Cepheid 10,000,000 Shares Common Stock (No par value per Share) Underwriting Agreement
Exhibit 1.01
10,000,000 Shares
Common Stock
(No par value per Share)
(No par value per Share)
Underwriting Agreement
March 7, 2006
Underwriting Agreement
March 7, 2006
UBS Securities LLC
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx X. Xxxxx & Co. Incorporated
as Managing Underwriters
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx X. Xxxxx & Co. Incorporated
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Cepheid, a California corporation (the “Company”), proposes to issue and sell to the
underwriters named in Schedule A annexed hereto (the “Underwriters”), for whom you
are acting as representatives, an aggregate of 10,000,000 shares (the “Firm Shares”) of
common stock, no par value per share (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 1,500,000 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 prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the “Commission”) a registration statement on Form
S-3 (File No. 333-131520) under the Act (the “registration statement”). Amendments to such
registration statement, if necessary or appropriate, have been similarly prepared and filed with
the Commission in accordance with the Act. Such registration statement, as so amended, has become
effective under the Act.
Except where the context otherwise requires, “Registration Statement,” as used herein,
means the registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such section applies to the respective
Underwriters (the “Effective Time”), including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, (ii) any information contained or
incorporated by reference in a prospectus filed with the Commission pursuant to Rule 424(b) under
the Act, to the extent such information is deemed, pursuant to Rule 430B or Rule 430C under the
Act, to be part of the registration statement at the Effective Time, and (iii) any registration
statement filed to register the offer and sale of Shares pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectus supplements and the
documents incorporated by reference therein, relating to the Shares. Except
where the context otherwise requires, “Pre-Pricing Prospectus,” as used herein, means
the preliminary prospectus supplement dated as of February 24, 2006, in the form so furnished,
including the basic prospectus dated as of February 22, 2006 furnished to you by the Company and
attached to or used with the Pre-Pricing Prospectus. Except where the context otherwise requires,
“Basic Prospectus,” as used herein, means such basic prospectus furnished to you by the
Company and attached to or used with the Prospectus Supplement (as defined below).
Except where the context otherwise requires, “Prospectus Supplement,” as used herein,
means the final prospectus supplement, relating to the Shares, 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), in the form furnished by the
Company to you for use by the Underwriters and by dealers in connection with the offering of the
Shares.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
Prospectus Supplement together with the Basic Prospectus attached to or used with the Prospectus
Supplement.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show” (as defined in Rule 433 under the Act), if
any, related to the offering of the Shares contemplated hereby that is a “written communication”
(as defined in Rule 405 under the Act) (each such road show, a “Road Show”).
“Disclosure Package,” as used herein, means the Pre-Pricing Prospectus or Basic
Prospectus, in either case together with any combination of one or more of the Permitted Free
Writing Prospectuses, if any.
Any reference herein to the registration statement, the Registration Statement, any Basic
Prospectus, the Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus or any Permitted
Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated
by reference, or deemed to be incorporated by reference, therein (the “Incorporated
Documents”), including, unless the context otherwise requires, the documents, if any, filed as
exhibits to such Incorporated Documents. Any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, any Basic
Prospectus, the Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus or any Permitted
Free Writing Prospectus shall be deemed to refer to and include the filing of any document under
the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the “Exchange Act”) on or after the initial effective date of the
Registration Statement, or the date of such Basic Prospectus, such Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may
be, and deemed to be incorporated therein by reference.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,”
“hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision
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of this Agreement. The term “or,” as used herein, is not exclusive.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8 hereof, in
each case at a purchase price of $8.1055 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 effectiveness of this Agreement 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.
In addition, the Company hereby grants to the several Underwriters the option (the
“Over-Allotment Option”) to purchase, and upon the basis of the representations and
warranties 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. The Over-Allotment Option may be exercised by UBS Securities LLC (“UBS”) on behalf
of the several Underwriters at any time and from time to time 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 Over-Allotment Option is being exercised and
the date and time when the Additional Shares are to be delivered (any such date and time being
herein referred to as an “additional time of purchase”); provided, however,
that no additional time of purchase shall be earlier than the “time of purchase” (as defined below)
nor earlier than the second business day after the date on which the Over-Allotment Option shall
have been exercised nor later than the tenth business day after the date on which the
Over-Allotment 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 UBS may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the 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 A.M.,
New York City time, on March 13, 2006 (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 to be made is hereinafter sometimes called “the
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time of purchase.” Electronic transfer of the Firm Shares shall be made to you at the
time of purchase in such names and in such denominations as you shall specify.
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.
Electronic transfer of the Additional Shares shall be made to you at the additional time of
purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of Xxxx Xxxxx LLP at 0 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, at 9:00 A.M., New York City time, on the date of the closing of the
purchase of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 P.M., New York City time, on the date of
determination of the public offering price for the Shares; no stop order of the Commission
preventing or suspending the use of any Basic Prospectus, the Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus, or the
effectiveness of the Registration Statement, has been issued, and no proceedings for such
purpose have been instituted or, to the Company’s knowledge, are contemplated by the
Commission;
(b) the Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares, will comply, in all material respects,
with the requirements of the Act; the conditions to the use of Form S-3 in connection with
the offering and sale of the Shares as contemplated hereby have been satisfied; the
Registration Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Act (including, without limitation,
Rule 415(a)(5)); the Registration Statement did not, as of the Effective Time, 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; the Pre-Pricing
Prospectus complied, at the time it was filed with the Commission, and complies as of the
date hereof, in all material respects, with the requirements of the Act; at no time during
the period that begins on the earlier of the date of the Pre-Pricing Prospectus and the date
the Pre-Pricing Prospectus was filed with the Commission and ends at the time of purchase
did or will the Pre-Pricing Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the
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circumstances under which they were made, not misleading, and at no time during such
period did or will the Pre-Pricing Prospectus, as then amended or supplemented, together
with any combination of one or more of the then issued Permitted Free Writing Prospectuses,
if any, include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; each Basic Prospectus complied or will comply, at the
time it was or will be filed with the Commission, complies as of the date hereof (if filed
with the Commission on or prior to the date hereof) and, at the time of purchase, each
additional time of purchase, if any, and at all times during which a prospectus is required
by the Act to be delivered (whether physically or through compliance with Rule 172 under the
Act or any similar rule) in connection with any sale of Shares, will comply, in all material
respects, with the requirements of the Act; at no time during the period that begins on the
earlier of the date of such Basic Prospectus and the date such Basic Prospectus was filed
with the Commission and ends at the time of purchase did or will any Basic Prospectus, as
then amended or supplemented, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and at no time during such period
did or will any Basic Prospectus, as then amended or supplemented, together with any
combination of one or more of the then issued Permitted Free Writing Prospectuses, if any,
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading; each of the Prospectus Supplement and the Prospectus will comply,
as of the date that it is filed with the Commission, the date of the Prospectus Supplement,
the time of purchase, each additional time of purchase, if any, and at all times during
which a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares, in all material respects, with the requirements of the Act (in the case of the
Prospectus, including, without limitation, Section 10(a) of the Act); at no time during the
period that begins on the earlier of the date of the Prospectus Supplement and the date the
Prospectus Supplement is filed with the Commission and ends at the later of the time of
purchase, the latest additional time of purchase, if any, and the end of the period during
which a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares did or will any Prospectus Supplement or the Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; at no time during the period that begins on the
date of such Permitted Free Writing Prospectus and ends at the time of purchase did or will
any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty with respect to any
statement contained in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with
information concerning an Underwriter and furnished in
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writing by or on behalf of such Underwriter through you to the Company expressly for
use in the Registration Statement, such Pre-Pricing Prospectus, the Prospectus or such
Permitted Free Writing Prospectus; each Incorporated Document, at the time such document was
filed with the Commission or at the time such document became effective, as applicable,
complied, in all material respects, with the requirements of the Exchange Act and did not
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the Pre-Pricing Prospectuses and the
Permitted Free Writing Prospectuses, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus except in compliance
with Rules 164 and 433 under the Act; assuming that such Permitted Free Writing Prospectus
is accompanied or preceded by the most recent Pre-Pricing Prospectus or the Prospectus, as
the case may be, and that such Permitted Free Writing Prospectus is so sent or given after
the Registration Statement was filed with the Commission (and after such Permitted Free
Writing Prospectus was, if required pursuant to Rule 433(d) under the Act, filed with the
Commission), the sending or giving, by any Underwriter, of any Permitted Free Writing
Prospectus will satisfy the provisions of Rule 164 or Rule 433 (without reliance on
subsections (b), (c) and (d) of Rule 164); the
Pre-Pricing Prospectus dated February 24,
2006 is a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act,
satisfies the requirements of Section 10 of the Act, including a price range where required
by rule; neither the Company nor the Underwriters are disqualified, by reason of subsection
(f) or (g) of Rule 164 under the Act, from using, in connection with the offer and sale of
the Shares, “free writing prospectuses” (as defined in Rule 405 under the Act) pursuant to
Rules 164 and 433 under the Act; the Company is not an “ineligible issuer” (as defined in
Rule 405 under the Act) as of the eligibility determination date for purposes of Rules 164
and 433 under the Act with respect to the offering of the Shares contemplated by the
Registration Statement; the parties hereto agree and understand that the content of any and
all “road shows” (as defined in Rule 433 under the Act) related to the offering of the
Shares contemplated hereby is solely the property of the Company;
(d) the Shares have been registered with the Commission on Form S-3 under the Act
pursuant to the requirements for primary offerings of securities for such Form S-3 in effect
prior to October 21, 1992;
(e) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the sections of the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus entitled “Capitalization” and the description of its capital
stock as set forth in the Registration Statements on Form 8-A filed with the Commission on
June 6, 2000 and October 4, 2002 (collectively, the “Form 8-As” and, together with
any similar sections or information, if any, contained in any Permitted Free
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Writing Prospectus, the “Description of Capital Stock”), and, as of the time of
purchase and any additional time of purchase, as the case may be, the Company shall have an
authorized and outstanding capitalization as set forth in the sections of the Registration
Statement and the Prospectus entitled “Capitalization” and in its Description of Capital
Stock (subject, in each case, to the issuance of shares of Common Stock upon exercise of
stock options and warrants disclosed as outstanding in the Registration Statement (excluding
the exhibits thereto), each Pre-Pricing Prospectus and the Prospectus and the grant of
options under existing stock option plans and purchases of shares of Common Stock under
existing stock purchase plans, each as described in the Registration Statement (excluding
the exhibits thereto), each Pre-Pricing Prospectus and the Prospectus); all of the issued
and outstanding shares of capital stock, including the Common Stock, of the Company have
been duly authorized and validly issued and are fully paid and non-assessable, have been
issued in compliance with all applicable securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar right; the Shares are
duly listed, and admitted and authorized for trading, subject to official notice of
issuance, on the Nasdaq National Market (“NASDAQ”);
(f) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of California, with full corporate power and
authority to own, lease and operate its properties and conduct its business as described in
the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted
Free Writing Prospectuses, if any, to execute and deliver this Agreement and to issue, sell
and deliver the Shares as contemplated herein;
(g) the Company is duly qualified to do business as a foreign corporation and is 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 be so
qualified and in good standing would not, individually or in the aggregate, either (i) have
any reasonable possibility of having a material adverse effect on the business, properties,
financial condition, results of operations or prospects of the Company and the Subsidiary
(as hereinafter defined) taken as a whole, (ii) have any reasonable possibility of
preventing or materially interfering with consummation of the transactions contemplated
hereby or (iii) have any reasonable possibility of resulting in the delisting of shares of
Common Stock from the NASDAQ (the occurrence of any such effect or any such prevention or
interference or any such result described in the foregoing clauses (i), (ii) and (iii) being
herein referred to as a “Material Adverse Effect”);
(h) the Company has no subsidiaries (as defined under the Act) other than Cepheid
Europe, S.A. (the “Subsidiary”); other than six shares held by natural persons in
accordance with the requirements of local law, the Company owns all of the issued and
outstanding capital stock of the Subsidiary; other than the capital stock of the Subsidiary,
the Company does not own, directly or indirectly, any shares of stock or any other equity
interests or long-term debt securities of any corporation, firm, partnership, joint venture,
association or other entity; complete and correct copies of the charter and the bylaws of
the Company and the Subsidiary and all amendments thereto have been delivered to you,
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and, except as set forth in the exhibits to the Registration Statement, no changes
therein will be made on or after the date hereof through and including the time of purchase
or, if later, any additional time of purchase; the Subsidiary has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement and the
Prospectus; the Subsidiary is duly qualified to do business as a foreign corporation and is
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 be so
qualified and in good standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the outstanding shares of capital stock of the Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and are owned by the
Company subject to no security interest, other encumbrance or adverse claims; and no
options, warrants or other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligation into shares of capital stock or ownership interests
in the Subsidiary are outstanding; the Company has no “significant subsidiary,” as that term
is defined in Rule 1-02(w) of Regulation S-X under the Act, and the Subsidiary does not
constitute a “significant subsidiary” of the Company; the Subsidiary does not own or possess
any property or assets that, or have any obligations or liabilities, or possess any rights
(by contract, franchise, permit or otherwise) or engage in any operations that, are,
individually or in the aggregate, material to the Company or its properties, operations,
business, prospects or condition (financial or otherwise); notwithstanding the generality of
the foregoing, the Subsidiary does not own or possess property or assets, in the aggregate
and excluding any intracompany loans, in excess of $1,500,000, does not have any obligations
or liabilities, in the aggregate, in excess of $500,000, and does not have losses or
earnings for the last twelve months in excess of $400,000;
(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, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the Shares, when issued and delivered against
payment therefor as provided herein, will be free of any restriction upon the voting or
transfer thereof pursuant to the Company’s articles of incorporation or bylaws or any
agreement or other instrument to which the Company is a party;
(j) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained or incorporated by reference in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus or any Permitted Free
Writing Prospectus; and the certificates for the Shares (if delivered in certificated form)
are in due and proper form;
(k) this Agreement has been duly authorized, executed and delivered by the Company;
(l) neither the Company nor the Subsidiary is in breach or violation of or in
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default under (nor has any event occurred which, with notice, lapse of time or both,
would result in any breach or violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (A) its
charter or bylaws, or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or the Subsidiary is a party or by which any of
them or their respective properties may be bound or affected, or (C) any federal, state,
local or foreign law, regulation or rule, or (D) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the NASDAQ), or (E) any decree, judgment or
order applicable to the Company or the Subsidiary or any of their respective properties,
except, in the case of clauses (B), (C), (D) and (E), to the extent that any such conflict,
breach, violation or default would not, individually or in the aggregate, have a Material
Adverse Effect;
(m) 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, result in any breach or violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a person acting on
such holder’s behalf) the right to require the repurchase, redemption or repayment of all or
a part of such indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or the Subsidiary pursuant
to) (A) the charter or bylaws of the Company or the Subsidiary, or (B) any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or
any license, lease, contract or other agreement or instrument to which the Company or the
Subsidiary is a party or by which any of them or any of their respective properties may be
bound or affected, or (C) any federal, state, local or foreign law, regulation or rule, or
(D) any rule or regulation of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations of the
NASDAQ), or (E) any decree, judgment or order applicable to the Company or the Subsidiary or
any of their respective properties, except, in the case of clauses (B) and (D), to the
extent that any such conflict, breach, violation or default would not, individually or in
the aggregate, have a Material Adverse Effect;
(n) no approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
of or with any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NASDAQ), or approval of the shareholders of the Company,
is required in connection with the issuance and sale of the Shares or the consummation by
the Company of the transactions contemplated hereby, other than (i) registration of the
Shares under the Act, which has been effected (or, with respect to any registration
statement to be filed hereunder pursuant to Rule 462(b) under the Act, will be effected in
accordance herewith), (ii) any necessary qualification under
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the securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or (iii) under the Conduct Rules of the National
Association of Securities Dealers, Inc. (the “NASD”);
(o) except as expressly set forth in the Registration Statement (excluding the exhibits
thereto), each Pre-Pricing Prospectus and the Prospectus, (i) no person has the right,
contractual or otherwise, to cause the Company to issue or sell to it any shares of Common
Stock or shares of any other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other capital stock of or other equity
interests in the Company and (iii) no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and sale of the Shares, in the
case of each of the foregoing clauses (i), (ii) and (iii), whether as a result of the filing
or effectiveness of the Registration Statement or the sale of the Shares as contemplated
thereby or otherwise; except as set forth in the Amended and Restated Investor Rights
Agreement dated January 21, 2000 by and among the Company and the investor parties thereto
(the “Investor Rights Agreement”), no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of Common Stock or shares of any other capital stock of or other equity interests in the Company, or to include
any such shares or interests in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the Registration Statement or
the sale of the Shares as contemplated thereby or otherwise; all of the shares (or other
equity interests) subject to the Investor Rights Agreement may be sold or transferred,
without registration under the Act, in reliance on Rule 144 of the Act (“Rule 144”),
and no person who may be deemed an “affiliate” of the Company (as such term is
defined under Rule 144) having any right to cause the Company to register any securities
under the Investor Rights Agreement has securities in excess of one percent of the
outstanding capital stock of the Company and each such person is entitled to rely on Rule
144 for sales of such shares without registration under the Act;
(p) each of the Company and the Subsidiary has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any applicable law,
regulation or rule, and has obtained all necessary licenses, authorizations, consents and
approvals from other persons, in order to conduct their respective businesses as described
in the Registration Statement, the Pre-Pricing Prospectus, the Prospectus and any Permitted
Free Writing Prospectus, except in each case as would not, individually or in the aggregate,
have a Material Adverse Effect; neither the Company nor the Subsidiary is in violation of,
or in default under, or has received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or judgment applicable to the
Company or the Subsidiary, except where such violation, default, revocation or modification
would not, individually or in the aggregate, have a Material Adverse Effect;
(q) all legal or governmental proceedings, affiliate transactions, off-balance sheet
transactions (including, without limitation, transactions related to, and the existence
- 10 -
of, “variable interest entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), contracts, licenses, agreements, leases or documents
of a character required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement have been so described or filed as
required;
(r) there are no actions, suits, claims, investigations or proceedings pending or, to
the Company’s knowledge, threatened or contemplated to which the Company or the Subsidiary
or any of their respective directors or officers is or would be a party or of which any of
their respective properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission, board, body,
authority or agency, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the NASDAQ), except
any such action, suit, claim, investigation or proceeding which, if resolved adversely to
the Company or the Subsidiary, would not, individually or in the aggregate, have a Material
Adverse Effect;
(s) Ernst & Young LLP, whose report on the consolidated financial statements of the
Company and the Subsidiary is included or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses and the Prospectus, are independent registered
public accounting firm as required by the Act and by the rules of the Public Company
Accounting Oversight Board;
(t) the financial statements included or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, together with the related notes and schedules, present fairly the consolidated
financial position of the Company and the Subsidiary as of the dates indicated and the
consolidated results of operations, cash flows and changes in shareholders’ equity of the
Company and the Subsidiary for the periods specified and have been prepared in compliance
with the requirements of the Act and Exchange Act and in conformity with U.S. generally
accepted accounting principles applied on a consistent basis during the periods involved;
all pro forma financial statements or data included or incorporated by reference in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus comply with the requirements of the Act and the Exchange Act, and the
assumptions used in the preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those statements and data;
the other financial and statistical data contained or incorporated by reference in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus are accurately and fairly presented and prepared on a basis consistent
with the financial statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included or incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectus or the Prospectus that
are not included or incorporated by reference as required; the Company
- 11 -
and the Subsidiary do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations or any “variable interest
entities” within the meaning of Financial Accounting Standards Board Interpretation No.
46), not described in the Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus; and all disclosures contained or incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable;
(u) subsequent to the respective dates as of which information is given in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, in each case excluding any amendments or supplements to the
foregoing made after the execution of this Agreement, there has not been (i) any material
adverse change, or any development involving a prospective material adverse change, in the
business, properties, management, financial condition or results of operations of the
Company and the Subsidiary taken as a whole, (ii) any transaction which is material to the
Company and the Subsidiary taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the Company or the
Subsidiary, which is material to the Company and the Subsidiary taken as a whole, (iv) any
change in the capital stock (other than as a result of the exercise of options, exercises
under the Company’s employee stock purchase plan or the grant of stock options or other
stock awards under the Company’s benefit plans, in each case disclosed as either outstanding
or reserved for future issuance in the Registration Statement, any Prepricing Prospectus and
the Prospectus) or any increase in outstanding indebtedness of the Company or the Subsidiary
in excess of $5,000,000 or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company; or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or the Subsidiary;
(v) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A hereto, of each of
its directors and “officers” (within the meaning of Rule 16a-1(f) under the Exchange Act);
(w) neither the Company nor the Subsidiary is, and at no time during which a prospectus
is required by the Act to be delivered (whether physically or through compliance with Rule
172 under the Act or any similar rule) in connection with any sale of Shares will either of
them be, and, after giving effect to the offering and sale of the Shares, neither of them
will 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”);
(x) the Company and the Subsidiary have good and marketable title to all property (real
and personal) described in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus as being owned by
- 12 -
any of them, free and clear of all liens, claims, security interests or other
encumbrances, subject only to such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property by the Company or the Subsidiary; all
the property described in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus as being held under lease by the Company
or the Subsidiary is held thereby under valid, subsisting and enforceable leases;
(y) except as set forth in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, the Company and the Subsidiary own, or
have obtained valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered), tradenames,
service names, copyrights, trade secrets and other proprietary information described in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus as being owned or licensed by them or which are necessary for the conduct
of their respective businesses as currently conducted, or, to the extent described in the
Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, as proposed to be conducted, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have a Material Adverse Effect
(collectively, “Intellectual Property”); (i) except as set forth in the Registration
Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, to the Company’s knowledge, there are no third parties who have or will be able
to establish rights to any Intellectual Property, except for, and to the extent of, the
ownership rights of the owners or licensees of the Intellectual Property which the
Registration Statement (excluding the exhibits thereto), each Pre-Pricing Prospectus and the
Prospectus disclose is licensed to or by the Company or the Subsidiary; (ii) to the
Company’s knowledge, there is no infringement by third parties of any Intellectual Property
owned by or exclusively licensed to the Company or the Subsidiary; (iii) there is no
material pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the rights of the Company or the Subsidiary in or to any
Intellectual Property, and the Company is unaware of any facts which could form a reasonable
basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the
validity, enforceability or scope of any Intellectual Property, and the Company is unaware
of any facts which could form a reasonable basis for any such action, suit, proceeding or
claim; (v) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others alleging that the Company or the Subsidiary infringes or
otherwise violates, or would, upon the commercialization of any product or service described
in the Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted
Free Writing Prospectus as under development, infringe or violate, any patent, trademark,
tradename, service name, copyright, trade secret or other proprietary rights of others, and,
except as set forth in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, the Company is unaware of any facts
which could form a reasonable basis for any such action, suit, proceeding or claim; (vi) the
Company and the Subsidiary have complied in all material respects with the terms of each
agreement pursuant to which Intellectual
- 13 -
Property has been licensed to the Company or the Subsidiary, and all such agreements
are in full force and effect; (vii) to the Company’s knowledge, there is no patent or patent
application that contains claims that materially interfere with the issued or pending claims
of any of the Intellectual Property or that challenges the validity, enforceability or scope
of any of the Intellectual Property; (viii) to the Company’s knowledge, there is no prior
art that could reasonably be expected to render any patent application owned by the Company
or the Subsidiary and included within the Intellectual Property unpatentable that has not
been disclosed to the U.S. Patent and Trademark Office; and (ix) the product candidates
described in the Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as under development by the Company or the Subsidiary for
use in the detection of BCR/ABL, group B streptococcus, methicillin-resistant Staphylococcus
aureus and methicillin-susceptible Staphylococcus aureus and Enterovirus, as well as for use
in connection with the Scorpion technology fall within the scope of the claims of one or
more patents owned by, or licensed to, the Company or the Subsidiary;
(z) neither the Company nor the Subsidiary is engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the
Company’s knowledge, threatened against the Company or the Subsidiary before the National
Labor Relations Board or any similar body, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements is pending or threatened, (B) no
strike, labor dispute, slowdown or stoppage pending or, to the Company’s knowledge,
threatened against the Company or the Subsidiary and (C) no union representation dispute
currently existing concerning the employees of the Company or the Subsidiary, (ii) to the
Company’s knowledge, no union organizing activities are currently taking place concerning
the employees of the Company or the Subsidiary and (iii) there has been no violation of any
federal, state, local or foreign law relating to discrimination in the hiring, promotion or
pay of employees, any applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 (“ERISA”) or the rules and regulations
promulgated thereunder, or any similar law, concerning the employees of the Company or the
Subsidiary;
(aa) the Company and the Subsidiary and their respective properties, assets and
operations are in compliance with, and the Company and the Subsidiary hold all permits,
authorizations and approvals required under, Environmental Laws (as defined below), except
to the extent that failure to so comply or to hold such permits, authorizations or approvals
would not, individually or in the aggregate, have a Material Adverse Effect; there are no
past, present or, to the Company’s knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or plans of the Company
or the Subsidiary or, to the Company’s knowledge, of any other person that could reasonably
be expected to give rise to any material costs or liabilities to the Company or the
Subsidiary under, or to interfere with or prevent compliance by the Company or the
Subsidiary with, Environmental Laws; except as would not, individually or in the aggregate,
have a Material Adverse Effect, neither the Company nor the Subsidiary (i) is the subject of
any investigation, (ii) has received any written notice or
- 14 -
claim, (iii) is a party to or affected by any pending or threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any
agreement, in each case relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, “Environmental Law” means any federal,
state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the environment or
natural resources, including those relating to the distribution, processing, generation,
treatment, storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “Hazardous Materials” means any material
(including, without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any Environmental Law);
(bb) in the ordinary course of their businesses, the Company and the Subsidiary conduct
periodic reviews of the effect of the Environmental Laws on their respective businesses,
operations and properties, in the course of which they identify and evaluate associated
costs and liabilities (including, without limitation, any capital or operating expenditures
required for cleanup, closure of properties or compliance with the Environmental Laws or any
permit, license or approval, any related constraints on operating activities and any
potential liabilities to third parties);
(cc) all material tax returns required to be filed by the Company or the Subsidiary
have been timely filed, and all material taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest, additions to tax
or penalties applicable thereto due or claimed to be due from such entities have been timely
paid, other than those being contested in good faith and for which adequate reserves have
been provided;
(dd) the Company and the Subsidiary maintain insurance covering their respective
properties, operations, personnel and businesses as the Company deems adequate; such
insurance insures against such losses and risks to an extent which the Company reasonably
believes is adequate in accordance with customary industry practice to protect the Company
and the Subsidiary and their respective businesses; all such insurance is fully in force on
the date hereof and will be fully in force at the time of purchase and any additional time
of purchase; neither the Company nor the Subsidiary has reason to believe that it will not
be able to renew any such insurance as and when such insurance expires;
(ee) neither the Company nor the Subsidiary has sustained since the date of the last
audited consolidated financial statements of the Company included or incorporated by
reference in the Registration Statement, the Pre-Pricing Prospectuses and the Prospectus any
loss or interference with their respective businesses from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, except as would not, individually or in
- 15 -
the aggregate, have a Material Adverse Effect;
(ff) neither the Company nor the Subsidiary has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or agreements
referred to or described in the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement or any Incorporated Document, and no such termination or non-renewal
has been threatened by the Company or the Subsidiary or, to the Company’s knowledge, any
other party to any such contract or agreement;
(gg) the Company and the Subsidiary maintain a system of internal accounting controls
sufficient to provide reasonable assurance 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;
(hh) the Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its Chief Financial
Officer by others within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; the Company’s
independent auditors and the Audit Committee of the Board of Directors of the Company have
been advised of: (i) all significant deficiencies, if any, in the design or operation of
internal controls which could adversely affect the Company’s ability to record, process,
summarize and report financial data; and (ii) all fraud known to the Company, if any,
whether or not material, that involves management or other employees who have a role in the
Company’s internal controls; all material weaknesses, if any, in internal controls known to
the Company have been identified to the Company’s independent auditors; since the date of
the most recent evaluation of such disclosure controls and procedures and internal controls,
there have been no significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses; the principal executive officers (or their
equivalents) and principal financial officers (or their equivalents) of the Company have
made all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx
Act”) and any related rules and regulations promulgated by the Commission, and the
statements contained in each such certification are complete and correct; the Company and,
to the Company’s knowledge, its officers and directors (in their capacities as such) are
each in compliance in all material respects with all applicable effective provisions of the
Xxxxxxxx-Xxxxx Act
- 16 -
and the rules and regulations of the Commission and the NASDAQ promulgated thereunder;
(ii) the Company has provided you with true, correct and complete copies of all
documentation pertaining to any extension of credit in the form of a personal loan made,
directly or indirectly, by the Company or the Subsidiary to any director or executive
officer of the Company, or to any family member or affiliate of any director or executive
officer of the Company; and on or after July 30, 2002, the Company has not, directly or
indirectly, including through the Subsidiary: (i) extended credit, arranged to extend
credit, or renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family member or affiliate of
any director or executive officer of the Company; or (n) made any material modification,
including any renewal thereof, to any term of any personal loan to any director or executive
officer of the Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(jj) each “forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus has been made or reaffirmed with a reasonable basis and in good faith;
(kk) all statistical or market-related data included or incorporated by reference in
the Registration Statement, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus are based on or derived from sources that the Company believes to be
reliable and accurate, and the Company has obtained the written consent to the use of such
data from such sources to the extent required;
(ll) neither the Company nor the Subsidiary nor, to the Company’s knowledge, any
employee or agent of the Company or the Subsidiary has made any payment of funds of the
Company or the Subsidiary or received or retained any funds in violation of any law, rule or
regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977), which
payment, receipt or retention of funds is of a character required to be disclosed in the
Registration Statement, the Pre-Pricing Prospectus or the Prospectus;
(mm) the Subsidiary is not currently prohibited, directly or indirectly, from paying
any dividends to the Company, from making any other distribution on the Subsidiary’s capital
stock, from repaying to the Company any loans or advances to the Subsidiary from the Company
or from transferring any of the Subsidiary’s property or assets to the Company, except as
described in the Registration Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus;
(nn) except to the extent disclosed in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus, the Company and the
Subsidiary have operated and currently are in compliance in all
- 17 -
material respects with all applicable rules, regulations and policies of the U.S. Food
and Drug Administration and comparable drug regulatory agencies outside of the United States
in which its products are sold or tested (collectively, the “Regulatory
Authorities”); except for such non-compliance as would not, individually or in the
aggregate, have a Material Adverse Effect, the Company’s business practices have been
structured in a manner reasonably designed to comply with the federal and state laws
governing Medicare and state Medicaid programs, including, without limitation, Sections
1320a-7a and 1320a-7b of Title 42 of the United States Code, and the Company reasonably
believes that the Company and the Subsidiary are in compliance with such laws; the Company
and the Subsidiary have taken reasonable actions designed to ensure that they do not: (i)
violate the False Claims Act, 31 U.S.C. §§ 3729-3733 or (ii) allow any individual with an
ownership or control interest (as defined in 42 U.S.C. § 1320a-3(a)(3)) in the Company or
the Subsidiary or have any officer, director or managing employee (as defined in 42 U.S.C. §
1320a-5(b)) of the Company or the Subsidiary who would be a person excluded from
participation in any federal health care program (as defined in 42 U.S.C. § 1320a-7b(f)) as
described in 42 U.S.C. § 1320a-7(b)(8);
(oo) the issuance and sale of the Shares as contemplated hereby will not cause any
holder of any shares of capital stock, securities convertible into or exchangeable or
exercisable for capital stock or options, warrants or other rights to purchase capital stock
or any other securities of the Company to have any right to acquire any shares of preferred
stock or other capital stock of the Company;
(pp) the Company has not received any notice from the NASDAQ regarding the delisting of
the Common Stock from the NASDAQ;
(qq) except pursuant to this Agreement, neither the Company nor the Subsidiary has
incurred any liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby or by the Registration Statement;
(rr) neither the Company nor the Subsidiary nor any of their respective directors,
officers, affiliates or controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares; and
(ss) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD and (ii) the Company or any of the Company’s officers, directors or
5% or greater security holders or any beneficial owner of the Company’s unregistered equity
securities that were acquired at any time on or after the 180th day immediately preceding
the date the Registration Statement was initially filed with the Commission, except as
disclosed in the Registration Statement (excluding the exhibits thereto), the Pre-Pricing
Prospectuses and the Prospectus.
In addition, any certificate signed by any officer of the Company and delivered to
- 18 -
the Underwriters or counsel for the Underwriters in connection with the offering of the Shares
shall be deemed to be a representation and warranty by the Company, as to matters covered thereby,
to each Underwriter.
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 or other jurisdictions as you may designate and to maintain such qualifications in
effect so long as you may request for the distribution of the Shares; provided,
however, 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 jurisdiction (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 offer or 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 this Agreement 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 (whether
physically or through compliance with Rule 172 under the Act or any similar rule), in
connection with the sale of the Shares, a prospectus after the nine-month period referred to
in Section 10(a)(3) of the Act, or after the time a post-effective amendment to the
Registration Statement is required pursuant to Item 512(a) of Regulation S-K under the Act,
the Company will prepare, at its expense, promptly upon request such amendment or amendments
to the Registration Statement and the Prospectus as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Act or Item 512(a) of Regulation S-K under
the Act, as the case may be;
(c) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement, or a Registration Statement under
Rule 462(b) under the Act, to be filed with the Commission and become effective before the
Shares may be sold, the Company will use its best efforts to cause such post-effective
amendment or such Registration Statement to be filed and become effective as soon as
possible, and the Company will advise you promptly and, if requested by you, will confirm
such advice in writing, (i) when such post-effective amendment or such Registration
Statement has become 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 in accordance with 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, the
- 19 -
Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing 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 use its best efforts to obtain the lifting or removal of such
order as soon as possible; to advise you promptly of any proposal to amend or supplement the
Registration Statement, the Pre-Pricing Prospectus or the Prospectus, and to provide you and
Underwriters’ counsel copies of any such documents for review and comment a reasonable
amount of time prior to any proposed filing and to file no such amendment or supplement to
which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act for so long as a prospectus is
required by the Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares; and to provide you
with a copy of such reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period for your review
and comment a reasonable amount of time prior to any proposed filing, and to file no such
report, statement or document to which you shall have reasonably objected in writing; and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement pursuant to, and in
accordance with, Rule 462(b) under the Act and pay the applicable fees in accordance with
the Act;
(g) to advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares, which event could 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 in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and, during such time,
subject to Section 4(d) hereof, 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;
(h) 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) under the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but in any case not later than
May 10, 2007;
(i) to furnish to you one copy for each Managing Underwriter and one copy
- 20 -
for counsel for the Underwriters of the Registration Statement, as initially filed with
the Commission, and of all amendments thereto (including all exhibits thereto and documents
incorporated by reference therein) and sufficient copies of the foregoing (other than
exhibits) for distribution of a copy to each of the other Underwriters;
(j) to furnish to you promptly 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, proxy
statements, 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, transition and current reports filed with the Commission on Forms 10-K, 10-Q or
8-K, or such other similar forms 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 or the Subsidiary, provided, however, that in no case shall
the Company be required to furnish materials pursuant to this paragraph which are filed and
publicly accessible via the XXXXX database;
(k) to furnish to you as early as practicable prior to the time of purchase and any
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 and monthly consolidated financial
statements, if any, of the Company and the Subsidiary that have been read by the Company’s
independent registered public accountants, as stated in their letter to be furnished
pursuant to Section 6(d) hereof;
(l) 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 Supplement;
(m) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Basic Prospectus, each Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus, each Permitted Free Writing
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 including any stock
or transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of
the Shares to the Underwriters, (iii) the producing, word processing and/or printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements 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 or foreign laws and the determination of their eligibility for
investment under state or foreign law (including the filing fees and reasonable legal 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 the NASDAQ and any registration thereof under the Exchange Act, (vi)
any filing for review of the public
- 21 -
offering of the Shares by the NASD, including the filing fees and reasonable legal fees
and other disbursements of counsel to the Underwriters relating to NASD matters, (vii) the
fees and disbursements of any transfer agent or registrar for the Shares, (viii) the costs
and expenses of the Company relating to presentations or meetings undertaken in connection
with the marketing of the offering and sale of the Shares to prospective investors and the
Underwriters’ sales forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel, lodging and other expenses incurred by
the officers of the Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, and (ix) the performance of the Company’s other
obligations hereunder;
(n) to comply with Rule 433(g) under the Act;
(o) beginning on the date hereof and ending on, and including, the date that is 90 days
after the date hereof (the “Lock-Up Period”), without the prior written consent of
UBS, not to (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant
any option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, any Common Stock 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 Common Stock, (ii) file or cause
to become effective a registration statement under the Act relating to the offer and sale of
any shares of Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock or warrants or other rights to purchase Common Stock or any other securities of
the Company that are substantially similar to Common Stock, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii), except, in each case,
for (A) the registration of the offer and sale of the Shares as contemplated by this
Agreement, (B) issuances of Common Stock upon the exercise of options or warrants disclosed
as outstanding in the Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus, (C) the issuance of stock options to employees or
consultants of the Company not exercisable during the Lock-Up Period pursuant to stock
option plans described in the Registration Statement (excluding the exhibits thereto), each
Pre-Pricing Prospectus and the Prospectus, and (D) issuances of Common Stock pursuant to the
Company’s employee stock purchase plan described in the Registration Statement, each
Pre-Pricing Prospectus and the Prospectus; provided, however, that if (a)
during the period that begins on the date that is fifteen (15) calendar days plus three (3)
business days before the last day of the Lock-Up Period and ends on the last day of the
Lock-Up Period, the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (b) prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the sixteen (16) day period
beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Section 4(o) shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the
earnings release or the material news or material event occurs;
- 22 -
(p) prior to the time of purchase or any additional time of purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company or the Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of the Company or the
Subsidiary, or the offering of the Shares, without your prior consent, not to be
unreasonably withheld;
(q) not, at any time at or after the execution of this Agreement, to offer or sell any
Shares by means of any “prospectus” (within the meaning of the Act), or use any “prospectus”
(within the meaning of the Act) in connection with the offer or sale of the Shares, in each
case other than the Prospectus;
(r)
not, and to cause the Subsidiary not, to take, directly or indirectly,
any action designed, or which will constitute, or has constituted, or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(s) to use its best efforts to cause the Common Stock to be listed for quotation on the
NASDAQ and to maintain such listing; and
(t) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
5. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for any
reason other than the termination of this Agreement pursuant to the fifth paragraph 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(m) hereof,
reimburse the Underwriters for all of their out-of-pocket accountable expenses actually incurred,
including the 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, at the time of purchase and, if applicable, at the
additional time of purchase, 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, if applicable, at the
additional time of purchase, an opinion of Fenwick & West LLP, 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 executed copies for each of the other Underwriters, and
in form and substance satisfactory to and approved by UBS and counsel
to the Underwriters.
(b) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxxxxx and Xxxxxxxx and Crew LLP, special
counsel for the Company with respect to patents and proprietary
- 23 -
rights, addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with executed copies for each of the other
Underwriters, and in form and substance satisfactory to and approved
by UBS and counsel to the Underwriters.
(c) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxx Amalric, special counsel for the Company
with respect to the Subsidiary, addressed to the Underwriters, and dated the time of
purchase or the additional time of purchase, as the case may be, with executed copies for
each of the other Underwriters, and in form and substance
satisfactory to and approved by UBS and counsel to the Underwriters.
(d) You shall have received from Ernst & Young LLP letters dated, respectively, the
date of this Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (with executed copies for each of the
Underwriters) in the forms approved by UBS, which letters shall cover, without limitation,
the various financial disclosures, if any, contained in any Basic Prospectus, the
Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus, and the Permitted Free
Writing Prospectuses, if any.
(e) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxx Xxxxx LLP, counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as the case may
be, in form and substance reasonably satisfactory to UBS.
(f) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in writing.
(g) The Registration Statement and any registration statement required to be filed,
prior to the sale of the Shares, under the Act pursuant to Rule 462(b) shall have been filed
and shall have become effective under the Act. The Prospectus Supplement shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or before 5:30 P.M., New
York City time, on the second full business day after the date of this Agreement (or such
earlier time as may be required under the Act).
(h) Prior to the time of purchase, and, if applicable, the additional time of purchase,
(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 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; (iii) none of the Pre-Pricing
Prospectuses or the Prospectus, and no amendment or supplement thereto, shall include an
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they are made,
not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto, shall
include an untrue statement of a material fact or omit to state a material fact
- 24 -
necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(i) The Company will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to you a certificate of its Chief Executive Officer and its Chief
Financial Officer, dated the time of purchase or the additional time of purchase, as the
case may be, in the form attached as Exhibit B hereto.
(j) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(v) hereof, and each such Lock-Up Agreement shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may be.
(k) 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, the
Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing Prospectus as of the
time of purchase and, if applicable, the additional time of purchase, as you may reasonably
request.
(l) The Shares shall have been approved for quotation on the 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.
(m) The NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
7. Effective Date of Agreement; Termination. This Agreement shall become effective
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 UBS, if (1) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has been
any material adverse change or any development involving a prospective material adverse change in
the business, properties, management, financial condition or results of operations of the Company
and the Subsidiary taken as a whole, which would, in the sole judgment of UBS, make it
impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, or (2) since the
time of execution of this Agreement, there shall have occurred: (A) a suspension or material
limitation in trading in securities generally on the NYSE, the American Stock Exchange or the
NASDAQ; (B) a suspension or material limitation in trading in the Company’s securities on the
NASDAQ; (C) a general moratorium on commercial
- 25 -
banking activities declared by either federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance services in the United
States; (D) an outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or (E) any other
calamity or crisis or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (D) or (E), in the sole
judgment of UBS, makes it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the Registration Statement,
the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any,
or (3) since the time of execution of this Agreement, there shall have occurred any downgrading, or
any notice or announcement shall have been given or made of: (A) any intended or potential
downgrading or (B) any watch, review or possible change that does not indicate an affirmation or
improvement in the rating accorded any securities of or guaranteed by the Company or the Subsidiary
by any “nationally recognized statistical rating organization,” as that term is defined in Rule
436(g)(2) under the Act.
If UBS elects to terminate this Agreement as provided in this Section 7, the Company and each
other Underwriter shall be notified promptly in writing.
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 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(m), 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 hereof, 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 failure of a condition set forth in Section 6 hereof or 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 (including the Underwriters, if any, substituted in the manner set
forth below) 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 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 forth 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
- 26 -
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 the 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 hereto.
If the aggregate number of Firm Shares which the defaulting Underwriter or Underwriters agreed
to purchase exceeds 10% of the total number of Firm 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 Firm
Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability on the part of the
Company to any 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.
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
arises out of or is based upon (i) 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 arises out of or is based
upon any omission or alleged omission to state a material fact required to be stated therein
or necessary to make the statements 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
concerning such Underwriter furnished in writing by or on behalf of such Underwriter through
you to the Company expressly for use in, the Registration Statement or arises out of or is
based upon any omission or alleged omission to state a material fact in the Registration
Statement in connection with such information, which material fact was not contained in such
information and which material fact was required to be stated in such Registration Statement
or was necessary to
- 27 -
make such information not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact included in any Prospectus (the term Prospectus for the purpose
of this Section 9 being deemed to include any Basic Prospectus, the Pre-Pricing Prospectus,
the Prospectus Supplement, the Prospectus and any amendments or supplements to the
foregoing), in any Permitted Free Writing Prospectus, in any “issuer information” (as
defined in Rule 433 under the Act) of the Company or in any Prospectus together with any
combination of one or more of the Permitted Free Writing Prospectuses, if any, or arises out
of or is based upon any omission or alleged omission 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, with respect to such Prospectus or Permitted Free Writing
Prospectus, 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 concerning such Underwriter furnished in writing by
or on behalf of such Underwriter through you to the Company expressly for use in, such
Prospectus or Permitted Free Writing Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in such Prospectus or Permitted Free
Writing Prospectus in connection with such information, which material fact was not
contained in such information and which material fact was necessary in order to make the
statements in such information, in the light of the circumstances under which they were
made, not misleading.
(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 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 (i) any untrue statement or alleged untrue statement of a material
fact contained in, and in conformity with information concerning such Underwriter furnished
in writing by or on behalf of such Underwriter through you to the Company expressly for use
in, the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in such information
and which material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement or alleged
untrue statement of a material fact contained in, and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of such Underwriter through
you to the Company expressly for use in, a Prospectus or a Permitted Free Writing
Prospectus, or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus in connection with
such information, which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such information, in the
light of the circumstances under which they were
- 28 -
made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company or an Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection (a) or (b), respectively, of this Section 9, such indemnified party
shall promptly notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party 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 indemnifying party shall not relieve such indemnifying party from any liability
which such indemnifying party may have to any indemnified party or otherwise, except to the
extent the indemnifying party was unaware of the proceeding to which such notice would have
related and was materially prejudiced by the failure to give such notice. The indemnified
party or parties 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 indemnified party
or parties unless the employment of such counsel shall have been authorized in writing by
the indemnifying party in connection with the defense of such Proceeding or the indemnifying
party shall not have, within a reasonable period of time in light of the circumstances,
employed counsel to defend 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 such indemnifying party (in which
case such indemnifying party 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 such indemnifying party and paid as incurred (it being
understood, however, that such indemnifying party 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 indemnifying party shall not be liable for any
settlement of any Proceeding effected without its written consent but, if settled with its
written consent, such indemnifying party agrees to indemnify and hold harmless the
indemnified party or parties 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 Section 9(c), 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 75
business days after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully 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 45 days’ prior notice of its intention to settle.
Any payments made by an indemnifying party shall be without prejudice to such party’s right
to dispute its indemnification obligations hereunder. 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
- 29 -
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 or culpability or a failure to act by
or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an
indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying 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.
(e) 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 (d) 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 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.
- 30 -
The Underwriters’ obligations to contribute pursuant to this Section 9 are several in
proportion to their respective underwriting commitments and not joint.
(f) 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, the Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus.
10. Information Furnished by the Underwriters. The statements set forth under the
headings “Commissions and Discounts” and “Price Stabilization, Short Positions, Passive Market
Making” under the caption “Underwriting” in the Pre-Pricing Prospectus and the Prospectus
Supplement, only insofar as such statements relate to the amount of selling concession and
reallowance or to over-allotment and stabilization activities that may be undertaken by the
Underwriters, constitute the only information furnished by or on behalf of the Underwriters, as
such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram or facsimile and, if to the Underwriters, shall
be sufficient in all respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000-0000, 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 000 Xxxxxxxxx
Xxxxx, Xxxxxxxxx, XX 00000, Attention: Chief Executive Officer.
12. 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. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. 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
- 31 -
any third party against any Underwriter or any indemnified party. Each Underwriter and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf of its
shareholders and affiliates) waive all right to trial by jury in any action, 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 to the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
14. 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.
15. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters
are acting solely as underwriters in connection with the purchase and sale of the Company’s
securities. The Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to
the Company, its management, shareholders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby
expressly disclaim any fiduciary or similar obligations to the Company in connection with the
transactions contemplated by this Agreement, and the Company hereby confirms its understanding and
agreement to that effect. The Company and the Underwriters agree that they are each responsible
for making their own independent judgments with respect to any such transactions and that any
opinions or views expressed by the Underwriters to the Company regarding such transactions,
including, but not limited to, any opinions or views with respect to the price or market for the
Company’s securities, do not constitute advice or recommendations to the Company. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may
have against the Underwriters with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated by this Agreement.
16. 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.
17. 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.
18. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is not a bank
and is separate from any affiliated bank, including any U.S. branch or agency of UBS AG.
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Because UBS 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 UBS 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.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
- 33 -
If the foregoing correctly sets forth the understanding between the Company and the several
Underwriters, please so indicate in the space provided below for that purpose, whereupon this
Agreement and your acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
| Very truly yours, | ||||
| Cepheid | ||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: Xxxx X. Xxxxxx | ||||
| Title: Chief Executive Officer | ||||
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
UBS Securities LLC
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx X. Xxxxx & Co. Incorporated
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxx X. Xxxxx & Co. Incorporated
By:
|
UBS Securities LLC | ||||
By: |
/s/ Xxxxxxx Xxxxxxxx | ||||
| Name: | Xxxxxxx Xxxxxxxx | ||||
| Title: | Managing Director | ||||
By: |
/s/ Xxxxx Xxxxxx | ||||
| Name: | Xxxxx Xxxxxx | ||||
| Title: | Director | ||||
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Shares | |||
UBS SECURITIES LLC |
6,500,000 | |||
XXXXXXX XXXXX & COMPANY, L.L.C. |
2,500,000 | |||
XXXXXX X. XXXXX & CO. INCORPORATED |
1,000,000 | |||
Total |
10,000,000 | |||
SCHEDULE B
PERMITTED FREE WRITING PROSPECTUSES
(EXCLUDING ELECTRONIC ROAD SHOWS)
(EXCLUDING ELECTRONIC ROAD SHOWS)
None.
EXHIBIT A
Lock-Up Agreement
February __, 2006
UBS Securities LLC
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Cepheid, a California
corporation (the “Company”), and you and the other underwriters named in Schedule A to the
Underwriting Agreement, with respect to the public offering (the “Offering”) of common
stock, no par value per share, of the Company (the “Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that,
for a period (the “Lock-Up Period”) beginning on the date hereof and ending on, and
including, the date that is 90 days after the date of the final prospectus supplement relating to
the Offering, the undersigned will not, without the prior written consent of UBS Securities LLC,
(i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or file (or
participate in the filing of) a registration statement with the Securities and Exchange Commission
(the “Commission”) in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated
thereunder (the “Exchange Act”) with respect to, any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock or any such securities (collectively, the “Securities”), (ii) enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Securities, whether any such transaction is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise or (iii) publicly announce
an intention to effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of the offer and sale of Common Stock as contemplated by
the Underwriting Agreement and the sale of the Common Stock to the Underwriters (as defined in the
Underwriting Agreement) in the Offering, (b) bona fide gifts, provided the recipient thereof agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Agreement or (c)
dispositions to any trust for the direct or indirect benefit of the
A-1
undersigned and/or the immediate family of the undersigned, provided that such trust agrees in
writing with the Underwriters to be bound by the terms of this Lock-Up Agreement1 For
purposes of this paragraph, “immediate family” shall mean the undersigned and the spouse, any
lineal descendent, father, mother, brother or sister of the
undersigned.
In addition, the undersigned hereby waives any rights the undersigned may have to require
registration of Common Stock in connection with the filing of a registration statement relating to
the Offering. The undersigned further agrees that, for the Lock-Up Period, the undersigned will
not, without the prior written consent of UBS Securities LLC, make any demand for, or exercise any
right with respect to, the registration of Common Stock or any securities convertible into or
exercisable or exchangeable for Securities.
Notwithstanding the above, if (a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs.
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Common Stock.
* * *
| 1 | The letter to be delivered by Xx. Xxxxxx Xxxxxxxx shall include the following additional exception: “and (d) dispositions of not more than 30,000 shares of Common Stock issued to the undersigned, provided that such disposition takes place pursuant to a written plan for trading securities, within the meaning of Rule 10b5-1 promulgated under the Exchange Act, as amended, approved by the Company and in effect prior to the commencement of the Offering.” |
A-2
If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Commission with respect to the Offering is
withdrawn, (iii) the Underwriting Agreement is not executed and delivered by the Company on or
before May 1, 2006 or (iv) for any reason the Underwriting Agreement shall be terminated prior to
the “time of purchase” (as defined in the Underwriting Agreement), this Lock-Up Agreement shall be
terminated and the undersigned shall be released from its obligations hereunder.
| Yours very truly, | ||
| Name: |
A-3
EXHIBIT
B
OFFICERS’ CERTIFICATE
Each of the undersigned, Xxxx X. Xxxxxx, Chief Executive Officer of Cepheid, a California
corporation (the “Company”), and Xxxx X. Xxxxx, Senior Vice President, Finance, and Chief
Financial Officer of the Company, on behalf of the Company, does hereby certify pursuant to Section
6(i) of that certain Underwriting Agreement dated March 7, 2006 (the “Underwriting
Agreement”) between the Company and, on behalf of the several Underwriters named therein, UBS
Securities LLC, Xxxxxxx Xxxxx & Company, L.L.C. and Xxxxxx X.
Xxxxx & Co. Incorporated, that as of the date hereof:
| 1. | He has reviewed the Registration Statement, each Pre-Pricing Prospectus, the Prospectus and each Permitted Free Writing Prospectus. |
| 2. | The representations and warranties of the Company as set forth in the Underwriting Agreement are true and correct as of the date hereof and as if made on the date hereof. |
| 3. | The Company has performed all of its obligations under the Underwriting Agreement as are to be performed at or before the date hereof. |
| 4. | The conditions set forth in paragraph (h) of Section 6 of the Underwriting Agreement have been met. |
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
In
Witness Whereof, the undersigned have hereunto set their hands
on this March 13, 2006.
| Name: | Xxxx X. Xxxxxx | |||||
| Title: | Chief Executive Officer | |||||
| Name: | Xxxx X. Xxxxx | |||||
| Title: | Senior Vice President, Finance, and | |||||
| Chief Financial Officer | ||||||
B-1
