1
EXHIBIT 1.1
PHARMACYCLICS, INC.
1,750,000 SHARES(1)
COMMON STOCK
UNDERWRITING AGREEMENT
January __,1998
XXXXXXXXX & XXXXX LLC
XXXXX & COMPANY
PACIFIC GROWTH EQUITIES, INC.
x/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Pharmacyclics, Inc., a Delaware corporation (herein called the Company),
proposes to issue and sell 1,750,000 shares of its authorized but unissued
Common Stock, $0.0001 par value (herein called the Common Stock) (said 1,750,000
shares of Common Stock being herein called the Underwritten Stock). The Company
proposes to grant to the Underwriters (as hereinafter defined) an option to
purchase up to 262,500 additional shares of Common Stock (herein called the
Option Stock and with the Underwritten Stock herein collectively called the
Stock). The Common Stock is more fully described in the Registration Statement
and the Prospectus hereinafter mentioned.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I attached hereto (herein collectively called the
Underwriters, which term shall also include any underwriter purchasing Stock
pursuant to Section 3(b) hereof). You represent and warrant that you have been
authorized by each of the other Underwriters to enter into this Agreement on its
behalf and to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the Commission) a registration
statement on Form S-3 (No. 333-_____), including the related preliminary
prospectus, for the registration under the Securities Act of 1933, as amended
(herein called the Securities Act) of the Stock. Copies of such registration
statement and of each amendment thereto, if any, including the related
preliminary prospectus (meeting the requirements of Rule 430A of the rules and
regulations of the Commission) heretofore filed by the Company with the
Commission have been delivered to you.
--------
1 Plus an option to purchase from the Company up to 262,500
additional shares to cover over-allotments.
2
The term Registration Statement as used in this agreement shall mean
such registration statement, including all documents incorporated by reference
therein, all exhibits and financial statements, all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus referred to
below, in the form in which it became effective, and any registration statement
filed pursuant to Rule 462(b) of the rules and regulations of the Commission
with respect to the Stock (herein called a Rule 462(b) registration statement),
and, in the event of any amendment thereto after the effective date of such
registration statement (herein called the Effective Date), shall also mean (from
and after the effectiveness of such amendment) such registration statement as so
amended (including any Rule 462(b) registration statement). The term Prospectus
as used in this Agreement shall mean the prospectus, including the documents
incorporated by reference therein, relating to the Stock first filed with the
Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing is
required, as included in the Registration Statement) and, in the event of any
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus, including the documents incorporated by reference
therein, included in such registration statement prior to the time it becomes
effective.
The Registration Statement has been declared effective under the
Securities Act, and no post-effective amendment to the Registration Statement
has been filed as of the date of this Agreement. The Company has caused to be
delivered to you copies of each Preliminary Prospectus and has consented to the
use of such copies for the purposes permitted by the Securities Act.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company hereby represents and warrants as follows:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which the character of the property
owned or leased or the nature of the business transacted by it makes
qualification necessary (except where the failure to be so qualified
would not have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole).
(ii) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been any materially adverse change in the business,
properties, financial condition or results of operations of the Company,
whether or not arising from transactions in the ordinary course of
business, other than as set forth in the Registration Statement and the
Prospectus, and since such dates, except in the ordinary course of
business, the Company has not entered into any material transaction or
paid any dividend or made any distribution on any class of its capital
stock not referred to in the Registration Statement and the Prospectus.
(iii) The Registration Statement and the Prospectus
comply, and on the Closing Date (as hereinafter defined) and any later
date on which Option Stock is to be purchased, the Prospectus will
comply with the provisions of the Securities Act and the Securities
Exchange Act of 1934, as amended (herein called the Exchange Act) and
the rules and regulations of the Commission thereunder; on the Effective
Date, the Registration Statement did not contain any untrue statement of
a material fact and did not omit to state any material fact required to
be stated therein or necessary in order to make the statements
-2-
3
therein not misleading; and, on the Effective Date the Prospectus did
not, on the Closing Date, and any later date on which Option Stock is to
be purchased, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that none of the
representations and warranties in this subparagraph (iii) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished herein in Section 4(b) below to the Company by or on behalf of
the Underwriters for use in the Registration Statement or the
Prospectus.
(iv) The Stock, when issued and sold to the
Underwriters as provided herein, will be duly and validly issued, fully
paid and nonassessable and conforms to the description thereof in the
Prospectus. No further approval or authority of the stockholders or the
Board of Directors of the Company will be required for the issuance and
sale of the Stock as contemplated herein. The stockholders of the
Company have no preemptive rights with respect to the Stock
(v) Prior to the Closing Date the Stock to be issued
and sold by the Company will be authorized for listing by the Nasdaq
National Market upon official notice of issuance.
(vi) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(vii) Except as disclosed in the Prospectus, there are
no contracts, agreements, or understandings between the Company and any
person at would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment.
(viii) No consent, approval, authorization, or order
of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Stock by the
Company, except such as have been obtained and made under the Securities
Act and such as may be required by the National Association of
Securities Dealers, Inc. or under state securities laws.
(ix) The execution, delivery and performance of this
Agreement and the issuance and sale of the Securities will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any of its properties, or any
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the properties of the Company is
subject, or the charter or bylaws of the Company and the Company has
full power and authority to authorize, issue and sell the Stock as
contemplated by this Agreement.
(x) This Agreement has been duly authorized,
executed and delivered by the Company.
-3-
4
(xi) Except as disclosed in the Prospectus, the
Company good and marketable title to all properties and assets owned by
it which are material to the business of the Company, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by it; and except as disclosed in the Prospectus, the Company
holds any leased real or personal property under valid and enforceable
leases with no exceptions that would materially interfere with the use
made or to be made thereof by it.
(xii) The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by it except to
the extent that failure to obtain such certificates, authorities or
permits would have a material adverse effect on the Company; and the
Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company, would individually or in
the aggregate have a material adverse effect on the Company.
(xiii) No labor dispute with the employees of the
Company exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company.
(xiv) Except as disclosed in the Prospectus, the
Company owns, possesses or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual
property (collectively, "Intellectual Property Rights") necessary to
conduct the business as presently conducted or as proposed to be
conducted by it, and has not received any notice of infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property Rights that, if determined adversely to the Company, would
individually or in the aggregate have a material adverse effect on the
Company.
(xv) Except as disclosed in the Prospectus, the
Company is not in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "Environmental Laws"), does not own or operate
any real property contaminated with any substance that is subject to any
Environmental Laws, is not liable for any off-site disposal or
contamination pursuant to any environmental laws, and is not subject to
any claim relating to any Environmental Laws, which violation,
contamination, liability or claim would individually or in the aggregate
have a material adverse effect on the Company; and the Company is not
aware of any pending investigation which might lead to such a claim.
(xvi) Except as disclosed in the Prospectus, there are
no pending actions, suits or proceedings against or affecting the
Company or any of its respective properties that, if determined
adversely to the Company, would individually or in the aggregate have a
material adverse effect on the condition (financial or other), business,
prospects, or results of operations of the Company, or would materially
and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the
context of the sale of the Stock; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge, contemplated.
(xvii) The financial statements included in each
Registration Statement and the Prospectus present fairly the financial
position of the Company as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
-4-
5
basis; and the schedules included in each Registration Statement present
fairly the information required to be stated therein.
(xviii) The Company is not and, after giving effect to
the offering and sale of the Stock and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of 1940.
(xix) All directors and officers have executed
agreements stating that without the prior written consent of Xxxxxxxxx &
Xxxxx LLC on behalf of the underwriters, such person or entity will not,
for a period of 90 days following the commencement of the public
offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase of otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into
or exchange or exercisable for or any rights to purchase or acquire
Common Stock, or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences or
ownership of Common Stock, whether any such transaction described in
clauses (i) or (ii) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell 1,750,000 shares of the Underwritten Stock to the several
Underwriters and each of the Underwriters agrees to purchase from the Company
the respective aggregate number of shares of Underwritten Stock set forth
opposite its name in Schedule I. The price at which such shares of Underwritten
Stock shall be sold by the Company and purchased by the several Underwriters
shall be $___ per share. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 3, the agreement of each Underwriter is to purchase only the
respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 or 9 hereof) to
purchase and pay for the number of shares of the Stock agreed to be purchased by
such Underwriter or Underwriters, the Company shall immediately give notice
thereof to you, and the non-defaulting Underwriters shall have the right within
24 hours after the receipt by you of such notice to purchase, or procure one or
more other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds ten percent (10%) of the total number of shares of the Stock which
all Underwriters agreed to purchase hereunder. If the total number of shares of
the Stock which the defaulting Underwriter or Underwriters agreed to purchase
shall not be purchased or absorbed in accordance with the two preceding
sentences, the Company shall have the right, within 24 hours next succeeding the
24-hour period above referred to, to make arrangements with other underwriters
or purchasers satisfactory to you for purchase of such shares and portion on the
terms herein set forth. In any such case, either you or the Company shall have
the right
-5-
6
to postpone the Closing Date determined as provided in Section 5 hereof for not
more than seven business days after the date originally fixed as the Closing
Date pursuant to said Section 5 in order that any necessary changes in the
Registration Statement, the Prospectus or any other documents or arrangements
may be made. If neither the non-defaulting Underwriters nor the Company shall
make arrangements within the 24-hour periods stated above for the purchase of
all the shares of the Stock which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall be terminated without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph (b), and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to purchase,
severally and not jointly, up to 262,500 shares in the aggregate of the Option
Stock from the Company at the same price per share as the Underwriters shall pay
for the Underwritten Stock. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Stock by the Underwriters and
may be exercised in whole or in part at any time (but not more than once) on or
before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
shares of the Option Stock as to which the several Underwriters are exercising
the option. Delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made as provided in Section 5 hereof. The number of shares of
the Option Stock to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Stock to be purchased by
the several Underwriters as such Underwriter is purchasing of the Underwritten
Stock, as adjusted by you in such manner as you deem advisable to avoid
fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering by the
Underwriters of the Stock to be purchased by them shall be as set forth in the
Prospectus. The Underwriters may from time to time change the public offering
price after the closing of the initial public offering and increase or decrease
the concessions and discounts to dealers as they may determine.
(b) The information set forth in the last paragraph on the
front cover page, the legends set forth at the bottom of page 2 of the
Prospectus, the table and the second, sixth and eighth paragraphs under the
table under the caption "Underwriting" in the Registration Statement, any
Preliminary Prospectus and the Prospectus relating to the Stock filed by the
Company (insofar as such information relates to the Underwriters) constitutes
the only information furnished by the Underwriters to the Company for inclusion
in the Registration Statement, any Preliminary Prospectus, and the Prospectus,
and you, on behalf of the respective Underwriters, represent and warrant to the
Company that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the
Underwritten Stock and the Option Stock (if the option granted by Section 3(c)
hereof shall have been exercised not later than 2:00 p.m., San Francisco time,
on the date two business days preceding the Closing Date), and payment therefor,
shall be made at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, Two Embarcadero
Place, 0000 Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, at 7:00 a.m., San Francisco
time, on the fourth business day after the date of this Agreement, or at such
time on such other day, not later than seven full business days after such
fourth business day, as shall be agreed upon in writing by the Company and you.
The date and hour of such delivery and payment (which may be postponed as
provided in Section 3(b) hereof) are herein called the Closing Date.
-6-
7
(b) If the option granted by Section 3(c) hereof shall be
exercised after 2:00 p.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Xxxxxxx Phleger &
Xxxxxxxx, Two Embarcadero Place, 0000 Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, at
7:00 a.m., San Francisco time, on the third business day after the exercise of
such option.
(c) Payment for the Stock purchased from the Company shall
be made to the Company or its order by one or more certified or official bank
check or checks or by wire transfer, at your option, in same day funds. Such
payment shall be made upon delivery of certificates for the Stock to you for the
respective accounts of the several Underwriters against receipt therefor signed
by you. Certificates for the Stock to be delivered to you shall be registered in
such name or names and shall be in such denominations as you may request at
least one business day before the Closing Date, in the case of Underwritten
Stock, and at least one business day prior to the purchase thereof, in the case
of the Option Stock. Such certificates will be made available to the
Underwriters for inspection, checking and packaging at the offices of [Lewco
Securities Corporation,] 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the business
day prior to the Closing Date or, in the case of the Option Stock, by 3:00 p.m.,
New York time, on the business day preceding the date of purchase.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A and (ii) not file any amendment to the Registration Statement or
supplement to the Prospectus of which you shall not previously have been advised
and furnished with a copy or to which you shall have reasonably objected in
writing or which is not in compliance with the Securities Act or the rules and
regulations of the Commission.
(b) The Company will promptly notify each Underwriter in the
event of (i) the request by the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional information,
(ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, (iii) the institution or notice of
intended institution of any action or proceeding for that purpose, (iv) the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Stock for sale in any jurisdiction, or (v) the receipt by
it of notice of the initiation or threatening of any proceeding for such
purpose. The Company will make every reasonable effort to prevent the issuance
of such a stop order and, if such an order shall at any time be issued, to
obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the Closing Date,
deliver to you a signed copy of the Registration Statement as originally filed
and of each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that one copy of each may be distributed to each Underwriter, (ii) as
promptly as possible deliver to you and send to the several Underwriters, at
such office
-7-
8
or offices as you may designate, as many copies of the Prospectus and the
filings under the Exchange Act incorporated by reference therein as you may
reasonably request, and (iii) thereafter from time to time during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, likewise send to the Underwriters as many additional copies of the
Prospectus and as many copies of any supplement to the Prospectus and of any
amended prospectus and as many copies of the filings under the Exchange Act
incorporated by reference in the Prospectus and any amended prospectus, filed by
the Company with the Commission, as you may reasonably request for the purposes
contemplated by the Securities Act.
(d) If at any time during the period in which a prospectus
is required by law to be delivered by an Underwriter or dealer any event
relating to or affecting the Company, or of which the Company shall be advised
in writing by you, shall occur as a result of which it is necessary, in the
opinion of counsel for the Company or of counsel for the Underwriters, to
supplement or amend the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser of the Stock, the Company will forthwith prepare and
file with the Commission a supplement to the Prospectus or an amended prospectus
so that the Prospectus as so supplemented or amended will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances existing
at the time such Prospectus is delivered to such purchaser, not misleading. If,
after the initial public offering of the Stock by the Underwriters and during
such period, the Underwriters shall propose to vary the terms of offering
thereof by reason of changes in general market conditions or otherwise, you will
advise the Company in writing of the proposed variation, and, if in the opinion
either of counsel for the Company or of counsel for the Underwriters such
proposed variation requires that the Prospectus be supplemented or amended, the
Company will forthwith prepare and file with the Commission a supplement to the
Prospectus or an amended prospectus setting forth such variation. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the several Underwriters to use the Prospectus, as from time to time amended
or supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the
Company will submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement to the Prospectus or
any amended prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by
you, in the qualification of the Stock for offer and sale under the securities
or blue sky laws of such jurisdictions as you may designate and, during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing under
said securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified. The
Company will, from time to time, prepare and file such statements, reports, and
other documents as are or may be required to continue such qualifications in
effect for so long a period as you may reasonably request for distribution of
the Stock.
(g) During a period of five years commencing with the date
hereof, the Company will furnish to you, and to each Underwriter who may so
request in writing, copies of all periodic and special reports furnished to
stockholders of the Company and of all information, documents and reports filed
with the Commission.
(h) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the Effective
Date, the Company will make generally available to its security holders an
earnings statement in accordance with Section 11(a) of the Securities Act and
Rule 158 thereunder.
-8-
9
(i) The Company agrees to pay all costs and expenses
incident to the performance of its obligations under this Agreement, including
all costs and expenses incident to (i) the preparation, printing and filing with
the Commission and the National Association of Securities Dealers, Inc. of the
Registration Statement, any Preliminary Prospectus and the Prospectus, (ii) the
furnishing to the Underwriters of copies of any Preliminary Prospectus and of
the several documents required by paragraph (c) of this Section 6 to be so
furnished, (iii) the printing of this Agreement and related documents delivered
to the Underwriters, (iv) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in paragraph (d) of
this Section 6, (v) the furnishing to you and the Underwriters of the reports
and information referred to in paragraph (g) of this Section 6 and (vi) the
printing and issuance of stock certificates, including the transfer agent's
fees.
(j) The Company agrees to reimburse you, for the account of
the several Underwriters, for blue sky fees and related disbursements (including
counsel fees and disbursements and cost of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Stock under state securities or blue sky laws and in the review
of the offering by the NASD.
(k) The Company hereby agrees that, without the prior
written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the
Company will not, for a period of 90 days following the commencement of the
public offering of the Stock by the Underwriters, directly or indirectly, (i)
sell, offer, contract to sell, make any short sale, pledge, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for or any rights to purchase or acquire Common Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences or ownership of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Stock to be sold to the Underwriters pursuant to this
Agreement, (B) shares of Common Stock issued by the Company upon the exercise of
options granted under the stock option plans of the Company (the "Option
Plans"), all as described in the Preliminary Prospectus, and (C) options and
purchase rights to purchase Common Stock granted under the Option Plans.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise, and
the Company agrees to reimburse each such Underwriter and controlling person for
any legal or other expenses (including except as otherwise hereinafter provided,
reasonable fees and disbursements of counsel) incurred by the respective
indemnified parties in connection with defending against any such losses,
claims, damages or liabilities or in connection with any investigation or
inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
-9-
10
however, that (1) the indemnity agreements of the Company contained in this
paragraph (a) shall not apply to any such losses, claims, damages, liabilities
or expenses if such statement or omission was made in reliance upon and in
conformity with information furnished herein in Section 4(b) above to the
Company by or on behalf of any Underwriter for use in any Preliminary Prospectus
or the Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto and (2) the indemnity agreement contained in this paragraph
(a) with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
(excluding the documents incorporated therein by reference) and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented) unless the failure is the result of noncompliance by the Company
with paragraph (c) of Section 6 hereof. The indemnity agreements of the Company
contained in this paragraph (a) and the representations and warranties of the
Company contained in Section 2 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its officers who signs the Registration Statement
on his own behalf or pursuant to a power of attorney, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus as part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus (as amended or as supplemented if the Company shall have filed with
the Commission any amendment thereof or supplement thereto) or the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, if such statement or omission was made in reliance upon
and in conformity with information furnished herein in Section 4(b) above to the
Company by or on behalf of such indemnifying Underwriter for use in the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto. The indemnity agreement of each Underwriter contained in
this paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs
(a) and (b) of this Section 7 agrees that, upon the service of a summons or
other initial legal process upon it in any action or suit instituted against it
or upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to
-10-
11
whom such Notice was not given was unaware of the action, suit, investigation,
inquiry or proceeding to which the Notice would have related and was prejudiced
by the failure to give the Notice, but the omission so to notify such
indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be necessary to protect the interests of the indemnified party
or parties and (ii) in any event, the indemnified party or parties shall be
entitled to have counsel chosen by such indemnified party or parties participate
in, but not conduct, the defense. If, within a reasonable time after receipt of
the Notice, an indemnifying party gives a Notice of Defense and the counsel
chosen by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party or parties in connection
with the defense of the action, suit, investigation, inquiry or proceeding,
except that (A) the indemnifying party or parties shall bear the legal and other
expenses incurred in connection with the conduct of the defense as referred to
in clause (i) of the proviso to the preceding sentence and (B) the indemnifying
party or parties shall bear such other expenses as it or they have authorized to
be incurred by the indemnified party or parties. If, within a reasonable time
after receipt of the Notice, no Notice of Defense has been given, the
indemnifying party or parties shall be responsible for any legal or other
expenses incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the total underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
-11-
12
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigation, preparing to defend or defending against any action or claim
which is the subject of this paragraph (d). Notwithstanding the provisions of
this paragraph (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discount applicable to the Stock purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) The Company will not, without the prior written consent
of each Underwriter, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter or any person who controls such Underwriter within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of such Underwriter and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding.
8. TERMINATION. This Agreement may be terminated by you at any time
prior to the Closing Date by giving written notice to the Company if after the
date of this Agreement trading in the Common Stock shall have been suspended, or
if there shall have occurred (i) the engagement in hostilities or an escalation
of major hostilities by the United States or the declaration of war or a
national emergency by the United States on or after the date hereof, (ii) any
outbreak of hostilities or other national or international calamity or crisis or
change in economic or political conditions if the effect of such outbreak,
calamity, crisis or change in economic or political conditions in the financial
markets of the United States would, in the Underwriters' reasonable judgment,
make the offering or delivery of the Stock impracticable, (iii) suspension of
trading in securities generally or a material adverse decline in value of
securities generally on the New York Stock Exchange, the American Stock
Exchange, The Nasdaq National Market, or limitations on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Underwriters' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in the Underwriters' reasonable opinion has a
material adverse effect on the securities markets in the United States. If this
Agreement shall be terminated pursuant to this Section 8, there shall be no
liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
-12-
13
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, including all costs and expenses referred to in
paragraphs (i) and (j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters to purchase and pay for the Stock shall be subject to the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date or any later date on which Option Stock is to be
purchased, as the case may be, and to the following further conditions:
(a) The Registration Statement shall have become effective;
and no stop order suspending the effectiveness thereof shall have been
issued and no proceedings therefor shall be pending or threatened by the
Commission.
(b) The Underwriters shall be satisfied that (i) as of the
Effective Date, the statements made in the Registration Statement and
the Prospectus were true and correct and neither the Registration
Statement nor the Prospectus omitted to state any material fact required
to be stated therein or necessary in order to make the statements
therein, respectively, not misleading, (ii) since the Effective Date, no
event has occurred which should have been set forth in a supplement or
amendment to the Prospectus which has not been set forth in such a
supplement or amendment, (iii) since the respective dates as of which
information is given in the Registration Statement in the form in which
it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the
business, properties, financial condition or results of operations of
the Company, whether or not arising from transactions in the ordinary
course of business, and, since such dates, except in the ordinary course
of business, the Company does not have entered into any material
transaction not referred to in the Registration Statement in the form in
which it originally became effective and the Prospectus contained
therein, (iv) the Company does not have the Company any material
contingent obligations which are not disclosed in the Registration
Statement and the Prospectus, (v) there are not any pending or known
threatened legal proceedings to which the Company is a party or of which
property of the Company or any of its subsidiaries is the subject which
are material and which are not disclosed in the Registration Statement
and the Prospectus, (vi) there are not any franchises, contracts, leases
or other documents which are required to be filed as exhibits to the
Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company herein are true and
correct in all material respects as of the Closing Date or any later
date on which Option Stock is to be purchased, as the case may be, and
(viii) there has not been any material change in the market for
securities in general or in political, financial or economic conditions
from those reasonably foreseeable as to render it impracticable in your
reasonable judgment to make a public offering of the Stock, or a
material adverse change in market levels for securities in general (or
those of companies in particular) or financial or economic conditions
which render it inadvisable to proceed.
(c) The Underwriters shall have received a letter, dated the
Effective Date of Price Waterhouse LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to the
effect set forth in Exhibit A attached hereto.
(d) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxxxx, Xxxxxxx & Xxxxxxxx, counsel for the
Company, to the effect set forth in Exhibit B attached hereto.
-13-
14
(e) The Underwriters shall have received an opinion, dated
such Closing Date, of Brinks, Hofer, Xxxxxx & Lione, special patent
counsel for the Company, to the effect set forth in Exhibit C attached
hereto.
(f) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxxx, White & Xxxxxx, patent counsel for the
Company, to the effect set forth in Exhibit D attached hereto.
(g) The Underwriters shall have received an opinion, dated
such Closing Date, of Akin, Gump, et. al., patent counsel for the
Company, to the effect set forth in Exhibit E attached hereto.
(h) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxxxx & Xxxxxxx & Crew, patent counsel for the
Company, to the effect set forth in Exhibit F attached hereto.
(i) The Underwriters shall have received an opinion, dated
such Closing Date, of Xxxxxx Xxxxxx, in house patent counsel for the
Company, to the effect set forth in Exhibit G attached hereto.
(j) The Underwriters shall have received from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, counsel for the Underwriters, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Underwriters may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(k) The Underwriters shall have received a certificate dated
such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable investigation,
shall state that: the statements included in clauses (i) through (vii)
of paragraph (b) of this Section 9 are true and correct; the
representations and warranties of the Company in this Agreement are true
and correct; that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b)
was filed pursuant to Rule 462(b), including payment of the applicable
filing fee in accordance with Rule 111(a) or (b) under the Act, prior to
the time the Prospectus was printed and distributed to any Underwriter;
and subsequent to the date of the most recent financial statements in
the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(l) The Underwriters shall have received a letter, dated
such Closing Date, of Price Waterhouse LLP which meets the requirements
of subsection (c) of this section, except that the specified date
referred to in such subsection will be a date not more than five days
prior to such Closing Date for the purposes of this subsection.
(m) You shall have been furnished evidence in usual written
or telegraphic form from the appropriate authorities of the several
jurisdictions, or other evidence satisfactory to you, of the
qualification referred to in paragraph (f) of Section 6 hereof.
-14-
15
(n) On or prior to the Closing Date, you shall have received
agreements from all directors and officers, in form reasonably
satisfactory to Xxxxxxxxx & Xxxxx LLC, stating that without the prior
written consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters,
such person or entity will not, for a period of 90 days following the
commencement of the public offering of the Stock by the Underwriters,
directly or indirectly, (i) sell, offer, contract to sell, make any
short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any shares of Common Stock
or any securities convertible into or exchangeable or exercisable for or
any rights to purchase or acquire Common Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of the
economic consequences or ownership of Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel for the Underwriters, shall be satisfied that they comply
in form and scope. The Company will furnish the Underwriters with such conformed
copies of such opinions, certificates, letters and documents as the Underwriters
reasonably request. Xxxxxxxxx & Xxxxx LLC may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof, and (ii) if this Agreement is terminated by you because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein, to fulfill any of the conditions herein, or to comply with any
provision hereof other than by reason of a default by any of the Underwriters,
the Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the transactions
contemplated hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of
the Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement,
including all costs and expenses referred to in paragraphs (i) and (j) of
Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination
-15-
16
as to the propriety and enforceability of the obligations under this Section 11
and the possibility that such payments might later be held to be improper;
provided, however, that (i) to the extent any such payment is ultimately held to
be improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions of
said Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall be mailed,
telegraphed or delivered to it at its office, Pharmacyclics, Inc., 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000, Attention: Xxxxxxx X. Xxxxxx, M.D.,
President and Chief Executive Officer. All notices given by telegraph shall be
promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or their respective directors or officers, and (c)
delivery and payment for the Stock under this Agreement; provided, however, that
if this Agreement is terminated prior to the Closing Date, the provisions of
paragraph (k) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
-16-
17
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
PHARMACYCLICS, INC.
By_______________________________________
Name:
Title:
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
XXXXX & COMPANY
PACIFIC GROWTH EQUITIES, INC.
By Xxxxxxxxx & Xxxxx LLC
By________________________________________
Name:
Title:
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
-17-
18
SCHEDULE I
UNDERWRITERS
Number of
Underwriter Firm Securities
----------- ---------------
Xxxxxxxxx & Xxxxx LLC...........................
Xxxxx & Company.................................
Pacific Growth Equities, Inc....................
---------
Total............ 1,750,000
=========
19
EXHIBIT A
Letter of Independent Public Accountants
Referred to in Section 9(c)
(i) in their opinion the financial statements and schedules
examined by them and included in the Registration Statements comply in
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations.
(ii) on the basis of inquiries of officials of the Company
who have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) at the date of the latest available balance
sheet read by such accountants, or at a subsequent specified date not
more than five days prior to the date of this Agreement, there was any
change in the capital stock or any increase in short-term indebtedness
or long-term debt of the Company or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in net
assets, as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(B) for the period from the closing date of the
latest income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants there
were any decreases in total revenues or increases in total operating
expenses, as compared with the corresponding period of the previous year
and with the period of corresponding length ended the data of the latest
income statement included in the Prospectus;
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iii) they have compared specific dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Company subject to the internal controls of the Company's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in such letter
and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise
specified in such letter.
The term Registration Statements as used herein shall mean such
registration statements, including all documents incorporated by reference
therein, all exhibits and financial statements, all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus referred to
below, in the form in which it became effective, any additional registration
statement as proposed to be amended by the amendment, and any registration
statement filed pursuant to Rule 462(b) of the rules and regulations of the
Commission with respect to the Stock (herein called a Rule 462(b) registration
statement), and, in the event of any amendment thereto after the effective date
of such registration statement (herein called the Effective Date), shall also
mean (from and after the effectiveness of such amendment) such registration
statement as so amended (including any Rule 462(b) registration statement). The
term Prospectus as used herein shall mean the prospectus, including the
documents incorporated by reference therein, relating to the Stock first filed
with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing
is required, as included in the Registration Statement) and, in the event of any
20
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used herein shall mean each preliminary
prospectus, including the documents incorporated by reference therein, included
in such registration statement prior to the time it becomes effective.
-2-
21
EXHIBIT B
Opinion of Counsel for the Company
Referred to in Section 9(d)
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its own
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in
California and, to the knowledge of such counsel, in each other
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company;
(ii) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus;
(iii) The shares of Common Stock outstanding prior to the
issuance of the Stock to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable;
(iv) The Stock to be sold by the Company have been duly
authorized, and when issued and delivered in accordance with the terms
of this Agreement will be, validly issued, fully paid and
non-assessable, and the issuance of such Offered Securities will not be
subject to any preemptive or similar rights;
(v) The Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters
the Stock to be issued and sold by the Company. This Agreement has been
duly authorized, executed and delivered by the Company;
(vi) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or bylaws of the Company or, to such counsel's knowledge,
any material agreement or other instrument binding upon the Company or,
to such counsel's knowledge, any judgement, order or decree of any
governmental body, agency or court having jurisdiction over the Company,
and no consent, approval, authorization or order of or qualification
with any governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such as may
be required by the securities or Blue Sky laws of the various states and
jurisdictions in connection with the offer and sale of the Stock;
(vii) Such counsel does not know of any legal, regulatory or
governmental proceeding pending or threatened to which the Company is a
party or to which any of the properties of the Company is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required;
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended;
22
(ix) To such counsel's knowledge, there is no legal or
beneficial owner of any securities of the Company who has any rights,
not effectively satisfied or waived, to require registration of any
shares of capital stock of the Company in connection with the filing of
the Registration Statement;
(x) To such counsel's knowledge: (A) the Registration
Statement has become effective under the Securities Act, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Securities Act and nothing has come to such
counsel's attention to lead it to believe that such proceedings are
contemplated; and (B) any required filing of the Prospectus and any
supplement thereto pursuant to Rule 424(b) or the rules and regulations
has been made in the manner and within the time period required by such
Rule 424(b); and
(xi) The Stock to be sold under this Agreement to the
Underwriters are duly authorized for quotation on the Nasdaq National
Market.
(xii) the information required to be set forth in the
Registration Statement in answer to Items 9 and 10 (insofar as it
relates to such counsel) of Form S-3 is to the best of such counsel's
knowledge accurately and adequately set forth therein in all material
respects or no response is required with respect to such Items, and, the
description of the Company's stock option plans and the options granted
and which may be granted thereunder and the options granted otherwise
than under such plans set forth or incorporated by reference in the
Prospectus accurately and fairly presents the information required to be
shown with respect to said plans and options to the extent required by
the Securities Act and the rules and regulations of the Commission
thereunder;
(xiii) such counsel do not know of any franchises, contracts,
leases, documents or legal proceedings, pending or threatened, which in
the opinion of such counsel are of a character required to be described
in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement, which are not described and
filed as required;
(xiv) Such counsel shall also state that (A) it believes that
the Registration Statement and Prospectus (except for financial
statements and schedules included therein as to which such counsel need
not express any opinion) comply as to form in all material respects with
the Securities Act and the rules and regulations of the Commission
thereunder and (B) nothing has come to its attention that would cause it
to believe that (except for financial statements and schedules as to
which such counsel need not express any belief) the Registration
Statement and the Prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of its
date or as of the Closing Date contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
-2-
23
EXHIBIT C
Opinion of Special Patent Counsel
Referred to in Section 9(e)
(i) Such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and
certain trademark matters;
(ii) Such counsel is familiar with the Company's technology,
and in particular the GADOLITE and [gadolinium] texaphyrin products
including Gd-Tex, [LUTRIN and ANTRIN] under development by the Company
and has read those portions of the Registration Statement and the
Prospectus entitled "Risk Factors--Uncertainties Regarding Patents and
Proprietary Rights" at the penultimate paragraph thereof and
"Business--Patents and Proprietary Technology" at the penultimate
paragraph thereof, each of which relates to certain patents held or
licensed by Schering AG (collectively, the "Schering Intellectual
Property Portion");
(iii) Such counsel has reviewed the Schering Intellectual
Property Portion, and based upon such review, a review of the prior art
references made known to counsel and discussions with Company scientific
personnel, such counsel is aware of no valid United States or foreign
patent that is or would be infringed by the activities of the Company in
the manufacture, use or sale of GADOLITE or an MRI contrast agent based
on [gadolinium] texaphyrins, including Gd-Tex, [LUTRIN and ANTRIN];
(iv) Such counsel is aware of no pending judicial or
governmental proceedings relating to issued or licensed patents or
proprietary information to which the Company is a party or of which any
property of the Company is subject and such counsel is not aware of any
pending or threatened action, suit or claim by others that the Company
is infringing or otherwise violating any patent rights of others; and
(v) Such counsel has no reason to believe that the
information contained in the Schering Intellectual Property Portion of
the Registration Statement or the Prospectus at the time it became
effective contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that, at such Closing Date
the information contained in the Intellectual Property Portion of the
Prospectus or any amendment or supplement to the Schering Intellectual
Property Portion of the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
24
EXHIBIT D
Opinion of Patent Counsel Referred
to in Section 9(f)
(i) Such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and
certain trademark matters;
(ii) Such counsel is familiar with the Company's technology,
and in particular its GADOLITE product under development and the class
of compounds known as texaphyrins including Gd-Tex, LUTRIN and ANTRIN,
used by the Company in its business and the manner of their use and has
read the portions of the Registration Statement and the Prospectus
entitled "Risk Factors--Uncertainties Regarding Patents and Proprietary"
and "Business--Patents and Proprietary Technology" exclusive of those
portions defined as the "Schering Intellectual Property Portion" in
Exhibit C (collectively, the "Intellectual Property Portion");
(iii) The Intellectual Property Portion contains accurate
descriptions of the Company's patent applications, issued and allowed
patents, and patents licensed to it and fairly summarizes the legal
matters, documents and proceedings relating thereto;
(iv) Such counsel has reviewed the Company's patent
applications filed in the U.S. and outside the U.S. (the
"Applications"), which Applications are set forth on SCHEDULE I attached
hereto, and based upon such review, a review of the prior art references
made known to counsel and discussions with Company scientific personnel,
such counsel is aware of no valid United States or foreign patent that
is or would be infringed by the activities of the Company in the
manufacture, use or sale of any proposed product, drug or other material
as described in the Prospectus or made or used according to the
Applications;
(v) The Applications have been properly prepared and filed
on behalf of the Company, and are being diligently pursued by the
Company; the inventions described in the Applications are assigned or
licensed to the Company; to such counsel's knowledge, no other entity or
individual has any right or claim in any of the inventions,
Applications, or any patent to be issued therefrom, except as noted in
the Prospectus under "Business--Research, Clinical Development and
Marketing Collaborations" and each of the Applications discloses
patentable subject matter;
(vi) Such counsel is aware of no pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which any property of
the Company is subject and such counsel is not aware of any pending or
threatened action, suit or claim by others that the Company is
infringing or otherwise violating any patent rights or others, nor is
such counsel aware of any rights of third parties to any of the
Company's inventions described in the Applications, issued, approved or
licensed patents which could reasonably be expected materially to affect
the ability of the Company to conduct its business as described in the
Prospectus, including the commercialization of its GADOLITE and
texaphyrin products including Gd-Tex, LUTRIN and ANTRIN currently under
development; and
(vii) Such counsel has no reason to believe that the
information contained in the Intellectual Property Portion of the
Registration Statement or the Prospectus at the time it became effective
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein
25
or necessary to make the statements therein not misleading or that, at
such Closing Date the information contained in the Intellectual Property
Portion of the Prospectus or any amendment or supplement to the
Intellectual Property Portion of the Prospectus contains any untrue
statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
-2-
26
EXHIBIT E
Opinion of Patent Counsel Referred
to in Section 9(g)
(i) Such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and
certain trademark matters;
(ii) Such counsel is familiar with the Company's technology,
and in particular its GADOLITE product under development and the class
of compounds known as texaphyrins including Gd-Tex, LUTRIN and ANTRIN,
used by the Company in its business and the manner of their use and has
read the portions of the Registration Statement and the Prospectus
entitled "Risk Factors--Uncertainties Regarding Patents and Proprietary"
and "Business--Patents and Proprietary Technology" exclusive of those
portions defined as the "Schering Intellectual Property Portion" in
Exhibit B (collectively, the "Intellectual Property Portion");
(iii) The Intellectual Property Portion contains accurate
descriptions of the Company's patent applications, issued and allowed
patents, and patents licensed to it and fairly summarizes the legal
matters, documents and proceedings relating thereto;
(iv) Such counsel has reviewed the Company's patent
applications filed in the U.S. and outside the U.S. (the
"Applications"), which Applications are set forth on SCHEDULE I attached
hereto, and based upon such review, a review of the prior art references
made known to counsel and discussions with Company scientific personnel,
such counsel is aware of no valid United States or foreign patent that
is or would be infringed by the activities of the Company in the
manufacture, use or sale of any proposed product, drug or other material
as described in the Prospectus or made or used according to the
Applications;
(v) The Applications have been properly prepared and filed
on behalf of the Company, and are being diligently pursued by the
Company; the inventions described in the Applications are assigned or
licensed to the Company; to such counsel's knowledge, no other entity or
individual has any right or claim in any of the inventions,
Applications, or any patent to be issued therefrom, except as noted in
the Prospectus under "Business--Research, Clinical Development and
Marketing Collaborations"] and each of the Applications discloses
patentable subject matter;
(vi) Such counsel is aware of no pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which any property of
the Company is subject and such counsel is not aware of any pending or
threatened action, suit or claim by others that the Company is
infringing or otherwise violating any patent rights or others, nor is
such counsel aware of any rights of third parties to any of the
Company's inventions described in the Applications, issued, approved or
licensed patents which could reasonably be expected materially to affect
the ability of the Company to conduct its business as described in the
Prospectus, including the commercialization of its GADOLITE and
texaphyrin products including Gd-Tex, LUTRIN and ANTRIN currently under
development; and
(vii) Such counsel has no reason to believe that the
information contained in the Intellectual Property Portion of the
Registration Statement or the Prospectus at the time it became effective
contained
-3-
27
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, at such Closing Date the information
contained in the Intellectual Property Portion of the Prospectus or any
amendment or supplement to the Intellectual Property Portion of the
Prospectus contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
-4-
28
EXHIBIT F
Opinion of Patent Counsel Referred
to in Section 9(h)
(i) Such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and
certain trademark matters;
(ii) Such counsel is familiar with the technology, and in
particular its GADOLITE product under development and the class of
compounds known as texaphyrins, including Gd-Tex, LUTRIN and ANTRIN,
used by the Company in its business and the manner of their use and has
read the portions of the Registration Statement and the Prospectus
entitled "Risk Factors--Uncertainties Regarding Patents and Proprietary"
and "Business--Patents and Proprietary Technology" exclusive of those
portions defined as the "Schering Intellectual Property Portion" in
Schedule D (collectively, the "Intellectual Property Portion");
(iii) The Intellectual Property Portion contains accurate
descriptions of the Company's patent applications, issued and allowed
patents, and patents licensed to it and fairly summarizes the legal
matters, documents and proceedings relating thereto;
(iv) Such counsel has reviewed the Company's patent
applications filed in the U.S. and outside the U.S. (the
"Applications"), which Applications are set forth on SCHEDULE I, and
based upon such review, a review of the prior art references made known
to counsel and discussions with Company scientific personnel, such
counsel is aware of no valid United States or foreign patent that is or
would be infringed by the activities of the Company in the manufacture,
use or sale of any proposed product, drug or other material as described
in the Prospectus or made or used according to the Applications;
(v) The Applications have been properly prepared and filed
on behalf of the Company, and are being diligently pursued by the
Company; the inventions described in the Applications are assigned or
licensed to the Company; to such counsel's knowledge, no other entity or
individual has any right or claim in any of the inventions,
Applications, or any patent to be issued therefrom, except as noted in
the Prospectus under "Business--Research, Clinical Development and
Marketing Collaborations" and each of the Applications discloses
patentable subject matter;
(vi) Such counsel is aware of no pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which any property of
the Company is subject and such counsel is not aware of any pending or
threatened action, suit or claim by others that the Company is
infringing or otherwise violating any patent rights or others, nor is
such counsel aware of any rights of third parties to any of the
Company's inventions described in the Applications, issued, approved or
licensed patents which could reasonably be expected materially to affect
the ability of the Company to conduct its business as described in the
Prospectus, including the commercialization of its GADOLITE and
texaphyrin products, including Gd-Tex, LUTRIN and ANTRIN, currently
under development; and
(vii) Such counsel has no reason to believe that the
information contained in the Intellectual Property Portion of the
Registration Statement or the Prospectus at the time it became effective
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein
-5-
29
or necessary to make the statements therein not misleading or that, at
such Closing Date the information contained in the Intellectual Property
Portion of the Prospectus or any amendment or supplement to the
Intellectual Property Portion of the Prospectus contains any untrue
statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
-6-
30
EXHIBIT G
Opinion of Patent Counsel Referred
to in Section 9(i)
(i) Such counsel represents the Company in certain matters
relating to intellectual property, including patents, trade secrets and
certain trademark matters;
(ii) Such counsel is familiar with the technology, and in
particular its GADOLITE product under development and the class of
compounds known as texaphyrins, including Gd-Tex, LUTRIN and ANTRIN,
used by the Company in its business and the manner of their use and has
read the portions of the Registration Statement and the Prospectus
entitled "Risk Factors--Uncertainties Regarding Patents and Proprietary"
and "Business--Patents and Proprietary Technology" exclusive of those
portions defined as the "Schering Intellectual Property Portion" in
Schedule D (collectively, the "Intellectual Property Portion");
(iii) The Intellectual Property Portion contains accurate
descriptions of the Company's patent applications, issued and allowed
patents, and patents licensed to it and fairly summarizes the legal
matters, documents and proceedings relating thereto;
(iv) Such counsel has reviewed the Company's patent
applications filed in the U.S. and outside the U.S. (the
"Applications"), which Applications are set forth in the Intellectual
Property portion, and based upon such review, a review of the prior art
references made known to counsel and discussions with Company scientific
personnel, such counsel is aware of no valid United States or foreign
patent that is or would be infringed by the activities of the Company in
the manufacture, use or sale of any proposed product, drug or other
material as described in the Prospectus or made or used according to the
Applications;
(v) The Applications have been properly prepared and filed
on behalf of the Company, and are being diligently pursued by the
Company; the inventions described in the Applications are assigned or
licensed to the Company; to such counsel's knowledge, no other entity or
individual has any right or claim in any of the inventions,
Applications, or any patent to be issued therefrom, except as noted in
the Prospectus under "Business--Research, Clinical Development and
Marketing Collaborations" and each of the Applications discloses
patentable subject matter;
(vi) Such counsel is aware of no pending or threatened
judicial or governmental proceedings relating to patents or proprietary
information to which the Company is a party or of which any property of
the Company is subject and such counsel is not aware of any pending or
threatened action, suit or claim by others that the Company is
infringing or otherwise violating any patent rights or others, nor is
such counsel aware of any rights of third parties to any of the
Company's inventions described in the Applications, issued, approved or
licensed patents which could reasonably be expected materially to affect
the ability of the Company to conduct its business as described in the
Prospectus, including the commercialization of its GADOLITE and
texaphyrin products, including Gd-Tex, LUTRIN and ANTRIN, currently
under development; and
(vii) Such counsel has no reason to believe that the
information contained in the Intellectual Property Portion of the
Registration Statement or the Prospectus at the time it became effective
contained
-7-
31
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that, at such Closing Date the information
contained in the Intellectual Property Portion of the Prospectus or any
amendment or supplement to the Intellectual Property Portion of the
Prospectus contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
FOR PURPOSES OF THIS OPINION, THE TERMS REGISTRATION STATEMENT AND
PROSPECTUS, SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE UNDERWRITING
AGREEMENT IN CONNECTION WITH WHICH THIS OPINION IS BEING DELIVERED TO YOU.
-8-
