Exhibit 1.1
AEROGEN, INC.
________ SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
_____ __, 2000
CHASE SECURITIES INC.
CIBC WORLD MARKETS CORP.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION, as Representatives of
the several Underwriters identified on Schedule I
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
AeroGen, Inc., a Delaware corporation (herein called the "Company"),
proposes to issue and sell ______shares of its authorized but unissued common
stock, $_______ par value per share (herein called the "Common Stock") (said
____________ shares of Common Stock being herein called the "Underwritten
Stock"). The Company proposes to grant to the Underwriters (as hereinafter
defined) an option to purchase up to 15% over-allotment option additional
shares of Common Stock (herein called the "Option Stock" and with the
"Underwritten Stock" herein collectively called the "Stock"). The Common
Stock is more fully described in the Registration Statement and the
Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the "Underwriters",
which term shall also include any underwriter purchasing Stock pursuant to
Section 3(b) hereof). You represent and warrant that you have been authorized
by each of the other Underwriters to enter into this Agreement on its behalf
and to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the Securities
and Exchange Commission (herein called the "Commission") a registration
statement on Form S-1 (No. 333-44470), including the related preliminary
prospectus, for the registration under the Securities Act of 1933, as amended
(herein called the "Securities Act") of the Stock. Copies of such
registration statement and of each amendment thereto, if any, including the
related preliminary prospectus (meeting the requirements of Rule 430A of the
rules and regulations of
--------
(1) Plus an option to purchase from the Company up to 15% over-allotment option
additional shares to cover over-allotments.
the Commission) heretofore filed by the Company with the Commission have been
delivered to you.
The term Registration Statement as used in this agreement shall mean
such registration statement, including all exhibits and financial statements,
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, in the form in which it became effective, and
any registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a "Rule
462(b) registration statement"), and, in the event of any amendment thereto
after the effective date of such registration statement (herein called the
"Effective Date"), shall also mean (from and after the effectiveness of such
amendment) such registration statement as so amended (including any Rule 462(b)
registration statement). The term "Prospectus" as used in this Agreement shall
mean the prospectus relating to the Stock first filed with the Commission
pursuant to Rule 424(b) and Rule 430A (or if no such filing is required, as
included in the Registration Statement) and, in the event of any supplement or
amendment to such prospectus after the Effective Date, shall also mean (from and
after the filing with the Commission of such supplement or the effectiveness of
such amendment) such prospectus as so supplemented or amended. The term
"Preliminary Prospectus" as used in this Agreement shall mean each preliminary
prospectus included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(i) Each of the Company and its subsidiary has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
full corporate power and authority to own or lease its properties and
conduct its business as described in the Registration Statement and the
Prospectus and as being conducted, and is duly qualified as a foreign
corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by it makes qualification necessary, except where the
failure to be so qualified would not have a Material Adverse Effect.
"Material Adverse Effect" means, when used in connection with the
Company and its subsidiary, any development, change or effect that is
materially adverse to the business, prospects, properties, financial
condition or results of operations of the Company and its subsidiary,
taken as a whole.
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(ii) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any change in the Company or its subsidiary, whether
or not arising from transactions in the ordinary course of business
that would have a Material Adverse Effect, other than as set forth in
the Registration Statement and the Prospectus, and since such dates,
except in the ordinary course of business, neither the Company nor its
subsidiary has entered into any material transaction not referred to in
the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus
comply, and on the Closing Date (as hereinafter defined) and any later
date on which Option Stock is to be purchased, the Prospectus will
comply, in all material respects, with the provisions of the Securities
Act and the rules and regulations of the Commission thereunder (the
"Rules and Regulations"); on the Effective Date, the Registration
Statement did not contain any untrue statement of a material fact and
did not omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading;
and, on the Effective Date the Prospectus did not and, on the Closing
Date and any later date on which Option Stock is to be purchased, will
not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that none of the representations and
warranties in this subparagraph (iii) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in
reliance upon and in conformity with information herein or otherwise
furnished in writing to the Company by or on behalf of the Underwriters
specifically for use in the Registration Statement or the Prospectus.
(iv) The Company has the duly authorized and validly
outstanding capitalization set forth under the caption "Capitalization"
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and will have the adjusted
capitalization set forth therein on the Closing Date, based on the
assumptions set forth therein. The securities of the Company conform to
the descriptions thereof contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus). The outstanding shares of Common Stock have been duly
authorized and validly issued by the Company and are fully paid and
nonassessable. Except as created hereby or referred to in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), there are no outstanding options, warrants,
rights or other arrangements requiring the Company at any time to issue
any Common Stock. No holders of outstanding shares of Common Stock of
the Company are entitled as such to any preemptive or other rights to
subscribe for any of the Stock and neither the filing of the
registration statement nor the offering or sale of the Stock as
contemplated by this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to, the
registration of any securities of the Company. The Stock has been duly
authorized; on the Closing Date, after payment therefor in accordance
with the terms of this Agreement, (A) the Stock to be sold by the
Company hereunder will be validly issued, fully paid and nonassessable,
and (B) good and marketable title to the Stock will pass to the
Underwriters on the Closing Date free
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and clear of any lien, encumbrance, security interest, claim or other
restriction whatsoever. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required
for the issuance and sale of the Stock as contemplated herein. The
Company has received, subject to notice of issuance, approval to have
the Shares quoted on the National Market System of the National
Association of Securities Dealers' Automated Quotation System and the
Company knows of no reason or set of facts which is likely to adversely
affect such approval.
(v) The consolidated financial statements and the
related notes and schedules thereto included in the Registration
Statement and the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) fairly present the
consolidated financial condition, results of operations, stockholders'
equity and cash flows of the Company and its subsidiary at the dates
and for the periods specified therein. Such financial statements and
the related notes and schedules thereto have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted
therein) and such financial statements as are audited have been
examined by PricewaterhouseCoopers LLP, who are independent public
accountants within the meaning of the Act and the Rules and
Regulations, as indicated in their reports filed therewith. The
selected financial information and statistical data set forth under the
captions "Summary Selected Consolidated Financial Data" and "Selected
Consolidated Financial Data" in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) have been
prepared on a basis consistent with the financial statements of the
Company and its subsidiary.
(vi) Each of the Company and its subsidiary has filed
all necessary federal, state and local income, franchise and other
material tax returns and has paid all taxes shown as due thereunder,
and each of the Company and its subsidiary has no knowledge of any tax
deficiency which might be assessed against the Company or the
subsidiary which, if so assessed, would have a Material Adverse Effect.
(vii) Each of the Company and its subsidiary
maintains insurance of the types and in amounts which it reasonably
believes to be adequate for its business in such amounts and with such
deductibles as is customary for companies of comparable size in the
same or similar business, all of which insurance is in full force and
effect.
(viii) Except as disclosed in the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus), there is no pending action, suit, proceeding or
investigation or, to the Company's or the subsidiary's best knowledge,
threatened action, suit, proceeding or investigation before or by any
court, regulatory body or administrative agency or any other
governmental agency or body, domestic or foreign, which (A) questions
the validity of the capital stock of the Company or the subsidiary or
this Agreement or of any action taken or to be taken by the Company
pursuant to or in connection with this Agreement, (B) is required to be
disclosed in the Registration Statement which is not so disclosed (and
such proceedings, if any, as are
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summarized in the Registration Statement are accurately summarized in
all material respects), or (C) would have a Material Adverse Effect.
(ix) The Company has full legal right, power and
authority to enter into this Agreement and to consummate the
transactions provided for herein. This Agreement has been duly
authorized, executed and delivered by the Company and, assuming it is a
binding agreement of yours, constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws of general application relating to or affecting the enforcement of
creditors' rights and the application of equitable principles relating
to the availability of remedies and except as rights to indemnity or
contribution may be limited by federal or state securities laws and the
public policy underlying such laws), and none of the Company's
execution, delivery, or performance of this Agreement, its consummation
of the transactions contemplated herein and therein, its application of
the net proceeds of the offering in the manner set forth under the
caption "Use of Proceeds" or the conduct of its business as described
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus), conflicts or will conflict with or
results or will result in any breach or violation of any of the terms
or provisions of, or constitutes or will constitute a default under,
causes or will cause (or permits or will permit) the maturation or
acceleration of any liability or obligation or the termination of any
right under, or result in the creation or imposition of any lien,
charge, or encumbrance upon, any property or assets of the Company
pursuant to the terms of (A) the certificate of incorporation or
by-laws of the Company, (B) any indenture, mortgage, deed of trust,
voting trust agreement, stockholders' agreement, note agreement or
other agreement or instrument to which the Company is a party or by
which it is or, to the knowledge of the Company, may be bound or to
which any of its properties is or, to the knowledge of the Company, may
be subject or (C) any statute, judgment, decree, order, rule or
regulation applicable to the Company of any government, arbitrator,
court, regulatory body or administrative agency or other governmental
agency or body, domestic or foreign, having jurisdiction over the
Company or any of its activities or properties.
(x) All executed agreements or copies of executed
agreements filed as exhibits to the Registration Statement to which the
Company is a party or by which it is or may be bound or to which any of
its assets, properties or businesses is or may be subject have been
duly and validly authorized, executed and delivered by the Company, and
constitute the legal, valid and binding agreements of the Company,
enforceable against it in accordance with their respective terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to
enforcement of creditors' rights generally, and general equitable
principles relating to the availability of remedies, and except as
rights to indemnity or contribution may be limited by federal or state
securities laws and the public policy underlying such laws). The
descriptions in the Registration Statement of contracts and other
documents are accurate and fairly present the information required to
be shown with respect thereto
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by the Act and the Rules and Regulations, and there are no contracts or
other documents which are required by the Act or the Rules and
Regulations to be described in the Registration Statement or filed as
exhibits to the Registration Statement which are not described or filed
as required or incorporated therein by reference, and the exhibits
which have been filed are complete and correct copies of the documents
of which they purport to be copies.
(xi) Subsequent to the most recent respective dates
as of which information is given in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), and except as expressly contemplated therein, neither the
Company nor its subsidiary has incurred, other than in the ordinary
course of its business, any material liabilities or obligations, direct
or contingent, purchased any of its outstanding capital stock, paid or
declared any dividends or other distributions on its capital stock or
entered into any material transactions not in the ordinary course of
business, and there has been no material change in capital stock or
debt. Each of the Company and its subsidiary (or the manner in which it
conducts its business) is not in breach or violation of, or in default
under, any term or provision of (A) its certificate of incorporation or
bylaws, (B) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement
or instrument to which it is a party or by which it is or, to the
knowledge of the Company, may be bound or to which any of its property
is or, to the knowledge of the Company, may be subject, or any
indebtedness, the effect of which breach or default singly or in the
aggregate may have a Material Adverse Effect, or (C) any statute,
judgment, decree, order, rule or regulation applicable to the Company
or its subsidiary or of any arbitrator, court, regulatory body,
administrative agency or any other governmental agency or body,
domestic or foreign, having jurisdiction over the Company or its
subsidiary or any of its activities or properties and the effect of
which breach or default singly or in the aggregate may have a Material
Adverse Effect.
(xii) No labor disturbance by the employees of the
Company or its subsidiary exists or, to the knowledge of the Company,
is imminent which may have a Material Adverse Effect.
(xiii) Since its inception, each of the Company and
its subsidiary and their predecessors have not incurred any material
liability arising under or as a result of the application of the
provisions of the Act.
(xiv) Each of the Company and its subsidiary own, or
have licensed or otherwise have sufficient right to use, the
proprietary knowledge, inventions, patents, patent applications,
trademarks, service marks, trade names, licenses, logo marks,
copyrights and other confidential information used in or necessary for
the conduct of its business (collectively "Rights") as described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus). Except as otherwise disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), no claims or notices of infringement have been
asserted
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against the Company or its subsidiary by any person with respect to the
use of any such Rights or challenging or questioning the validity or
effectiveness of any such Rights. Except as otherwise disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), the use, in connection with the business and
operations of the Company and its subsidiary of such Rights does not,
to the Company's or the subsidiary's best knowledge, infringe the
rights of any person.
The Company has settled a Patent Interference
with U.S. Patent No. 5,261,601 assigned to Bespak as disclosed in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(xv) No consent, approval, authorization or order of
or filing with any court, regulatory body, administrative agency or any
other governmental agency or body, domestic or foreign, is required for
the performance of this Agreement or the consummation of the
transactions contemplated hereby, except such as have been or may be
obtained under the Act or may be required under state securities or
Blue Sky laws in connection with the Underwriters' purchase and
distribution of the Stock.
(xvi) There are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities under the Registration Statement (other than those that have
been disclosed in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), that have not been
waived with respect to the Registration Statement.
(xvii) Neither the Company nor any of its officers,
directors or affiliates (within the meaning of the Rules and
Regulations) has taken, directly or indirectly, any action designed to
stabilize or manipulate the price of any security of the Company, or
which has constituted or which might in the future reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale
of the Stock or otherwise.
(xviii) Each of the Company and its subsidiary have
good and marketable title to, or valid and enforceable leasehold
interests in, all properties and assets owned or leased by it, free and
clear of all liens, encumbrances, security interests, claims,
restrictions, equities, claims and defects, except (A) such as are
described in the Registration Statement and Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), or such as do not materially adversely affect the value of
any of such properties or assets taken as a whole and do not materially
interfere with the use made and proposed to be made of any of such
properties or assets, and (B) liens for taxes not yet due and payable
as to which appropriate reserves have been established and reflected in
the financial statements included in the Registration Statement. Each
of the Company and its subsidiary owns or leases all such properties as
are necessary to its operations as now conducted, and as proposed to be
conducted, as set forth in the
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Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus); and the
properties and business of the Company and its subsidiary conform in
all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus). All the material
leases and subleases of each of the Company and its subsidiary, and
under which each of the Company and its subsidiary holds properties or
assets as lessee or sublessee, constitute valid leasehold interests of
the Company or its subsidiary free and clear of any lien, encumbrance,
security interest, restriction, equity, claim or defect, are in full
force and effect, and each of the Company and its subsidiary is not in
default in respect of any of the material terms or provisions of any
such material leases or subleases, and each of the Company and its
subsidiary does not have any notice of any claim which has been
asserted by anyone adverse to the Company's and its subsidiary's rights
as lessee or sublessee under either the material lease or sublease, or
affecting or questioning the Company's or its subsidiary's right to the
continued possession of the leased or subleased premises under any such
material lease or sublease, which may have a Material Adverse Effect.
(xix) Each of the Company and its subsidiary has not
violated any applicable environmental, safety, health or similar law
applicable to the business of the Company or its subsidiary, nor any
federal or state law relating to discrimination in the hiring,
promotion, or pay of employees, nor any applicable federal or state
wages and hours law, nor any provisions of ERISA or the rules and
regulations promulgated thereunder, the consequences of which violation
may have a Material Adverse Effect.
(xx) Each of the Company and its subsidiary holds all
franchises, licenses, permits, approvals, certificates and other
authorizations from federal, state and other governmental or regulatory
authorities necessary to the ownership, leasing and operation of its
properties or required for the present conduct of its business, and
such franchises, licenses, permits, approvals, certificates and other
governmental authorizations are in full force and effect and each of
the Company and its subsidiary is in compliance therewith in all
material respects except where the failure so to obtain, maintain or
comply with would not have a Material Adverse Effect.
(xxi) The Company does not conduct its operations in
a manner that subjects it to registration as an investment company
under the Investment Company Act of 1940, as amended, and this
transaction will not cause the Company to become an investment company
subject to registration under the Act.
(xxii) Each certificate signed by an officer of the
Company and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
(xxiii) Each of the Company and its subsidiary
maintains a system of
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internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's
general or specific authorizations; (2) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (3) access to assets is permitted only in accordance
with management's general or specific authorization; and (4) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and subject to
the terms and conditions herein set forth, the Company agrees to issue and sell
_________ shares of the Underwritten Stock to the several Underwriters and each
of the Underwriters agrees to purchase from the Company the respective aggregate
number of shares of Underwritten Stock set forth opposite its name in Schedule
I. The price at which such shares of Underwritten Stock shall be sold by the
Company and purchased by the several Underwriters shall be $___ per share. In
making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall notify the
Company that it will fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 8 or 9
hereof) to purchase and pay for the number of shares of the Stock agreed to be
purchased by such Underwriter or Underwriters, the Company shall immediately
give notice thereof to you, and the non-defaulting Underwriters shall have the
right within 24 hours after the receipt by you of such notice to purchase, or
procure one or more other Underwriters to purchase, in such proportions as may
be agreed upon between you and such purchasing Underwriter or Underwriters and
upon the terms herein set forth, all or any part of the shares of the Stock that
such defaulting Underwriter or Underwriters agreed to purchase. If the
non-defaulting Underwriters fail so to make such arrangements with respect to
all such shares, the number of shares of the Stock that each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares which
the defaulting Underwriter or Underwriters agreed to purchase; PROVIDED,
HOWEVER, that the non-defaulting Underwriters shall not be obligated to purchase
the shares and portion which the defaulting Underwriter or Underwriters agreed
to purchase if the aggregate number of such shares of the Stock exceeds 10% of
the total number of shares of the Stock which all Underwriters agreed to
purchase hereunder. If the total number of shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase shall not be purchased
or absorbed in accordance with the two preceding sentences, the Company shall
have the right, within 24 hours next succeeding the 24-hour period above
referred to, to make arrangements with other underwriters or purchasers
satisfactory to you for purchase of such shares and portion on the terms herein
set forth. In any such case, either you or the Company shall have the right to
postpone the Closing Date determined as provided in
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Section 5 hereof for not more than seven business days after the date originally
fixed as the Closing Date pursuant to said Section 5 to make any necessary
changes in the Registration Statement, the Prospectus or any other documents or
arrangements. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph (b), and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 15% over-allotment shares in the aggregate of the Option
Stock from the Company at the same price per share as the Underwriters shall pay
for the Underwritten Stock. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Stock by the Underwriters and
may be exercised in whole or in part at any time (but not more than once) on or
before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
shares of the Option Stock as to which the several Underwriters are exercising
the option. Delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made as provided in Section 5 hereof. The number of shares of
the Option Stock to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Stock to be purchased by
the several Underwriters as such Underwriter is purchasing of the Underwritten
Stock, as adjusted by you in such manner as you deem advisable to avoid
fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the Underwriters of the
Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the front cover
page and under "Underwriting" in the Registration Statement, any Preliminary
Prospectus and the Prospectus relating to the Stock filed by the Company
(insofar as such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and you
on behalf of the respective Underwriters represent and warrant to the Company
that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
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(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof
shall have been exercised not later than 7:00 A.M., San Francisco time, on
the date two business days preceding the Closing Date), and payment therefor,
shall be made at the office of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ at 7:00 a.m., San Francisco time, on the [fourth](2)
business day after the date of this Agreement, or at such time on such other
day, not later than seven full business days after such [fourth] business
day, as shall be agreed upon in writing by the Company and you. The date and
hour of such delivery and payment (which may be postponed as provided in
Section 3(b) hereof) are herein called the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding
the Closing Date, delivery of certificates for the shares of Option Stock,
and payment therefor, shall be made at the office of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, at 7:00 a.m., San Francisco time,
on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made to
the Company or its order either by certified or official bank check or checks in
same day funds or by one or more wire transfers as instructed by the Company.
Such payment shall be made upon delivery of certificates for the Stock to you
for the respective accounts of the several Underwriters against receipt therefor
signed by you. Certificates for the Stock to be delivered to you shall be
registered in such name or names and shall be in such denominations as you may
request at least one business day before the Closing Date, in the case of
Underwritten Stock, and at least one business day prior to the purchase thereof,
in the case of the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of Lewco
Securities Corporation, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on the business day
prior to the Closing Date or, in the case of the Option Stock, by 3:00 p.m., New
York time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and agrees
as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A and (ii) not file any amendment to
the Registration Statement or supplement to the Prospectus of which you
------------
(2) This assumes that the transaction will be priced after the close of
market and that T+4 will apply to the transaction. If the pricing took place
before or during market hours (which will generally not be the case), the
closing would be three business days after pricing.
-11-
shall not previously have been advised and furnished with a copy and as
to which the Underwriters shall not have given their consent or which
is not in compliance with the Securities Act or the Rules and
Regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the
event of (i) the request by the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, (iii)
the institution or notice of intended institution of any action or
proceeding for that purpose, (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction, or (v) the receipt by it of notice
of the initiation or threatening of any proceeding for such purpose.
The Company will make every reasonable effort to prevent the issuance
of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date,
deliver to you a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time
the Registration Statement becomes effective and, promptly upon the
filing thereof, a signed copy of each post-effective amendment, if any,
to the Registration Statement (together with, in each case, all
exhibits thereto unless previously furnished to you) and will also
deliver to you, for distribution to the Underwriters, a sufficient
number of additional conformed copies of each of the foregoing (but
without exhibits) so that one copy of each may be distributed to each
Underwriter, (ii) as promptly as possible deliver to you and send to
the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably
request, and (iii) thereafter from time to time during the period in
which a prospectus is required by law to be delivered by an Underwriter
or dealer, likewise send to the Underwriters as many additional copies
of the Prospectus and as many copies of any supplement to the
Prospectus and of any amended prospectus, filed by the Company with the
Commission, as you may reasonably request for the purposes contemplated
by the Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be
advised in writing by you, shall occur as a result of which it is
necessary, in the opinion of counsel for the Company after consultation
with counsel for the Underwriters, to supplement or amend the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a
purchaser of the Stock, the Company will forthwith prepare and file
with the Commission a supplement to the Prospectus or an amended
prospectus so that the Prospectus as so supplemented or amended will
not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances existing at the time such Prospectus is
delivered to such purchaser, not misleading. If, after the initial
-12-
public offering of the Stock by the Underwriters and during such
period, the Underwriters shall propose to vary the terms of offering
thereof by reason of changes in general market conditions or otherwise,
you will advise the Company in writing of the proposed variation, and,
if in the opinion of counsel for the Company after consultation with
counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the Company will forthwith
prepare and file with the Commission a supplement to the Prospectus or
an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Stock
may be sold by the several Underwriters to use the Prospectus, as from
time to time amended or supplemented, in connection with the sale of
the Stock in accordance with the applicable provisions of the
Securities Act and the applicable Rules and Regulations thereunder for
such period.
(e) Prior to the filing thereof with the Commission, the
Company will submit to you, for your information, a copy of any
post-effective amendment to the Registration Statement and any
supplement to the Prospectus or any amended prospectus proposed to be
filed.
(f) The Company will cooperate, when and as requested by you,
in the qualification of the Stock for offer and sale under the
securities or blue sky laws of such jurisdictions as you may designate
and, during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, in keeping such qualifications
in good standing under said securities or blue sky laws; PROVIDED,
HOWEVER, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will,
from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in
effect for so long a period as you may reasonably request for
distribution of the Stock.
(g) During a period of five years commencing with the date
hereof, the Company will furnish to you, and to each Underwriter who
may so request in writing, copies of all periodic and special reports
furnished to stockholders of the Company and of all information,
documents and reports filed with the Commission.
(h) Reserved.
(i) The Company agrees to pay all costs and expenses incident
to the performance of its obligations under this Agreement, including
all costs and expenses incident to (i) the preparation, printing and
filing with the Commission and the National Association of Securities
Dealers, Inc. of the Registration Statement, any Preliminary Prospectus
and the Prospectus, (ii) the furnishing to the Underwriters of copies
of any Preliminary Prospectus and of the several documents required by
paragraph (c) of this Section 6 to be so furnished, (iii) the printing
of this Agreement and related documents delivered to the Underwriters,
(iv) the preparation, printing and filing of all supplements
-13-
and amendments to the Prospectus referred to in paragraph (d) of this
Section 6, (v) the furnishing to you and the Underwriters of the
reports and information referred to in paragraph (g) of this Section 6
and (vi) the printing and issuance of stock certificates, including the
transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of
the several Underwriters, for blue sky fees and related disbursements
(including reasonable counsel fees and disbursements and the reasonable
cost of printing memoranda for the Underwriters) paid by or for the
account of the Underwriters or their counsel in qualifying the Stock
under state securities or blue sky laws and in the review of the
offering by the NASD.
(k) The Company hereby agrees that, without the prior written
consent of Chase Securities Inc. on behalf of the Underwriters, the
Company will not, for a period of 180 days following the commencement
of the public offering of the Stock by the Underwriters, directly or
indirectly, (i) sell, offer, contract to sell, make any short sale,
pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of Common Stock or any
securities convertible into or exchangeable or exercisable for or any
rights to purchase or acquire Common Stock or (ii) enter into any swap
or other agreement that transfers, in whole or in part, any of the
economic consequences or ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Stock to
be sold to the Underwriters pursuant to this Agreement, (B) shares of
Common Stock issued by the Company upon the exercise of options granted
under the stock option plans of the Company (the "Option Plans") as
described in notes to the table under the caption "Capitalization" in
the Preliminary Prospectus, (C) options to purchase Common Stock
granted under the Option Plans, and (D) shares issued upon the
automatic conversion of the Company's preferred stock in the Company's
initial public offering.
(l) If at any time during the 25-day period after the
Registration Statement becomes effective any rumor, publication or
event relating to or affecting the Company shall occur as a result of
which in your opinion the market price for the Stock has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after written notice from you advising
the Company to the effect set forth above, forthwith prepare, consult
with you concerning the substance of, and, to the extent deemed
necessary by counsel to the Company after consultation with Counsel
to the Underwriters, disseminate a press release or other public
statement responding to or commenting on such rumor, publication or
event.
(m) The Company is familiar with the Investment Company Act of
1940, as amended, and has in the past conducted its affairs, and will
in the future conduct its
-14-
affairs, in such a manner to ensure that the Company was not and will
not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.
(n) The Company will cause the Shares to be duly included for
quotation on the National Association of Securities Dealers Automated
Quotations National Market System prior to the Closing Date.
(o) Neither the Company nor any of its officers or directors,
nor affiliates of any of them (within the meaning of the Rules and
Regulations) will take, directly or indirectly, any action designed to,
or which might in the future reasonably be expected to cause or result
in, stabilization or manipulation of the price of any securities of the
Company.
(p) The Company will apply the net proceeds of the offering
received by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(q) The Company will timely file all such reports, forms or
other documents as may be required from time to time, under the Act,
the Rules and Regulations, the Exchange Act, and the rules and
regulations thereunder, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements
under the Act, the Rules and Regulations, the Exchange Act and the
rules and regulations thereunder.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person (including each partner or officer thereof) who controls any
Underwriter within the meaning of Section 15 of the Securities Act from and
against any and all losses, claims, damages or liabilities, joint or several, to
which such indemnified parties or any of them may become subject under the
Securities Act, the Exchange Act, or the common law or otherwise, and the
Company agrees to reimburse each such Underwriter and controlling person for any
legal or other expenses (including, except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any
-15-
amendment thereof or supplement thereto) or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that (1) the indemnity agreements of the Company contained in
this paragraph (a) shall not apply to any such losses, claims, damages,
liabilities or expenses if such statement or omission was made in reliance upon
and in conformity with information furnished as herein stated or otherwise
furnished in writing to the Company by or on behalf of any Underwriter for use
in any Preliminary Prospectus or the Registration Statement or the Prospectus or
any such amendment thereof or supplement thereto and (2) the indemnity agreement
contained in this paragraph (a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the Stock which
is the subject thereof (or to the benefit of any person controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
Stock a copy of the Prospectus (or the Prospectus as amended or supplemented)
was not sent or delivered to such person and the untrue statement or omission of
a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the failure is
the result of noncompliance by the Company with paragraph (c) of Section 6
hereof. The indemnity agreements of the Company contained in this paragraph (a)
and the representations and warranties of the Company contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, from and against any and all losses, claims, damages
or liabilities, joint or several, to which such indemnified parties or any of
them may become subject under the Securities Act, the Exchange Act, or the
common law or otherwise and to reimburse each of them for any legal or other
expenses (including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case arising out of or based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(including the Prospectus as part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus (as amended or as supplemented if
the Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, if such statement
or omission was made in reliance upon and in conformity with information
furnished as herein
-16-
stated or otherwise furnished in writing to the Company by
or on behalf of such indemnifying Underwriter for use in the Registration
Statement or the Prospectus or any such amendment thereof or supplement thereto.
The indemnity agreement of each Underwriter contained in this paragraph (b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; PROVIDED, HOWEVER, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred
-17-
to in clause (i) of the proviso to the preceding sentence and (B) the
indemnifying party or parties shall bear such other expenses as it or they have
authorized to be incurred by the indemnified party or parties. If, within a
reasonable time after receipt of the Notice, no Notice of Defense has been
given, the indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the total underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
-18-
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act is a party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended, or
if there shall have occurred (i) the engagement in hostilities or an escalation
of major hostilities by the United States or the declaration of war or a
national emergency by the United States on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the Underwriters' reasonable judgment,
make the offering or delivery of the Stock impracticable, (iii) suspension of
trading in securities generally or a material adverse decline in value of
securities generally on the New York Stock Exchange, the American Stock
Exchange, The Nasdaq Stock Market, or limitations on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Underwriters' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the Underwriters' reasonable opinion has a
material adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; PROVIDED, HOWEVER, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all the Company's costs or expenses incident to the performance of the
obligations of the Company under this Agreement, including, but not limited to,
all costs and expenses referred to in paragraphs (i) and (j) of Section 6
hereof.
-19-
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective;
and no stop order suspending the effectiveness thereof shall have been
issued and no proceedings therefor shall be pending or threatened by
the Commission.
(b) The legality and sufficiency of the sale of the Stock
hereunder and the validity and form of the certificates representing
the Stock, all corporate proceedings and other legal matters incident
to the foregoing, and the form of the Registration Statement and of the
Prospectus (except as to the financial statements contained therein),
shall have been approved at or prior to the Closing Date by Stroock &
Stroock & ▇▇▇▇▇ LLP, counsel for the Underwriters.
(c) You shall have received from ▇▇▇▇▇▇ Godward LLP, counsel
for the Company, and from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, patent counsel for the
Company, opinions, addressed to the Underwriters and dated the Closing
Date, covering the matters set forth in Annex A and Annex B hereto,
respectively, and if Option Stock is purchased at any date after the
Closing Date, additional opinions from each such counsel, addressed to
the Underwriters and dated such later date, confirming that the
statements expressed as of the Closing Date in such opinions remain
valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date,
the statements made in the Registration Statement and the Prospectus
were true and correct and neither the Registration Statement nor the
Prospectus omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein,
respectively, not misleading, (ii) since the Effective Date, no event
has occurred which should have been set forth in a supplement or
amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which
it originally became effective and the Prospectus contained therein,
there has not been any change with respect to the Company which would
have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, and, since such dates,
except in the ordinary course of business, the Company has not entered
into any material transaction not referred to in the Registration
Statement in the form in which it originally became effective and the
Prospectus contained therein, (iv) the Company does not have any
material contingent obligations which are not disclosed in the
Registration Statement and the Prospectus, (v) there are not any
pending or known threatened legal proceedings to which the Company is a
party or of which property of the Company or any of its subsidiaries is
the subject which are material and which are not disclosed in the
Registration Statement and the Prospectus, (vi) there are not any
franchises, contracts, leases or other documents which are required to
be filed as
-20-
exhibits to the Registration Statement which have not been filed as
required, (vii) the representations and warranties of the Company
herein are true and correct in all material respects as of the Closing
Date or any later date on which Option Stock is to be purchased, as the
case may be, and (viii) there has not been any material change in the
market for securities in general or in political, financial or economic
conditions from those reasonably foreseeable as to render it
impracticable in your reasonable judgment to make a public offering of
the Stock, or a material adverse change in market levels for securities
in general (or those of companies in particular) or financial or
economic conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any
later date on which Option Stock is purchased a certificate, dated the
Closing Date or such later date, as the case may be, and signed by the
President and the Chief Financial Officer of the Company, stating that
the respective signers of said certificate have carefully examined the
Registration Statement in the form in which it originally became
effective and the Prospectus contained therein and any supplements or
amendments thereto, and that the statements included in clauses (i)
through (vii) of paragraph (d) of this Section 9 are true and correct.
(f) You shall have received from PricewaterhouseCoopers LLP, a
letter or letters, addressed to the Underwriters and dated the Closing
Date and any later date on which Option Stock is purchased, confirming
that they are independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable
published Rules and Regulations thereunder and based upon the
procedures described in their letter delivered to you concurrently with
the execution of this Agreement (herein called the Original Letter),
but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased
(i) confirming, to the extent true, that the statements and conclusions
set forth in the Original Letter are accurate as of the Closing Date or
such later date, as the case may be, and (ii) setting forth any
revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of the Original
Letter or to reflect the availability of more recent financial
statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company which, in your sole
judgment, makes it impractical or inadvisable to proceed with the
public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(g) Reserved.
(h) You shall have been furnished evidence in usual written or
telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
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(i) Prior to the Closing Date, the Stock to be issued and
sold by the Company shall have been duly authorized for listing by the
Nasdaq National Market upon official notice of issuance.
(j) On or prior to the Closing Date, you shall have received
from all directors, officers, and beneficial holders of more than 5% of
the outstanding Common Stock "lock-up" agreements, in form reasonably
satisfactory to Chase Securities Inc., stating that without the prior
written consent of Chase Securities Inc. on behalf of the Underwriters,
such person or entity will not, for a period of 180 days following the
commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, (i) sell, offer, contract to sell, make any
short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for
or any rights to purchase or acquire Common Stock or (ii) enter into
any swap or other agreement that transfers, in whole or in part, any of
the economic consequences or ownership of Common Stock, whether any
such transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or
otherwise.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the
Underwriters, shall be reasonably satisfied that they comply in form and scope
unless, pursuant to this Agreement, counsel to the Underwriters only has
consultation privileges with respect to such agreements, opinions, certificates
and letters.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance by the Company of its obligations under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the transactions
contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
-22-
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; PROVIDED,
HOWEVER, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; PROVIDED, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions of
said Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Chase Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel. All notices given by telegraph
shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; PROVIDED, HOWEVER, that if this
-23-
Agreement is terminated prior to the Closing Date, the provisions of paragraph
(k) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
AEROGEN, INC.
By:
--------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Chairman & Chief Executive Officer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
CIBC WORLD MARKETS CORP.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By: CHASE SECURITIES INC.
By:
---------------------------
Name:
Title:
Acting on behalf of the several Underwriters, including themselves, named in
Schedule I hereto.
-24-
SCHEDULE I
UNDERWRITERS
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Chase Securities Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CIBC World Markets Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
▇▇ ▇▇▇▇▇ Securities Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
----
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ____
-25-
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF ▇▇▇▇▇▇ GODWARD LLP
COUNSEL FOR THE COMPANY
(i) the Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware;
(ii) the Company has the requisite corporate power to own or lease its
property and assets and to conduct its business as described in the Prospectus
and, to our knowledge, is qualified to do business as a foreign corporation in
good standing in all United States jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect;
(iii) the Underwritten Stock, and all other outstanding shares of
common stock of the Company, have been duly authorized and validly issued, and
are fully paid and nonassessable;
(iv) the description of the Company's common stock contained in the
Prospectus under the heading "Description of Capital Stock" fairly summarizes
the information called for with respect thereto to the extent required under the
Act and the Rules and Regulations thereunder; the stockholders of the Company
have no statutory preemptive rights with respect to the Stock and, to our
knowledge, there are no contractual preemptive rights, rights of first refusal
or rights of co-sale which exist with respect to the issue and sale of the
Underwritten Stock that have not been waived or satisfied;
(v) the Registration Statement has become effective under the
Securities Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus is in effect and no proceedings for that purpose have been
instituted or are pending or overtly contemplated by the Commission;
(vi) the Registration Statement and the Prospectus (except the
financial statements and schedules and other financial data contained therein,
as to which we express no opinion), as of their respective effective or issue
dates, complied as to form in all material respects with the requirements of the
Securities Act and the rules and regulations of the Commission thereunder;
(vii) to our knowledge, there are no legal or governmental proceedings
pending or overtly threatened which are of a character required to be disclosed
in the Registration Statement which are not disclosed as required, nor to our
knowledge are there contracts or documents to which the Company is a party which
are of a character required to be filed as exhibits to the Registration
Statement which are not filed as required;
(viii) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(ix) the issuance and sale of the Underwritten Stock as contemplated by
the Underwriting Agreement will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Company or, to our knowledge, any order of any
governmental agency or body or any court having jurisdiction over the Company or
any of its properties, or any agreement filed as an exhibit to the Registration
Statement, which breach, violation or default thereof would have a Material
Adverse Effect;
(x) all holders of securities of the Company having rights to the
registration of shares of Common Stock, or other securities, because of the
filing of the Registration Statement by the Company, have waived such rights;
and
(xi) no consent, approval, authorization or order of any court or
governmental agency or body in the United States is required for the sale and
issuance of the Underwritten Stock pursuant to the Underwriting Agreement,
except such as have been obtained under the Securities Act, such as may be
required under state securities or blue sky laws in connection with the purchase
and distribution of the Stock by the Underwriters and such consents, approvals
or filings as may be required by or with the NASD.
* * * * *
In the course of the preparation of the Registration Statement and the
Prospectus, we have participated in discussions and conferences with officers of
the Company, representatives of its independent public accountants,
representatives of the Underwriters and their counsel during which the contents
of the Registration Statement and the Prospectus were discussed, and while we
have not independently verified, are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Prospectus, we advise you that no
facts have come to our attention which have lead us to believe that the
Registration Statement as of its effective date contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except for the financial statements, related schedules, other
financial information and statistical information derived therefrom included in
the Registration Statement and Prospectus, and the information contained under
the headings "Business--Intellectual Property and Proprietary Rights", "Risk
Factors--We may be unable to effectively protect our intellectual property,
which could enable third parties to use our technology and impair our ability to
compete effectively." and "Risk Factors--We may become subject to patent
litigation, which could be costly to defend and could invalidate our patents.",
as to which we express no view).
-26-
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF
PATENT COUNSEL FOR THE COMPANY
-27-
