel for the Underwriters, pursuant to which
each such person shall agree not to offer for sale, sell, distribute or
otherwise dispose of any shares of Common Stock during the 90 days following the
Effective Date, except with the prior written consent of ▇▇▇▇▇ & Company.
(m) The Company will use the net proceeds received by it from the sale
of the Shares being sold by it in the manner specified in the Prospectus.
(n) The Company will not take, directly or indirectly, any action
designed to cause or result in or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such
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15
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise, and the Company agrees to
reimburse each such Underwriter and controlling person for any legal or other
expenses (including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceedings which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any document filed under the
Exchange Act and incorporated by reference therein) or any post-effective
amendment thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Pre-Effective Prospectus or the Prospectus
(as amended or as supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iii) any untrue statement or alleged untrue statement
of a material fact contained in any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Shares under the securities laws thereof (any
such application, document or information being hereinafter called a "Blue Sky
Application"), or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
that (i) the indemnity agreement of the Company contained in this Section 7(a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter expressly for use in any Pre-Effective Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement thereto, or any
Blue Sky Application and (ii) the indemnity agreement contained in this Section
7(a) with respect to any Pre-Effective Prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased the Shares which is the subject
thereof (or the benefit of any person controlling such Underwriter) if at or
prior to the written confirmation of the sale of such Shares a copy of the
Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person and the untrue statement or omission of a material fact
contained in such Pre-Effective Prospectus was corrected in the Prospectus (or
the Prospectus was amended or
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supplemented) unless such failure is the result of noncompliance by the Company
with Section 6(c) hereof.
The indemnity agreement of the Company contained in this Section 7(a)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, and each
person (including each partner or officer thereof), if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
such indemnified parties or any of them may become subject under the Securities
Act, the Exchange Act, or the common law or otherwise and to reimburse each of
them for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceedings which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as a part thereof), or any
post-effective amendment thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any Pre-Effective Prospectus or the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of circumstances under which they were made,
not misleading, or (iii) any Blue Sky Application, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case only if
such statement or omission was made in reliance upon and in conformity with
information furnished in writing as herein stated or otherwise furnished in
writing to the Company by or on behalf of such indemnifying Underwriter
expressly for use in any Pre-Effective Prospectus, the Registration Statement,
the Prospectus, or any such amendment or supplement thereto, or any Blue Sky
Application.
The indemnity agreement of each Underwriter contained in this Section
7(b) shall remain operative and in full force and effect regardless of any
investigation
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made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Shares.
(c) Each party indemnified under the provisions of Section 7(a) or 7(b)
agrees that, upon the service of a summons or other initial legal process upon
it in any action or suit instituted against it or upon its receipt of written
notification of the commencement of any investigation or inquiry of, or
proceedings against, it in respect of which indemnity may be sought on account
of any indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the "Notice") of such service or notification to
the party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in such paragraphs shall be available to any party
who shall fail so to give the Notice if the party to whom such Notice was not
given was unaware of the action, suit, investigation, inquiry or proceedings to
which the Notice would have related and was prejudiced by the failure to give
the Notice, but the omission to notify such indemnifying party or parties of any
such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled to participate in the defense of any
action, suit or proceedings against, or investigation or inquiry of, any
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(herein called the "Notice of Defense") to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceedings, in
which event such defense shall be conducted at the expense of the indemnifying
party or parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; provided, however,
that (i) if the indemnified party or parties reasonably determined that there
may be a conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties in conducting the defense of such action,
suit, investigation, inquiry or proceedings or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled, at the expense of the
indemnifying party or parties, to conduct the defense to the extent reasonably
determined by such counsel to be necessary to protect the interests of the
indemnified party or parties, and (ii) in any event, the indemnified party or
parties shall be entitled, at its own expense, to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under Section 7(a) through 7(c)
for any legal or other expenses subsequently incurred by the indemnified party
or parties in connection with the
-17-
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defense of the action, suit, investigation, inquiry or proceedings, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the provision to the preceding sentence, and (B) the indemnifying party
or parties shall bear such other expenses as it or they have authorized to be
incurred by the indemnified party or parties. If, within a reasonable time after
receipt of the Notice, no Notice of Defense has been given, the indemnifying
party or parties shall be responsible for any legal or other expenses incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceedings.
(d) Notwithstanding the above, in no event shall the indemnifying
parties be responsible for fees and expenses of more than one counsel for all
indemnified parties in connection with one action (or separate but similar or
related actions) arising out of the same general allegations or circumstances.
Further, no indemnifying party shall be responsible for any settlement of an
action or claim effected without its written consent.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b) above although applicable in accordance with its terms, then each
such indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in Sections 7(a) or
7(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party 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
each indemnifying party in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities or actions in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, as set
forth in the table on the cover page of the Prospectus, bear to the aggregate
public offering price of the Shares. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this Section 7(e) were to be determined by pro-rata
allocation (even if the
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Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to in the first sentence of this Section 7(e). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in the first sentence of
this Section 7(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
preparing to defend or defending against any action or claim which is the
subject of this Section 7(e). Notwithstanding the provisions of this Section
7(e), no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(g) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 7(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect to which contribution may be sought, it shall promptly give
written notice of such service to the party or parties from whom contributions
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought of any
obligation it may have hereunder or otherwise (except as specifically provided
in Section 7(c) hereof).
(f) No indemnifying party will, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceedings in
respect of which indemnification may be sought hereunder (whether or not such
indemnifying party or any person who controls such indemnifying party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless the indemnifying party
uses its reasonable efforts to insure that such settlement, compromise or
consent includes an unconditional release of such indemnified party and each
such controlling person from all liability arising out of such claim, action,
suit or proceedings.
8. Termination. This Agreement may be terminated by you by giving written
notice to the Company (i) if at or prior to the First Closing Date trading in
securities on any of the New York Stock Exchange, American Stock Exchange or
Nasdaq National Market System shall have been suspended or minimum or maximum
prices shall have been established on any such exchange or market, or a banking
moratorium shall have been declared by New York or United States authorities;
(ii) if after the date of this Agreement trading of any securities of the
Company shall have
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been suspended on any exchange or in any over-the-counter market; (iii) if at or
prior to the First Closing Date there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign power or of
any other insurrection or armed conflict involving the United States or (B) any
change in financial markets or any calamity or crisis, which, in either such
case, in the judgment of the Representatives, makes it impractical or
inadvisable to offer or sell the Shares on the terms contemplated by the
Prospectus; (iv) if there shall have been any development or prospective
development involving particularly the business or properties or securities of
the Company or the transactions contemplated by this Agreement, which, in your
judgment, makes it impractical or inadvisable to offer or deliver the Shares on
the terms contemplated by the Prospectus; (v) if there shall be any litigation
or proceeding pending or threatened, which, in your judgment, makes it
impractical or inadvisable to offer or deliver the Shares on the terms
contemplated by the Prospectus, or (vi) if there shall have occurred any of the
events specified in the immediately preceding clauses (i) - (v) together with
any other such event that makes it, in your judgment, impractical or inadvisable
to offer or deliver the Shares on the terms contemplated by the Prospectus. If
this Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to honor all of its obligations set forth in
Sections 6(i), 6(j) and 7 hereof.
9. Conditions of Underwriters' Obligations. The obligations of each of the
Underwriters to purchase and pay for the Shares shall be subject to the
performance by the Company of all of its obligations to be performed hereunder
at or prior to the First Closing Date or the Option Closing Date, as the case
may be, and to the following further conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) (if required) within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; the
Registration Statement shall have become effective; and no stop order suspending
the effectiveness thereof shall have been issued and no proceedings therefor
shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Shares hereunder
and the validity and form of the certificates representing the Shares, all
corporate proceedings and other legal matters incident to the foregoing, and the
form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been at or prior to the
First Closing Date reasonably acceptable to ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the
Underwriters, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this subsection.
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(c) On each Closing Date there shall have been furnished to you the
opinion (addressed to the Underwriters) of ▇▇▇▇▇▇ & Dodge LLP, counsel for the
Company, dated such Closing Date and in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(1) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease the properties known to us to be
owned or leased by it and to conduct its business as described in the
Registration Statement; the Company is duly qualified to transact business in
all jurisdictions in which the conduct of its business requires such
qualification, except where the failure to so qualify would not have a
materially adverse effect upon its business; and to such counsel's knowledge the
Company does not own or control, directly or indirectly, any corporation or
other entity other than those that are not "significant subsidiaries" within the
meaning of the Commission's Regulation S-X.
(2) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company; the performance of the Underwriting Agreement and
the consummation of the transactions therein contemplated will not result in a
breach or a violation of any of the terms and provisions of, or constitute a
default under (A) any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company is a party or by which the property of the Company is bound, (B) the
corporate charter or bylaws of the Company or (C) (assuming compliance with all
applicable federal and state securities laws) any statute, rule or regulation or
any order of any court or governmental agency or body having jurisdiction over
the Company or over any of its properties.
(3) Except as set forth in the Prospectus, there is not known to
such counsel any action, suit or proceeding, at law or in equity, pending
against the Company before any court or administrative agency, which, if
determined adversely to the Company, would materially adversely affect the
business, operations, financial condition, income or business prospects of the
Company, or prevent the consummation of the transaction contemplated by this
Underwriting Agreement.
(4) The outstanding shares of Common Stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable. The
Shares have been duly authorized and, when issued and paid for as provided in
the Underwriting Agreement, will be validly issued, fully paid, non-assessable
and free of preemptive rights. To such counsel's knowledge, no person or entity
holds a right to require or participate in a registration under the Securities
Act of shares of Common Stock of the Company with respect to the registration of
shares pursuant to the
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Registration Statement, and no person holds a right to require registration
under the Securities Act of shares of Common Stock of the Company at any other
time.
(5) The Registration Statement has become effective under the
Securities Act, and to such counsel's knowledge, no stop order suspending the
effectiveness thereof has been issued and no proceedings therefor are pending or
threatened by the Commission.
(6) The Registration Statement, each Preliminary Prospectus, the
Prospectus and each amendment or supplement thereto comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations thereunder (except that such counsel need express no opinion as to
the financial statements and schedules or other financial data included
therein). In passing upon the form of such documents, such counsel need not have
independently verified and is not passing upon, and may have necessarily assumed
the correctness and completeness of, the statements made therein and take no
responsibility therefor.
(7) Such counsel has reviewed all contracts of the Company referred
to in the Registration Statement. The descriptions thereof (insofar as such
descriptions constitute a summary of the legal matters referred to therein) are
accurate in all material respects (except that such counsel need express no
opinion as to any descriptions thereof appearing in the financial statements,
schedules and other financial or statistical data contained in the Registration
Statement or incorporated by reference therein). With respect to any contract
description appearing in any document incorporated by reference in the
Registration Statement that is modified or superseded by a description in the
Prospectus, the foregoing opinion is limited to the description of such contract
appearing in the Prospectus. Such counsel need express no opinion as to the
validity or enforceability of any contract referred to.
(8) Such counsel does not know of any contracts or other documents
required to be filed as an exhibit to the Registration Statement which have not
been so filed.
(9) Each approval, consent, order, authorization, designation,
declaration or filing by or with any United States regulatory, administrative or
other governmental body necessary in connection with the execution and delivery
by the Company of the Underwriting Agreement and the consummation of the
transactions therein contemplated has been obtained or made and is in full force
and effect (except that no opinion shall be given as to state and foreign
securities laws or approvals required from the ▇▇▇▇).
-▇▇-
▇▇
(▇▇) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act, nor will the Company become such after giving effect to the sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus.
In rendering such opinion, such counsel may rely as to matters governed
by laws of jurisdictions other than the laws of the Commonwealth of
Massachusetts, the General Corporation Law of the State of Delaware, or federal
laws, on opinions of local counsel in such jurisdictions. Further, such counsel
may state that they are not passing upon any matters relating to patents,
trademarks or United States Food and Drug Administration regulation or other
Federal or state regulation of pharmaceutical products. Such counsel may state
that as to various questions of fact material to their opinion, they have relied
upon representations made in or pursuant to this Agreement and upon certificates
of officers of the Company. In addition to the matters set forth above, the
opinion shall also include a statement to the effect that no facts have come to
such counsel's attention which would cause such counsel to believe that the
Registration Statement at the time it became effective contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that, on the Closing Date, the Prospectus and the Registration Statement
contained any untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no belief as to the financial statements and schedules or
other financial data included therein). With respect to such statement, such
counsel may state that their belief is based on the procedures set forth
therein, but is without independent check and verification.
(d) On each Closing Date there shall have been furnished to you the
opinion (addressed to the Underwriters) of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
P.C., patent counsel to the Company, dated such Closing Date and in form and
substance satisfactory to counsel for the Underwriters to the effect that such
counsel is familiar with that portion of the technology used by the Company in
its business concerning which such counsel has been consulted and has read the
Registration Statement and the Prospectus, including in particular the portions
of the Registration Statement and the Prospectus under the captions "Risk
Factors-Dependence on Patents and Proprietary Technology" and "Business-Patents
and Trade Secrets" (the "Technology Portion"), such counsel consents to being
named as an "Expert" in the Registration Statement, if required by the
Securities Act and the rules and regulations thereunder, and:
(i) such counsel has no knowledge of any fact which would
preclude the Company from having clear title to the
Company's patents and patent applications referenced in the
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Technology Portion. To the best of such counsel's knowledge,
none of the patents owned by the Company is unenforceable or
invalid. To the best of such counsel's knowledge, the
Company has not received any notice of infringement of or
conflict with rights or claims of others with respect to any
patents, trademarks, service marks, trade names, copyrights
or know-how which is reasonably likely to result in any
material adverse effect upon the Company. Such counsel is
not aware of any patents of others which are infringed by
specific products or processes referred to in the Prospectus
in such manner as to materially and adversely affect the
Company.
(ii) to the best of such counsel's knowledge, other than
proceedings (except interference proceedings) of the various
patent and trademark offices, there are no legal or
governmental proceedings pending relating to patent rights,
trade secrets, trademarks, service marks or other
proprietary information or materials of the Company, and to
the best of such counsel's knowledge no such proceedings are
threatened or contemplated by governmental authorities or
others;
(iii) the statements in the Technology Portion of the Prospectus,
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate
summaries and fairly present, in all material respects, the
information called for with respect to such documents and
matters; provided, however, that such counsel may rely on
representations of the Company with respect to the factual
matters contained in such statements, and provided that such
counsel shall state that nothing has come to the attention
of such counsel which leads them to believe that such
representations are not true and correct in all material
respects.
(e) The Underwriters shall be satisfied that (i) as of the Effective
Date, the statements made in the Registration Statement and the Prospectus were
true and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, respectively, not misleading, (ii) since
the Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus
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which has not been set forth in such a supplement or amendment, (iii) since the
respective date as of which information is given in the Registration Statement
in the form in which it originally became effective and the Prospectus contained
therein, there has not been any material adverse change in the business,
properties, operations, financial condition, income or business prospects of the
Company, as presently being conducted, whether or not arising from transactions
in the ordinary course of business, and, since such dates except in the ordinary
course of business, the Company has not entered into any material transaction
not referred to in the Registration Statement in the form in which it originally
became effective and the Prospectus contained therein that would be required to
be disclosed therein, (iv) there are not any pending or known threatened legal
proceedings to which the Company is a party or of which property of the Company
is the subject which are material and which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any franchise
agreements, contracts, leases or other documents which are required to be filed
as exhibits to the Registration Statement which have not been filed as required,
and (vi) the representations and warranties of the Company herein are true and
correct in all material respects as of the First Closing Date or the Option
Closing Date, as the case may be.
(f) The Underwriters shall have received on the First Closing Date and
on the Option Closing Date a certificate, dated the First Closing Date or the
Option Closing Date, as the case may be, and signed by the President of the
Company, stating that to the best of his knowledge, the representations and
warranties of the Company in this Agreement are true and correct.
(g) The Underwriters shall have received from Ernst & Young LLP a
letter or letters, addressed to the Underwriters and dated the Effective Date,
the First Closing Date and the Option Closing Date, as the case may be,
confirming that they are independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable published
rules and regulations thereunder and based upon the procedures described in
their letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
five business days prior to the Effective Date, First Closing Date, or the
Option Closing Date, as the case may be, (i) confirming, to the extent true,
that the statements and conclusions set forth in the Original Letter are
accurate as of the Effective Date, First Closing Date or the Option Closing
Date, as the case may be, and (ii) setting forth any revisions and additions to
the Original Letter or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change, or
any development involving a prospective change, in or affecting the business or
properties of the Company not contemplated by the Prospectus which, in the sole
judgment of the Underwriters, makes it impracticable or inadvisable to
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proceed with the public offering of the Shares or the purchase of the Option
Shares as contemplated by the Prospectus.
(h) The Representatives of the Underwriters shall have been furnished
evidenced in usual written or fax form from the appropriate authorities of the
several states, or other evidence satisfactory to you, of the qualification
referred to in Section 6(f) hereof.
(i) The Company shall have furnished to you such further certificates
and documents as you shall reasonably request (including certificates of
officers of the Company) as to the accuracy of the representations and
warranties of the Company, the performance of their respective obligations
hereunder and as to other conditions concurrent and precedent to the obligations
of the Underwriters hereunder.
All the agreements, opinions, certificates and letters referred to in
this Section 9 or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if ▇▇▇▇ and ▇▇▇▇, counsel for the
Underwriters, shall reasonably be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs and expenses
referred to in Sections 6(i) and 6(j) hereof, and (ii) if this Agreement is
terminated by the Underwriters because of any refusal, inability or failure on
the part of the Company to perform any agreement herein, to fulfill any of the
conditions herein required to be fulfilled by the Company, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters or
the occurrence of an event specified in Section 8, the Company will reimburse
the Underwriters, severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the transactions contemplated hereby.
10. Conditions of the Obligations of the Company. The obligation of the
Company to deliver the Shares shall be subject to the conditions that (a) the
Registration Statement shall have become effective, and (b) no stop order
suspending the effectiveness of the Registration Statement thereof shall be in
effect and no proceedings therefor shall be pending or threatened by the
Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
the
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Underwriters. Any such termination shall be without liability of the Company to
the Underwriters and without liability of the Underwriters to the Company;
provided, however, (i) that in the event of any such termination the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses referred to in Sections 6(i) and 6(j) hereof.
11. Reimbursement of Certain Expenses. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse the Underwriters on a quarterly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or proceedings arising out of or based upon any
statement or omission, or any alleged statement or omission, described in
Section 7(a) of this Agreement, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the obligations under
this Section 11 and the possibility that such payments might later be held to be
improper; provided, however, (i) to the extent that indemnification under
Section 7(a) is held to be unavailable by its terms then such expenses shall be
promptly refunded to the Company by the indemnified persons who received such
expenses, and (ii) the Company shall not be obligated to so reimburse the
Underwriters to the extent it is not liable for such expenses under the fifth
sentence of Section 7(c).
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 7 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Section 7 and their respective personal representatives, successors and assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term
"successors and assigns" as herein used shall not include any purchaser, as such
purchaser, of any of the Shares from any of the several Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by fax and, if to the Underwriters, shall be
mailed, telecopied or delivered to ▇▇▇▇▇ & Company, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇; and if to the Company, shall be
mailed, telecopied or delivered to it at its office at Nine ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇. All notices given by
fax shall be promptly confirmed by letter.
14. Miscellaneous.
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(a) The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants
contained in this Agreement shall remain in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any party hereto and (iii) delivery of and payment for the Shares
under this Agreement; provided, however, that if this Agreement is terminated
prior to the First Closing Date, the provisions of Sections 2, 3, 5 and 6
(except for paragraphs (i) and (j) thereof) shall be of no further force and
effect, and provided further that no party shall be barred from taking any
action or seeking any remedy with respect to the breach of any representation,
warranty or covenant contained in this Agreement prior to the termination.
(b) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(c) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the choice of
law or conflict of laws principles thereof.
(intentionally left blank]
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Please sign and return to the Company the enclosed duplicate of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
GELTEX PHARMACEUTICALS, INC.
By:________________________________
Title:_____________________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
CIBC ▇▇▇▇▇▇▇▇▇▇▇ CORP.
Acting on behalf of themselves
and as the Representatives of
the Several Underwriters
BY: ▇▇▇▇▇ & COMPANY
By:_____________________________
Title:__________________________
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SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
▇▇▇▇▇ & Company
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
CIBC ▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
Total 2,500,000
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SCHEDULE II
Shares Subject to
Stockholders "Lock-up" Letters
------------ -----------------
Genzyme Corporation 100,000
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