1
EXHIBIT 1.1
DEPOTECH CORPORATION
2,000,000 SHARES OF
COMMON STOCK
UNDERWRITING AGREEMENT
____________, 1996
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UNDERWRITING AGREEMENT
____________, 1996
DILLON, READ & CO. INC.
UBS SECURITIES LLC
VECTOR SECURITIES INTERNATIONAL, INC.
As Representatives of the
Several Underwriters
c/o Dillon, Read & Co. Inc.
535 Madison Avenue
New York, New York 10022
Dear Sirs:
DepoTech Corporation, a California company (the "Company") proposes to
issue and sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of 2,000,000 shares of Common Stock, no par value
(the "Common Stock"), of the Company (the "Firm Shares"). In addition, solely
for the purpose of covering over-allotments, the Company proposes to grant to
the Underwriters the option to purchase from the Company up to an additional
300,000 shares of Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1, including a prospectus,
relating to the Shares. The Company has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(each thereof being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective, including all documents filed as a part
thereof, and including any information contained in a prospectus subsequently
filed with the Commission pursuant to Rule 424(b) under the Act and deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430(A) under the Act, and, if applicable, any registration statement filed
pursuant to Rule 462(b) under the Act, is herein called the "Registration
Statement," and the prospectus, in the form filed by the Company with the
Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the time it became effective, is herein called the "Prospectus."
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The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and the other terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the aggregate
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto in each case at a purchase price of $____ per Share.
You shall release the Firm Shares for public sale promptly after this Agreement
becomes effective. You may from time to time increase or decrease the public
offering price after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and, upon the basis of the warranties and representations
and the other terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company, ratably in
accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised at any time (but not more than
once) on or before the thirtieth day following the date hereof, by written
notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the additional time of purchase); provided, however, that
the additional time of purchase shall not be earlier than the time of purchase
(as defined below) nor earlier than the second business day* after the date on
which the option shall have been exercised nor later than the eighth business
day after the date on which the option shall have been exercised. The number of
Additional Shares to be sold to each Underwriter shall be the number which bears
the same proportion to the aggregate number of Additional Shares being purchased
as the number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company by certified or official bank check, in New
York Clearing House funds, at the office of Dillon, Read & Co. Inc. in New York
City, against
- --------------------
* As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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delivery of the certificates for the Firm Shares to you for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 10:00
A.M., New York City time, on ______________, 1996 (unless another time shall be
agreed to by you and the Company or unless postponed in accordance with the
provisions of Section 8 hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "time of purchase."
Certificates for the Firm Shares shall be delivered to you in definitive form in
such names and in such denominations as you shall specify on the second business
day preceding the time of purchase. For the purpose of expediting the checking
of the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the additional time of
purchase. For the purpose of expediting the checking of the certificates for the
Additional Shares by you, the Company agrees to make such certificates available
to you for such purpose at least one full business day preceding the additional
time of purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that
(a) when the Registration Statement becomes effective and at
all times subsequent thereto up to the time of purchase and the additional time
of purchase, the Registration Statement and the Prospectus, and any supplements
or amendments thereto fully complied and will fully comply in all material
respects with the provisions of the Act, and the Registration Statement and the
Prospectus at all such times did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes
no warranty or representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; provided further, that such
information furnished by or on behalf of the Underwriters shall be limited to
certain information in the section of the Registration Statement and Prospectus
entitled "Underwriting;"
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(b) as of the date set forth herein, the Company has an
authorized capitalization as set forth under the heading entitled "Actual" in
the section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional time of
purchase, as the case may be, the Company will have an authorized capitalization
as set forth under the heading entitled "As Adjusted" in the section of the
Registration Statement and the Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, nonassessable and free of any
preemptive rights; except as described in the Registration Statement and the
Prospectus, there are no outstanding rights, subscriptions, warrants, calls,
preemptive rights, options or other agreements (collectively, "Stock Rights") of
any kind issued by the Company with respect to its capital stock and, to the
best of the Company's knowledge, no outstanding Stock Rights issued by any other
party with respect to the Company's capital stock; the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of California, with full corporate power and authority to own
its properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to issue
and sell the Shares as herein contemplated;
(c) the Company does not have any subsidiaries;
(d) the Company is duly qualified or licensed to do business
by, and is in good standing in, each jurisdiction in which it owns or leases
property or conducts its business and in each other jurisdiction in which the
failure, individually or in the aggregate, to be so licensed or qualified could
have a material adverse effect on the properties, assets, operations, business
or condition (financial or otherwise) of the Company (a "Material Adverse
Effect"); and the Company is in compliance with all laws, orders, rules,
regulations and directives issued or administered by such jurisdictions, except
where the failure so to comply could not have a Material Adverse Effect;
(e) the Board of Directors of the Company has duly adopted
resolutions authorizing the issuance and sale of the Firm Shares and the
Additional Shares; and the Firm Shares and the Additional Shares, when issued
and delivered to and paid for by the Underwriters as contemplated hereby, will
be duly authorized, validly issued and fully paid and nonassessable, and free
and clear of any pledge, lien, encumbrance, security interest, preemptive right
or other claim;
(f) the Company is not in violation of any provision of the
Articles of Incorporation or Bylaws of the Company and is not in breach of, or
in default under (nor has any event occurred which with notice, lapse of time,
or both would constitute a
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breach of, or default under), any provision of any obligation, agreement,
covenant or condition contained in any license, indenture, lease, mortgage, deed
of trust, bank loan, credit agreement or other material agreement or instrument
to which the Company is a party or by which it is bound and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with, or result in any breach
of or constitute a default under (nor constitute any event which with notice,
lapse of time, or both would constitute a breach of, or default under), any
provisions of the Articles of Incorporation or Bylaws of the Company or under
any provision of any license, indenture, lease, mortgage, deed of trust, bank
loan, credit agreement or other material agreement or instrument to which the
Company is a party or by which it or its properties may be bound or affected, or
under any federal, state, local or foreign law, regulation or rule or any
decree, judgment or order applicable to the Company;
(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state securities laws
and except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general principles of equity, and each of the (i)
Collaboration Agreement, dated March 30, 1994, between the Company and Chiron
Corporation, and (ii) the Assignment Agreement, dated February 9, 1994, between
the Company and the Research Development Foundation is a legal, valid and
binding agreement of the Company enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by general principles of equity;
(h) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained in the
Registration Statement and Prospectus, and the certificates for the Shares are
in due and proper form and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(i) no approval, authorization, consent or order of or filing
with any national, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection with the
issuance and sale of the Shares as contemplated hereby other than registration
of the Shares under the Act and any necessary qualification under the securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters and the review of the fairness and
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reasonableness of the proposed underwriting and other terms and arrangements by
the National Association of Securities Dealers, Inc. (the "NASD");
(j) except as described in the Registration Statement and the
Prospectus, no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of capital
stock of the Company upon the issue and sale of the Shares to the Underwriters
hereunder, nor does any person have preemptive rights, rights of first refusal
or other rights to purchase any of the Shares, which rights have not been
waived;
(k) Ernst & Young LLP, whose reports on the consolidated
financial statements of the Company are filed with the Commission as part of the
Registration Statement and Prospectus, are independent public accountants as
required by the Act;
(l) the Company has all permits, licenses, authorizations,
consents and approvals and has made all filings required under any federal,
state, local or foreign law, regulation or rule, and has obtained all
authorizations, consents and approvals from other persons, in order to conduct
its business as described in the Registration Statement and the Prospectus;
except where the failure to have such permit, license, authorization, consent or
approval, to make any such filing or to obtain such authorization consent or
approval could not have a Material Adverse Effect, and the Company is not in
violation of, or in default under, any such permit, license, authorization,
consent or approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company the effect of
which could have a Material Adverse Effect;
(m) all legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(n) there are no actions, suits or proceedings pending or, to
the best of the Company's knowledge, threatened against the Company or any of
its properties, at law or in equity, or before or by any federal, state, local
or foreign governmental or regulatory commission, board, body, authority or
agency which could result in a judgment, decree or order having a Material
Adverse Effect;
(o) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the financial position
of the Company as of the dates indicated and the results of operations and cash
flows of the Company for the periods specified, subject, in the case of the
Company's unaudited financial statements, to normal recurring year-end
adjustments; such financial statements have been prepared in
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conformity with generally accepted accounting principles applied on a consistent
basis during the periods involved;
(p) subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as may be
otherwise stated in the Registration Statement and Prospectus, there has not
been (i) any material adverse change in the properties, assets, operations,
business, regulatory environment, prospects or condition (financial or
otherwise), present or prospective, of the Company, (ii) any transaction which
is, or the Company reasonably expects could be, material to the Company
contemplated or entered into by the Company, or (iii) any obligation, contingent
or otherwise, directly or indirectly incurred by the Company which is, or the
Company reasonably expects could be, material to the Company;
(q) the Company has obtained the agreement of each of its
directors and officers and certain of its shareholders designated by you not to
sell, contract to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of the Common Stock or securities convertible
into or exchangeable for Common Stock or warrants or other rights to purchase
Common Stock for a period of 90 days after the date of the Prospectus without
the prior written consent of Dillon, Read & Co. Inc.;
(r) the business, operations and facilities of the Company
have been and are being conducted in compliance with all applicable laws,
ordinances, rules, regulations, licenses, permits, approvals, plans,
authorizations or requirements relating to occupational safety and health,
pollution, protection of health or the environment, or reclamation (including,
without limitation, those relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants or hazardous or toxic
substances, materials or wastes into ambient air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, gaseous or liquid in nature) or otherwise relating to remediating real
property in which the Company has any interest, whether owned or leased, of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state or political subdivision thereof or any foreign
jurisdiction and all applicable judicial or administrative agency or regulatory
decrees, awards, judgments and order relating thereto (collectively,
"Environmental Regulations"), except such failures to comply as would not in the
aggregate have a Material Adverse Effect; and the Company has not received any
notice from a governmental instrumentality or any third party alleging any
violation of any Environmental Regulation or liability thereunder (including,
without limitation, liability
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for costs of investigating or remediating sites containing hazardous substances
or damages to natural resources);
(s) the Company is not and, upon the sale of the Shares to be
issued and sold in accordance herewith and the temporary investment of the net
proceeds of such sale as set forth under the caption "Use of Proceeds" in the
Registration Statement and Prospectus, will not be, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), and is not, and will not upon such sale be, subject
to regulation under the Investment Company Act;
(t) to the best of the Company's knowledge after reasonable
investigation, no valid United States patent issued to date is or would be
infringed by the activities of the Company in the manufacture, use or sale of
any drug or component thereof or other material as described in the Registration
Statement and Prospectus;
(u) the issued patents owned by or licensed to the Company and
described in the Registration Statement and Prospectus are valid and enforceable
patents and, except as described in the Registration Statement and Prospectus,
no other entity or individual has any right or claim in any of such issued
patents; the patent applications owned by or licensed to the Company and
described in the Registration Statement and Prospectus have been properly
prepared and filed and are being diligently pursued on behalf of the Company;
and each of such patent applications is owned or controlled by the Company, and
no other entity or individual has any right or claim in any of the patent
applications or any patent to be issued therefrom, except as described in the
Registration Statement and Prospectus; and each patent application owned by or
licensed to the Company and described in the Registration Statement and
Prospectus discloses patentable subject matter;
(v) except as described in the Registration Statement and
Prospectus, there are no judicial proceedings pending relating to patents,
patent applications or proprietary information to which the Company is a party
or of which any property of the Company is subject, and to the best of the
Company's knowledge, no such judicial proceedings are threatened by governmental
authorities or others;
(w) the Company owns or possesses sufficient licenses or other
rights to use all patents, patent applications, trademarks, copyrights, trade
names, trade secrets, technology and know-how necessary to conduct the Company's
business as described in the Registration Statement and Prospectus; and the
assignment of the patents and patent applications to which the Company has
exclusive rights under the Assignment Agreement, dated February 9, 1994, between
the Company and the Research
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Development Foundation, as described in the Registration Statement and the
Prospectus, has been properly prepared and filed on behalf of the Company with
the appropriate governmental agency or agencies and is in full force and effect;
(x) except as described in the Registration Statement and
Prospectus, the Company is not aware of any pending or threatened action, suit,
proceeding or claim by others that the Company is infringing or otherwise
violating any patents or patent applications of others and is not aware of any
rights of third parties to any of the patents or patent applications owned by or
licensed to the Company which could have a material adverse effect on the use
thereof by the Company; and the Company is not aware of any pending or
threatened action, suit, proceeding or claim by others challenging the validity
or scope of any patents or patent applications owned by or licensed to the
Company;
(y) the Company has filed with the United States Food and Drug
Administration (the "FDA"), and all applicable state and local regulatory
bodies, for and received approval of all registrations, applications, licenses,
requests for exemptions, permits and other regulatory authorizations necessary
to conduct the Company's business as it is described in the Registration
Statement and Prospectus based on all available information provided to the
Company through the date hereof by applicable regulatory authorities; the
Company is in compliance with all such registrations, applications, licenses,
requests for exemptions, permits and other regulatory authorizations, and all
applicable FDA, state and local rules, regulations, guidelines and policies,
including, but not limited to, applicable FDA, state and local rules,
regulations and policies relating to current good manufacturing practice and
current good laboratory practice, except where the failure so to comply would
not have a Material Adverse Effect; and the Company has no reason to believe
that any party granting any such registration, application, license, request for
exemption, permit or other authorization is considering limiting, suspending or
revoking the same and knows of no basis for any such limitation, suspension or
revocation; and
(z) the human clinical trials, animal studies and other
preclinical tests conducted by the Company or in which the Company has
participated that are described in the Registration Statement and Prospectus or
the results of which are referred to in the Registration Statement and
Prospectus, and such studies and tests conducted on behalf of the Company, were
and, if still pending, are being conducted in accordance with experimental
protocols, procedures and controls pursuant to accepted professional scientific
standards for the preclinical or clinical study of new drugs; the descriptions
of the results of such studies, tests and trials contained in the Registration
Statement and Prospectus are accurate and complete in all material respects, and
the Company has no knowledge of any other trials, studies or tests, the results
of which reasonably call into
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question the results described or referred to in the Registration Statement and
Prospectus; and the Company has not received any notices or correspondence from
the FDA or any other governmental agency requiring the termination, suspension
or modification of any animal studies, preclinical tests or clinical trials
conducted by or on behalf of the Company or in which the Company has
participated that are described in the Registration Statement and Prospectus or
the results of which are referred to in the Registration Statement and
Prospectus.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to maintain
such qualifications in effect so long as required for the distribution of the
Shares, provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to you in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement (including
any registration statement filed pursuant to Rule 462(b) under the Act) has
become effective and when any post-effective amendment thereto becomes
effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is
filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for, or the entry of a stop
order suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
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lifting or removal of such order as soon as possible; to advise you promptly of
any proposal to amend or supplement the Registration Statement or Prospectus and
to file no such amendment or supplement to which you shall object in writing;
(e) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send to
its shareholders generally or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, (iii) copies of any document in the form filed
with the Commission by the Company pursuant to Sections 12, 13, 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (iv)
such other information as you may reasonably request regarding the Company;
(f) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a Prospectus
relating to the Shares is required to be delivered under the Act which, in the
judgment of the Company, would require the making of any change in the
Prospectus then being used so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or supplements
to such Prospectus as may be necessary to reflect any such change and to furnish
you a copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(g) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will satisfy the
provisions of Section 11(a) of the Act) covering a period of twelve months
beginning after the effective date of the Registration Statement but ending not
later than fifteen months after the effective date of the Registration
Statement, as soon as is reasonably practicable after the termination of such
twelve-month period;
(h) to furnish to you or your counsel three signed copies of
the Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient conformed
copies of the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
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(i) to furnish to you as early as practicable prior to the
time of purchase and the additional time of purchase, as the case may be, but
not later than two business days prior thereto, a copy of the latest available
unaudited interim financial statements, if any, of the Company which have been
read by the Company's independent certified public accountants, as stated in
their letter to be furnished pursuant to Section 6(b) of this Agreement;
(j) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of Proceeds" in the Prospectus;
(k) to use its best efforts to cause the Common Stock to be
authorized for listing by the Nasdaq National Market upon official notice of
issuance;
(l) to pay all out-of-pocket expenses, fees and taxes (other
than any transfer taxes and fees and disbursements of counsel for the
Underwriters except as set forth under Section 5 hereof and (iii) and (iv)
below) in connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each thereof
to the Underwriters and to dealers (including costs of mailing and shipment),
(ii) the issue, sale and delivery of the Shares, (iii) the word processing
and/or printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Statements of Information and Powers of Attorney and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and the laws
of any province of Canada and the determination of their eligibility for
investment under such law as aforesaid (including the legal fees and filing fees
and other disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares to be included in the Nasdaq National
Market and any registration thereof under the Exchange Act, (vi) any filing for
review of the public offering of the Shares by the NASD and (vii) the
performance of the Company's other obligations hereunder; and
(m) not to sell, contract to sell, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock or permit the registration under the Act
of any shares of Common Stock, except for (i) the registration of the Shares and
the sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of outstanding options,
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warrants and debentures, and (iii) the grant of options or rights to purchase no
more than an aggregate of 200,000 shares of Common Stock to employees,
consultants and directors of the Company pursuant to the stock option plans of
the Company in effect on the date hereof as approved by the Board of Directors
of the Company, for a period of 90 days after the date hereof, without the prior
written consent of Dillon, Read & Co. Inc.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof or the default by one or more of
the Underwriters in its or their respective obligations hereunder, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
conditions:
(a) The Company shall furnish to you at the time of purchase
and at the additional time of purchase, as the case may be, an opinion of
Brobeck, Phleger & Harrison, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase,
as the case may be, with reproduced copies for each of the other Underwriters
and in form satisfactory to Cooley Godward Castro Huddleson & Tatum, counsel for
the Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of California, with full corporate power and authority to own its properties and
conduct its business as described in the Registration Statement and the
Prospectus, execute and deliver this Agreement and issue, sell and deliver the
Shares as herein contemplated;
(ii) the Company is duly qualified to do business as a
foreign corporation, and is in good standing in each state or jurisdiction of
the United States where its failure, individually or in the aggregate, to do so
would have a material adverse effect on the properties, assets, operations,
business or condition (financial or otherwise) of the Company;
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(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Shares, when issued and delivered to and paid for by
the Underwriters in accordance with this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable and free of any preemptive rights;
(v) the outstanding shares of capital stock of the Company
have been duly and validly authorized and issued, are, to the best of such
counsel's knowledge, fully paid and nonassessable;
(vi) the authorized capital stock of the Company, including
the Shares, conforms as to legal matters in all material respects to the
description thereof contained in the Registration Statement and Prospectus; the
certificates for the Shares are in due and proper form;
(vii) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and statistical
data contained therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act;
(viii) the Registration Statement has become effective under
the Act, and, to the best of such counsel's knowledge, no stop order proceedings
suspending the effectiveness of the Registration Statement have been instituted
or threatened or are pending under the Act;
(ix) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene any provision of applicable law or regulation or the articles of
incorporation or bylaws of the Company, or, to such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any of its property, or to such counsel's
knowledge, constitute a breach or default under (nor constitute any event
which, with notice, lapse of time or both, would constitute a breach or default
under) any agreement or other instrument filed as an exhibit to the
Registration Statement and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the securities or blue sky laws of the various states or
other jurisdictions (on which such counsel expresses no opinion) in connection
with the purchase and distribution of the Shares by the Underwriters.
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Registration Statement or under any law, regulation or rule or any decree,
judgment or order applicable to the Company;
(x) such counsel is not aware of any legal or governmental
proceeding pending or threatened to which the Company is or may become a party
or to which any of the properties of the Company is or may become subject that
is required to be described in the Registration Statement or the Prospectus and
is not so described, or of any statute, regulation, contract or other document
that is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that is
not described or filed as required;
(xi) such counsel is not aware that there is any action,
proceeding or governmental investigation pending, against the Company or any of
its officers or directors, which are required to be described in the Prospectus
but are not so described;
(xii) to the best of such counsel's knowledge and except as
otherwise described in the Registration Statement and the Prospectus, no person
has the right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any shares of capital stock of the Company upon
the sale of the Shares to the Underwriters, nor does any person have preemptive
rights, rights of first refusal or other rights to purchase any of the Shares;
and
(xiii) the description of the charter and bylaws of the
Company and of statutes and contracts contained in "Risk Factors -- Registration
Rights; Lockup," "Risk Factors -- Possible Anti-Takeover Effect of Certain
Charter Provisions," "Business -- Legal Proceedings," "Management," "Certain
Transactions" and "Description of Capital Stock" (other than the statements
under "--Transfer Agent and Registrar") and in Items 14 and 15 of Part II
of the Registration Statement are accurate and fairly present the information
required to be presented by the Act or the Rules and Regulations.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus (except as and to the extent stated in subparagraphs (vi), (vii),
(viii) and (xvi) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes it to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement or
amendment became effective and at all
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times up to and including the time of purchase or additional time of purchase,
as the case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at all times up
to and including the time of purchase or additional time of purchase, as the
case may be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no opinion
with respect to the financial statements and schedules and other financial and
statistical data included in the Registration Statement or Prospectus).
(b) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Hyman, Phelps
& McNamara, P.C., special FDA counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of purchase,
as the case may be, with reproduced copies for each of the other Underwriters
and in a form reasonably satisfactory to Cooley Godward Castro Huddleson &
Tatum, counsel for the Underwriters, stating that the statements in the
Registration Statement and Prospectus appearing under the captions "Risk Factors
- -- Government Regulation; Uncertainty of Obtaining Regulatory Approval,"
"Business -- Product Research and Development Programs" and "Business -
Government Regulation" and other statements and references in the Registration
Statement and Prospectus to United States Federal regulatory matters, insofar
as such statements and references constitute descriptions or summaries of
matters of the law arising out of the Orphan Drug Act, the Federal Food, Drug
and Cosmetic Act and applicable FDA regulations, are accurate and complete in
all material respects.
(c) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Fish &
Richardson, P.C., patent counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in a form
reasonably satisfactory to Cooley Godward Castro Huddleson & Tatum, counsel for
the Underwriters, stating that:
(i) the statements in the Registration Statement and
Prospectus appearing under the captions "Risk Factors -- Patents and Proprietary
Technology" and "Business -- Patents and Proprietary Rights" and other
statements and references in the Registration Statement and Prospectus to
patents and patent applications owned by and licensed to the Company, insofar as
such statements and references constitute descriptions or summaries of patents
or patent applications owned by and licensed to the Company or
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documents and proceedings relating thereto, are accurate and complete in all
material respects;
(ii) such counsel has reviewed the patents and patent
applications owned by the Company and filed or pending in the United States,
including, without limitation, those patents and patent applications assigned to
the Company by the Research Development Foundation, and based upon such review,
a review of the United States patents of record in the patents and patent
applications owned by the Company and discussions with Company scientific
personnel, such counsel is not aware of any valid United States patent that is
or would be infringed by the activities of the Company in the manufacture, use
or sale of any proposed product, drug or other material as described in the
Registration Statement and Prospectus and made or used according to the claims
of the United States patents and patent applications owned by the Company;
(iii) the assignment of the patents and patent applications to
which the Company has exclusive rights under the Assignment Agreement, dated
February 9, 1994, between the Company and the Research Development Foundation,
as described in the Registration Statement and Prospectus, has been properly
prepared and filed on behalf of the Company with the appropriate governmental
agency or agencies and is in full force and effect;
(iv) such counsel has reviewed the patent applications owned
by or licensed to the Company, including, without limitation, those patent
applications assigned to the Company by the Research Development Foundation,
have been properly prepared and filed on behalf of the Company and are being
diligently pursued on behalf of the Company; to such counsel's knowledge and
except as described in the Registration Statement and Prospectus, no other
entity or individual has any right or claim in any of such patents or patent
applications;
(v) to such counsel's knowledge, the Company owns or possesses
sufficient licenses or other rights to practice in the United States the
specific embodiments of technology disclosed and claimed in the patents and
patent applications of the Company described in the Registration Statement and
Prospectus; and
(vi) such counsel is not aware of (a) any pending or
threatened action, suit, proceeding or claim by others that the Company is
infringing or otherwise violating any patents of others or (b) any pending or
threatened action, suit, proceeding or claim by others challenging the validity
or scope of the patents and patent applications owned by or licensed to the
Company, including, without limitation, those patents and patent applications
assigned to the Company by the Research Development Foundation.
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(d) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by Dillon, Read & Co. Inc.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Cooley Godward
Castro Huddleson & Tatum, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, as to the
matters referred to in subparagraphs (iii), (iv), (v) (as to subclause (a)
only), (vi) and (vii) of paragraph (a) of this Section 6.
In addition, such counsel shall state that such counsel has participated
in conferences with officers and other representatives of the Company, counsel
for the Company, representatives of the independent public accountants of the
Company and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement and Prospectus (except as to matters referred to under
subparagraph (vii) of paragraph (a) of this Section 6), on the basis of the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus as of its date or any supplement thereto as of its date
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
(f) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time the Registration Statement becomes
effective to which you object in writing.
(g) The Registration Statement shall become effective at or before
5:00 P.M. on the date of this Agreement and, if Rule 430A under the Act is used,
the Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
under the
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Act at or before 5:00 P.M., New York City time, on the second full business day
after the date of this Agreement; provided, however, that the Company and you
and any group of Underwriters, including you, who have agreed hereunder to
purchase in the aggregate at least 50% of the Firm Shares may from time to time
agree on a later date.
(h) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under the Act
or proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications thereof, if
any, shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments or
supplements thereto, or modifications thereof, if any, shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
adverse change (other than as referred to in the Registration Statement and
Prospectus) in the properties, assets, operations, business, prospects or
condition (financial or otherwise) of the Company shall occur or become known
and (ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company; and (iii) there has not been any
obligation, contingent or otherwise, directly or indirectly incurred by the
Company, which would have a Material Adverse Effect.
(j) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct and the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to each such date.
(k) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and certain
shareholders of the Company designated by you as contemplated by Section 3(q) to
the effect set forth in such Section.
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration
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Statement and the Prospectus as of the time of purchase and the additional time
of purchase, as the case may be, as you may reasonably request.
(m) The Company shall perform such of its obligations under this
Agreement as are to be performed by the terms hereof at or before the time of
purchase and at or before the additional time of purchase, as the case may be.
(n) The Shares shall have been approved for listing on the Nasdaq
National Market, subject only to notice of issuance at or prior to the time of
purchase.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of you or any group of Underwriters
(which may include you) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if, at any time prior to the time of purchase or, with
respect to the purchase of any Additional Shares, the additional time of
purchase, as the case may be, trading in securities on the New York Stock
Exchange shall have been suspended or minimum prices shall have been established
on the New York Stock Exchange, or if a banking moratorium shall have been
declared either by the United States or New York State authorities, or if the
United States shall have declared war in accordance with its constitutional
processes or there shall have occurred any material outbreak or escalation of
hostilities or other national or international calamity or crisis of such
magnitude in its effect on the financial markets of the United States as, in
your judgment or in the judgment of such group of Underwriters, to make it
impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this agreement as
provided in this Section 7, the Company and each other Underwriter shall be
notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(l), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
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8. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall default
in its obligation to take up and pay for the Firm Shares to be purchased by it
hereunder and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the nondefaulting Underwriters shall take up and
pay for (in addition to the aggregate principal amount of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval). If a new
Underwriter or Underwriters are substituted by the Underwriters or by the
Company for a defaulting Underwriter or Underwriters in accordance with the
foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and Prospectus and other
documents may be effected. The term Underwriter as used in this agreement shall
refer to and include any Underwriter substituted under this Section 8 with like
effect as if such substituted Underwriter had originally been named in Schedule
A.
9. INDEMNITY BY THE COMPANY AND THE UNDERWRITERS.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the agents,
employees, officers and directors of any Underwriter or any such controlling
person (collectively, the "Underwriter indemnified parties") from and against
any loss, expense, liability or claim (including the reasonable fees and
expenses of counsel and other expenses in connection with investigating,
defending or settling any such action or claim) which, jointly or severally,
such person may incur as they are incurred (and regardless of whether the
Underwriter indemnified party is a party to the litigation, if any), arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration Statement
as amended by any post-effective
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amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented by the
Company), or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished in
writing by any Underwriter through you to the Company expressly for use with
reference to such Underwriter in such Registration Statement or such Prospectus
or arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in
either such Registration Statement or Prospectus or necessary to make such
information not misleading; provided, however, that the indemnity agreement
contained in this subsection (a) with respect to any Preliminary Prospectus or
amended Preliminary Prospectus shall not inure to the benefit of any Underwriter
indemnified party if the Prospectus corrected any such alleged untrue statement
or omission giving rise to such losses, expenses, liabilities or claims and you
or such Underwriter indemnified party failed to send or give a copy of the final
Prospectus (i.e., the Prospectus forming part of the Registration Statement
(including any registration statement filed pursuant to Rule 462(b) under the
Act) at the time of effectiveness under the Act or the Prospectus filed pursuant
to Rule 424(b) if Rule 430A under the Act is applicable) to the person in
respect of whom such losses, expenses, liabilities or claims arose at or prior
to the written confirmation of the corresponding sale of such Shares to such
person.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) is brought against an Underwriter
indemnified party or parties in respect of which indemnity may be sought against
the Company pursuant to the foregoing paragraph, such Underwriter indemnified
party or parties shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action,
including the employment of counsel and payment of expenses. Such Underwriter
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, (ii) the Company shall not have
employed counsel to have charge of the defense of such action promptly after
having received notice of such action, or (iii) such Underwriter indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the
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Company shall not have the right to direct the defense of such action on behalf
of the Underwriter indemnified party or parties), in any of which events such
fees and expenses shall be borne by the Company and paid as incurred (it being
understood, however, that the Company shall not be liable for the expenses of
more than one separate counsel (other than local counsel) in any one action or
series of related actions in the same jurisdiction representing the Underwriter
indemnified party or parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent.
(c) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act (collectively, the "Company
indemnified parties") from and against any loss, expense, liability or claim to
the same extent as the indemnity from the Company to the Underwriter indemnified
parties contained in Section 9(a) hereof, but only with respect to information
furnished in writing by the Underwriters through you to the Company expressly
for use in the Registration Statement, the Prospectus or any Preliminary
Prospectus. In case any action shall be brought against any Company indemnified
party based on the Registration Statement, the Prospectus or any Preliminary
Prospectus and in respect of which indemnity may be sought against the
Underwriters pursuant to this Section 9(c), the Underwriters shall have the
rights and duties given to the Company by Section 9(b) hereof (except that if
the Company shall have assumed the defense thereof, the Underwriters shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof, provided that the fees and expenses of such counsel shall
be at the Underwriters' expense), and the Company indemnified parties shall have
the rights and duties given to the Underwriter indemnified parties by Section
9(b) hereof.
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 9(a) or Section 9(c) in respect of any loss, expense, liability or claim
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, expense, liability
or claim (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such loss, expense, liability or claim, as well as any other
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Underwriting Agreement
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relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company or by the Underwriters (such information so furnished by the
Underwriters shall be limited to certain information in the Underwriting section
of the Preliminary Prospectus and Prospectus) and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, expenses, liabilities and claims referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
(e) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 9(d). Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue statement or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriter's obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter indemnified party, or
by or on behalf of any Company indemnified party, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company and each Underwriter agree promptly to notify the others of the
commencement of any litigation or proceeding against it or a related
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Underwriting Agreement
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indemnified party in connection with the issuance and sale of the Shares, or in
connection with the Registration Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Dillon, Read & Co. Inc., 535 Madison Avenue, New York, NY 10022, Attention:
Syndicate Department; and, if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
10450 Science Center Drive, San Diego, CA 92121 Attention: President.
11. CONSTRUCTION. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflict or choice of law. The Section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a part of this
Agreement.
12. PARTIES IN INTEREST. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and the
controlling persons, directors and officers referred to in Section 9 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
13. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties.
14. SEVERABILITY. If any provision of this Agreement shall, for any
reason, be invalid, illegal or unenforceable, the validity, legality and
unenforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon
27
Underwriting Agreement
Page 26
this letter and your acceptance shall constitute a binding agreement among the
Company and the Underwriters, severally.
Very truly yours,
DEPOTECH CORPORATION
By: ____________________________
Title: _________________________
Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
DILLON, READ & CO. INC.
UBS SECURITIES LLC
VECTOR SECURITIES INTERNATIONAL, INC.
By: DILLON, READ & CO. INC.
By: _________________________
Title: ______________________
28
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SHARES
Dillon, Read & Co. Inc.....................
UBS Securities LLC..........................
Vector Securities International, Inc........
TOTAL..................... 2,000,000