Exhibit 1.1
XXXX LABORATORIES, INC.
3,200,000 Shares
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
, 1998
XXXX LABORATORIES, INC.
3,200,000 Shares
Common Stock
($.01 par value)
UNDERWRITING AGREEMENT
, 1998
SBC WARBURG DILLON READ INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION,
as Managing Underwriters
c/o SBC Warburg Dillon Read Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxx Laboratories, Inc. (the "Company") proposes to issue and sell and
the persons named in Schedule B annexed hereto (the "Selling Stockholders")
propose to sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters") an aggregate of 3,200,000 shares (the "Firm Shares") of Common
Stock, $.01 par value (the "Common Stock"), of the Company, of which 200,000
shares are to be issued and sold by the Company and an aggregate of 3,000,000
shares are to be sold by the Selling Stockholders in the respective amounts set
forth under the caption "Firm Shares" in Schedule B annexed hereto. In
addition, solely for the purpose of covering over-allotments, the Selling
Stockholders and the Company propose to grant to the Underwriters the option to
purchase from the Selling Stockholders or the Company, as the case may be, up to
an additional 480,000 shares of Common Stock (the "Additional Shares"). The
Selling Stockholders shall provide the Additional Shares pursuant to the
over-allotment option, however, if such Additional Shares are unavailable from
the Selling Stockholders then the Company shall provide 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.
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The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3, including a prospectus,
relating to the Shares, which incorporates by reference documents which the
Company has filed in accordance with the provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively,
the "Exchange Act"). The Company has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses and
the documents incorporated by reference therein (each thereof, including the
documents incorporated therein by reference, 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 or incorporated by reference
therein, 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
430A under the Act, is herein called the "Registration Statement," and the
prospectus, including all documents incorporated therein by reference, 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."
The Company, the Selling Stockholders 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
and each of the Selling Stockholders, severally and not jointly, agree to sell
to the respective Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and each Selling Stockholder the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company or by such Selling Stockholders,
as the case may be, as the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A annexed hereto bears to the total number of Firm
Shares to be sold by the Company and the Selling Stockholders, in each case at a
purchase price of $ per Share. The Company and each Selling Stockholder is
advised by you that the Underwriters intend
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(i) to make a public offering of their respective portions of the Firm Shares as
soon after the effective date of the Registration Statement as in your judgment
is advisable and (ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Selling Stockholders and the Company hereby grant 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 Selling Stockholders and the Company, as the case may be,
ratably in accordance with the number of Firm Shares to be purchased by each of
them (subject to such adjustment as you shall determine to avoid fractional
shares), 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 Selling
Stockholders and 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 Selling Stockholders or the Company,
as the case may be. 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(1) after
the date on which the option shall have been exercised nor later than the tenth
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).
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(1) As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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Pursuant to powers of attorney, which shall be satisfactory to counsel
for the Underwriters, granted by each Selling Stockholder (the "Powers of
Attorney"), and will act as representatives of the
Selling Stockholders. The foregoing representatives (the "Representatives of
the Selling Stockholders") are authorized, on behalf of each Selling
Stockholder, to execute any documents necessary or desirable in connection with
the sale of the Shares to be sold hereunder by each Selling Stockholder, to make
delivery of the certificates of such Shares, to receive the proceeds of the sale
of such Shares, to give receipts for such proceeds, to pay therefrom the
expenses to be borne by each Selling Stockholder in connection with the sale and
public offering of the Shares, to distribute the balance of such proceeds to
each Selling Stockholder in proportion to the number of Shares sold by each
Selling Stockholder, to receive notices on behalf of each Selling Stockholder
and to take such other action as may be necessary or desirable in connection
with the transactions contemplated by this Agreement.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company and each of the Selling Stockholders by
Federal (same day) funds, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust Company (the "DTC")
in the form of a global certificate or certificates registered in the name of
Cede & Co., the nominee of the DTC at the offices of Xxxxxx Xxxxxx & Xxxxxxx in
New York City, for the respective accounts of the Underwriters. Such payment
and delivery shall be made at 9:00 A.M., New York City time, on , 1998
(unless another time shall be agreed to by you and the Selling Stockholders or
unless postponed in accordance with the provisions of Section 10 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 issued in the name of Cede & Co. or 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 and the Selling Stockholders agree 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 issued
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in the name of Cede & Co. or 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 Selling Stockholders and the Company, as the
case may be, agree 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, the
Registration Statement and the Prospectus will fully comply in all
material respects with the provisions of the Act, and the Registration
Statement 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 not misleading, and the
Prospectus 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; the documents incorporated
by reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of
the Exchange Act, and do 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;
(b) as of the date of this Agreement, 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
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Company shall 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 including Common Stock
of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of New York, with full 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 and each of its subsidiaries (the
"Subsidiaries") are duly qualified or licensed by and are in good
standing in each jurisdiction in which they conduct their
respective businesses and in which the failure, individually or
in the aggregate, to be so licensed or qualified could have a
material adverse effect on the operations, business, condition,
prospects or property of the Company and its Subsidiaries, taken
as a whole (a "Material Adverse Effect"); and the Company and
each of its Subsidiaries are in compliance in all material
respects with the laws, orders, rules, regulations and directives
issued or administered by such jurisdictions;
(d) neither the Company nor any of its Subsidiaries is in
breach of, or in default under (nor has any event occurred which
with notice, lapse of time, or both would constitute a breach of,
or default under), its respective charter or by-laws or in the
performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust,
bank loan or credit agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by
which any of them is bound and which could have a Material
Adverse Effect, 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 charter or
by-laws, of the Company or any of its Subsidiaries or under any
provision of any
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license, indenture, mortgage, deed of trust, bank loan or credit
agreement or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or their
respective 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 or any of its
Subsidiaries;
(e) 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 securities laws and except as the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity;
(f) 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;
(g) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency 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;
(h) 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;
(i) Deloitte & Touche LLP, whose reports on the
consolidated financial statements of the Company and its
Subsidiaries are filed with the Commission as part
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of the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(j) each of the Company and its Subsidiaries has all
necessary licenses, authorizations, consents and approvals and
has made all necessary filings required under any federal, state,
local or foreign law, regulation or rule, and has obtained all
necessary authorizations, consents and approvals from other
persons, in order to conduct its respective business, except
where the absence of any such license, authorization, consent
approval or filing could not have a Material Adverse Effect;
neither the Company nor any of its Subsidiaries is in violation
of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a violation of or
a default under), any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation
or rule or any decree, order or judgment applicable to the
Company or any of its Subsidiaries the effect of which could have
a Material Adverse Effect;
(k) 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;
(l) except as described in the Registration Statement,
there are no actions, suits or proceedings pending or threatened
against the Company or any of its Subsidiaries or any of their
respective 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;
the Company is not a party nor subject to the provisions of any
material injunction, judgment, decree or order of any court,
regulatory body or other governmental agency or body;
(m) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its
Subsidiaries as of the dates indicated and the consolidated
results of operations and changes in financial position of the
Company and its Subsidiaries for the periods specified; such
financial statements
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have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis during the periods involved;
(n) the unaudited interim financial statements included in
the Registration Statement and the Prospectus present fairly the
condensed consolidated financial position of the Company and its
Subsidiaries as of the dates indicated and the condensed
consolidated results of operations and changes in cash flows of
the Company and the Subsidiaries for the periods specified,
subject to normal year-end adjustments; such financial statements
have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the
periods involved;
(o) 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 or Prospectus, there has not been (A) any
material adverse change, financial or otherwise, in the business,
properties, prospects, regulatory environment, results of
operations or condition (financial or otherwise), present or
prospective, of the Company and its Subsidiaries taken as a
whole, (B) any transaction, which is material to the Company and
its Subsidiaries taken as a whole, contemplated or entered into
by the Company or any of its Subsidiaries or (C) any obligation,
contingent or otherwise, directly or indirectly incurred by the
Company or any of its Subsidiaries which is material to the
Company and its Subsidiaries taken as a whole;
(p) the Company has obtained the agreement of each of its
directors and officers, each of the Selling Stockholders and
certain of its other stockholders not to directly or indirectly
sell, offer, pledge, contract to sell or grant any option to
purchase or otherwise dispose of or transfer any shares of Common
Stock, or securities convertible into or exchangeable or
exercisable for Common Stock, including without limitation,
options, convertible bonds and the like for a period of 90 days
after the date of the Prospectus without the prior written
consent of SBC Warburg Dillon Read Inc.;
(q) except as disclosed in the Registration Statement and
Prospectus, the Company and its Subsidiaries own or possess the
right to use all patents,
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trademarks (including the Company's name, together with its logo),
trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets, know-how
and rights described in the Prospectus as being owned by them or any
of them or necessary for the conduct of their respective businesses,
and the Company is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and its
Subsidiaries with respect to the foregoing. Except as described in
the Prospectus, no claim has been made against or notice given to the
Company alleging the infringement or other violation by the Company of
any patent, trademark, service xxxx, trade name, copyright, trade
secret, license or other intellectual property right or franchise
right of any person; and
(r) neither the Company nor any of its Subsidiaries is or,
after application of the net proceeds of the offering as
described under the caption "Use of Proceeds" in the Prospectus,
will become an entity required to register as an "investment
company" or an entity "controlled" by an entity required to
register as an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder (the "Investment Company
Act"). The Company intends to conduct its business in a manner
such that it will not become an entity required to register as an
"investment company" subject to regulation under the Investment
Company Act.
4. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder, severally and not jointly, represents and warrants to each
Underwriter that:
(a) such Selling Stockholder now is and at the time of
delivery of such Shares will be, the lawful owner of the number
of Shares to be sold by such Selling Stockholder pursuant to this
Agreement and has and, at the time of delivery thereof, will have
valid and marketable title to such Shares, and upon delivery of
and payment for such Shares, the Underwriters will acquire valid
and marketable title to such Shares free and clear of any claim,
lien, encumbrance, security interest, community property right,
restriction on transfer or other defect in title;
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(b) such Selling Stockholder has, and at the time of
delivery of such Shares will have, full legal right, power and
capacity, and any approval required by law (other than those
imposed by the Act and the securities or blue sky laws of various
jurisdictions in which the Shares are being offered by the
Underwriters), to sell, assign, transfer and deliver such Shares
in the manner provided in this Agreement;
(c) this Agreement, the Powers of Attorney and the Custody
Agreement among the Company, as custodian, and the Selling
Stockholders (the "Custody Agreement") have been duly executed
and delivered by such Selling Stockholder and each is a legal,
valid and binding agreement of such Selling Stockholder
enforceable in accordance with its respective terms in the case
of this Agreement, as rights to indemnity and contribution
hereunder may be limited by securities laws and except as the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally and general principles of equity;
(d) when the Registration Statement becomes effective and
at all times subsequent thereto through the latest of the time of
purchase, additional time of purchase or the termination of the
offering of the Shares, the Registration Statement and
Prospectus, and any supplements or amendments thereto as they
relate to such Selling Stockholder 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;
(e) such Selling Stockholder has duly and irrevocably
authorized the Representatives of the Selling Stockholders, on
behalf of such Selling Stockholder, to execute and deliver this
Agreement and any other document necessary or desirable in
connection with the transactions contemplated hereby and to
deliver the Shares to be sold by such Selling Stockholder and
receive payment therefor pursuant hereto; and
(f) the sale of such Selling Stockholder's Shares pursuant
to this Agreement is not prompted by any information concerning
the Company which is not set forth in the Prospectus.
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5. 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 jurisdictions
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 jurisdiction (except service of process with
respect to the offering and sale of the Shares); and to promptly
advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for
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 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 lifting or
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removal of such order as soon as possible; to advise you promptly of
any proposal to amend or supplement the Registration Statement or
Prospectus including by filing any document that would be incorporated
therein by reference 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 stockholders 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 and (iii) such other information as
you may reasonably request regarding the Company or its
Subsidiaries;
(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, or in the information incorporated therein by reference, 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) as soon as practicable and for the time period
specified by Rule 158 under the Act, to make generally available
to its securityholders, and to deliver to you, an earnings
statement of the Company that will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act;
(h) to furnish to you four signed copies of the
Registration Statement, as initially filed with the Commission,
and of all amendments thereto (including
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all exhibits thereto and documents incorporated by reference therein)
and sufficient conformed copies of the foregoing (other than exhibits)
for distribution of a copy to each of the other Underwriters;
(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 consolidated
financial statements, if any, of the Company and its Subsidiaries
which have been read by the Company's independent certified
public accountants, as stated in their letter to be furnished
pursuant to Section 8(c) 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 furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement
and during the period referred to in paragraph (f) above, a copy
of any document proposed to be filed pursuant to Sections 13, 14
or 15(d) of the Exchange Act;
(l) not to issue, directly or indirectly sell, offer,
pledge, contract to sell or grant any option to purchase or
otherwise dispose of or transfer any shares of Common Stock, or
securities convertible into or exchangeable or exercisable for
Common Stock, including without limitation, options, convertible
bonds and the like or permit the registration under the Act of
any shares of Common Stock for a period of 90 days after the date
of the Prospectus, without the prior written consent of SBC
Warburg Dillon Read Inc., except for the registration of the
Shares and the sales to the Underwriters pursuant to this
Agreement and except for grants of options or issuances of Common
Stock upon the exercise of outstanding options pursuant to any of
the Company's stock option plans existing as of the date hereof;
and
(m) to use its best efforts to cause the Shares to be
listed on the New York Stock Exchange.
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6. Certain Covenants of the Company and the Selling Stockholders.
The Company and each of the Selling Stockholders agree with each Underwriter as
follows:
(a) the Company and the Selling Stockholders agree that,
whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, the Company and the
Selling Stockholders, in such proportions (aggregating 100%) as
the number of Shares to be sold by the Company and by each such
Selling Stockholder bears to the total number of Shares or as
they otherwise may determine among themselves, will pay all
expenses, fees and taxes (other than any transfer taxes and fees
and disbursements of counsel for the Underwriters except as set
forth under Section 7 hereof or clauses (iii) or (iv) of this
Section 6(a)) 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 issuance, sale and delivery of the Shares by
the Company and the Selling Stockholders, (iii) the word
processing and/or printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Statements of
Information, the Custody Agreement and the 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 determination of their
eligibility for investment under state law as aforesaid
(including the legal fees and filing fees and other disbursements
of counsel to the Underwriters) and the word processing and/or
printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v)
any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on the New York Stock
Exchange and any registration thereof under the Exchange Act,
(vi) the filing for review of the public offering of the Shares
by the National Association of Securities Dealers, Inc. (the
"NASD") and (vii) the performance of the Company's and the
Selling Stockholders' other obligations hereunder;
-16-
(b) each Selling Stockholder will pay all underwriting
discounts and commissions, and will pay all transfer taxes and
all fees and disbursements of any counsel or accountant retained
by it, in connection with the sale of the Shares to be sold
hereunder by each Selling Stockholder; and
(c) the Company and the Selling Stockholders will not
issue, directly or indirectly sell, offer, pledge, contract to
sell or grant any option to purchase or otherwise dispose of or
transfer any shares of Common Stock, or securities convertible
into or exchangeable or exercisable for Common Stock, including
without limitation, options, convertible bonds and the like, or,
in the case of the Company, permit the registration under the Act
of any shares of Common Stock, except for the registration of the
Shares and the sales to the Underwriters pursuant to this
Agreement and except for grants of options or issuances of Common
Stock upon the exercise of outstanding options pursuant to any of
the Company's stock option plans existing as of the date hereof,
for a period of 90 days after the date of the Prospectus, without
the prior written consent of SBC Warburg Dillon Read Inc.
7. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the second paragraph of Section 9 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.
8. 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 and the Selling Stockholders 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 and the Selling
Stockholders 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 and the Selling Stockholders of their obligations
hereunder and to the following conditions:
-17-
(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 Winston & Xxxxxx, 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 Xxxxxx Xxxxxx & Xxxxxxx, 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 New
York, 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, sell and deliver the Shares as herein contemplated;
(ii) each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation with full corporate power
and authority to own its respective properties and to conduct its
respective business;
(iii) the Company and its Subsidiaries are duly qualified,
licensed and in good standing in each jurisdiction in which they
conduct their respective businesses and in which the failure,
individually or in the aggregate, to be so licensed or qualified could
have a Material Adverse Effect;
(iv) each of this Agreement and the Custody Agreement has been duly
authorized, executed and delivered by the Company;
(v) the Shares, when issued and delivered to and paid for by the
Underwriters, will be duly and validly authorized and issued and will
be fully paid and non-assessable;
(vi) the Company has an authorized capitalization as set forth in the
Registration Statement and the Prospectus; the outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued, and are fully paid, nonassessable and free of statutory and
contractual preemptive rights; the Shares when issued will be free of
statutory and contractual preemptive
-18-
rights; 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;
(vii) 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;
(viii) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(ix) the Registration Statement has become effective under the Act
and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(x) no approval, authorization, consent or order of or filing with
any federal, state or local 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 (except such counsel need
express no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters);
(xi) the execution, delivery and performance of this Agreement and the
Custody Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby do not and 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 charter or by-laws of the Company or any of its Subsidiaries or
under any provision of any license, indenture, mortgage, deed of
trust, bank
-19-
loan, credit agreement or other agreement or instrument known to such
counsel to which the Company or any of its Subsidiaries is a party or
by which any of them or their respective properties may be bound or
affected, or under any law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its Subsidiaries;
(xii) to the best of such counsel's knowledge, neither the Company
nor any of its Subsidiaries is in breach of, or in default under (nor
has any event occurred which with notice, lapse of time, or both would
constitute a breach of, or default under), any license, indenture,
mortgage, deed of trust, bank loan or any other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which any of them or their respective properties may be bound or
affected or under any law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its Subsidiaries;
(xiii) to the best of such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a character
which are required to be filed as exhibits to the Registration
Statement or to be summarized or described in the Prospectus which
have not been so filed, summarized or described;
(xiv) to the best of such counsel's knowledge, there are no
actions, suits or proceedings pending or threatened against the
Company or any of its Subsidiaries or any of their respective
properties, at law or in equity or before or by any commission, board,
body, authority or agency which are required to be described in the
Prospectus but are not so described;
(xv) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment
with respect to any such document was filed when such amendment was
filed), complied as to form in all material respects with the Exchange
Act (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference
therein as to which such counsel need express no opinion);
-20-
(xvi) the Shares comply with the additional
listing requirements of the New York Stock
Exchange and have been approved for such
additional listing with the New York Stock
Exchange subject only to notice of issuance at or
prior to the time of purchase; and
(xvii) the Company is not an entity required to
register as an "investment company" under the
Investment Company Act, nor is the Company a
holding company or a subsidiary of a holding
company under the Public Utility Holding Company
Act of 1935.
In addition, such counsel shall state that
such counsel have participated in conferences with
officers and other representatives of the Company,
representatives of the Selling Stockholders,
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) and (vii) above), on the
basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers
and other representatives of the Company) nothing
has come to the attention of such counsel that
causes them 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 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
-21-
statistical data included in the Registration
Statement or Prospectus).
(b) The Selling Stockholders shall
furnish to you at the time of purchase and at
the additional time of purchase, as the case may
be, an opinion of , counsel for the Selling
Stockholders, 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 and substance satisfactory to Xxxxxx Xxxxxx &
Xxxxxxx, counsel for the Underwriters, stating
that:
(i) each of this Agreement, the Custody Agreement and
the Powers of Attorney has been duly executed and
delivered by or on behalf of each of the Selling
Stockholders;
(ii) each Selling Stockholder has full legal right and
power, and has obtained any authorization or approval
required by law (other than those imposed by the Act
and the state securities or blue sky laws of the
various jurisdictions in which the Shares are being
offered by the Underwriters), to sell, assign, transfer
and deliver the Shares to be sold by such Selling
Stockholder in the manner provided in this Agreement;
(iii) delivery of certificates for the Shares by
each Selling Stockholder pursuant hereto will pass
valid and marketable title thereto to the Underwriters,
free and clear of any claim, lien, encumbrance,
security interest, community property right,
restriction on transfer or other defect in title;
(iv) each Selling Stockholder has duly authorized the
execution and delivery of this Agreement, the Custody
Agreement and the Powers of Attorney and any other
document necessary or desirable in connection with the
transactions contemplated hereby and the delivery of
the Shares;
(v) each of the Representatives of the Selling
Stockholders has been duly authorized by each Selling
Stockholder to execute and deliver on behalf of such
Selling Stockholder this Agreement and any other
document necessary or desirable in connection with the
transactions contemplated hereby and to deliver
-22-
the Shares to be sold by such Selling Stockholder; and
(vi) to the best of such counsel's knowledge, the
statements in the Prospectus under the caption
"Principal and Selling Stockholders" insofar as such
statements constitute a summary of the matters referred
to therein with respect to the Selling Stockholders,
present fairly the information called for with respect
to such matters.
(c) You shall have received from Deloitte &
Touche 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 you.
(d) You shall have received at the time of
purchase and at the additional time of purchase,
as the case may be, the favorable opinion of
Xxxxxx Xxxxxx & Xxxxxxx, 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
(vii), (viii) and (ix) of paragraph (a) of this
Section 8.
In addition, such counsel shall state that such counsel
have participated in conferences with officers and other
representatives of the Company, counsel for the Company,
representatives of the Selling Stockholders, 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 8), on the basis of the
foregoing (relying as to materiality to a large extent upon
the opinions of officers and other representatives of the
Company), no facts have come to the attention of such
counsel which lead them 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
-23-
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).
(e) You shall have received at the time of purchase
and at the additional time of purchase, as the case may be,
an opinion of , special
regulatory 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 and substance satisfactory to Xxxxxx Xxxxxx & Xxxxxxx,
counsel for the Underwriters, stating that:
(i) the descriptions in the Registration Statement and
in the Prospectus of the statutes, regulations and
legal or governmental proceedings or procedures
relating to the United States Food and Drug
Administration or the Drug Enforcement Administration
and the approval process relating to the Company's
products are accurate in all material respects and are
a fair summary of those statutes, regulations,
proceedings or procedures; and
(ii) nothing has come to the attention of such counsel
that leads such counsel to believe that descriptions of
federal laws, regulations or rules relating to the
manufacture or sale of the Company's products and the
approval process relating thereto contained in the
Registration Statement and in the Prospectus or the
documents incorporated by reference therein including,
without limitation, the portions of the Prospectus
entitled "Risk Factors -- Government Regulation; No
Assurances of Regulatory Approval" and "Business --
Government Regulation," and the portion of the Form
10-K of the Company dated June 30, 1997 entitled
"Business -- Government Regulation," contain an untrue
statement of a material
-24-
fact or omit to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading.
(f) No amendment or supplement to the
Registration Statement or Prospectus, including
documents deemed to be incorporated by reference
therein, 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, or if Rule 430A under the Act is used,
the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act,
at or before 5:00 P.M., New York City time, on the
date of this Agreement, unless a later time (but
not later than 5:00 P.M., New York City time, on
the second full business day after the date of
this Agreement) shall be agreed to by the Company,
the Representatives of the Selling Stockholders
and you in writing or by telephone, confirmed in
writing; provided, however, that the Company, the
Representatives of the Selling Stockholders 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
-25-
change, financial or otherwise (other than as referred
to in the Registration Statement and Prospectus), in
the business, condition or prospects of the Company and
its Subsidiaries taken as a whole shall occur or become
known and (ii) no transaction which could reasonably be
expected to have a Material Adverse Effect has been
entered into by the Company or any of its Subsidiaries.
(j) The Company will, at the time of
purchase or additional time of purchase, as the
case may be, deliver to you a certificate executed
by its chief executive officer and its chief
financial officer to the effect that the
representations and warranties of the Company as
set forth in this Agreement and the conditions set
forth in paragraph (h) and paragraph (i) have been
met and that they are true and correct as of each
such date.
(k) You shall have received signed letters,
dated the date of this Agreement, from each of the
Selling Stockholders and each of the directors and
officers of the Company and certain of its other
stockholders to the effect that such persons shall
not directly or indirectly sell, offer, pledge,
contract to sell or grant any option to purchase
or otherwise dispose of or transfer any shares of
Common Stock, or securities convertible into or
exchangeable or exercisable for Common Stock,
including without limitation, options, convertible
bonds and the like for a period of 90 days after
the date of the Prospectus without the prior
written consent of SBC Warburg Dillon Read Inc.
(l) The Company and the Selling Stockholders
shall have furnished to you such other documents
and certificates as to the accuracy and
completeness of any statement in the Registration
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 and the Selling Stockholders
shall perform such of their respective 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.
-26-
(n) The Shares shall have been approved for
listing on the New York Stock Exchange, subject
only to notice of issuance at or prior to the time
of purchase.
(o) The Selling Stockholders will at the
time of purchase and the additional time of
purchase, as the case may be, deliver to you a
certificate of the Representatives of the Selling
Stockholders to the effect that the
representations and the warranties of the Selling
Stockholders as set forth in this Agreement are
true and correct as of each such date.
(p) Between the time of execution of this
Agreement and the time of purchase or additional
time of purchase, as the case may be, there shall
not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or
potential downgrading or (ii) any review or
possible change that does not indicate an
improvement, in the rating accorded any securities
of or guaranteed by the Company or any subsidiary
of the Company by any "nationally recognized
statistical rating organization," as that term is
defined in Rule 436(g)(2) promulgated under the
Act.
9. 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, since the time of execution of this Agreement or the
respective dates as of which information is given in the
Registration Statement and Prospectus, (y) there has been any
material adverse change, financial or otherwise (other than as
referred to in the Registration Statement and Prospectus), in the
business, condition or prospects of the Company and its
Subsidiaries taken as a whole, which would, in your judgment or
in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (z) there shall have
occurred any downgrading, or any notice shall have been given of
(i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company or
any
-27-
Subsidiary of the Company by any "nationally recognized
statistical rating organization," as that term is defined in Rule
436(g)(2) promulgated under the Act or, 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 9, the Company, the
Representatives of the Selling Stockholders 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 or the Selling
Stockholders, as the case may be, shall be unable to comply with
any of the terms of this Agreement, the Company or the Selling
Stockholders, as the case may be, shall not be under any
obligation or liability under this Agreement (except to the
extent provided in Sections 6(a), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the
Company and the Selling Stockholders under this Agreement (except
to the extent provided in Section 11 hereof) or to one another
hereunder.
10. 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 non-defaulting
Underwriters shall take up and pay for (in addition to the
aggregate 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
-28-
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 and the Selling Stockholders
agree with the non-defaulting Underwriters that they 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 10 with like effect as if such substituted Underwriter
had originally been named in Schedule A.
11. Indemnity by the Company, the Selling Stockholders
and the Underwriters.
(a) The Company and the Selling Stockholders jointly
and severally agree to indemnify, defend and hold harmless each
Underwriter, its directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter
or any such person may incur under the Act, the Exchange Act or
otherwise insofar as 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 the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this
Section 11 being deemed to include any Preliminary Prospectus,
-29-
the Prospectus and the Prospectus as amended or supplemented by
the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated
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 (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such loss,
expense, liability or claim purchased the Shares which are the
subject thereof if the Prospectus corrected any such alleged
untrue statement or omission and if such Underwriter failed to
send or give a copy of the Prospectus to such person at or prior
to the written confirmation of the sale of such Shares to such
person; provided, further, that no Selling Stockholder shall be
responsible, either pursuant to this indemnity or as a result of
any breach of this Agreement, for losses, expenses, liability or
claims for an amount in excess of the proceeds to be received by
such Selling Stockholder (before deducting expenses) from the
sale of Shares hereunder.
If any action is brought against an Underwriter or any
such person in respect of which indemnity may be sought against
the Company or any Selling Stockholder pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify
the Company and the Representatives of the Selling Stockholders
in writing of the institution of such action and the Company or
such Selling Stockholder, as the case may be, shall assume the
defense of such action, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of
all fees and expenses, provided, however, that the omission to so
notify the Company or the Representative of the Selling
Stockholders shall not relieve the Company or any Selling
Stockholder from any liability which they may have to any
Underwriter or any such person or otherwise.
-30-
Such Underwriter or such controlling person 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 or of such person unless the employment of such
counsel shall have been authorized in writing by the Company or
such Selling Stockholder in connection with the defense of such
action or the Company or such Selling Stockholder shall not have
employed counsel to have charge of the defense of such action or
such 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 or
such Selling Stockholder (in which case the Company or such
Selling Stockholder shall not have the right to direct the
defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be
borne by the Company or such Selling Stockholder, as the case may
be, and paid as incurred (it being understood, however, that the
Company or such Selling Stockholder shall not be liable for the
expenses of more than one separate counsel in any one action or
series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). The
Company or such Selling Stockholder shall not be liable for any
settlement of any such claim or action effected without its
written consent but if settled with the written consent of the
Company or such Selling Stockholder, the Company or such Selling
Stockholder agrees to indemnify and hold harmless any Underwriter
and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such
-31-
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers,
each Selling Stockholder and any person who controls the Company
or any Selling Stockholder within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any
loss, expense, liability or claim (including the reasonable cost
of investigation) which, jointly or severally, the Company, any
Selling Stockholder or any such person may incur under the Act or
otherwise, insofar as 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 or on behalf
of such Underwriter through you to the Company expressly for use
with reference to such Underwriter in the Registration Statement
(or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a
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 either in such Registration
Statement or Prospectus or necessary to make such information not
misleading.
If any action is brought against the Company, any
Selling Stockholder or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company, such Selling Stockholder or
such person shall promptly notify such Underwriter in writing of
the institution of such action and such Underwriter shall assume
the defense of such action, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of
all fees and expenses, provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter, from
any liability which they may have to the Company, any Selling
Stockholder or any such person or otherwise. The Company, such
Selling Stockholder or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, such Selling
Stockholder or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in
connection with the defense of such action or such Underwriter
shall not have employed counsel to have charge of the defense of
such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it
or them which are different from or
-32-
additional to those available to such Underwriter (in which case
such Underwriter shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties, but
such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall
be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one
separate counsel in any one action or series of related actions
in the same jurisdiction representing the indemnified parties who
are parties to such action). No Underwriter shall be liable for
any settlement of any such claim or action effected without the
written consent of such Underwriter but if settled with the
written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company, any Selling Stockholder
and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(c) If the indemnification provided for in this
Section 11 is unavailable to an indemnified party under
subsections (a) and (b) of this Section 11 in respect of any
losses, expenses, liabilities or claims 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 losses, expenses,
liabilities or claims (i) in such
-33-
proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders 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
and the Selling Stockholders on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, expenses, liabilities or
claims, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholders 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 and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the
Underwriters. The relative fault of the Company and the Selling
Stockholders 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, by the Selling Stockholders or by the
Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as
a result of the losses, 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.
(d) The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 11 were determined by pro
rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the
provisions of this Section 11, 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 statements or
alleged untrue
-34-
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
Underwriters' obligations to contribute pursuant to this Section
11 are several in proportion to their respective underwriting
commitments and not joint.
(e) The indemnity and contribution agreements
contained in this Section 11 and the covenants, warranties and
representations of the Company and the Selling Stockholders
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any
Underwriter, its directors and officers or any person who
controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, or by or on behalf of the
Company, its directors and officers, any Selling Stockholder or
any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance
and delivery of the Shares. The Company, each Selling
Stockholder and each Underwriter agree promptly to notify the
others of the commencement of any litigation or proceeding
against it and, in the case of the Company, against any of the
Company's officers and directors in connection with the issuance
and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
12. 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 SBC Warburg Dillon Read
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, Attention:
Syndicate Department, if to the Company, shall be sufficient in
all respects if delivered or sent to the Company at the offices
of the Company at 0 Xxxxxx Xxxx, Xxxxxx, XX 00000-0000,
Attention: General Counsel and, if to any of the Selling
Stockholders, shall be sufficient in all respects if delivered or
sent to the Representatives of the Selling Stockholders at
Apotex, 000 Xxxxxx Xxxxx, Xxxxxx (Xxxxxxx), Xxxxxxx X0X 0X0,
Attention: Chief Financial Officer.
13. Construction. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been
inserted as a matter of convenience of reference and are not a
part of this Agreement.
-35-
14. Parties at Interest. The Agreement herein set
forth has been and is made solely for the benefit of the
Underwriters, the Company, the Selling Stockholders and the
controlling persons, directors and officers referred to in
Section 11 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.
15. Counterparts. This Agreement may be signed by the
parties in counterparts which together shall constitute one and
the same agreement among the parties.
16. Miscellaneous. SBC Warburg Dillon Read Inc., an
indirect, wholly owned subsidiary of Swiss Bank Corporation, is
not a bank and is separate from any affiliated bank, including
any U.S. branch or agency of Swiss Bank Corporation. Because SBC
Warburg Dillon Read Inc. is a separately incorporated entity, it
is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended
by SBC Warburg Dillon Read Inc. are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed
by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may
have lending relationships with issuers of securities
underwritten or privately placed by SBC Warburg Dillon Read Inc.
To the extent required under the securities laws, prospectuses
and other disclosure documents for securities underwritten or
privately placed by SBC Warburg Dillon Read Inc. will disclose
the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to
affiliates of SBC Warburg Dillon Read Inc.
-36-
If the foregoing correctly sets forth the understanding
among the Company, the Selling Stockholders and the Underwriters,
please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a
binding agreement among the Company, the Selling Stockholders and
the Underwriters, severally.
Very truly yours,
XXXX LABORATORIES, INC.
By:
-----------------------------------------
Name:
Title:
THE SELLING STOCKHOLDERS NAMED IN
SCHEDULE B ATTACHED HERETO
By:
-----------------------------------------
Attorney-in-Fact
Accepted and agreed to as of
the date first above written,
on behalf of themselves and
the other several Underwriters
named in Schedule A
SBC WARBURG DILLON READ INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: SBC WARBURG DILLON READ INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
SBC WARBURG DILLON READ INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
------------------
Total......... ------------------
------------------
SCHEDULE B
Number of
Selling Stockholders Firm Shares
-------------------- -----------
Xxxxxxx Delaware, Inc.
Glastex Investments, Inc.
----------------------
Total..................................
----------------------
----------------------
