Exhibit 1.1
MediChem Life Sciences, Inc.
Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
October , 2000
UNDERWRITING AGREEMENT
October , 2000
UBS Warburg LLC
Chase Securities, Inc.
Xxxxxxx Xxxxx & Company, L.L.C.
as Representatives to the Several Underwriters
named on Schedule A hereto
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
MediChem Life Sciences, Inc., a Delaware corporation (the Company),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the Underwriters) an aggregate of 6,400,000 shares (the Firm Shares) of
Common Stock, $0.01 par value per share (the Common Stock), of the Company. In
addition, solely for the purpose of covering over-allotments, the Company
proposes to grant to the Underwriters the option to purchase from the Company up
to an additional 960,000 shares of Common Stock (the Additional Shares). The
Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the Shares. The Shares are described in the Prospectus which is
referred to below.
The Company hereby acknowledges that in connection with the proposed
offering of the Shares, it has requested UBS Warburg LLC (UBSW) to administer a
directed share program (the Directed Share Program) under which up to 320,000
shares of the Firm Shares to be purchased by you (the Reserved Shares) shall be
reserved for sale by you at the initial public offering price to the Company's
officers, directors, employees, and consultants and others having a business
relationship with the Company (the Directed Share Participants) as part of the
distribution of the Shares by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. and all other applicable laws, rules and
regulations. The number of Shares available for sale to the general public will
be reduced to the extent that Directed Share Participants purchase Reserved
Shares. You may offer any Reserved Shares not purchased by Directed Share
Participants to the general public on the same basis as the other Shares being
issued and sold hereunder. The
Company has supplied UBSW with the names, addresses and telephone numbers of the
individuals or other entities which the Company has designated to be
participants in the Directed Share Program. It is understood that any number of
those designated to participate in the Directed Share Program may decline to do
so.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the Act), with the Securities and Exchange Commission (the
Commission) a registration statement on Form S-1 (File No. 333-39548) including
a prospectus, relating to the Shares. The Company has furnished to you, for use
by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (each thereof being herein called a Preliminary Prospectus)
relating to the Shares. Except where the context otherwise requires, the
registration statement, as amended when it becomes effective, including all
documents filed as a part thereof, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 424(b) under
the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430(A) under the Act, and also including any
registration statement filed pursuant to Rule 462(b) under the Act, is herein
called the Registration Statement, and the prospectus, in the form filed by the
Company with the Commission pursuant to Rule 424(b) under the Act on or before
the second business day after the date hereof (or such earlier time as may be
required 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.
As described in the Registration Statement and the Prospectus, prior
to the time of purchase (as defined herein), the Company will be a wholly-owned
subsidiary of MCR Holdings, Inc. (MCR Holdings), an Illinois corporation.
Immediately prior to the time of purchase, MCR Holdings will merge with and into
the Company. As a result of these actions, existing MCR Holdings' stockholders
automatically will become Company stockholders and the Company then will own all
of the outstanding shares of ThermoGen, Inc. (ThermoGen) and Emerald
BioStructures, Inc. (Emerald). The reorganization and related transactions
discussed in the Registration Statement and Prospectus under the caption
"CORPORATE REORGANIZATION" are collectively referred to herein as the
Reorganization.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
aggregate number of Firm Shares set forth opposite the name of such Underwriter
in
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Schedule A attached hereto in each case at a purchase price of $______ per
Share. The Company is advised by you that the Underwriters intend (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.
It is further understood that UBSW will act as, and has authority to
act as, the representative for the Underwriters in the offering and sale of the
Shares in accordance with a master agreement among Underwriters entered into by
you and the several Underwriters.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover over-
allotments made in connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares. This option may be exercised by you on behalf of the several
Underwriters at any time and from time to time on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised, and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); provided, however, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day/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).
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
------------------
/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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delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company (DTC) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on _____, 2000 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 8
hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the time of purchase. Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify on the second business day preceding the time
of purchase. For the purpose of expediting the checking of the certificates for
the Firm Shares by you, the Company agrees to make such certificates available
to you for such purpose at least one full business day preceding the time of
purchase.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Certificates for the Additional Shares shall
be delivered to you in definitive form in such names and in such denominations
as you shall specify no later than the second business day preceding the
additional time of purchase. For the purpose of expediting the checking of the
certificates for the Additional Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the additional time of purchase.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Shares shall be made at the offices of Winston & Xxxxxx,
00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, 00000 at 9:00 a.m., Chicago time, on
the date of the closing of the purchase of the Firm Shares or the Additional
Shares, as the case may be.
3. Representations and Warranties. The Company represents and warrants to
each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of
the preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act; and when the Registration Statement became or
becomes effective, the Registration Statement and the Prospectus complied
or will comply fully in all material respects with the provisions of the
Act, and the Registration Statement did not or 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 did not or will not contain an untrue
statement of a material fact or omit to state
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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; and the Company has not
distributed directly or indirectly any offering material in connection with
the offering or sale of the Shares other than the Registration Statement,
the Preliminary Prospectus, the Prospectus, any amended or corrected
prospectuses or any other materials, if any, permitted by the Act;
(b) as of the date of this Agreement and after giving pro forma effect
to the Reorganization, the Company has authorized and outstanding capital
stock as set forth under the heading entitled "Pro Forma" in the section of
the Registration Statement and the Prospectus entitled "Capitalization"
and, as of the time of purchase, and assuming the receipt and application
of the net proceeds as described under the section of the Registration
Statement and the Prospectus entitled "Use of Proceeds," the Company shall
have an authorized and outstanding capital stock as set forth under the
heading entitled "Pro Forma As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization"; all of the
outstanding shares of capital stock are duly and validly authorized and
issued, fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws and have not been issued in violation
of any preemptive right, resale right, right of first refusal or similar
right;
(c) the Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Delaware, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement;
(d) ThermoGen has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Illinois, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement;
(e) Emerald has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Washington, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement;
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(f) each of the Company, ThermoGen and Emerald is, and upon
completion of the Reorganization the Company will be, duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on the
business, prospects, properties, financial condition or results of
operation of, taken as a whole, the Company, ThermoGen and Emerald (a
"Material Adverse Effect"). Neither ThermoGen nor Emerald has any
subsidiaries (as defined in the Act); The Company has no subsidiaries (as
defined in the Act) other than ThermoGen and Emerald; neither the Company,
ThermoGen nor Emerald owns, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or has any
equity interest in any firm, partnership, limited liability company, joint
venture, association or other entity except as set forth in the
Registration Statement and the Prospectus; complete and correct copies of
the certificate of incorporation and bylaws of the Company, ThermoGen and
Emerald and all amendments thereto have been delivered to you, and except
as set forth in the exhibits to the Registration Statement no changes
therein will be made subsequent to the date hereof and prior to the time of
purchase or, if later, the additional time of purchase.
(g) neither the Company, ThermoGen nor Emerald is in breach of, or in
default under (and no event has occurred which with notice, lapse of time,
or both would result in any breach of, or constitute a 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 evidence of
indebtedness, or any lease, contract or other agreement or instrument to
which the Company, ThermoGen or Emerald is a party or by which it or any of
its properties is bound (each, an Obligation Default), which Obligation
Defaults would individually or in the aggregate have a Material Adverse
Effect, and the consummation of the Reorganization, the execution, delivery
and performance of this Agreement, the issuance and sale of the Shares
contemplated hereby and by the Registration Statement 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 result
in any breach of, or constitute a default under), any provisions of the
charter or by-laws of the Company, ThermoGen or Emerald or under any
provision of any license, permit, franchise, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the Company,
ThermoGen or Emerald is a party or by which either of them or their
respective properties may be bound or affected, or under any
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federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company, ThermoGen or Emerald;
(h) 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 enforceability may be
limited by general equitable principles, bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally;
(i) 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, 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;
(j) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable;
(k) except as set forth in the Registration Statement and the
Prospectus, no approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution,
delivery and performance of this Agreement, the issuance and sale of the
Shares contemplated hereby and by the Registration Statement, other than
registration of the Shares under the Act, which has been or will be
effected by the Company, 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 or under the rules and
regulations of the National Association of Securities Dealers, Inc. (NASD);
(l) Except as set forth in the Registration Statement and the
Prospectus: (i) 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 or other equity or membership interests of the Company; and
(ii) no person has any preemptive rights, co-sale rights, rights of first
refusal or other rights to purchase any shares of Common Stock of the
Company.
(m) KPMG LLP whose report on the financial statements of the Company
and reports on the financial statements of each of ThermoGen and Emerald
are filed with the Commission as part of the Registration Statement and
Prospectus, are independent public accountants as required by the Act;
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(n) each of the Company, ThermoGen and Emerald has, and upon
completion of the Reorganization the Company will have, all necessary
licenses, permits, franchises, authorizations, consents and approvals
(each, an "Authorization"), and made all necessary filings required under
any federal, state, local or foreign law, regulation or rule, and has
obtained all necessary Authorizations from other persons, in order to
conduct its business, except where the failure to have any such
Authorization or to make such filing would not have a Material Adverse
Effect; neither the Company, ThermoGen nor Emerald is in violation of, or
in default under, any such license, permit, franchise, 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,
ThermoGen or Emerald, as the case may be, the effect of which could have a
Material Adverse Effect;
(o) all statutes and regulations and all contracts or other documents
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 in all material respects, or filed as required,;
(p) there are no private or governmental actions, suits, claims,
investigations or proceedings pending, or, to the knowledge of the Company,
threatened, to which the Company, ThermoGen or Emerald or any of their
respective officers is subject or of which any of their respective
properties is subject, whether at law, in equity or before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency;
(q) the audited financial statements of each of the Company,
ThermoGen and Emerald included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) together with related
schedules and notes, present fairly the financial position of the Company,
ThermoGen and Emerald, as the case may be, on the basis stated therein as
of the respective dates or periods to which they apply; all such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved except as disclosed therein; the pro forma financial data included
in the Registration Statement and the Prospectus comply as to form in all
material respects with the applicable accounting requirements of Regulation
S-X of the Securities Act, and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of those statements;
and the other financial and statistical data set forth in the Registration
Statement and the Prospectus are, in all material respects, accurately
presented and prepared on
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a basis consistent with such financial statements and the books and records
of the Company, ThermoGen or Emerald, as the case may be;
(r) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a prospective
material adverse change, in the business, prospects, properties, financial
condition or results of operations of, taken as a whole, the Company,
ThermoGen and Emerald, (ii) any transaction which is material to, taken as
a whole, the Company, ThermoGen and Emerald, (iii) the incurrence by the
Company, ThermoGen or Emerald, of any obligation, direct or contingent,
which is material to, taken as a whole, the Company, ThermoGen or Emerald,
(iv) any change in the capital stock or other equity interest or
outstanding indebtedness of the Company, ThermoGen or Emerald, or (v) any
dividend or distribution of any kind declared, paid or made on the capital
stock or other equity interest of the Company, ThermoGen or Emerald;
(s) each of the Company, ThermoGen and Emerald has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims,
security interests or other encumbrances except such as are described or
are required to be described in the Registration Statement and the
Prospectus and except as would not individually or in the aggregate have a
Material Adverse Effect. All the property described in the Prospectus as
being held under lease by the Company, ThermoGen or Emerald is held thereby
under valid, subsisting and, to the knowledge of the Company, ThermoGen or
Emerald, as the case may be, enforceable leases;
(t) each of the Company, ThermoGen and Emerald is insured by insurers
of recognized financial responsibility against such losses and risks and in
such amount as are customary in the business in which it is engaged. All
policies of insurance insuring the Company, ThermoGen or Emerald or any of
their respective businesses, assets, employees, officers and directors are
in full force and effect, and the Company, ThermoGen and Emerald are in
compliance with the terms of such policies in all material respects. There
are no claims by the Company, ThermoGen or Emerald under any such policy or
instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause;
(u) neither the Company, ThermoGen nor Emerald has either sent or
received any notice of termination of any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement,
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and no such termination has been threatened by the Company, ThermoGen or
Emerald or any other party to any such contract or agreement;
(v) each of the Company, ThermoGen and Emerald maintains a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(w) each of the Company, ThermoGen and Emerald has filed all material
federal, state, local and foreign tax returns and tax forms required to be
filed. Such returns and forms are complete and correct in all material
respects, and all taxes shown by such returns or otherwise assessed that
are due or payable have been paid, except such taxes as are being contested
in good faith and as to which adequate reserves have been provided. There
have been no tax deficiencies asserted and, to the knowledge of the
Company, ThermoGen and Emerald, no tax deficiency might be reasonably
asserted or threatened against the Company, ThermoGen or Emerald that
could, individually or in the aggregate, have a Material Adverse Effect;
(x) the Company has obtained the agreement (a "Lock-up Agreement") of
each of its officers and directors and the holders in the aggregate of up
to 99% of Common Stock and securities convertible into or exchangeable or
exercisable for Common Stock (including options and warrants) not to sell,
offer to sell, contract to sell, hypothecate, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock for a period of 180 days after the
date of the Prospectus; and
(y) neither the Company, ThermoGen nor Emerald is, and, after giving
effect to the Reorganization, the offering and sale of the Shares, the
Company will not be, an "investment company" or a "promoter," "principal
underwriter" for or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act").
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4. Certain Covenants. The Company hereby agrees with the Underwriters:
(a) to furnish such information as may be reasonably required and
otherwise to cooperate in qualifying the Shares for offering and sale under
the securities or blue sky laws of such states as you may reasonably
designate and to maintain such qualifications in effect so long as
reasonably required for the distribution of the Shares; provided that the
Company shall not be required to qualify as a foreign corporation or to
consent to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the Shares);
and to promptly advise you of the receipt 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 the Underwriters 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
reasonably request for the purposes contemplated by the Act; in case any
Underwriter is required under applicable law to deliver a prospectus beyond
the nine-month period referred to in Section 10(a)(3) of the Act in
connection with the sale of the Shares, the Company will prepare promptly
upon request, but at the cost of such requesting Underwriter, such
amendment or amendments to the Registration Statement and such
prospectuses as may be reasonably necessary to permit compliance with the
requirements of Section 10(a)(3) of 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, and (if requested by you) to confirm 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 use
its best efforts to obtain the
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lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration Statement
or Prospectus and to file no such amendment or supplement to which you
shall reasonably object in writing;
(e) subject to Section 4(n) hereof, to file on a timely basis all
reports and any definitive proxy or information statement required to be
filed by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus, and to promptly
notify you of such filing;
(f) if necessary or appropriate, to file in a timely fashion a
registration statement pursuant to Rule 462(b) under the Act;
(g) 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, in
each case as soon as such communications, documents or information becomes
available;
(h) 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 would require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an 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 are made, not misleading, and,
during such time, to prepare and furnish promptly to the underwriters, at
no expense to the Underwriters, such amendments or supplements to such
Prospectus as may be reasonably 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;
(i) to make generally available to its security holders, and to
deliver to you, as soon as practicable an earnings statement (which need
not be audited) of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning
after the effective date of the Registration Statement (as defined in Rule
158(c) of the Act) and ending not later than 15 months thereafter;
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(j) to furnish to you four conformed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto including all exhibits thereto) and sufficient conformed copies of
the foregoing (other than exhibits) for distribution of a copy to each of
the other Underwriters;
(k) 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
quarterly (if available) or monthly unaudited interim consolidated
financial statements, if any, of the Company, that have been read by the
Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 6(b) hereof;
(l) 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;
(m) to pay all costs, expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the Underwriters
except as set forth under Section 5 hereof and subsection (iii), (iv) and
(vi) below) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus, and
any amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs
of mailing and shipment), (ii) the registration, issue, sale and delivery
of the Shares, (iii) the producing, word processing and/or copying of this
Agreement, and any closing documents (including compilations thereof), (iv)
the qualification of the Shares for offering and sale under state laws
(including the legal fees and filing fees and other disbursements of
counsel for the Underwriters) and the word processing and/or copying and
furnishing of copies of any blue sky surveys to the Underwriters, (v) any
qualification of the Shares for quotation on NASDAQ and any registration
thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the associated fees and
disbursements of counsel for the Underwriters, and (vii) the performance of
the Company's other obligations hereunder;
(n) 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 (h) above, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
(o) not to sell, offer or agree to sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares
of Common
13
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any
other shares of the Company that are substantially similar to Common Stock
or permit the registration under the Act of any shares of Common Stock for
a period of 180 days after the date hereof (the "Lock-up Period"), without
the prior written consent of UBSW, except for (i) the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement, (ii)
the grant of options to purchase Common Stock disclosed in the Registration
Statement and the Prospectus, and (iii) the issuance of Common Stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof;
(p) to the extent that the Company is a party thereto, not to amend,
supplement or otherwise modify, without the consent of UBSW, any agreement
that prevents any holder of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock, from
selling, offering or agreeing to sell, contracting to sell, granting any
option to sell or otherwise disposing of, directly or indirectly, during
the Lock-up Period, such shares or convertible securities; and
(q) to use their best efforts to cause the Common Stock to be listed
for quotation on the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ");
14
5. Reimbursement of Underwriters' Expenses. The Company agrees that if
the Shares are not delivered for any reason other than the termination of this
Agreement pursuant to subsections (ii), (iii) or (iv) of Section 7 hereof or the
default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company shall, in addition to paying the amounts
described in Section 4(m) hereof, reimburse the Underwriters for all of the out-
of-pocket accountable expenses actually incurred by the Underwriters, including
the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of their obligations hereunder and to the
following additional conditions precedent:
(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, in form satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, stating that:
(i) the Company has been duly organized and is validly existing
as a corporation and is in good standing under the laws of the State
of Delaware, with full power and authority to own, lease and operate
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) ThermoGen is validly existing as a corporation and is in
good standing under the laws of the State of Illinois, with full power
and authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and the
Prospectus;
(iii) Emerald is validly existing as a corporation and is in good
standing under the laws of the State of Washington, with full power
and authority to own, lease and operate its properties and conduct its
15
business as described in the Registration Statement and the
Prospectus;
(iv) each of the Company, ThermoGen and Emerald is duly qualified
to do business as a foreign corporation and in good standing in each
jurisdiction in which the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where
the failure to so qualify would not have a Material Adverse Effect;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be validly issued,
fully paid and non-assessable;
(vii) the Company has authorized and outstanding shares of capital
stock 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, to such counsel's knowledge, contractual
preemptive rights, rights of first refusal and similar rights, except
as set forth in the Prospectus and the Registration Statement; the
Shares when issued will be free of statutory and, to such counsel's
knowledge, contractual preemptive rights; the certificates for the
Shares are in due and proper form;
(viii) 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;
(ix) the Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act;
(x) such counsel has been informed by the staff of the
Commission that the Registration Statement has become effective under
the Act and, to such counsel's knowledge, no stop order proceedings
with respect thereto are pending or threatened under the Act and any
required filing of the Prospectus, and any supplement
16
thereto pursuant to Rule 424 under the Act has been made in the manner
and within the time period required by such Rule 424;
(xi) except as set forth in the Registration Statement and the
Prospectus, no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required which, in
such counsel's opinion, based on its experience, is normally required
in transactions in connection with the completion of the
Reorganization, the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation of
the transactions contemplated hereby and by the Registration
Statement, other than registration of the Shares under the Act and
other than 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, as to which such qualification such
counsel need express no opinion;
(xii) the completion of the Reorganization, the execution,
delivery and performance of this Agreement by the Company, the
issuance and sale of the Shares contemplated hereby and by the
Registration Statement 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 result in any breach
of, or constitute a default under), any provisions of the charter or
by-laws of the Company, ThermoGen or Emerald, or under any provision
of any license, permit, franchise, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument to which the
Company, ThermoGen or Emerald is a party or by which either of them or
their respective properties may be bound or affected that is filed as
an exhibit to the Registration Statement or is otherwise known to such
counsel, or under any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to the Company,
ThermoGen or Emerald;
(xiii) to such counsel's knowledge, neither the Company, ThermoGen
nor Emerald is in violation of its charter or by-laws, and neither the
Company, ThermoGen nor Emerald is in breach of nor in default under
(nor has any event occurred which with notice, lapse of time, or both
would result in any breach of, or constitute a default under), any
license, permit, franchise, indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness,
17
or any lease, contract or other agreement or instrument to which the
Company, ThermoGen or Emerald is or was a party or by which either of
them or their respective properties may be bound or affected that is
filed as an exhibit to the Registration Statement or in violation of
any U.S. federal, Illinois or Delaware law, regulation or rule or any
decree, judgment or order applicable to the Company, ThermoGen or
Emerald which, in such counsel's opinion, based on its experience, is
normally applicable to transactions contemplated by the Registration
Statement;
(xiv) to 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;
(xv) to such counsel's knowledge, there are no private or
governmental actions, suits, claims, investigations or proceedings
pending, threatened or contemplated to which the Company, ThermoGen or
Emerald is subject or of which any of their respective properties is
subject, whether at law, in equity or before or by any U.S. federal,
Illinois or Delaware governmental or regulatory commission, board,
body, authority or agency;
(xvi) neither the Company, ThermoGen nor Emerald is, and after
giving effect to the Reorganization and the offering and sale of the
Shares, the Company will not be, an "investment company," or a
"promoter," "principal underwriter" for or an entity controlled by an
"investment company," as such terms are defined in the Investment
Company Act;
(xvii) the statements in the Registration Statement and
Prospectus under the headings "Description of Capital Stock",
"Corporate Reorganization" and "Legal Matters" fairly summarize the
matters described therein;
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company, and
representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs
18
(xvii) above), on the basis of the foregoing 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 other financial and statistical data
included in the Registration Statement or Prospectus).
(b) You shall have received from KPMG LLP, letters dated,
respectively, the date of this Agreement, the time of purchase and the
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 Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters.
(c) 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
Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may require.
(d) No amendment or supplement to the Registration Statement or
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you object in writing.
(e) The Registration Statement shall become effective, and if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act, at or before 5:30 P.M.,
New York City time, on the date of this Agreement, unless a later time (but
not later than 5:30 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 and
you in
19
writing or by telephone, confirmed in writing; provided, however, that the
Company and you may from time to time agree on a later date.
(f) 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.
(g) 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 and unfavorable change, or any development involving a prospective
material and adverse change, financial or otherwise (other than as
specifically identified in the Registration Statement and Prospectus), in
the business, prospects, properties, financial condition or results of
operations of, taken as a whole, the Company, ThermoGen and Emerald shall
occur or become known and (ii) no transaction which is material and
unfavorable to, taken as a whole, the Company, ThermoGen and Emerald shall
have been entered into by the Company, ThermoGen or Emerald;
(h) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of its President
and its Chief Financial Officer to the effect that the representations and
warranties of the Company as set forth in this Agreement are true and
correct as of each such date, that the Company has performed such of its
obligations under this Agreement as are to be performed at or before the
time of purchase and at or before the additional time of purchase, as the
case may be, and the conditions set forth in paragraphs (e), (f) and (g) of
this Section 6 have been met.
(i) You shall have received signed Lock-up Agreements, from each of
the officers and directors of the Company and the holders in the aggregate
of up to 99% of Common Stock and securities convertible into or
exchangeable or exercisable for Common Stock (including options and
warrants), stating that such persons will not sell, offer or agree to sell,
contract to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock of the Company or
securities convertible into or
20
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to the Common Stock for a period of 180 days after
the date of the Prospectus.
(j) The Company, ThermoGen and Emerald shall have furnished to you
such other documents relating to 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.
(k) The Shares shall have been approved for listing for quotation on
NASDAQ, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
(l) The Reorganization shall have occurred on the terms set forth and
as otherwise described in the Registration Statement in all material
respects.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when the Registration
Statement shall become effective under the Act, 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, (i) 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, there has been any material
adverse and unfavorable change, or any development involving a prospective
material adverse change, financial or otherwise (other than as specifically
identified in the Registration Statement and Prospectus), in the business,
prospects, properties, condition or results of operations of, taken as a whole,
the Company, ThermoGen and Emerald which would, in your judgment, make it
impracticable to market the Shares, or, (ii) 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, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or limitations or minimum prices shall have
been established on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market, or (iii) if a banking moratorium shall have been
declared either by the United States or New York State authorities, or (iv) 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
21
financial markets of the United States as, in your judgment, to make it
impracticable to market the Shares.
If you elects to terminate this Agreement as provided in this Section
7, the Company and each other Underwriter shall be notified promptly by letter
or telegram.
Notwithstanding anything in this Agreement to the contrary, the
obligations of the Company under Sections 4(m), 5 and 9 hereof and the
obligations of the Underwriters under Sections 8 and 9 hereof shall survive the
termination of this Agreement.
8. Increase in Underwriters' Commitments. Subject to the satisfaction of
the conditions set forth in Sections 6, if any Underwriter shall default in its
obligation to take up and pay for the Firm Shares to be purchased by it
hereunder (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 7 hereof) 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 number of Firm Shares they are obligated to purchase pursuant to
Section 1 hereof) the number of Firm Shares agreed to be purchased by all such
defaulting Underwriters, as hereinafter provided. Such Shares shall be taken up
and paid for by such non-defaulting Underwriter or Underwriters in such amount
or amounts as you may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such non-
defaulting Underwriters in Schedule A.
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
22
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
be terminated without further act or deed and without any liability on the part
of the Company to any non-defaulting Underwriter and without any liability on
the part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, 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, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, 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, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) 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
9 being deemed to include any Preliminary Prospectus, 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, damage, 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 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 such Registration
Statement or such Prospectus or necessary to make such information not
misleading or (ii) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement or the failure by the Company to perform
when and as required any agreement or covenant contained herein (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films, tape recordings, used in connection with the
marketing of the Shares, or (iv) the Directed
23
Share Program, provided that, the Company shall not be responsible for any loss,
damage, expense, liability, or claim that is finally judicially determined to
have resulted from the bad faith or gross negligence of the Underwriters in
conducting the Directed Share Program, and provided further that, the indemnity
agreement contained in clause (i) of this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, damage,
expense, liability or claim purchased the Shares which is 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, unless the failure is the result of noncompliance by the Company with
Section 4(g) hereof.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, 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 shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise. Such Underwriter or such 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
in connection with the defense of such Proceeding or the Company shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those available to
the Company (in which case the Company shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company shall not be liable for any settlement of any
Proceeding effected without the written consent of the Company but if settled
with the written consent of the Company, the Company agree 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
24
indemnified party shall have requested that an indemnifying party 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 the Company's
written consent if (i) such settlement is entered into more than 60 business
days after receipt by the 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 and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) In connection with the offer and sale of the Reserved Shares, the
Company agrees to pay UBSW, at its request, the full purchase price of all
Reserved Shares which were subject to a properly confirmed agreement to purchase
and for which any Directed Share Participant failed to pay therefor and accept
delivery thereof.
(c) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its respective directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which the Company, or any such
person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, 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 in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
25
If any Proceeding is brought against the Company, or any such person
in respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, 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 such Underwriter may have to the Company or any such person or otherwise.
The Company 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 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
Proceeding or such Underwriter shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have charge of the
defense of such Proceeding 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 or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding 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 addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding 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 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
26
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.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, 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, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriters 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, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.
(e) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, in no case shall any Underwriter be required
to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by
27
such Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its partners,
directors or officers or any person (including each partner, officer or director
of such 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 respective directors or officers 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 and each Underwriter agree promptly to notify each
other of the commencement of any Proceeding against it and, in the case of the
Company, against any of the Company's officers or directors in connection with
the issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 00000 Xxxxx
Xxx Xxxxxx, Xxxxxx, Xxxxxxxx, 00000, Attention: Xxxxxxx X. Xxxxxx, Chief
Executive Officer.
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, 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.
12. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have
28
jurisdiction over the adjudication of such matters, and the Company consents to
the jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents to personal jurisdiction, service and venue in any court
in which any Claim arising out of or in any way relating to this Agreement is
brought by any third party against UBSW or any indemnified party. Each of UBSW
and the Company (on its behalf and, to the extent permitted by applicable law,
on behalf of its stockholders and affiliates) waives all right to trial by jury
in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment.
13. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and 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.
14. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
15. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's, and any of the
Underwriters' respective businesses and/or assets.
16. Miscellaneous. UBSW, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBSW. Because UBSW 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 UBSW 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 UBSW may have lending relationships with
issuers of securities underwritten or privately placed by UBSW. To the extent
required under the securities laws, prospectuses and other disclosure documents
for securities underwritten or privately placed by UBSW will disclose the
existence of any such
29
lending relationships and whether the proceeds of the issue will be used to
repay debts owed to affiliates of UBSW.
30
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
MEDICHEM LIFE SCIENCES, INC.
By:
----------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on behalf of
themselves and the other several Underwriters
named in Schedule A
UBS WARBURG LLC
CHASE SECURITIES, INC.
XXXXXXX XXXXX & COMPANY, L.L.C.
--------------------------------
By: UBS WARBURG LLC
By:
-------------------------
Title: Managing Director
By:
-------------------------
Title: Director
31
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC....................................................
CHASE SECURITIES, INC..............................................
XXXXXXX XXXXX & COMPANY, L.L.C.....................................
...................................................................
...................................................................
...................................................................
...................................................................
Total..................................... ============
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