TRANSGENOMIC, INC.
4,000,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
_____ __, 2000
CHASE SECURITIES INC.
Bear, Stearns & Co. Inc.
Dain Rauscher Incorporated
as representatives of the
Several Underwriters
c/o Chase Securities Inc.
One Bush Street
San Francisco, CA 94104
Ladies and Gentlemen:
Transgenomic, Inc. a Delaware corporation (herein called the
Company, which term shall also include its direct and indirect subsidiaries,
unless the context otherwise requires), proposes to issue and sell 4,000,000
shares of its authorized but unissued common stock, $0.01 par value (herein
called the Common Stock) (said 4,000,000 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 600,000
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. 333-32174), 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 the Commission) heretofore filed by the Company with the
Commission have been delivered to you.
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(1) Plus an option to purchase from the Company up to additional shares to cover
over-allotments.
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 under the Securities Act (herein called the
Rules and Regulations) 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. No stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or threatened by the Commission. 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.
The Company hereby represents and warrants as follows:
(a) Each of the Company and its subsidiaries 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 on
the business, properties, financial condition or results of operations
of the Company and its subsidiaries, taken as a whole) (herein called a
Material Adverse Effect). The Company has no Subsidiary (as defined in
the Rules and Regulations) other than Transgenomic, Ltd., a U.K.
limited liability company, and Transgenomic St. Thomas, Inc., a
corporation organized under the laws of the U.S. Virgin Islands (herein
called the Subsidiaries). Other than the Subsidiaries, the Company does
not own, directly or indirectly, any shares of capital stock or any
other equity interest in any firm, partnership, joint venture,
association or other entity.
(b) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, other than as
set forth in the Registration Statement and the Prospectus, (i) there
has not been any material adverse change, or any development involving
a prospective material adverse change, in the business,
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properties, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, (ii) neither the
Company nor any of its Subsidiaries has incurred any material liability
or obligation, direct or contingent, and (iii) since such dates, except
in the ordinary course of business, neither the Company nor any of its
Subsidiaries has entered into any material transaction not referred to
in the Registration Statement and the Prospectus. Neither the Company
nor any of its Subsidiaries has any material contingent obligations
which are not disclosed in the Prospectus or provided for in the
Company's consolidated financial statements that are included in the
Registration Statement.
(c) 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; 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 (c) 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
for use in the Registration Statement or the Prospectus.
(d) The shares of the Company's common stock, $.01 par value,
issued and outstanding prior to the offering of the Stock have been
duly authorized and are validly issued, fully paid and nonassessable.
The Stock, when issued and sold to the Underwriters as provided herein,
will be duly authorized and, when issued and paid for as contemplated
herein, will be validly issued, fully paid and nonassessable and
conform to the description thereof in the Prospectus. No preemptive
right, registration right, right of first refusal or other similar
rights of stockholders exists with respect to any Stock or the issue or
sale thereof, except as set forth in the Prospectus. 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. Except as described in the Prospectus, 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 shares of capital stock. Except as described in the
Prospectus, 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
Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
Except as described in the Prospectus, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible
securities, commitments of sales or liens
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related to or entitling any person to purchase or otherwise acquire
any shares of the capital stock of, or other ownership interest in
the Company.
(e) Prior to the Closing Date, the Stock to be issued and sold
by the Company will be authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(f) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus relating
to the proposed offering of Stock, nor, to the best knowledge of the
Company, instituted proceedings for that purpose.
(g) Each Preliminary Prospectus or Prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities
Act, complied when so filed in all material respects with the
Securities Act, and did not contain 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 none of the
representations and warranties contained in this subparagraph (g) shall
apply to the statements in, or omissions from, any Preliminary
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 for use in such Preliminary Prospectus.
(h) The authorized and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization". The form of certificates for the Stock conforms to
the legal requirements of the state of Delaware, the Company's charter
and bylaws and the rules of the Nasdaq National Market.
(i) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Stock, nor, to the best knowledge of the Company, instituted
proceedings for that purpose.
(j) The financial statements of the Company, together with
related notes and schedules as set forth in the Registration Statement,
present fairly the consolidated financial position and the results of
operations and cash flows of the Company and its Subsidiaries at the
indicated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in accordance with
generally accepted accounting principles, consistently applied
throughout the periods involved, and all adjustments necessary for a
fair presentation of results for such periods have been made. The
summary and selected financial data included in the Registration
Statement present fairly the information shown therein and such data
has been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company. The other
financial and statistical information and data set forth in the
Registration Statement are, in all material respects, accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(k) Deloitte & Touche LLP, who have certified certain of the
financial statements filed with the Commission as part of the
Registration Statement, are
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independent public accountants as required by the Securities Act and
the Rules and Regulations.
(l) Except as disclosed in the Registration Statement, there
is no action, suit, claim or proceeding pending, or, to the knowledge
of the Company, threatened against the Company, any of its
Subsidiaries, or any of their respective directors, officers or
properties, before any court or administrative agency or otherwise,
which if determined adversely to the Company or such Subsidiaries could
reasonably be expected to result in any Material Adverse Effect or
prevent the consummation of the transactions contemplated hereby.
(m) There are no agreements, contracts, leases or documents of
the Company of a character required to be described or referred to in
the Registration Statement or Prospectus or to be filed as an exhibit
to the Registration Statement by the Securities Act or the Rules and
Regulations which have not been accurately described in all material
respects or referred to in the Registration Statement or Prospectus or
filed as exhibits to the Registration Statement. The agreements,
contracts, leases or documents so described in the Registration
Statement and Prospectus are in full force and effect on the date
hereof (unless otherwise indicated in the Registration Statement and
the Prospectus), and neither the Company nor, to the best of the
Company's knowledge, any other party, is in breach of or default under,
and no event has occurred which with the giving of notice or with the
lapse of time would constitute a breach of or default under, any of
such agreements, contracts, leases or documents. Neither the Company,
nor to its knowledge, any other party has repudiated any provision of
such agreements, contracts, leases or documents.
(n) Each of the Company and its Subsidiaries has good and
marketable title to all of the properties and assets as described in
the Registration Statement or as reflected in the financial statements
filed with the Commission as part of the Registration Statement, free
and clear of any lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements or as
described in the Registration Statement. All leases to which the
Company or any of its Subsidiaries is a party are valid and binding
obligations of the Company or such Subsidiary, as the case may be, and
no default by the Company or such Subsidiary has occurred or is
continuing thereunder which could reasonably be expected to result in a
Material Adverse Effect, and each of the Company and its Subsidiaries
enjoys peaceful and undisturbed possession under all such leases to
which it is a party as lessee. Such leases conform in all material
respects to the descriptions thereof set forth in the Prospectus.
(o) Each of the Company and its Subsidiaries has timely filed
all federal, state, local and foreign income tax returns which have
been required to be filed and have paid all taxes indicated by said
returns and all assessments received by them or any of them to the
extent that such taxes have become due and are not being contested in
good faith except where the failure to file such returns and pay such
taxes would not have a Material Adverse Effect. All tax liabilities
(including those being contested in good faith) for the periods covered
by the financial statements of the Company that are included in the
Registration Statement have been adequately provided for in such
financial statements. No tax deficiency has been, or to the best of the
Company's knowledge, might be, asserted or contemplated against the
Company or any of its Subsidiaries.
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(p) The Company has full legal right, power and authority to
enter into this Agreement and to perform the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered
by the Company and (assuming due authorization and delivery by the
Underwriters) is a valid and binding agreement of the Company,
enforceable in accordance with its terms except insofar as
indemnification and contribution provisions may be limited by Federal
or state securities laws, principles of public policy or equitable
principles and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable
principles.
(q) Neither the Company nor any of its Subsidiaries is, or
with the giving of notice or lapse of time or both will be, in
violation of or in default under its charter or bylaws or under any
agreement, lease, contract, indenture or other instrument or obligation
to which it is a party or by which it, or any of its properties, is
bound and which default could have a Material Adverse Effect. The
execution and delivery of this Agreement by the Company and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party, or of the respective
Certificate of Incorporation or Bylaws of the Company or any law,
order, rule or regulation, injunction, judgment, or decree applicable
to the Company or any of its Subsidiaries of any court or of any
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or any of its Subsidiaries, which
conflict, breach or default could have a Material Adverse Effect.
(r) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated, including, without limitation, any
such approval, consent, order, authorization, designation, declaration
or filing which may be required in connection with the offering of
Stock reserved for sale to the Company's directors, officers,
employees, business associates and related persons (herein called
the Directed Shares) pursuant to a program established for such
purpose by the Company (herein called the Directed Share Program)
(except as may be required in connection with the registration of
the Stock under the Securities Act and such additional steps as may
be required by the National Association of Securities Dealers, Inc.
(herein called the NASD) or such additional steps as may be necessary
to qualify the Stock for public offering by the Underwriters under
state securities or blue sky laws) has been obtained or made and is
in full force and effect.
(s) The Company and each of its Subsidiaries now holds and at
the Closing Date and any later date on which the Option Stock is
purchased, as the case may be, will hold, all licenses, consents,
certificates, orders, approvals and permits from all state, United
States, foreign and other governmental or regulatory authorities, that
are required for the conduct of the business of the Company and its
Subsidiaries as such business is currently conducted and as proposed to
be conducted as described in the Prospectus, except for such licenses,
certificates approvals and permits the failure of which to maintain
would not have a Material Adverse Effect, all of which are valid and in
full force and effect (and there is no proceeding pending or, to the
best knowledge of the Company, threatened which may cause any such
license, consent, certificate, order,
6
approval or permit to be withdrawn, cancelled, suspended or not
renewed). Neither the Company nor any of its Subsidiaries is in
violation or breach of any of its obligations under, or of the terms
of, any such license, consent, certificate, order, approval or permit,
except for such breach, default or failure as would not reasonably be
expected to result in a Material Adverse Effect.
(t) The Company and each of its Subsidiaries is in compliance
with all of the laws, rules, regulations, orders, directives or
judgments issued or administered by any governmental agency or body or
any court, foreign or domestic having jurisdiction over the Company or
any of its Subsidiaries or any of their respective properties or
assets, except where any such failure to be in compliance would not
have a Material Adverse Effect.
(u) The Company and each of its Subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (including, without limitation, all laws and
regulations relating to biohazardous substances) (herein called
Environmental Laws), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its respective business and (iii) is in compliance with all terms and
conditions of any such permit, license or approvals, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly, or in the aggregate, have a Material Adverse Effect.
(v) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a Material Adverse Effect.
(w) To the best of Company's knowledge, no labor disturbance
by the employees of the Company or its Subsidiaries exists or is
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
authorized dealers or distributors that might be expected to result in
a Material Adverse Effect. No collective bargaining agreement exists
with any of the Company's or any of its Subsidiaries' employees and, to
the best of the Company's knowledge, no such agreement is imminent.
(x) The Company is in compliance in all material respects with
all currently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (herein called ERISA); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company would
have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971
of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretation thereunder (herein called the
Code); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material
7
respects and nothing has occurred, whether by action or by failure to
act, that would cause the loss of such qualification.
(y) The Company and each of its Subsidiaries owns or possesses
adequate licenses or other rights to the patents and patent
applications, copyrights, trademarks, service marks, trade names,
technology and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary rights) (herein collectively called
Intellectual Property) which are necessary to conduct, or currently
employed by them in connection with the conduct, of their businesses as
described in the Registration Statement and the Prospectus. Neither the
Company nor any of its Subsidiaries is obligated to pay a material
royalty, grant a material license or provide other material
consideration to any third party in connection with the Intellectual
Property, except as described in the Registration Statement and in the
Prospectus. Except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any of its Subsidiaries has
received any notice of, or has any knowledge of, any infringement of or
conflict with any rights of the Company by others or any infringement
of or conflict with any rights of others, in each case with respect to
any Intellectual Property which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect. There are no legal or governmental proceedings
pending or threatened relating to Intellectual Property, which, singly
or in the aggregate, would have a Material Adverse Effect. To the
Company's best knowledge, none of the Intellectual Property licensed to
or by the Company or any of its Subsidiaries is unenforceable or
invalid; and neither the Company nor any of its Subsidiaries is aware
of the granting of any patent rights to third parties or the filing of
any patent applications by third parties or of any other rights of
third parties to, or conflicting with, any Intellectual Property owned
by the Company or any of its Subsidiaries. Except as set forth in the
Registration Statement and the Prospectus, no third party, including
any academic or governmental organization, possesses rights to the
Intellectual Property which, if exercised, could reasonably be expected
to result in a Material Adverse Effect.
(z) To the best of the Company's knowledge, in connection with
the filing of all patent applications filed or caused to be filed by
the Company and its Subsidiaries with the United States Patent and
Trademark Office (herein called the PTO), the Company and each of its
Subsidiaries has complied with the PTO's duty of candor and disclosure
for their patent and has made no misrepresentation in any such
application or in any application filed with any applicable foreign and
international patent authorities. The Company is unaware of any facts
material to a determination of patentability regarding the Company's
and its Subsidiaries' patent applications not called to the attention
of the PTO and is unaware of any facts not called to the attention of
the PTO which would preclude the grant of a patent for such
applications. The Company has no knowledge of any facts which would
materially conflict with the Company's or its Subsidiaries' ownership
rights to the Company's patent applications.
(aa) The Company is not, and after giving effect to the offer
and sale of the Stock and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" or a
company "controlled" by an "investment company" within the meaning of
such terms under the Investment Company Act of 1940, as amended (herein
called the Investment Company Act), and the rules and regulations
thereunder.
8
(bb) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(cc) The Company and each of its Subsidiaries carries, or is
covered by, insurance with insurers of nationally recognized
reputability in such amounts and covering such risks as it believes is
customary for companies engaged in similar industries to protect it
from material liabilities; and neither the Company nor any of its
Subsidiaries (i) has received notice from any insurer or agent of such
insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance
or (ii) has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that would not,
singly or in the aggregate, have a Material Adverse Effect.
(dd) The statements in the Prospectus under the caption
"Related Party Transactions" set forth all existing agreements,
arrangements, understandings or transactions, or proposed agreements,
arrangements, understandings or transactions, between or among the
Company, on the one hand, and any officer, director or stockholder of
the Company, or with any partner, affiliate or associate of any of the
foregoing persons or entities, on the other hand, required to be set
forth or described thereunder.
(ee) The Company has not and will not distribute prior to the
later of (i) the Closing Date, or any date on which Option Stock is to
be purchased, as the case may be, and (ii) completion of the
distribution of the Stock, any offering material (including, without
limitation, content on its website, if any, that may be deemed to be
offering material) in connection with the offering and sale of the
Stock other than any Preliminary Prospectuses, the Prospectus, the
Registration Statement and other materials, if any, permitted by the
Securities Act.
(ff) The Company has not incurred any liability for any
finder's fees or similar payments in connection with the transactions
contemplated hereby other than to the Underwriters.
(gg) The Company has not offered, or caused any Underwriter to
offer, Stock to any person pursuant to the Directed Share Program with
the specific intent to unlawfully influence (i) a customer or supplier
of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its
products.
(hh) All sales of the Company's securities prior to the date
hereof were at all relevant times duly registered under the Securities
Act and applicable foreign securities laws and state securities or Blue
Sky laws or were exempt from the registration requirements of the
Securities Act and applicable foreign and state securities laws, or if
9
such securities were not registered or exempt in compliance with the
Securities Act and applicable foreign and state securities laws, any
private rights of action for recission or damages arising from the
failure to register any such securities are time barred by applicable
statutes of limitations or equitable principles, including laches.
(ii) The Company has obtained the agreement of (A) each of its
directors and officers, (B) the holders of at least [__]% of the
outstanding Common Stock; and (C) the holders of other securities
convertible into or exercisable or exchangeable for Common Stock or
warrants or other rights to purchase Common Stock (such that the
aggregate of such securities that are not subject to such agreement
does not represent more than [__]% of the outstanding Common Stock),
not to sell, contract to sell, transfer the economic risk of ownership
in, make any short sale, pledge or otherwise dispose of, directly or
indirectly, 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 for a period of 180 days after the date
of the Prospectus.
(jj) Each certificate signed by an officer of the Company and
delivered to the Underwriters or counsel for the Underwriters in
connection with the issuance and sale of the Common Stock shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
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 4,000,000 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 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 which 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 and portion, the number of
shares of the Stock which 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 and portion 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
10
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 Section 5 hereof for not more than
seven business days after the date originally fixed as the Closing Date
pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. 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 600,000 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 under "Underwriting" in the
Registration Statement, any Preliminary Prospectus and the Prospectus
(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.
11
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(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 10:00 a.m., New York time, on the date two
business days preceding the Closing Date), and payment therefor, shall be made
at the office of Milbank, Tweed, Hadley & McCloy LLP, One Chase Manhattan Plaza,
New York, New York 10005, at 10:00 a.m., New York time, on the third 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 10:00 a.m., New York 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 Milbank, Tweed, Hadley & McCloy
LLP, One Chase Manhattan Plaza, New York, New York 10005, at 10:00 a.m., New
York 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 by wire transfer of Federal or other funds immediately
available in New York City. 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, Two Broadway, New
York, New York 10004 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
shall not previously have been advised and furnished with a copy or to
which you shall have reasonably objected in writing or which is not in
compliance with the Securities Act or the Rules and Regulations.
(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
12
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 or of counsel for
the Underwriters, to supplement or amend the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser of the 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 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
either of counsel for the Company or of 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.
13
(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 three 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 including the Report on
Form SR required by Rule 463 of the Commission under the Securities
Act.
(h) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the
Effective Date, the Company will make generally available to its
security holders an earnings statement in accordance with Section 11(a)
of the Securities Act and Rule 158 thereunder.
(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 NASD 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 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. Except as
specifically provided for in this Section 6, the Underwriters will pay
their own costs and expenses, including fees of their counsel, any
stock transfer taxes due upon any resale of Stock by them and
advertising costs incurred by them.
(j) The Company agrees to reimburse you, for the account of
the several Underwriters, for blue sky fees and related disbursements
(including counsel fees and disbursements and 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.
14
(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) shares of
Common Stock issued by the Company upon the exercise of options granted
under the Company's stock option plan or upon the exercise of warrants
outstanding as of the date hereof, all as described in the Preliminary
Prospectus, and (B) options to purchase Common Stock granted under the
Company's stock option plan. If this Agreement is terminated prior to
the Closing Date, the provisions of this Section 6(k) shall be of no
further force or effect.
(l) The Company agrees to use its best efforts to cause all
directors, officers, and the beneficial owners of the outstanding
Common Stock identified on ANNEX C hereto to agree 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, sell, offer, contract to sell,
transfer the economic risk of ownership in, make any short sale, pledge
or otherwise 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.
(m) 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 disseminate a press release
or other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(n) 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 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.
(o) The Company (i) will comply with all applicable securities
and other applicable laws, rules and regulations in each jurisdiction
in which the Directed Shares are offered and (ii) will pay all
reasonable fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and any
stamp
15
duties, similar taxes or duties or other taxes, if any, incurred by
the Underwriters in connection with the Directed Share Program.
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 Securities Exchange Act of 1934, as amended (herein called
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; (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 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; (iii) any untrue statement or alleged untrue statement of a material
fact contained in any material prepared by or with the consent of the Company
for distribution to participants in connection with the Directed Share Program,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (iv) the failure of any participant under the Directed Share Program
to pay for and accept delivery of Directed Shares that such participant has
agreed to purchase thereunder; or (v) the establishment of and any offers and
sales of Stock made under or in connection with the Directed Share Program
(other than, in the case of clause (v) above, losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of the
Underwriters), PROVIDED, HOWEVER, that (1) the indemnity agreements of the
Company contained in clauses (i) and (ii) of this subparagraph (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 clauses (i) and
(ii) of this subparagraph (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 subparagraph (c) of Section 6
hereof. The
16
indemnity agreements of the Company contained in this subparagraph (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 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 subparagraph (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 subparagraphs (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,
17
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, (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, (iii) if the indemnified parties under this Section 7 consist of
the Underwriters or any of their officers, employees or controlling persons,
then any such counsel chosen for such indemnified parties shall be designated
in writing by Chase Securities Inc., and (iv) if the indemnified parties
under this Section 7 consist of the Company or any of its officers, employees
or controlling persons, then any such counsel chosen for such indemnified
parties shall be designated in writing by the Company. 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 subparagraphs (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 to in
clause (i) of the proviso to the preceding sentence (provided, however, that
the indemnifying party shall not be liable for more than one separate firm
for all such indemnified parties) 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
subparagraph (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 subparagraph (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
18
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 subparagraph (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 subparagraph (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 subparagraph (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 subparagraph (d).
Notwithstanding the provisions of this subparagraph (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 subparagraph (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of
a summons or other initial legal process upon it in any action instituted
against it in respect 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 subparagraph (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
19
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 indemnity and contribution agreements contained in Section 7
hereof shall survive such termination and (y) 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 subparagraphs (i) and (j) of Section 6
hereof.
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 Milbank,
Tweed, Hadley & McCloy LLP, counsel for the Underwriters.
(c) You shall have received from Kutak Rock LLP, counsel for
the Company, and from William B. Walker, Esq., Vice President of
Intellectual Property 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
20
became effective and the Prospectus contained therein, there has not
been any material adverse change or any development involving a
prospective material adverse change in or affecting the business,
properties, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, and,
since such dates, except in the ordinary course of business, neither
the Company nor any of its Subsidiaries has 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) neither the Company nor any of its Subsidiaries has 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 or
any of its Subsidiaries 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 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 subparagraph (d) of this Section 9 are true and
correct.
(f) You shall have received from Deloitte & Touche 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 or any of its
Subsidiaries which, in your sole judgment, makes it impractical or
inadvisable to proceed with the public
21
offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(g) You shall have received from Deloitte & Touche LLP a
letter stating that their review of the Company's system of internal
accounting controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's financial
statements as at March 31, 2000, did not disclose any weakness in
internal controls that they considered to be material weaknesses.
(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 subparagraph (f) of Section 6 hereof.
(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 the beneficial owners of the
outstanding Common Stock identified on ANNEX C hereto, 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, sell, offer, contract to
sell, transfer the economic risk of ownership in, make any short sale,
pledge or otherwise 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.
(k) The Company shall have acquired from Nebraska State
Bank, on terms reasonably satisfactory to you, the promissory notes
of SD Acquisition Inc. ("SD") in an aggregate principal amount of
$4.635 million (the "SD Notes") evidencing loans made by Nebraska
State Bank to SD under loan agreements between the parties, dated as
of May 15, 2000, the proceeds of which were used by SD to purchase
the assets of the Company associated with its non-life science
product line. The acquisition of the SD Notes will be made
simultaneously with the closing of the sale of the Stock to you
hereunder and will be financed with a portion of the net offering
proceeds. The Company authorizes you to pay a portion of the net
proceeds of the offering sufficient to purchase the SD Notes
directly to Nebraska State Bank (or such other parties as it shall
direct) at the Closing.
In addition, you shall have received on the Closing Date and on any
later date on which Option Stock is purchased, such additional documents
(including, without limitation, opinions of counsel, letters, certificates
and agreements) as you may reasonably request.
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 Milbank, Tweed, Hadley & McCloy LLP, counsel
for the Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not
be fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to
the Underwriters and without liability of the Underwriters to the Company;
PROVIDED, HOWEVER, that (i) in the event of such termination, the Company
agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses referred to in subparagraphs
(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.
22
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 no
stop order suspending the effectiveness thereof shall be in effect and no
proceedings therefor shall be pending or threatened by the Commission; and
(b) you shall have made payment for all the Stock to be sold on the
Closing Date (or, in the case of the Option Stock, on any later date on which
Option Stock is purchased) against delivery of the certificates evidencing
such Stock, as provided in Section 5 hereof.
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 termination due to the
non-fulfillment of the condition set forth in subparagraph (a) of this
Section 10, 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 subparagraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. With respect to its
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis any indemnified person identified in Section 7
of this Agreement 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 subparagraph (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., One Bush
Street, San Francisco, CA 94104, with a copy to Milbank, Tweed, Hadley &
McCloy LLP, One Chase Manhattan Plaza, 47th Floor, New York, New York 10005,
Attention: Robert B. Williams, Esq.; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, 5600 South 42nd Street, Omaha,
Nebraska 68107, Attention: Collin D'Silva, with a copy to Kutak Rock LLP,
1650 Farnam Street, Omaha,
23
Nebraska 68102, Attention: Steven P. Amen, Esq. 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 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 (b) delivery and payment for
the Stock under this Agreement.
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 New York.
24
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,
TRANSGENOMIC, INC.
By:
--------------------------
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CHASE SECURITIES INC.
Bear, Stearns & Co. Inc.
Dain Rauscher Incorporated
by Chase Securities Inc.
By
---------------------------
Managing Director
Acting on behalf of the several Underwriters, including themselves, named in
Schedule I hereto.
25
SCHEDULE I
UNDERWRITERS
NUMBER OF
SHARES
TO BE
UNDERWRITERS PURCHASED
------------ ----------
Chase Securities Inc.............................................................................
Bear, Stearns & Co. Inc..........................................................................
Dain Rauscher Incorporated ......................................................................
Total ............................................................................... 4,000,000
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF KUTAK ROCK LLP
COUNSEL FOR THE COMPANY
1. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, is duly qualified as a foreign corporation and
in good standing in each state of the United States of America in which
its ownership or leasing of property requires such qualification
(except where the failure to be so qualified would not have a Material
Adverse Effect) and has full corporate power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement.
2. The authorized capital stock of the Company
consists of 15,000,000 shares of Preferred Stock, $.01 par value, of
which there are no outstanding shares, and 60,000,000 shares of Common
Stock, $.01 par value, of which there are outstanding [__________]
shares (including the Underwritten Stock plus the number of shares of
Option Stock issued on the date hereof) and conforms as to legal
matters to the description thereof contained in the Prospectus; proper
corporate proceedings have been taken validly to authorize such
authorized capital stock; all of the outstanding shares of such capital
stock (including the Underwritten Stock and the shares of Option Stock
issued, if any) have been duly and validly issued and are fully paid
and nonassessable; any Option Stock purchased after the Closing Date,
when issued and delivered to and paid for by the Underwriters as
provided in the Underwriting Agreement, will have been duly and validly
issued and be fully paid and nonassessable; and no preemptive rights
of, or rights of refusal in favor of, stockholders exist with respect
to the Stock, or the issue and sale thereof, pursuant to the
Certificate of Incorporation or Bylaws of the Company and, to the
knowledge of such counsel, there are no contractual preemptive rights
that have not been waived, rights of first refusal or rights of co-sale
which exist with respect to the issue and sale of the Stock.
3. The Registration Statement has become effective
under the Securities Act and, to the best of such counsel's 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 contemplated by the Commission; any required filing of the
Prospectus pursuant to Rule 424(b) under the Securities Act has been
made within the time period required by Rule 424(b); and the Prospectus
may lawfully be used for the purposes specified in the Securities Act
in connection with the offer and sale of the Stock in the manner
therein specified.
4. The Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial data contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Securities Act and with the Rules and Regulations.
5. The information required to be set forth in the
Registration Statement in answer to Items 9, 10 (insofar as it relates
to such counsel), 11(c) and 15 of Form S-1 is to the best of such
counsel's knowledge accurately and adequately set forth
1
therein in all material respects or no response is required with
respect to such Items, and the description of the Company's stock
option plans and the options granted and which may be granted
thereunder and the options granted otherwise than under such plans
set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to said plans and
options to the extent required by the Securities Act and the rules
and regulations of the Commission thereunder.
6. Such counsel does not know of any franchises,
contracts, leases, documents or legal proceedings, pending or
threatened, which in the opinion of such counsel are of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement,
which are not described and filed as required.
7. The Underwriting Agreement has been duly
authorized, executed and delivered by the Company; and the Company has
the corporate power and authority to enter into the Underwriting
Agreement and to perform its obligations contemplated thereunder.
8. The issue and sale by the Company of the shares of
Stock sold by the Company as contemplated by the Underwriting Agreement
and the compliance by the Company with all of the provisions of the
Underwriting Agreement will not (a) conflict with, breach or result in
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or (b) violate the Company's charter or bylaws
or any law, statute, rule or regulation applicable to the Company or
any of its Subsidiaries (other than state securities or blue sky laws
as to which no opinion need be expressed) or any judgment, decree or
order known to such counsel and applicable to the Company or any of its
Subsidiaries of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their respective properties.
9. Except as described in the Registration Statement
and the Prospectus, 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, (i) have waived such rights, (ii) have had such rights expire
by reason of lapse of time following notification of the Company's
intent to file the Registration Statement or (iii) have had their
shares or other securities registered by the Company pursuant to the
Registration Statement.
10. No consent, approval, authorization or order of,
or filing or registration with, any court or governmental agency or
body is required for the execution, delivery and performance by the
Company of the Underwriting Agreement and the consummation of the
transactions contemplated therein, except such as have been obtained
under the Securities Act and 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 (as to which such counsel
need express no opinion).
11. The Company is not, and after the offer and sale
of the Stock in the manner set forth in the Underwriting Agreement and
in the manner contemplated in the Prospectus will not be, an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act and the rules
and regulations thereunder.
2
12. The Stock issued and sold by the Company will
have been duly authorized for listing by the Nasdaq National Market
upon official notice of issuance.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or of the State of Delaware,
upon opinions of local counsel satisfactory in form and scope to counsel for
the Underwriters. Copies of any opinions so relied upon shall be delivered to
the Representatives and to counsel for the Underwriters and the foregoing
opinion shall also state that counsel knows of no reason the Underwriters are
not entitled to rely upon the opinions of such local counsel.
In addition to the matters set forth above, counsel
rendering the foregoing opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel that leads such
counsel to believe that the Registration Statement (except as to the
financial statements and schedules and other financial data contained
therein, as to which such counsel need not express any opinion or belief) at
the Effective Date contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, that the Prospectus (except as
to the financial statements and schedules and other financial data contained
therein, as to which such counsel need not express any opinion or belief) as
of its date or at the Closing Date (or any later date on which Option Stock
is purchased), contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3
ANNEX B
MATTERS TO BE COVERED IN THE OPINION OF WILLIAM WALKER, ESQ.
VICE PRESIDENT OF INTELLECTUAL PROPERTY FOR THE COMPANY
1. The statements in the Registration Statement and
in the Prospectus relating to Intellectual Property, under the captions
"Risk Factors -- Our patents may not protect us from others using our
technology which could harm our business and our competitive position";
"Risk Factors -- We cannot be certain other measure taken to protect
our intellectual property will be effective"; "Risk Factors -- We are
dependent upon our licensed technologies and may need to obtain
additional licenses in the future to offer our products and remain
competitive"; "Risk Factors - The protection of intellectual property
in foreign countries is uncertain"; "Risk Factors -- Our products could
infringe on the intellectual property rights of others which could
require us to pay substantial royalties"; "Business -- Strategy --
Build a Substantial Intellectual Property Estate"; "Business -- Legal
Proceedings"; and "Business -- Intellectual Property", insofar as such
statements constitute matters of law, legal conclusions, or summaries
of legal matters or proceedings, are accurate and complete statements
or summaries of the matters set forth therein.
2. There are no pending, or to the best of such
counsel's knowledge, threatened, legal, or governmental proceedings
relating to any Intellectual Property that are referred to in the
Prospectus and listed in Schedules A, B, C and D hereto.
3. The Company owns each of the Intellectual Property
rights that are referred to in the Prospectus and listed in Schedules A
and B hereto.
4. No security interests have been recorded in the
U.S. Patent and Trademark Office with respect to any of the U.S.
patents or patent applications that are referred to in the Prospectus
and listed in Schedules A, B, C and D.
5. Except as described in the Prospectus, no third
party has any rights to any of the Intellectual Property rights that
are referred to in the Prospectus and listed in Schedules A, B, C and
D.
6. No liens have been recorded against the Company
with respect to any of the Intellectual Property rights that are
referred to in the Prospectus and listed in Schedules A, B, C and D.
7. No interference has been declared or provoked with
respect to any of the Intellectual Property rights that are referred to
in the Prospectus and listed in Schedules A, B, C and D.
8. For each U.S. patent application referred to in
the Prospectus and listed in Schedules B and D, all information known,
to date, to be "material to patentability", as defined in 37 C.F.R.
Section 1.56(b), has been disclosed, or will be disclosed pursuant to
37 C.F.R. Section 1.97, to the U.S. Patent and Trademark Office.
1
9. The Company has not received any notice
challenging the validity or enforceability of any of the Intellectual
Property rights that are referred to in the Prospectus and listed in
Schedules A and C.
10. The micro-beads packed into the commercially
available DNASep-Registered Trademark- chromatography columns for use
on the WAVE-Registered Trademark- platform are covered by one or more
of the claims of U.S. Patent No. 5,585,236.
11. The chromatographic processes intended for
utilization with the commercially available WAVE-Registered Trademark-
platform are covered by one or more of the claims of one or more of
U.S. Patent Nos. 5,986,085, 6,024,878, 6,027,898, and 5,795,976.
12. The chromatographic processes intended for
utilization with the commercially available WAVE-Registered Trademark-
platform are covered by one or more of the claims of the one or more of
U.S. Patent Nos. 5,972,222, 5,772,889, 5997,742, and 6,017,457.
13. The chromatographic processes for utilization
with the commercially available WAVE-Registered Trademark- platform
are covered by one or more of the claims of one or more of U.S. Patent
Nos. 5,149,661 and 5,393,673.
14. The chromatographic processes intended for
utilization with the commercially available WAVE-Registered Trademark-
platform are covered by one or more of the claims of U.S. Patent No.
5,338,448.
15. No claim which is presently pending has been
asserted against the Company relating to the potential infringement of,
or conflict with, any Intellectual Property rights of others.
16. Neither the Company nor any of its Subsidiaries
is infringing or otherwise violating any Intellectual Property rights
of others, and there are no infringements by others of any of Company's
or its Subsidiaries' Intellectual Property rights which in the judgment
of such counsel could affect materially the use thereof by the Company
or any of its Subsidiaries.
17. The Company and its Subsidiaries own or possess
sufficient Intellectual Property rights to conduct the business now
being or proposed to be conducted by the Company and its Subsidiaries
as described in the Prospectus.
In addition to the matters set forth above, such counsel
shall also state that such counsel is familiar with the technology used by
the Company and its Subsidiaries in their respective businesses and the
manner of their use thereof and has read the Registration Statement and the
Prospectus, including the portions of the Registration Statement and the
Prospectus referring to Intellectual Property and that, based thereon,
nothing has come to the attention of such counsel that leads it to believe
that Registration Statement at the Effective Date and the Prospectus at the
date thereof and as of the Closing Date contains any untrue statement of a
material fact with respect to Intellectual Property owned or used by the
Company and its Subsidiaries, or the manner of their use thereof, or omits to
state any material fact relating to Intellectual Property owned or used by
the Company and its Subsidiaries, or the manner of their use thereof, that is
required to be stated in the Registration Statement or the Prospectus or is
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
2
With respect to each of the opinions rendered in paragraphs
5, 6, 7 , 8, 16 and 17 above, such counsel may state that such opinion is
given to the best of such counsel's knowledge.
3
ANNEX C
SECURITYHOLDERS SUBJECT TO LOCK-UP