1
Exhibit 1.1
S&S Draft
9/20/96
3,000,000 Shares
IMMUSOL, INC.
Common Stock
UNDERWRITING AGREEMENT
_______, 1996
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Immusol, Inc., a California corporation (the "Company"),
proposes to sell an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's Common Stock, par value $0.001 per share (the "Common Stock"), to you
and to the other underwriters named in Schedule I (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 450,000
shares of Common Stock (the "Option Shares") on the terms and for the purposes
set forth in Section 1(b). The Firm Shares and the Option Shares are hereinafter
collectively referred to as the "Shares."
The initial public offering price per share for the Shares and
the purchase price per share for the Shares to be paid by the several
Underwriters shall be agreed upon by the Company and the Representatives, acting
on behalf of the several Underwriters, and such agreement shall be set forth in
a separate written instrument substantially in the form of Exhibit A hereto (the
"Price Determination Agreement"). The Price Determination Agreement may take the
form of an exchange of any standard form of written telecommunication among the
Company and the Representatives and shall specify such applicable information as
is indicated in Exhibit A hereto. The offering of the Shares will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this
2
2
Agreement shall be deemed to incorporate, and, unless the context otherwise
indicates, all references contained herein to "this Agreement" and to the phrase
"herein" shall be deemed to include the Price Determination Agreement.
The Company confirms as follows its agreements with the
Representatives and the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties
and agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter
named below, and each Underwriter, severally and not jointly, agrees to purchase
from the Company at the purchase price per share for the Firm Shares to be
agreed upon by the Representatives and the Company in accordance with Section
1(c) and set forth in the Price Determination Agreement, the aggregate number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I, plus
such additional number of Firm Shares which such Underwriter may
become obligated to purchase pursuant to Section 8 hereof. Schedule I may be
attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this
Agreement, the Company grants the Option to the several Underwriters to
purchase, severally and not jointly, up to 450,000 Option Shares from the
Company at the same price per share as the Underwriters shall pay for the Firm
Shares. The Option may be exercised only to cover over-allotments in the sale of
the Firm Shares by the Underwriters and may be exercised in whole or in part at
any time (but not more than once) on or before the 30th day after the date of
this Agreement (or, if the Company has elected to rely on Rule 430A, on or
before the 30th day after the date of the Price Determination Agreement), upon
written or telegraphic notice (the "Option Shares Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Shares Notice (the "Option Closing Date") setting forth
the aggregate number of Option Shares to be purchased and the time and date for
such purchase. On the Option Closing Date, the Company will issue and sell to
the Underwriters the number of Option Shares set forth in the Option Shares
Notice, and each Underwriter will purchase such percentage of the Option Shares
as is equal to the percentage of Firm Shares that such Underwriter is
purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
(c) If the Company has elected to rely on Rule 430A,
the initial public offering price per share for the Firm Shares and the purchase
price per share for the Firm Shares to be paid by the several Underwriters shall
be agreed upon and set forth in the Price Determination Agreement. In the event
such price has not been agreed upon and the
3
3
Price Determination Agreement has not been executed by the close of business on
the fourteenth business day following the date on which the Registration
Statement becomes effective, this Agreement shall terminate forthwith, without
liability of any party to any other party except that Section 6 shall remain in
effect.
2. Delivery and Payment. Delivery of the Firm Shares shall be
made to the Representatives for the accounts of the Underwriters against payment
of the purchase price by certified or official bank check or by wire transfer to
an account designated by the Company in Federal (same-day) funds. Such payments
shall be made at 10:00 a.m., New York City time, on the fourth business day
after the date on which the first bona fide offering of the Shares to the public
is made by the Underwriters or at such time on such other date, not later than
ten business days after such date, as may be agreed upon by the Company and the
Representatives (such date is hereinafter referred to as the "Closing Date").
(a) To the extent the Option is exercised, delivery
of the Option Shares against payment by the Underwriters (in the manner
specified above) will take place at the offices specified above for the Closing
Date at the time and date (which may be the Closing Date) specified in the
Option Shares Notice.
(b) The cost of original issue tax stamps, if any, in
connection with the issuance and delivery of the Firm Shares and Option Shares
by the Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying Federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Firm Shares and Option
Shares.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to each Underwriter that:
(a) A registration statement (Registration No.
______) on Form S-1 relating to the Shares, including a preliminary prospectus
and such amendments to such registration statement as may have been required to
the date of this Agreement, has been prepared by the Company under the
provisions of the Securities Act of 1933, as amended (the "Act"), and the rules
and regulations (collectively referred to as the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission. The term "preliminary prospectus" as used herein
means a preliminary prospectus as contemplated by Rule 430 or Rule 430A ("Rule
430A") of the Rules and Regulations included at any time as part of the
registration statement. Copies of such registration statement and amendments and
of each related preliminary prospectus
4
4
have been delivered to the Representatives. The term "Registration Statement"
means the registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed to be included by Rule 430A or Rule 434 of
the Rules and Regulations. If the Company files a registration statement to
register a portion of the Shares and relies on Rule 462(b) of the Rules and
Regulations for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
the "Registration Statement" shall be deemed to include the Rule 462
Registration Statement, as amended from time to time. The term "Prospectus"
means the prospectus as first filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective Date.
(b) On the Effective Date, the date the Prospectus is
first filed with the Commission pursuant to Rule 424(b) (if required), at all
times subsequent to and including the Closing Date and, if later, the Option
Closing Date and when any post-effective amendment to the Registration Statement
becomes effective or any amendment or supplement to the Prospectus is filed with
the Commission, the Registration Statement and the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
or supplement thereto), including the financial statements included in the
Prospectus, did or will comply with all applicable provisions of the Act and the
Rules and Regulations and will contain all statements required to be stated
therein in accordance with the Act and the Rules and Regulations. On the
Effective Date and when any post-effective amendment to the Registration
Statement becomes effective, no part of the Registration Statement or any such
amendment did or will contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading. At the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date, the
Prospectus did not or will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. For all purposes of this
Agreement, the amounts of the selling concession and reallowance set forth in
the Prospectus constitute the only information relating to any Underwriter
furnished in writing to the Company by the Representatives specifically for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. The Company has not distributed any offering material in connection
with the offering or sale of the Shares other than the Registration Statement,
the preliminary prospectus, the Prospectus or any other materials, if any,
permitted by the Act.
5
5
(c) The Company is, and at the Closing Date will be,
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company is, and at the Closing Date will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all jurisdictions in
which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary.
Except as disclosed in the Registration Statement, the Company does not own, and
at the Closing Date will not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or other
entity. Complete and correct copies of the articles of incorporation and of the
by-laws of the Company and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(d) The outstanding shares of Common Stock have been,
and the Shares to be issued and sold by the Company upon such issuance will be,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to any preemptive or similar right. The description of the Common Stock
in the Registration Statement and the Prospectus is, and at the Closing Date
will be, complete and accurate in all respects. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date will
not have outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock or any
such warrants, convertible securities or obligations.
(e) The financial statements and schedules included
in the Registration Statement or the Prospectus present fairly the financial
condition of the Company as of the respective dates thereof and the results of
operations and cash flows of the Company for the respective periods covered
thereby, all in conformity with generally accepted accounting principles applied
on a consistent basis throughout the entire period involved, except as otherwise
disclosed in the Prospectus. The pro forma financial statements and other pro
forma financial information included in the Registration Statement or the
Prospectus (i) present fairly in all material respects the information shown
therein, (ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii) have been
properly computed on the bases described therein. The assumptions used in the
preparation of the pro forma financial statements and other pro forma financial
information included in the Registration Statement or the Prospectus are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions or circumstances referred to therein. No other financial
statements or
6
6
schedules of the Company are required by the Act or the Rules and Regulations to
be included in the Registration Statement or the Prospectus. Ernst & Young LLP
(the "Accountants") who have reported on such financial statements and
schedules, are independent public accountants with respect to the Company as
required by the Act and the Rules and Regulations. The statements included in
the Registration Statement with respect to the Accountants pursuant to Rule
509 of Regulation S-K of the Rules and Regulations are true and correct in all
material respects.
(f) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(g) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus and prior
to the Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company, arising for any reason whatsoever, (ii) the Company has not
incurred nor will it incur any material liabilities or obligations, direct or
contingent, nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions referred
to herein and (iii) the Company has not and will not have paid or declared any
dividends or other distributions of any kind on any class of its capital stock.
(h) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(i) Except as set forth in the Registration Statement
and the Prospectus, there are no actions, suits or proceedings pending or, to
the Company's knowledge, threatened against or affecting the Company or any of
its officers in their capacity as such, before or by any Federal or state court,
commission, regulatory body, administrative agency or other governmental body,
domestic or foreign, wherein an unfavorable ruling, decision or finding might
materially and adversely affect the Company or its business, properties,
business prospects, condition (financial or otherwise) or results of operations.
7
7
(j) The Company has, and at the Closing Date will
have, (i) all governmental licenses, permits, consents, orders, approvals and
other authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and orders
applicable to it or its business and (iii) performed all its obligations
required to be performed by it, and is not, and at the Closing Date will not be,
in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other agreement") to
which it is a party or by which its property is bound or affected. To the best
knowledge of the Company, no other party under any contract or other agreement
to which it is a party is in default in any respect thereunder. The Company is
not, nor at the Closing Date will be, in violation of any provisions of its
articles of incorporation or by-laws.
(k) No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental agency or body is
required in connection with the authorization, issuance, transfer, sale or
delivery of the Shares by the Company, in connection with the execution,
delivery and performance of this Agreement by the Company or in connection with
the taking by the Company of any action contemplated hereby, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the by-laws and rules of the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Shares.
(l) The Company has full corporate power and
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in accordance
with the terms hereof. The performance of this Agreement and the consummation of
the transactions contemplated hereby and the application of the net proceeds
from the offering and sale of the Shares in the manner set forth in the
Prospectus under "Use of Proceeds" will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or give any
other party a right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the articles of incorporation or by-laws
of the Company, any contract or other agreement to which the Company is a party
or by which the Company or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company.
(m) The Company has good and marketable title to all
properties and assets described in the Prospectus as owned by it, free and clear
of all liens, charges,
8
8
encumbrances or restrictions, except such as are described in the Prospectus or
are not material to the business of the Company. The Company has valid,
subsisting and enforceable leases for the properties described in the Prospectus
as leased by it, with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such properties by the
Company.
(n) There is no document or contract 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 which is not described or
filed as required. All such contracts to which the Company is a party have been
duly authorized, executed and delivered by the Company, constitute valid and
binding agreements of the Company and are enforceable against the Company in
accordance with the terms thereof.
(o) No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any certificate or
document required by this Agreement to be delivered to the Representatives was
or will be, when made, inaccurate, untrue or incorrect.
(p) Neither the Company nor any of its directors,
officers or controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under the
Act or otherwise, in, or which has constituted, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Shares.
(q) Except as disclosed in the Prospectus, no holder
of securities of the Company has rights to the registration of any securities
of the Company because of the filing of the Registration Statement.
(r) The Shares have been approved for quotation on
the Nasdaq National Market.
(s) The Company is not involved in any material labor
dispute nor, to the knowledge of the Company, is any such dispute threatened.
(t) The Company nor, to the Company's knowledge, any
employee or agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or regulation or of
a character required to be disclosed in the Prospectus.
(u) The Company has complied, and until the
completion of the distribution of the Shares will comply, with all of the
provisions of (including, without limitation, filing all forms required by)
Section 517.075 of the Florida Securities and Investor
9
9
Protection Act and regulation 3E-900.001 issued thereunder with respect to the
offering and sale of the Shares.
(v) The Company owns or possesses adequate licenses
or other rights to use all patents, trademarks, service marks, trade names,
copyrights, mask works, technology and know-how necessary to conduct the
business now or proposed to be conducted by it as described in the Prospectus
and the Company has not received any notice of infringement of or conflict with
(and knows of no such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights, mask works, technology or know-how which could result in any
material adverse effect upon the Company; and the Company's discoveries,
inventions, products or processes referred to in the Prospectus do not, to the
knowledge of the Company, infringe or conflict with any right or patent, or any
discovery, invention, product or process which is the subject of a patent
application known to the Company, which infringement or conflict could result in
any material adverse effect upon the Company.
(w) The Company has obtained any permits, consents
and authorizations required to be obtained by it under laws or regulations
relating to the protection of the environment or concerning the handling,
storage, disposal or discharge of toxic materials (collectively "Environmental
Laws"), and any such permits, consents and authorizations remain in full force
and effect. The Company is in compliance with the Environmental Laws in all
material respects, and there is no pending or, to the Company's knowledge,
threatened, action or proceeding against the Company alleging violations of the
Environmental Laws.
(x) Except as disclosed in the Registration Statement
or the Prospectus, the Company maintains insurance of the types and in amounts
generally deemed adequate for its businesses and consistent with insurance
coverage maintained by similar companies and businesses, all of which insurance
is in full force and effect.
(y) There are no subsidiaries of the Company.
4. Agreements of the Company. The Company agrees with the
several Underwriters as follows:
(a) The Company will not, prior to the Effective Date
or thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by an Underwriter or dealer,
file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
10
10
(b) The Company will use its best efforts to cause
the Registration Statement to become effective, and will notify the
Representatives promptly, and will confirm such advice in writing, (1) when the
Registration Statement has become effective and when any post-effective
amendment thereto becomes effective, (2) of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, or the threat thereof, (4) of the happening of
any event during the period mentioned in the second sentence of Section 4(e)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue or that requires the making of any changes in
the Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (5) of receipt by the Company, its counsel or auditors or any representative
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. The Company will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
Rule 430A and to notify the Representatives promptly of all such filings.
(c) The Company will furnish to the Representatives,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions
of the undertakings contained in the Registration Statement.
(e) On the Effective Date, and thereafter from time
to time, the Company will deliver to each of the Underwriters, without charge,
as many copies of the Prospectus or any amendment or supplement thereto as the
Representatives may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the several Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur which in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law,
11
11
the Company will forthwith prepare and duly file with the Commission an
appropriate supplement or amendment thereto, and will deliver to each of the
Underwriters, without charge, such number of copies thereof as the
Representatives may reasonably request.
(f) Prior to any public offering of the Shares by the
Underwriters, the Company will cooperate with the Representatives and counsel to
the Underwriters in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may request; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the
Effective Date, the Company will furnish to the Representatives and each other
Underwriter who may so request copies of such financial statements and all
annual reports, quarterly reports and current reports filed with the Commission
on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission, and such other documents, reports and information as shall be
furnished by the Company to its stockholders or security holders generally.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event later
than the last day of the fifteenth full calendar month following the calendar
quarter in which the Effective Date falls, an earnings statement (which need not
be audited but shall be in reasonable detail) for a period of 12 months ended
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Company will
pay, or reimburse if paid by the Representatives, all costs and expenses
incident to the performance of the obligations of the Company under this
Agreement, including but not limited to costs and expenses of or relating to (1)
the preparation, printing and filing of the Registration Statement and exhibits
to it, each preliminary prospectus, the Prospectus and any amendment or
supplement to the Registration Statement or the Prospectus, (2) the preparation
and delivery of certificates representing the Shares, (3) the printing of this
Agreement, the Agreement Among Underwriters, any Dealer Agreements and any
Underwriters' Questionnaire, (4) furnishing (including costs of shipping,
mailing and courier) such copies of the Registration Statement, the Prospectus
and any preliminary prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold, (5) the listing
and quotation of the Shares on the Nasdaq National Market, (6) any filings
required to be made by the Underwriters with the NASD, and the fees,
disbursements
12
12
and other charges of counsel for the Underwriters in connection therewith, (7)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant
to Section 4(f), including the fees, disbursements and other charges of
counsel to the Underwriters in connection therewith, and the preparation and
printing of preliminary, supplemental and final Blue Sky memoranda, (8) counsel
to the Company, (9) the transfer agent for the Shares and (10) the Accountants.
(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than pursuant to
Section 8) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the several Underwriters for
all out-of-pocket expenses (including the fees, disbursements and other charges
of counsel to the Underwriters) reasonably incurred by them in connection
herewith.
(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be expected, to
cause or result in, or which will constitute, stabilization of the price of the
shares of Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the
offering and sale of the Shares to be sold by the Company in the manner set
forth in the Prospectus under "Use of Proceeds" and shall file such reports with
the Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 under the Act.
(m) During the period of 180 days commencing at the
Closing Date, the Company will not, without the prior written consent of
PaineWebber Incorporated, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Common Stock or securities
convertible into Common Stock, other than to the Underwriters pursuant to this
Agreement and other than pursuant to employee benefit plans, provided, that the
Company will not grant options to purchase shares of Common Stock pursuant to
such employee benefit plans at a price less than the initial public offering
price.
(n) The Company will not, and will cause each of its
executive officers, directors, employees and each beneficial owner of
outstanding securities of the Company to enter into agreements with the
Representatives in the form set forth in Exhibit B to the effect that they will
not, for a period of 180 days after the commencement of the public offering of
the Shares, without the prior written consent of PaineWebber Incorporated, sell,
contract to sell or otherwise dispose of any shares of Common Stock or rights to
acquire such shares (other than pursuant to employee stock option plans or in
connection with other employee incentive compensation arrangements).
13
13
5. Conditions of the Obligations of the Underwriters. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has
become effective shall be received by the Representatives not later than 5:00
p.m., New York City time, on the date of this Agreement or at such later date
and time as shall be consented to in writing by the Representatives and all
filings required by Rule 424 of the Rules and Regulations and Rule 430A shall
have been made.
(b) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or the authorities of any
jurisdiction shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Representatives and the
Representatives did not object thereto in good faith, and the Representatives
shall have received certificates, dated the Closing Date and the Option Closing
Date and signed by the Chief Executive Officer or the Chairman of the Board of
Directors of the Company and the Chief Financial Officer of the Company (who
may, as to proceedings threatened, rely upon the best of their information and
belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, (i) there
shall not have been a material adverse change in the general affairs, business,
business prospects, properties, management, condition (financial or otherwise)
or results of operations of the Company, taken as a whole, whether or not
arising from transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) the Company shall not have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
judgment of the Representatives any such development makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
14
14
(d) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
shall have been no litigation or other proceeding instituted against the Company
or any of its officers or directors in their capacities as such, before or by
any Federal, state or local court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company.
(e) Each of the representations and warranties of the
Company contained herein shall be true and correct in all material respects at
the Closing Date and, with respect to the Option Shares, at the Option Closing
Date, as if made at the Closing Date and, with respect to the Option Shares, at
the Option Closing Date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(f) The Representatives shall have received an
opinion, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and satisfactory in form and substance to counsel for the
Underwriters, from Brobeck, Phleger & Harrison LLP, counsel to the Company, to
the effect set forth in Exhibit C.
(g) The Representatives shall have received an
opinion, dated the Closing Date, and with respect to the Option Shares, the
Option Closing Date, and satisfactory in form and substance to counsel for the
Underwriters, from Townsend and Townsend and Crew, patent counsel to the
Company, to the effect set forth in Exhibit D.
(h) The Representatives shall have received an
opinion, dated the Closing Date and the Option Closing Date, from Shearman &
Sterling, counsel to the Underwriters, with respect to the Registration
Statement, the Prospectus and this Agreement, which opinion shall be
satisfactory in all respects to the Representatives.
(i) On the date of the Prospectus, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent public
accountants with respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement. At the Closing
Date and, as to the Option Shares, the Option Closing Date, the Accountants
shall have furnished to the Representatives a letter, dated the date of its
delivery, which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that
15
15
nothing has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the letter) not
more than five days prior to the Closing Date and the Option Closing Date which
would require any change in their letter dated the date of the Prospectus, if it
were required to be dated and delivered at the Closing Date and the Option
Closing Date.
(j) At the Closing Date and, as to the Option Shares,
the Option Closing Date, there shall be furnished to the Representatives an
accurate certificate, dated the date of its delivery, signed by each of the
Chief Executive Officer and the Chief Financial Officer of the Company, in form
and substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and
(A) as of the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein not untrue or misleading and (B) since the Effective
Date, no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading in any material respect.
(ii) Each of the representations and
warranties of the Company contained in this Agreement were, when
originally made, and are, at the time such certificate is delivered,
true and correct in all material respects.
(iii) Each of the covenants required herein
to be performed by the Company on or prior to the delivery of such
certificate has been duly, timely and fully performed and each
condition herein required to be complied with by the Company on or
prior to the date of such certificate has been duly, timely and fully
complied with.
(k) On or prior to the Closing Date, the
Representatives shall have received the executed agreements referred to in
Section 4(n).
(l) The Shares shall be qualified for sale in such
states as the Representatives may reasonably request, each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
Closing Date and the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have
been qualified for quotation on the Nasdaq National Market.
16
16
(n) The Company shall have furnished to the
Representatives such certificates, in addition to those specifically mentioned
herein, as the Representatives may have reasonably requested as to the accuracy
and completeness at the Closing Date and the Option Closing Date of any
statement in the Registration Statement or the Prospectus as to the accuracy at
the Closing Date and the Option Closing Date of the representations and
warranties of the Company herein, as to the performance by the Company of its
obligations hereunder, or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Representatives.
6. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") from and against any and all losses, claims,
liabilities, expenses and damages (including any and all investigative, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), to which they, or any of
them, may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the Prospectus or any
amendment or supplement to the Registration Statement or the Prospectus, or the
omission or alleged omission to state in such document a material fact required
to be stated in it or necessary to make the statements in it not misleading,
provided that the Company will not be liable to the extent that such loss,
claim, liability, expense or damage arises from the sale of the Shares in the
public offering to any person by an Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representatives on behalf of any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in addition to
any liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless
the Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each director of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with
17
17
information relating to any Underwriter furnished in writing to the Company by
the Representatives on behalf of such Underwriter expressly for use in the
Registration Statement, the Preliminary Prospectus or the Prospectus.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No
18
18
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
foregoing paragraphs of this Section 6 is applicable in accordance with its
terms but for any reason is held to be unavailable from the Company or the
Underwriters, the Company and the Underwriters will contribute to the total
losses, claims, liabilities, expenses and damages (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the Company from persons other than
the Underwriters, such as persons who control the Company within the meaning of
the Act, officers of the Company who signed the Registration Statement and
directors of the Company, who also may be liable for contribution) to which the
Company and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other. 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 net proceeds
from the offering (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. If,
but only if, the allocation provided by the foregoing sentence is not permitted
by applicable law, the allocation of contribution shall be made in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing sentence but also the relative fault of the Company, on the
one hand, and the Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Representatives on behalf of the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(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 herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or
19
19
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute as provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
6(d), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have under this Section 6(d). No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any investigation made by or on behalf of the
Underwriters, (ii) acceptance of the Shares and payment therefor or (iii) any
termination of this Agreement.
7. Termination. The obligations of the several Underwriters
under this Agreement may be terminated at any time on or prior to the Closing
Date (or, with respect to the Option Shares, on or prior to the Option Closing
Date), by notice to the Company from the Representatives, without liability on
the part of any Underwriter to the Company, if, prior to delivery and payment
for the Shares (or the Option Shares, as the case may be), in the sole judgment
of the Representatives, (i) trading in any of the equity securities of the
Company shall have been suspended by the Commission, the NASD, by an exchange
that lists the Shares or by the Nasdaq Stock Market, (ii) trading in securities
generally on the New York Stock Exchange or in the Nasdaq Stock Market shall
have been suspended or limited or minimum or maximum prices shall have been
generally established on such exchange or over-the-counter market, or additional
material governmental restrictions, not in force on the date of this Agreement,
shall have been imposed upon trading in securities generally by such exchange or
over-the-counter market or by order of the Commission or the NASD or any court
or other governmental authority, (iii) a general banking moratorium shall have
been declared by either Federal or New York State or California State
authorities or (iv) any material adverse change in the financial or securities
markets in the United States or
20
20
in political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred the effect of any of which is such as to make it, in the sole judgment
of the Representatives, impracticable or inadvisable to market the Shares on the
terms and in the manner contemplated by the Prospectus.
8. Substitution of Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it or
they have agreed to purchase hereunder, and the aggregate number of Firm Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of Firm Shares,
the other Underwriters shall be obligated, severally, to purchase the Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares which
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares which
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 8 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior written
consent of such Underwriter. If any Underwriter or Underwriters shall fail or
refuse to purchase any Firm Shares and the aggregate number of Firm Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase exceeds one-tenth of the aggregate number of the Firm Shares and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Firm Shares are not made within 48 hours after such default,
this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company for the purchase or sale of any Shares
under this Agreement. In any such case either the Representatives or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken pursuant to this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Miscellaneous. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, 3050 Science Park Road, San Diego, California 92121, Attention:
Tsvi Goldenberg, Ph.D., or (b) if to the Underwriters, to the Representatives at
the offices of PaineWebber Incorporated, 1285 Avenue of the Americas, New York,
New York 10019, Attention: Corporate Finance Department. Any such notice shall
be effective only upon receipt. Any notice under Section 7 or 8 may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.
21
21
This Agreement has been and is made solely for the benefit of
the several Underwriters and the Company and of the controlling persons,
directors and officers referred to in Section 6, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" as used in this
Agreement shall not include a purchaser, as such purchaser, of Shares from any
of the several Underwriters.
All representations, warranties and agreements of the Company
contained herein or in certificates or other instruments delivered pursuant
hereto, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any of its controlling
persons and shall survive delivery of and payment for the Shares hereunder.
Any action required or permitted to be taken by the
Representatives under this Agreement may be taken by them jointly or by
PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PRINCIPLES OF SUCH STATE.
This Agreement may be signed in two or more counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
In case any provision in this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
The Company and the Underwriters each hereby irrevocably waive
any right they may have to a trial by jury in respect of any claim based upon or
arising out of this Agreement or the transactions contemplated hereby.
This Agreement may not be amended or otherwise modified or any
provision hereof waived except by an instrument in writing signed by the
Representatives and the Company.
22
22
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the several Underwriters.
Very truly yours,
IMMUSOL, INC.
By:
------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves
and as the Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By:
-----------------------------------
Name:
Title:
23
SCHEDULE I
UNDERWRITERS
Number of
Name of Firm Shares
Underwriters to be Purchased
- ------------ ---------------
PaineWebber Incorporated
Needham & Company, Inc.
Sutro & Co. Incorporated
Total ................................................... ---------
3,000,000
=========
24
EXHIBIT A
IMMUSOL, INC.
---------------------
PRICE DETERMINATION AGREEMENT
_______, 1996
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Reference is made to the Underwriting Agreement, dated _______, 1996
(the "Underwriting Agreement"), among Immusol, Inc., a California corporation
(the "Company"), and the several Underwriters named in Schedule I thereto or
hereto (the "Underwriters"), for whom PaineWebber Incorporated, Needham &
Company, Inc. and Sutro & Co. Incorporated are acting as representatives (the
"Representatives"). The Underwriting Agreement provides for the purchase by the
Underwriters from the Company, subject to the terms and conditions set forth
therein, of an aggregate of 3,000,000 shares (the "Firm Shares") of the
Company's common stock, par value $.001 per share. This Agreement is the Price
Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Representatives as follows:
The initial public offering price per share for the Firm Shares shall
be $_______.
25
2
The purchase price per share for the Firm Shares to be paid by the
several Underwriters shall be $_______ representing an amount equal to the
initial public offering price set forth above, less $______ per share.
The Company represents and warrants to each of the Underwriters that
the representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I
is a completed list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
If the foregoing is in accordance with your understanding of the
agreement among the Underwriters and the Company, please sign and return to the
Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement among the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
IMMUSOL, INC.
By: _______________________
Name:
Title:
26
3
Confirmed as of the date first above mentioned:
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
SUTRO & CO. INCORPORATED
Acting on behalf of themselves
and as the Representatives of the
other several Underwriters
named in Schedule I hereof.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name:
Title:
27
EXHIBIT B
June ___ , 1996
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
SUTRO & CO. INCORPORATED
As Representatives of the
several Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
In consideration of the agreement of the several Underwriters, pursuant
to which PaineWebber Incorporated, Needham & Company, Inc. and Sutro & Co.
Incorporated (the "Representatives") intend to act as Representatives to
underwrite a proposed public offering (the "Offering") of shares of Common
Stock, par value $0.001 per share (the "Common Stock"), of Immusol, Inc., a
California corporation, as contemplated by a registration statement (the
"Registration Statement") with respect to such shares to be filed with the
Securities and Exchange Commission on Form S-1, the undersigned hereby agrees
that the undersigned will not, directly or indirectly, for a period of 180 days
after the commencement of the Offering, without the prior written consent of
PaineWebber Incorporated, (1) sell, transfer or otherwise dispose of, or offer,
contract or grant an option to sell, transfer or otherwise dispose of, or
require the Company to file with the Securities and Exchange Commission a
registration statement under the Securities Act of 1933, as amended, to
register, any shares of Common Stock or securities convertible into or
exchangeable for Common Stock or warrants or other rights to acquire shares of
Common Stock of which the undersigned is now, or may in the future become, the
beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended [(other than pursuant to employee stock option plans or
in connection with other employee incentive compensation arrangements)](1)) or
(2) enter into any swap or similar agreement that transfers, in whole or in
part, any of the economic consequences of the ownership of the
- -------------------
(1) Insert if this letter agreement will be signed by an employee of the
Company.
28
2
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise.
The undersigned acknowledges that the Representatives are relying on
the agreements of the undersigned contained herein in carrying out the
Offering and in entering underwriting agreements with respect thereto.
Very truly yours,
By: _______________________
Print
Name: _____________________
29
EXHIBIT C
Form of Opinion of
Brobeck, Phleger & Harrison LLP*
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has full
corporate power and authority to conduct all the activities conducted by it, to
own or lease all the assets and properties owned or leased by it and to conduct
its business as described in the Registration Statement and the Prospectus.
2. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on the
Company.
3. All of the outstanding shares of Common Stock have been, and the
Shares, when paid for by the Underwriters in accordance with the terms of the
Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right under
(i) the statutes, judicial and administrative decisions, and the rules and
regulations of the governmental agencies of the State of California, (ii) the
Company's articles of incorporation or by-laws or (iii) any instrument,
document, contract or other agreement referred to in the Registration Statement
or any instrument, document, contract or agreement filed as an exhibit to the
Registration Statement. Except as described in the Registration Statement or the
Prospectus, to the best of our knowledge, there is no commitment or arrangement
to issue, and there are no outstanding options, warrants or other rights calling
for the issuance of, any share of capital stock of the Company to any person or
any security or other instrument that by its terms is convertible into,
exercisable for or exchangeable for capital stock of the Company.
4. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in connection with the taking by
the Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may be
- --------------------
* All references in this opinion to the Agreement shall include the Price
Determination Agreement. Capitalized terms used herein and not
otherwise defined have the same meanings as in the Underwriting
Agreement.
30
2
required under state securities or "Blue Sky" laws or by the by-laws and rules
of the NASD in connection with the purchase and distribution by the Underwriters
of the Shares to be sold by the Company.
5. The authorized, issued and outstanding capital stock of the
Company is as set forth in the Registration Statement and the Prospectus under
the caption "Capitalization." The description of the Common Stock contained in
the Prospectus is complete and accurate in all material respects. The form of
certificate used to evidence the Common Stock is in due and proper form and
complies with all applicable statutory requirements.
6. The Registration Statement and the Prospectus comply in all
material respects as to form with the requirements of the Act and the Rules and
Regulations (except that we express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement or
the Prospectus). To the best of our knowledge, any instrument, document, lease,
license, contract or other agreement (collectively, "Documents") required to be
described or referred to in the Registration Statement or the Prospectus has
been properly described or referred to therein and any Document required to be
filed as an exhibit to the Registration Statement has been filed as an exhibit
thereto or has been incorporated as an exhibit by reference in the Registration
Statement; and no default exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any Document
filed or required to be filed as an exhibit to the Registration Statement.
7. To the best of our knowledge, except as disclosed in the
Registration Statement or the Prospectus, no person or entity has the right to
require the registration under the Act of shares of Common Stock or other
securities of the Company by reason of the filing or effectiveness of the
Registration Statement.
8. To the best of our knowledge, the Company is not in violation of,
or in default with respect to, any law, rule, regulation, order, judgment or
decree, except as may be described in the Prospectus or such as in the aggregate
do not now have and will not in the future have a material adverse effect upon
the business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company.
9. All descriptions in the Prospectus of statutes, regulations or
legal or governmental proceedings are accurate and fairly present the
information required to be shown.
10. The Company has full corporate power and authority to enter into
the Agreement, and the Agreement has been duly authorized, executed and
delivered by the Company, is a valid and binding agreement of the Company and,
except for the
31
3
indemnification and contribution provisions thereof, as to which we express no
opinion, is enforceable against the Company in accordance with the terms
thereof.
11. The execution and delivery by the Company of, and the
performance by the Company of its agreements in, the Agreement do not and will
not (i) violate the certificate of articles or by-laws of the Company, (ii)
breach or result in a default under, cause the time for performance of any
obligation to be accelerated under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company pursuant
to the terms of, (x) any indenture, mortgage, deed of trust, loan agreement,
bond, debenture, note agreement, capital lease or other evidence of indebtedness
of which we have knowledge, (y) any voting trust arrangement or any contract or
other agreement to which the Company is a party that restricts the ability of
the Company to issue securities and of which we have knowledge or (z) any
Document filed as an exhibit to the Registration Statement, (iii) breach or
otherwise violate any existing obligation of the Company under any court or
administrative order, judgment or decree of which we have knowledge or (iv)
violate applicable provisions of any statute or regulation in the State of
California or of the United States. Delivery of certificates for the Shares will
transfer valid and marketable title thereto to each Underwriter that has
purchased such Shares in good faith and without notice of any adverse claim with
respect thereto.
12. The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
13. The Shares have been duly approved for quotation on the Nasdaq
National Market.
14. We hereby confirm to you that we have been advised by the
Commission that the Registration Statement has become effective under the Act
and that no order suspending the effectiveness of the Registration Statement has
been issued and no proceeding for that purpose has been instituted or is
pending, threatened or contemplated.
15. Any required filing of the Prospectus or any supplement thereto
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b).
16. We hereby further confirm to you that there are no actions,
suits, proceedings or investigations pending or, to our knowledge, overtly
threatened in writing against the Company, or any of its officers or directors
in their capacities as such, before or by any court, governmental agency or
arbitrator which (i) seek to challenge the legality or enforceability of the
Agreement, (ii) seek to challenge the legality or enforceability of any of the
Documents filed, or required to be filed, as exhibits to the Registration
Statement, (iii)
32
4
seek damages or other remedies with respect to any of the Documents filed, or
required to be filed, as exhibits to the Registration Statement, (iv) except as
set forth in or contemplated by the Registration Statement and the Prospectus,
seek money damages or seek to impose criminal penalties upon the Company or any
of its officers or directors in their capacities as such and of which we have
knowledge or if determined adversely to the Company, would individually or in
the aggregate, have a material adverse effect on the Company or its business,
properties, business prospects, condition (financial or otherwise) or results of
operations, taken as a whole, or (v) seek to enjoin any of the business
activities of the Company or the transactions described in the Prospectus and of
which we have knowledge.
17. We have participated in the preparation of the Registration
Statement and the Prospectus and, without assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, nothing has come to our attention that causes us to believe that, both
as of the Effective Date and as of the Closing Date and the Option Closing Date,
the Registration Statement or any amendment thereto contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that any Prospectus or any amendment or supplement thereto, at the
time such Prospectus was issued, at the time any such amended or supplemented
Prospectus was issued, at the Closing Date and the Option Closing Date,
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 the light of the circumstances in which they were made, not
misleading (except that we express no opinion as to financial statements,
schedules and other financial data contained in the Registration Statement or
the Prospectus.
Opinion 11 is subject to the qualification that the enforceability
of the Agreement may be: (i) subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally; and (ii)
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity) including
principles of commercial reasonableness or conscionability and an implied
covenant of good faith and fair dealing.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Agreement and may not be circulated to,
or relied upon by, any other person, except that this letter may be relied upon
by your counsel in connection with the opinion letter to be delivered to you
pursuant to Section 5(h).
In rendering the foregoing opinion, counsel may rely, to the extent
they deem such reliance proper, on the opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel as to matters governed by the laws of
jurisdictions other than the United States and the State of
33
5
California, and as to matters of fact, upon certificates of officers of the
Company and of government officials; provided that such counsel shall state that
the opinion of any other counsel is in form satisfactory to such counsel. Copies
of all such opinions and certificates shall be furnished to counsel to the
Underwriters on the Closing Date.
34
EXHIBIT D
Form of Opinion of
Townsend and Townsend and Crew
1. The portions of the Registration Statement and the Prospectus
entitled "Risk Factors--Patents and Proprietary Technology; Reliance Upon
Licenses" and "Business--Patents and Proprietary Rights," (together, the "Patent
Paragraphs") are accurate and complete statements or summaries of the matters
set forth therein.
2. There are no legal or governmental proceedings, other than patent
applications pending, relating to patent rights of the Company, to which the
Company is a party, and, to our knowledge, no such proceedings are threatened or
contemplated by governmental authorities or others and no basis for any such
proceedings exist.
3. To our knowledge, the Company has not received any communication
in which it is alleged that the Company is infringing or violating patent rights
of third parties.
4. The Company owns or possesses licenses or other rights to use all
patents, trade secrets, trademarks, service marks or other proprietary
information or materials necessary to conduct the business now being or proposed
to be conducted by the Company as described in the Prospectus.
5. Although we have not independently verified the accuracy and
completeness of the statements contained in the Registration Statement and the
Prospectus, nothing has come to our attention that would cause us to believe
that, at the time the Registration Statement became effective under the
Securities Act of 1933, as amended, the description and statements in the Patent
Paragraphs of the Registration Statement 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 made therein not misleading; or as of the
date of the Prospectus or the date of this opinion, the description and
statements in the Patent Paragraphs of the Prospectus contained or contain any
untrue statement of a material fact or omitted or omit 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.