XOMA Ltd.
9,000,000 Shares
Common Shares
(US$0.0005 Par Value)
UNDERWRITING AGREEMENT
September 19, 2003
UNDERWRITING AGREEMENT
September 19, 2003
UBS Securities LLC
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxxxxx & Company, Inc.
ThinkEquity Partners LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
XOMA Ltd., a Bermuda company (the "Company"), proposes to issue and sell to
the Underwriters named in Schedule A annexed hereto (the "Underwriters"), for
whom you are acting as representatives, an aggregate of 9,000,000 shares (the
"Firm Shares") of common shares, US$0.0005 par value per share (the "Common
Shares"), of the Company. In addition, solely for the purpose of covering
over-allotments, the Company proposes to grant to the Underwriters the option to
purchase from the Company up to an additional 1,350,000 shares of Common Shares
(the "Additional Shares"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the "Shares." The Shares are
described in the Prospectus which is referred to below.
The Company has prepared and filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-50134) under
the Act (the "first registration statement"). Amendments to the first
registration statement have been similarly prepared and filed with the
Commission. The first registration statement, as so amended, has been declared
by the Commission to be effective under the Act. The Company has also prepared
and filed with the Commission, in accordance with the provisions of the Act, a
registration statement on Form S-3 (File No. 333-107929) under the Act (the
"second registration statement" and, together with the first registration
statement, the "registration statement"). Amendments to the second registration
statement have been similarly prepared and filed with the Commission. The second
registration statement, as so amended, has been declared by the Commission to be
effective under the Act. Pursuant to Rule 429 under the Act, the second
registration statement constitutes a post-effective amendment to the first
registration statement and includes a combined prospectus relating to any
offering of securities of the Company under both the first registration
statement and the second registration statement. The Company has filed with the
Commission a Prepricing Prospectus (as defined and referred to below) pursuant
to Rule 424(b) under the Act, describing the Shares and the offering thereof, in
such form as has been provided to or discussed with, and approved by, the
Underwriters. The Company will next file with the Commission pursuant to Rule
424(b) under the Act a final prospectus supplement to the basic prospectus
included within the second registration statement, describing the Shares and the
offering thereof, in such form as has been provided to or discussed with, and
approved, by the Underwriters.
The first registration statement, as amended at the time it became
effective and as supplemented or amended, or deemed to have been amended
pursuant to Rule 429 under the Act, prior to the execution of this Agreement and
the second registration statement, at the time it became effective and as
supplemented or amended prior to the execution of this Agreement, in each case
including (i) all financial schedules and exhibits thereto and (ii) all
documents incorporated by reference or deemed to be incorporated by reference
therein, are hereinafter referred to individually as a "Registration Statement"
and collectively as the "Registration Statements." If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Abbreviated Registration Statement"), the
term "Registration Statement" includes the Abbreviated Registration Statement.
The term "Basic Prospectus" as used in this Agreement means the basic prospectus
dated as of September 8, 2003 and to be filed with the Commission pursuant to
Rule 424(b) for use in connection with the offer and/or sale of Shares pursuant
to this Agreement. The term "Prepricing Prospectus" as used in this Agreement
means any form of preliminary prospectus used in connection with the marketing
of the Shares, including the preliminary prospectus supplement dated as of
September 11, 2003 and filed with the Commission on September 11, 2003 pursuant
to Rule 424 under the Act and any basic prospectus (whether or not in
preliminary form) used with any such preliminary prospectus supplement in
connection with the marketing of the Shares, in each case as any of the
foregoing may be amended or supplemented by the Company. The term "Prospectus
Supplement" as used in this Agreement means any final prospectus supplement
specifically relating to the Shares, in the form filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 under the Act. The term
"Prospectus" as used in this Agreement means the Basic Prospectus together with
the Prospectus Supplement except that if such Basic Prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement was
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the Basic
Prospectus as so amended or supplemented and as supplemented by the Prospectus
Supplement. Any reference herein to the registration statement, a Registration
Statement, the Basic Prospectus, any Prepricing Prospectus, any Prospectus
Supplement or the Prospectus shall be deemed to refer to and include (i) the
documents incorporated by reference therein
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pursuant to Form S-3 (the "Incorporated Documents") and (ii) the copy of such
Registration Statement, the Basic Prospectus, the Prepricing Prospectus, the
Prospectus Supplement, the Prospectus or the Incorporated Documents filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX"). Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to a Registration Statement, any Prepricing
Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the filing of any document under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act") after the effective date of a Registration Statement, or the
date of the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A
attached hereto, subject to adjustment in accordance with Section 8 hereof, in
each case at a purchase price of US$7.52 per Share. The Company is advised by
you that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective date of the
Registration Statements as in your judgment is advisable and (ii) initially to
offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by UBS Securities LLC ("UBS") on
behalf of the several Underwriters at any time and from time to time on or
before the thirtieth day following the date of the Prospectus, by written notice
to the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "additional time of purchase"); provided, however, that the additional
time of purchase shall not be earlier than the time of purchase (as defined
below) nor earlier than
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the second business day(1) after the date on which the option shall have been
exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Company by Federal Funds wire transfer, against delivery of
the certificates for the Firm Shares to you through the facilities of The
Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on September 24, 2003 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called the "time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. Electronic transfer of the Additional Shares shall
be made to you at the additional time of purchase in such names and in such
denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to
the purchase of the Shares shall be made at the offices of Xxxxx Xxxxxxxxxx LLP,
1301 Avenue of the Americas, New York, New York at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) each Registration Statement has been declared effective under the Act;
no stop order of the Commission preventing or suspending the use of the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement or the
Prospectus or the effectiveness of either Registration Statement has been issued
and no proceedings for such purpose have been instituted or, to the Company's
knowledge, are contemplated by the Commission; the
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1 As used herein "business day" shall mean any day on which the NASDAQ is
open for trading.
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Company is eligible to use Form S-3; each Registration Statement at the date of
this Agreement meets, and the offering of the Shares complies with, the
requirements of Rule 415 under the Act. Each Registration Statement complied
when it became effective, complies and will comply, at the time of purchase, any
additional time of purchase and any time at which any sales with respect to
which the Prospectus is delivered, and the Basic Prospectus, any Prepricing
Prospectus, the Prospectus Supplement and the Prospectus conformed as of its
date, conform and will conform, at the time of purchase, any additional time of
purchase and any time at which any sales with respect to which the Prospectus is
delivered, in all material respects with the requirements of the Act (including
said Rule 415); any statutes, regulations, contracts or other documents that are
required to be described in either Registration Statement or the Prospectus or
to be filed as exhibits to either Registration Statement have been and will be
so described or filed; the conditions to the use of Form S-3 have been
satisfied; and each Registration Statement did not at the time of effectiveness,
does not and will not, at the time of purchase, any additional time of purchase
and any time at which any sales with respect to which the Prospectus is
delivered, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Basic Prospectus, any Prepricing Prospectus, the
Prospectus Supplement and the Prospectus did not as of its date, does not and
will not, at the time of purchase, any additional time of purchase or any time
at which any sales with respect to which the Prospectus is delivered, contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no warranty or representation with respect to any
statement contained in the Registration Statements or the Prospectus in reliance
upon and in conformity with information concerning an Underwriter and furnished
in writing by or on behalf of such Underwriter through you to the Company
expressly for use in the Registration Statements or the Prospectus; the
documents incorporated by reference in the Basic Prospectus, any Prepricing
Prospectus, the Prospectus Supplement, each Registration Statement and the
Prospectus, at the time they became effective or were filed with the Commission,
complied in all material respects with the requirements of the Exchange Act and
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Company has not distributed and will not distribute any
offering material in connection with the offering or sale of the Shares other
than the second registration statement, any Prepricing Prospectus, the then most
recent Prospectus Supplement and the Prospectus except as permitted by
applicable law;
(b) as of the date of this Agreement, the Company has an authorized and
outstanding capitalization as set forth in the sections of the Registration
Statements and the Prospectus entitled "Capitalization" and "Description of
Share Capital" and, as of the time of purchase and the additional time of
purchase, as the case may be, the Company shall have an authorized and
outstanding capitalization as set forth in the sections of the Registration
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Statements and the Prospectus entitled "Capitalization" and "Description of
Share Capital" (subject, in each case, to the issuance of Common Shares upon
exercise of share options and warrants disclosed as outstanding in the
Registration Statements and the Prospectus and the grant of options under
existing share option plans described in the Registration Statements and the
Prospectus); all of the issued and outstanding share capital, including the
Common Shares, of the Company have been duly authorized and validly issued and
are fully paid and non-assessable, and have been issued in compliance with all
U.S. federal and state securities laws and Bermuda law, and no such issuance
constituted a violation by the Company of any preemptive right, resale right,
right of first refusal or similar right;
(c) the Company has been duly continued into and is validly existing as a
company in good standing under the laws of Bermuda, with full power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statements and the Prospectus, to execute and
deliver this Agreement and to issue, sell and deliver the Shares as contemplated
herein;
(d) the Company is duly qualified to do business as a foreign corporation
or company and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, have a material adverse effect on
the business, properties, financial condition, results of operation or prospects
of the Company and the Subsidiaries (as hereinafter defined) taken as a whole
("Material Adverse Effect");
(e) the Company has no subsidiaries (as defined in the Act) other than
those listed on Exhibit C hereto (collectively, the "Subsidiaries"); the Company
owns all of the issued and outstanding share capital or other equity interests
of each of the Subsidiaries; other than the share capital or other equity
interests of the Subsidiaries and except as disclosed in the Registration
Statements and the Prospectus, the Company does not own, directly or indirectly,
any shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity (other than equity interests held by the Company
with an aggregate book value of less than US$500,000); complete and correct
copies of the charter or bye-laws or other organizational documents of the
Company and the Subsidiaries and all amendments thereto have been made available
to you, and except as set forth in the exhibits to the Registration Statements
no changes therein will be made subsequent to the date hereof and prior to the
time of purchase or, if later, the additional time of purchase; each Subsidiary
has been duly organized and is validly existing as a corporation (or, in the
case of XOMA (US) LLC (the "LLC"), as a limited liability company) in good
standing under the laws of the jurisdiction of its organization, with full power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statements and the Prospectus; each
Subsidiary is duly qualified to do business as a foreign corporation (or, in the
case of the LLC,
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as a foreign limited liability company) and is in good standing in each
jurisdiction where the ownership or leasing of its properties or the conduct of
its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have
a Material Adverse Effect; all of the outstanding shares or other equity
interests of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company subject
to no security interest, other encumbrance or adverse claims, except as would
not, individually or in the aggregate, have a Material Adverse Effect; and no
options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligation into shares or other equity
interests in the Subsidiaries are outstanding;
(f) the Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued, fully paid and non-assessable and free of preemptive rights, resale
rights, rights of first refusal and similar rights imposed by any applicable
law, rule or regulation, the charter, bye-laws or other organizational documents
of the Company or any of the Subsidiaries or any agreement, commitment or
instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries is or may be bound;
(g) the share capital of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Registration
Statements and the Prospectus, the certificates for the Shares are in due and
proper form, and the holders of the Shares will not be subject to personal
liability for assessments for the indebtedness or obligations of the Company or
otherwise solely by reason of being such holders;
(h) this Agreement has been duly authorized, executed and delivered by the
Company;
(i) neither the Company nor any of the Subsidiaries is in breach or
violation of or in default under (nor has any event occurred which with notice,
lapse of time or both would result in any breach or violation of, constitute a
default under or give the holder of any indebtedness (or a person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a part of such indebtedness under) (A) its respective charter or bye-laws
or other organizational documents, or (B) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected except, in the case of clause (B), to the
extent that any such breach, violation or default would not, individually or in
the aggregate, have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated hereby will not conflict with,
result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in
any breach or violation of or constitute a default
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under) (X) the charter or bye-laws or other organizational documents of the
Company or any of the Subsidiaries, or (Y) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected, or (Z) any U.S. federal, state,
provincial, territorial, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of the Subsidiaries except,
in the case of clause (Y), to the extent that any such conflict, breach,
violation or default would not, individually or in the aggregate, have a
Material Adverse Effect;
(j) no approval, authorization, consent or order of or filing with any U.S.
federal, state, provincial, territorial, local or foreign governmental or
regulatory commission, board, body, authority or agency or any sub-division
thereof is required in connection with the issuance and sale of the Shares or
the consummation by the Company of the transactions contemplated hereby other
than registration of the Shares under the Act and filing of the Registration
Statements and the Prospectus with the Registrar of Companies in Bermuda, which
has been or will be effected, and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares are
being offered by the Underwriters or under the rules and regulations of the
NASD;
(k) except as set forth in the Registration Statements and the Prospectus,
(i) no person has the right, contractual or otherwise, to cause the Company to
issue or sell to it any Common Shares or any other shares or other equity
interests of the Company, (ii) no person has any preemptive rights, resale
rights, rights of first refusal or other rights to purchase any Common Shares or
any other shares or other equity interests of the Company pursuant to any
applicable law, rule or regulation, the charter, bye-laws or other
organizational documents of the Company or any of the Subsidiaries or any
agreement, commitment or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries is or
may be bound, and (iii) no person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and sale of the
Shares, in the case of each of the foregoing clauses (i), (ii) and (iii),
whether as a result of the filing or effectiveness of either Registration
Statement or the sale of the Shares as contemplated thereby or otherwise; no
person has the right, contractual or otherwise, to cause the Company to register
under the Act any Common Shares or any other shares or other equity interests of
the Company, or to include any such shares or interests in the Registration
Statements or the offering contemplated thereby, whether as a result of the
filing or effectiveness of either Registration Statement or the sale of the
Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiaries has all licenses,
authorizations, consents and approvals and has made all filings required under
any U.S. federal, state, provincial, territorial, local or foreign law,
regulation or rule, and has obtained
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all authorizations, consents and approvals from other persons, in order to
conduct its respective business, except where the failure to have such licenses,
authorizations, consents and approvals, to make such filings or to obtain such
authorizations, consents and approvals would not, individually or in the
aggregate, have a Material Adverse Effect; neither the Company nor any of the
Subsidiaries is in violation of, or in default under, or has received notice of
any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any U.S. federal, state, provincial,
territorial, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of the Subsidiaries, except where such
violation, default, revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration Statements
or the Prospectus or to be filed as an exhibit to the Registration Statements
have been so described or filed as required;
(n) except as disclosed in the Registration Statements and except for
applications and ordinary course proceedings relating to regulatory approvals of
new drugs or the granting of patents, there are no actions, suits, claims,
investigations or proceedings pending or, to the Company's knowledge, threatened
or contemplated to which the Company or any of the Subsidiaries or any of their
respective directors or officers is or would be a party or of which any of their
respective properties is or would be subject at law or in equity, before or by
any U.S. federal, state, provincial, territorial, local or foreign governmental
or regulatory commission, board, body, authority or agency or any subdivision
thereof, except any such action, suit, claim, investigation or proceeding which
would not result in a judgment, decree or order either (A) having, individually
or in the aggregate, a Material Adverse Effect or (B) preventing consummation of
the transactions contemplated hereby;
(o) Ernst & Young LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the Commission as
part of the Registration Statements and the Prospectus, are independent public
accountants as required by the Act;
(p) the financial statements included in the Registration Statements and
the Prospectus, together with the related notes and schedules (if any), present
fairly the consolidated financial position of the Company and the Subsidiaries
as of the dates indicated and the consolidated results of operations and cash
flows of the Company and the Subsidiaries for the periods specified (in the case
of the unaudited interim financial statements, subject to normal year-end
adjustments) and have been prepared in compliance with the requirements of the
Act and, in the case of the audited financial statements included in the
Registration Statements and the Prospectus, in conformity with U.S. generally
accepted accounting principles applied on a consistent basis during the periods
involved; all disclosures regarding Non-GAAP Financial Measures (as such term is
defined by the rules and regulations of the
9
Commission) comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K; the other financial and statistical data set forth in the
Registration Statements and the Prospectus are accurately presented in all
material respects and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included in the
Registration Statements and the Prospectus that are not included as required;
and the Company and the Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations),
not disclosed in the Registration Statements and the Prospectus;
(q) subsequent to the respective dates as of which information is given in
the Registration Statements and the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective material
adverse change, in the business, properties, management, financial condition or
results of operations of the Company and the Subsidiaries taken as a whole, (ii)
any transaction which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation, direct or contingent (including any off-balance
sheet obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv) any change
in the share capital (excluding the exercise of share options by non-executive
officers pursuant to share option plans described in the Registration Statements
and the Prospectus or the documents incorporated by reference therein) or
increase in the outstanding indebtedness of the Company or the Subsidiaries or
(v) any dividend or distribution of any kind declared, paid or made on the share
capital of the Company;
(r) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A hereto, of
each of its directors and executive officers;
(s) the Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the U.S. Investment Company
Act of 1940, as amended (the "Investment Company Act"); the Company believes
that it is not a "controlled foreign corporation" within the meaning of the U.S.
Internal Revenue Code, as amended (the "IRC"); and the Company believes that it
was not a "passive foreign investment company" within the meaning of the IRC for
the calendar year 2002 and, based on management's current projections of the
Company's future income and asset composition, and the manner in which
management currently intends to manage and conduct the Company's business in the
future, that it will not become a "passive foreign investment company" in any
subsequent year;
(t) the Company and each of the Subsidiaries has good and marketable title
to all property (real and personal) described in the Registration Statements and
in the Prospectus as being owned by each of them, free and clear of all liens,
claims, security
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interests or other encumbrances, subject only to such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property by the Company; all the property described in the Registration
Statements and the Prospectus as being held under lease by the Company or a
Subsidiary is held thereby under valid, subsisting and enforceable leases,
subject only to such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company;
(u) to the Company's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the Prospectus, (i)
the Company, by ownership, license or covenant not to xxx, has the right to use
all patents, patent applications, trademarks, trademark applications, service
marks, trade names and copyrights (other than with respect to RaptivaTM brand
anti-CD11a, collectively, the "Intellectual Property Rights") which are
necessary for use in connection with its business as presently conducted and as
proposed to be conducted; (ii) there is no existing infringement by another
party of any of the Intellectual Property Rights which are necessary for use in
connection with the Company's business as presently conducted; (iii) there is no
pending or threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to, or the validity or enforceability of, the
Intellectual Property Rights of the Company, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (iv) there is no
pending or threatened action, suit, proceeding or claim by others that the
business of the Company as described in the Registration Statements and the
Prospectus infringes or otherwise violates, or that the commercialization of any
of the products under development by the Company would infringe or otherwise
violate, any patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any facts which would form a
reasonable basis for any such claim; and (v) all of the Intellectual Property
Rights under the control of the Company were filed and are being or were
prosecuted in accordance with the applicable rules and regulations relating
thereto;
(v) to the Company's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the Prospectus, the
Company is unaware of facts which would form a reasonable basis for a finding
that (i) the patents owned or co-owned by Genentech, Inc. ("Genentech") and
relating to anti-CD11a as listed on Exhibit L attached hereto (the "Anti-CD11a
Patents") are unenforceable or invalid, (ii) the Anti-CD11a Patents are
infringed by another party or (iii) Genentech's contemplated sales of RaptivaTM
brand anti-CD11a would infringe patents owned by another party;
(w) neither the Company nor any of the Subsidiaries is engaged in any
unfair labor practice; except for matters which would not, individually or in
the aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the Company's knowledge after due inquiry,
threatened against the Company or any of the
11
Subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending or threatened, (B) no strike, labor dispute, slowdown or stoppage
pending or, to the Company's knowledge after due inquiry, threatened against the
Company or any of the Subsidiaries and (C) no union representation dispute
currently existing concerning the employees of the Company or any of the
Subsidiaries, and (ii) to the Company's knowledge after due inquiry, (A) no
union organizing activities are currently taking place concerning the employees
of the Company or any of the Subsidiaries and (B) there has been no violation of
any U.S. federal, state, provincial, territorial, local or foreign law relating
to discrimination in the hiring, promotion or pay of employees, any applicable
wage or hour laws or any provision of the Employee Retirement Income Security
Act of 1974 ("ERISA") or the rules and regulations promulgated thereunder
concerning the employees of the Company or any of the Subsidiaries;
(x) the Company and the Subsidiaries and their properties, assets and
operations are in compliance with, and hold all permits, authorizations and
approvals required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect; there are no past or present events, conditions, activities or practices
that would reasonably be expected to give rise to any costs or liabilities to
the Company or the Subsidiaries under, or to prevent compliance by the Company
or the Subsidiaries with, applicable Environmental Laws, except as would not,
individually or in the aggregate, have a Material Adverse Effect; to the
Company's knowledge, there are no reasonably anticipated future plans of the
Company or the Subsidiaries that would reasonably be expected to give rise to
any capital expenditures under applicable Environmental Laws, except as would
not, individually or in the aggregate, have a Material Adverse Effect; except as
would not, individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor any of the Subsidiaries (i) to the Company's knowledge,
is the subject of any investigation, (ii) has received any written notice or
claim, (iii) is a party to or, to the Company's knowledge, affected by any
pending or threatened action, suit or proceeding, (iv) is bound by any judgment,
decree or order or (v) has entered into any agreement, in each case relating to
any alleged violation of any Environmental Law or any actual or alleged release
or threatened release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "Environmental Law" means any law, statute,
ordinance, rule, regulation, order, decree, judgment or injunction, or common
law, relating to pollution or the protection, cleanup or restoration of the
environment or natural resources, or public health (to the extent relating to
the environment or exposure to Hazardous Materials) including those relating to
the distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release or threatened release of Hazardous
Materials, and "Hazardous Materials" means any material (including, without
limitation, pollutants, contaminants, hazardous or toxic substances or wastes)
that is regulated by or can give rise to liability under any Environmental Law);
12
(y) all tax returns required to be filed by the Company and each of the
Subsidiaries have been filed, and all taxes and other assessments of a similar
nature (whether imposed directly or through withholding) including any interest,
additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been paid, other than those being contested in good faith and
for which adequate reserves have been provided as required by U.S. generally
accepted accounting principles;
(z) the Company and each of the Subsidiaries maintains insurance covering
its properties, operations, personnel and businesses as the Company deems
adequate; such insurance insures against such losses and risks to an extent
which is adequate in accordance with customary industry practice to protect the
Company and the Subsidiaries and their businesses; all such insurance is fully
in force on the date hereof and will be fully in force at the time of purchase
and any additional time of purchase;
(aa) neither the Company nor any of the Subsidiaries has sustained since
the date of the last audited financial statements included in the Registration
Statements and the Prospectus any loss or interference with its respective
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, except as would not, individually or in the aggregate, have a
Material Adverse Effect;
(bb) except as disclosed in the Registration Statements and the Prospectus,
the Company has not sent or received any communication regarding termination of,
or intent not to renew, any of the contracts or agreements referred to or
described in, or filed as an exhibit to, a Registration Statement, and no such
termination or non-renewal has been threatened by the Company or, to the
Company's knowledge, any other party to any such contract or agreement;
(cc) the Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(dd) the Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were
13
established; the Company's auditors and the Audit Committee of the Board of
Directors have been advised of: (i) any significant deficiencies in the design
or operation of internal controls which could adversely affect the Company's
ability to record, process, summarize, and report financial data; and (ii) any
fraud, whether or not material, that involves management or other employees who
have a role in the Company's internal controls; any material weaknesses in
internal controls have been identified for the Company's auditors; and since the
date of the most recent evaluation of such disclosure controls and procedures,
there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses; the
principal executive officers (or their equivalents) and principal financial
officers (or their equivalents) of the Company have made all certifications
required by the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and any
related rules and regulations promulgated by the Commission, and the statements
contained in any such certification are complete and correct; the Company is
otherwise in compliance in all material respects with all applicable effective
provisions of the Xxxxxxxx-Xxxxx Act;
(ee) since July 30, 2002, the Company has not, directly or indirectly,
including through any subsidiary: (i) extended credit, arranged to extend
credit, or renewed any extension of credit, in the form of a personal loan, to
or for any director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the Company; or (ii)
made any material modification, including any renewal thereof, to any term of
any personal loan to any director or executive officer of the Company, or any
family member or affiliate of any director or executive officer, which loan was
outstanding on July 30, 2002;
(ff) any statistical and market-related data included in any Registration
Statement and the Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the extent
required;
(gg) neither the Company nor any of the Subsidiaries nor, to the Company's
knowledge after due inquiry, any employee or agent of the Company or the
Subsidiaries has made any payment of funds of the Company or the Subsidiaries or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in any Registration Statement or the Prospectus;
(hh) neither the Company nor any of the Subsidiaries nor any of their
respective directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has constituted or might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
14
(ii) to the Company's knowledge, there are no affiliations or associations
between any member of the NASD and any of the Company's officers, directors or
5% or greater securityholders, except as set forth in the Registration
Statements and the Prospectus; and
(jj) the clinical, pre-clinical and other studies and tests that are
described in the Registration Statements or the Prospectus or the results of
which are referred to in the Registration Statements or the Prospectus were and,
if still pending, are being conducted in all material respects in accordance
with standard medical and scientific research procedures; the descriptions in
the Registration Statements and the Prospectus of the results of such studies
and tests are accurate and complete in all material respects and fairly present
the data derived from such studies and tests, and the Company has no knowledge
of any other studies or tests the results of which are inconsistent with or
otherwise call into question the results described or referred to in the
Registration Statements and the Prospectus; except to the extent disclosed in
the Registration Statements and the Prospectus, the Company has operated and
currently is in compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and comparable
drug regulatory agencies outside of the United States (collectively, the
"Regulatory Authorities"); and except to the extent disclosed in the
Registration Statements and the Prospectus, the Company has not received any
notices or other correspondence from the Regulatory Authorities or any other
governmental agency or subdivision thereof requiring the termination, suspension
or modification of any clinical or pre-clinical studies or tests that are
described in the Registration Statements or the Prospectus or the results of
which are referred to in the Registration Statements or the Prospectus.
In addition, any certificate signed by any officer of the Company or any of
the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company or Subsidiary, as the case may be,
as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states or other jurisdictions as you may designate and to
maintain such qualifications in effect so long as you may request for the
distribution of the Shares; provided that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of process under
the laws of any such jurisdiction (except service of process with respect to the
offering and sale of the Shares); and to promptly advise you of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
15
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statements become effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver a
prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare, at its
expense, promptly upon request such amendment or amendments to the Registration
Statements and the Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for any Registration Statement or a post-effective amendment thereto
be declared effective before the Shares maybe sold, the Company will endeavor to
cause such Registration Statement or such post-effective amendment to become
effective as soon as possible and the Company will advise you promptly and, if
requested by you, will confirm such advice in writing, (i) when such
Registration Statement and any post-effective amendment thereto has become
effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is
filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to any Registration
Statement or the Prospectus or for additional information with respect thereto,
or of notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of any Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of any
Registration Statement, to use its best efforts to obtain the lifting or removal
of such order as soon as possible; to advise you promptly of any proposal to
amend or supplement any Registration Statement or the Prospectus, including by
filing any documents that would be incorporated therein by reference, and to
provide you and Underwriters' counsel copies of any such documents for review
and comment a reasonable amount of time prior to any proposed filing and to file
no such amendment or supplement to which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and any
definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; and to provide
you with a copy of such reports and statements and other documents to be filed
by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act during
such period a reasonable amount of time prior to any proposed filing, and to
promptly notify you of such filing;
16
(f) if necessary or appropriate, to file a registration statement pursuant
to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of any event
within the time during which a prospectus relating to the Shares is required to
be delivered under the Act which could require the making of any change in the
Prospectus then being used so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading, and, during such time, subject to Section 4(d) hereof, to
prepare and furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect any
such change;
(h) to make generally available to its security holders, and to deliver to
you an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning after the
effective date of the Registration Statements (as defined in Rule 158(c) under
the Act) as soon as is reasonably practicable after the termination of such
twelve-month period but not later than November 14, 2004;
(i) to furnish to its shareholders as soon as practicable after the end of
each fiscal year an annual report (including a consolidated balance sheet and
statements of income, shareholders' equity and cash flow of the Company and the
Subsidiaries for such fiscal year, accompanied by a copy of the certificate or
report thereon of nationally recognized independent certified public
accountants);
(j) to furnish to you seven copies of the Registration Statements, as
initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto and documents incorporated by reference therein) and
sufficient copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(k) upon request, to furnish to you promptly and to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports, proxy statements, or other communications which the
Company shall send to its shareholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms as may be designated by the Commission, (iii) copies of documents or
reports filed with any national securities exchange on which any class of
securities of the Company is listed, and (iv) such other non-confidential
information as you may reasonably request regarding the Company or the
Subsidiaries;
(l) to furnish to you as early as practicable prior to the time of purchase
and any additional time of purchase, as the case may be, but not later than two
business days
17
prior thereto, a copy of the latest available unaudited interim and monthly
consolidated financial statements, if any, of the Company and the Subsidiaries
which have been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 6(i) hereof;
(m) to apply the net proceeds from the sale of the Shares in the manner set
forth under the caption "Use of proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statements, the Basic Prospectus,
each Prepricing Prospectus, each Prospectus Supplement, the Prospectus, and any
amendments or supplements thereto, and the printing and furnishing of copies of
each thereof to the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the Shares
including any stock or transfer taxes and stamp or similar duties payable upon
the sale, issuance or delivery of the Shares to the Underwriters, (iii) the
producing, word processing and/or printing of this Agreement, any Agreement
Among Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state or
foreign laws and the determination of their eligibility for investment under
state or foreign law as aforesaid (including the legal fees and filing fees and
other disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on NASDAQ and any
registration thereof under the Exchange Act, (vi) any filing for review of the
public offering of the Shares by the NASD, including the legal fees and filing
fees and other disbursements of counsel to the Underwriters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the
costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the
Shares to prospective investors and the Underwriters' sales forces, including,
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants and (ix) the performance of the
Company's other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose
of, directly or indirectly, any Common Shares or securities convertible into or
exchangeable or exercisable for Common Shares or warrants or other rights to
purchase Common Shares or any other securities of the Company that are
substantially similar to Common Shares, or file or cause to
18
be declared effective a registration statement under the Act relating to the
offer and sale of any Common Shares or securities convertible into or
exercisable or exchangeable for Common Shares or other rights to purchase Common
Shares or any other securities of the Company that are substantially similar to
Common Shares for a period of 90 days after the date hereof (the "Lock-Up
Period"), without the prior written consent of UBS, except for (i) the
registration of the Shares and the sales to the Underwriters pursuant to this
Agreement, (ii) issuances of Common Shares upon the exercise of options or
warrants disclosed as outstanding in the Registration Statements and the
Prospectus, (iii) the issuance of employee share options not exercisable during
the Lock-Up Period pursuant to share option plans described in the Registration
Statements and the Prospectus, and (iv) the issuance and sale to Millennium
Pharmaceuticals, Inc. ("Millennium") of up to US$9,000,000 worth of Common
Shares, and the registration for resale of such shares under the Act, pursuant
to the terms of the Company's existing collaboration and financing agreements
with Millennium; provided, however, that the provisions of this Section 4(o)
shall not restrict the Company's ability to elect to repay outstanding
indebtedness owed to Genentech with Common Shares on terms set forth in the
Company's existing collaboration and financing agreements with Genentech if the
completion of the issuance and sale of such shares occurs after the expiration
of the Lock-Up Period;
(p) to use its best efforts to cause the Common Shares to be listed for
quotation on the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ"); and
(q) to maintain a transfer agent and, if necessary under the jurisdiction
of incorporation of the Company, a registrar for the Common Shares.
5. Reimbursement of Underwriters' Expenses. If the Shares are not delivered
for any reason other than the termination of this Agreement pursuant to the
fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx Xxxxxx &
Xxxxxxx LLP, U.S. counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the
19
other Underwriters and in form and substance satisfactory to Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, in the form set forth in Exhibit D attached
hereto.
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxxx Xxxx &
Xxxxxxx, Bermuda counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in form and
substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, in
the form set forth in Exhibit E attached hereto.
(c) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxxxxxxx X.
Xxxxxxxx, Vice President, General Counsel and Secretary of the Company,
addressed to the Underwriters, and dated the time of purchase or the additional
time of purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form and substance satisfactory to Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, in the form set forth as Exhibit F attached
hereto.
(d) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the opinion of XxXxxxxxx, Held & Xxxxxx, Ltd.,
special counsel for the Company with respect to patent and proprietary rights,
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in form and
substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, in
the form set forth as Exhibit G attached hereto.
(e) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the opinion of Xxxxxxxx, Gerstein & Borun,
special counsel for the Company with respect to patent and proprietary rights,
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in form and
substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, in
the form set forth as Exhibit H attached hereto.
(f) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the opinion of Xxxx X. Xxxxxxx, Director of
Intellectual Property of the Company, dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies for each
of the other Underwriters and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, stating in the form set forth as
Exhibit I attached hereto.
(g) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the opinion of XxXxxxxxx, Held & Xxxxxx, Ltd.,
special counsel for the Company with respect to patent and proprietary rights,
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for
20
each of the other Underwriters and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in the form set forth as Exhibit J
attached hereto.
(h) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx Xxxxxx &
Xxxxxxx LLP, U.S. counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case may
be, with reproduced copies for each of the other Underwriters and in form and
substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, in
the form set forth in Exhibit K attached hereto.
(i) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the Underwriters
(with reproduced copies for each of the Underwriters) in the forms heretofore
approved by UBS.
(j) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the opinion of Xxxxxxx Xxxxxxxx & Xxxxx,
Bermuda counsel for the Underwriters, dated the date of the time of purchase or
the date of the additional time of purchase, as the case may be, in form and
substance reasonably satisfactory to you.
(k) You shall have received at the time of purchase and, if applicable, at
the additional time of purchase, the favorable opinion of Xxxxx Xxxxxxxxxx LLP,
counsel for the Underwriters, dated the time of purchase or the additional time
of purchase, as the case may be, in form and substance reasonably satisfactory
to you.
(l) No Prospectus or amendment or supplement to any Registration Statement
or the Prospectus, including documents deemed to be incorporated by reference
therein, shall have been filed to which you object in writing.
(m) The Prospectus Supplement shall have been filed with the Commission
pursuant to Rule 424(b) under the Act at or before 5:30 P.M. New York City time
on the second full business day after the date of this Agreement.
(n) Prior to the time of purchase, and, if applicable, the additional time
of purchase, (i) no stop order with respect to the effectiveness of any
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration
Statements and all amendments thereto shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
21
(o) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (A) no material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole shall occur
or become known and (B) no transaction which is material to the Company has been
entered into by the Company or any of the Subsidiaries.
(p) The Company will, at the time of purchase and, if applicable, at the
additional time of purchase, deliver to you a certificate of its Chief Executive
Officer and its Chief Financial Officer in the form attached as Exhibit B
hereto.
(q) You shall have received signed Lock-up Agreements referred to in
Section 3(r) hereof.
(r) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in any
Registration Statement and the Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably request.
(s) The Shares shall have been approved for quotation on NASDAQ, subject
only to notice of issuance at or prior to the time of purchase or the additional
time of purchase, as the case may be.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statements, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the earlier of the time of execution of
this Agreement or the respective dates as of which information is given in the
Registration Statements and the Prospectus, there has been any material adverse
change or any development involving a prospective material adverse change in the
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole, which would, in UBS'
judgment or in the judgment of such group of Underwriters, make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
on the terms and in the manner contemplated in the Registration Statements and
the Prospectus, or (y) since of execution of this Agreement, there shall have
occurred: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ; (ii) a suspension or material limitation in trading in the Company's
securities on the Nasdaq National Market; (iii) a general moratorium on
commercial banking activities declared by
22
either federal or New York State authorities or the authorities of Bermuda or a
material disruption in commercial banking or securities settlement or clearance
services in the United States or Bermuda; (iv) an outbreak or escalation of
hostilities or acts of terrorism involving the United States or Bermuda or a
declaration by the United States or Bermuda of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or Bermuda or elsewhere, if the effect
of any such event specified in clause (iv) or (v) in UBS' judgment or in the
judgment of such group of Underwriters makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares on the terms and
in the manner contemplated in the Registration Statements and the Prospectus, or
(z) since the time of execution of this Agreement, there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of (i)
any intended or potential downgrading or (ii) any watch, review or possible
change that does not indicate an affirmation or improvement in the rating
accorded any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization," as that term is defined
in Rule 436(g)(2) under the Act.
If UBS or any group of Underwriters elects to terminate this Agreement as
provided in this Section 7, the Company and each other Underwriter shall be
notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
23
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters in accordance with
the foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in any Registration Statement and the Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Firm Shares
which all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
five business day period stated above for the purchase of all the Firm Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements (or in the
Registration Statements as amended by any post-effective amendment thereof by
the Company) or in a Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include the Basic Prospectus,
24
any Prepricing Prospectus, any Prospectus Supplement or the Prospectus, as any
of the foregoing may be amended or supplemented by the Company), or arises out
of or is based upon any omission or alleged omission to state a material fact
required to be stated in either such Registration Statement or such Prospectus
or necessary to make the statements made therein not misleading, except insofar
as any such loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading; provided, however, that the indemnity agreement contained in
this subsection (a) with respect to any Prepricing Prospectus or amended
Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) from whom the person
asserting any such loss, damage, expense, liability or claim purchased the
Shares which is the subject thereof if the Prospectus corrected any such alleged
untrue statement or omission and if such Underwriter failed to send or give a
copy of the Prospectus to such person at or prior to the written confirmation of
the sale of such Shares to such person, unless the failure is the result of
noncompliance by the Company with paragraph (b) of Section 4 hereof.
If any action, suit or proceeding (each, a "Proceeding") is brought against
an Underwriter or any such person in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, such Underwriter or
such person shall promptly notify the Company in writing of the institution of
such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise, except
to the extent that the Company has been materially prejudiced by such omission.
Such Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to
25
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company shall not be liable for any settlement of any
Proceeding effected without its written consent but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days' prior notice of
its intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use in the Registration Statements (or in the
Registration Statements as amended by any post-effective amendment thereof by
the Company) or in a Prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such
26
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify such Underwriter shall not relieve such Underwriter
from any liability which such Underwriter may have to the Company or any such
person or otherwise, except to the extent that such Underwriter has been
materially prejudiced by such omission. The Company or such person shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in conflict
with those available to such Underwriter (in which case such Underwriter shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Underwriter), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 9 or
insufficient to hold an indemnified party harmless in respect of any losses,
damages, expenses, liabilities or claims
27
referred to therein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on
28
behalf of any Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of the Company, its directors or officers or
any person who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statements or the Prospectus.
10. Information Furnished by the Underwriters; Offering Materials. The
statements set forth in the fifth, seventh, eighth, ninth and tenth paragraphs
under the caption "Underwriting" in the Prospectus Supplement constitute the
only information furnished by or on behalf of the Underwriters as such
information is referred to in Sections 3 and 9 hereof. Each of the Underwriters
represents and warrants to and agrees with the Company that such Underwriter has
not distributed and will not distribute any offering material in connection with
the offering or sale of the Shares other than the second registration statement,
any Prepricing Prospectus, the then most recent Prospectus Supplement and the
Prospectus except as permitted by applicable law.
11. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Syndicate
Department and, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 Xxxxxxx
Xxxxxx, Xxxxxxxx, XX 00000, Attention: Legal Department, with a copy to Xxxxxx
Xxxxxx & Xxxxxxx LLP, 00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxxx X.
Xxxxxxxx.
12. Governing Law; Construction. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service
29
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against UBS or any indemnified
party. Each of UBS and the Company (on its behalf and, to the extent permitted
by applicable law, on behalf of its shareholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment. The Company hereby appoints, without power of revocation, Xxxxxxxxxxx
X. Xxxxxxxx as its agent to accept and acknowledge on its behalf service of any
and all process which may be served in any action, proceeding or counterclaim in
any way relating to or arising out of this Agreement.
14. Waiver of Immunity. The Company irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction or order for specific performance or
for recovery of property, (iv) attachment of the Company's or any Subsidiary's
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which the Company or its revenues or assets might otherwise be
entitled in any suit, action or proceeding in the courts of any jurisdiction and
irrevocably agrees, to the extent permitted by applicable law, that the Company
will not claim any such immunity in any suit, action or proceeding.
15. Judgment Currency. The Company hereby covenants and agrees that the
following provisions shall apply to conversion of currency in the case of this
Agreement:
(a) If for the purpose of obtaining judgment in, or enforcing the judgment
of, any court in any country other than the United States, it becomes necessary
to convert into any other currency (the "judgment currency") an amount due in
United States Dollars, then the conversion shall be made at the rate of exchange
prevailing on the Business Day before the day which judgment is given or the
order of enforcement is made, as the case may be. The term "rate(s) of exchange"
shall mean the rate at which the Underwriters are able or would have been able
on the relevant date to purchase at such money center bank in the City of New
York as you designate at such time, United States Dollars with judgment currency
above and includes any premiums and costs of exchange payable.
(b) The Company hereby agrees to indemnify the Underwriters and each other
indemnified party related to the Underwriters against any loss incurred by any
of them as a result of any judgment or order being given or made for any amount
due under this Agreement and such judgment or order being expressed and paid in
the judgment currency and as a result of any variation as between (i) the rate
of exchange at which the United States Dollar amount is converted into the
judgment currency for the purpose of such judgment or
30
order and (ii) the spot rate of exchange in the City of New York at which the
Company on the date of payment of judgment or order is able to purchase United
States Dollars with the amount of the judgment currency actually paid by the
Company. The foregoing indemnity shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "spot rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of, or conversion into, United States Dollars.
16. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
17. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
18. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
19. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
31
If the foregoing correctly sets forth the understanding between the Company
and the several Underwriters, please so indicate in the space provided below for
that purpose, whereupon this agreement and your acceptance shall constitute a
binding agreement between the Company and the Underwriters, severally.
Very truly yours,
XOMA LTD.
By:
-----------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of itself and the
other several Underwriters
named in Schedule A
UBS SECURITIES LLC
CIBC WORLD MARKETS CORP.
U.S. BANCORP XXXXX XXXXXXX INC.
XXXXX, XXXXXXXX & XXXX, INC.
XXXXXXXXX & COMPANY, INC.
THINKEQUITY PARTNERS LLC
As Representatives of the several Underwriters
By: UBS SECURITIES LLC
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
SCHEDULE A
Underwriter Number of Firm Shares
----------- ---------------------
UBS Securities LLC............................... 4,350,000
CIBC World Markets Corp. ........................ 1,087,500
U.S. Bancorp Xxxxx Xxxxxxx Inc. ................. 1,087,500
Xxxxx, Xxxxxxxx & Xxxx, Inc. .................... 725,000
Xxxxxxxxx & Company, Inc. ....................... 725,000
ThinkEquity Partners LLC......................... 725,000
First Albany Corporation......................... 100,000
Fortis Securities Inc. .......................... 100,000
Xxxx, Xxxx & Co. LLC............................. 100,000
---------------
Total..................................... 9,000,000
===============
1
EXHIBIT A
XOMA Ltd.
Common Shares
(US$0.0005 Par Value)
[Date]
UBS Securities LLC
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxxxxx & Company, Inc.
ThinkEquity Partners LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection with
the proposed Underwriting Agreement (the "Underwriting Agreement") to be entered
into by XOMA Ltd. (the "Company") and you, as Representatives of the several
Underwriters named therein, with respect to the public offering (the "Offering")
of common shares, par value US$0.0005 per share, of the Company (the "Common
Shares").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period from the date hereof until the expiration
of 90 days after the date of the final prospectus supplement relating to the
Offering the undersigned will not, without the prior written consent of UBS
Securities LLC ("UBS"), (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with
A-1
respect to, any Common Shares of the Company or any securities convertible into
or exercisable or exchangeable for Common Shares, or warrants or other rights to
purchase Common Shares, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Shares or any securities convertible into or exercisable or
exchangeable for Common Shares, or warrants or other rights to purchase Common
Shares, whether any such transaction is to be settled by delivery of Common
Shares or such other securities, in cash or otherwise, or (iii) publicly
announce an intention to effect any transaction specified in clause (i) or (ii).
The foregoing sentence shall not apply to (a) the registration of or sale to the
Underwriters of any Common Shares pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement
and confirms that he, she or it has been in compliance with the terms of this
Lock-Up Letter Agreement, (c) dispositions to any trust for the direct or
indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing with the Underwriters to
be bound by the terms of this Lock-Up Letter Agreement and confirms that it has
been in compliance with the terms of this Lock-Up Letter Agreement, (d) the
receipt of options or shares pursuant to an equity-based compensation or benefit
plan of the Company in effect on the date of the final prospectus supplement
relating to the Offering or (e) the exercise of options by the undersigned in
accordance with the terms thereof (but not the sale of the Common Shares issued
as a result thereof) which options were outstanding on the date of the final
prospectus supplement relating to the Offering or issued in accordance with the
foregoing clause (d).(2)
In addition, the undersigned hereby waives any rights the undersigned may
have to require registration
----------
2 The letters to be delivered by Messrs. Castello, Scannon, Dellio, Xxxxx and
Xxxxxxxx would include the additional exception:
"(f) dispositions of not more than _______ Common Shares issued to the
undersigned upon exercise of options outstanding on the date of the final
prospectus supplement relating to the Offering, which options are scheduled
to expire in the first quarter of calendar 2005, provided that such
disposition takes place pursuant to a written plan for trading securities,
within the meaning of Rule 10b5-1 promulgated under the Securities Exchange
Act of 1934, as amended, approved by the Company," and the parenthetical
clause in clause (e) of such letters would clarify that the prohibitions on
sales contained in such parenthetical clause would not extend to sales
permitted by clause (f) of such letter. The number of Common Shares to be
set forth in clause (f) of such letter shall be as follows: Xx. Xxxxxxxx,
225,000 Common Shares; Dr. Scannon, 123,750 Common Shares; Xx. Xxxxxx,
16,801 Common Shares; Xx. Xxxxx, 22,500 Common Shares; and Xx. Xxxxxxxx,
28,125 Common Shares.
A-2
of Common Shares in connection with the filing of a registration statement
relating to the Offering. The undersigned further agrees that, for a period from
the date hereof until the expiration of 90 days after the date of the final
prospectus supplement relating to the Offering, the undersigned will not,
without the prior written consent of UBS, make any demand for, or exercise any
right with respect to, the registration of Common Shares of the Company or any
securities convertible into or exercisable or exchangeable for Common Shares, or
warrants or other rights to purchase Common Shares.
* * *
A-3
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
-----------------------------------
Name:
A-4
EXHIBIT B
Officers' Certificate
1. I have reviewed the Registration Statements and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, any additional time of purchase, as if made at such time.
3. The Company has performed all of its obligations in all material respects
under this Agreement as are to be performed at or before the time of
purchase and at or before any additional time of purchase, as the case may
be.
4. The conditions set forth in paragraphs (n) and (o) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statements and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
B-1
EXHIBIT C
SUBSIDIARIES
--------------------------------------------------------------------------------
Name of Subsidiary Jurisdiction of
Incorporation
--------------------------------------------------------------------------------
XOMA Limited United Kingdom
--------------------------------------------------------------------------------
XOMA (US) LLC Delaware
--------------------------------------------------------------------------------
XOMA (Bermuda) Ltd. Bermuda
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XOMA Technology Ltd. Bermuda
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XOMA Ireland Limited Ireland
--------------------------------------------------------------------------------
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EXHIBIT D
OPINION OF XXXXXX XXXXXX & XXXXXXX LLP
(i) XOMA (US) LLC has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of Delaware,
with full power and authority to own, lease and operate its properties and
to conduct its business as currently conducted.
(ii) All of the outstanding membership or other equity interests of XOMA (US)
LLC have been duly authorized and validly issued, are fully paid and
non-assessable and, to such counsel's knowledge, are owned by the Company,
subject to no security interest, encumbrance or adverse claim.
(iii) (A) The Registration Statements and the Prospectus (except as to the
financial statements and the notes thereto and the schedules and other
financial and accounting data, and the statistical data derived therefrom,
included or incorporated by reference therein, as to all of which such
counsel need express no opinion and make no comment) comply as to form in
all material respects with the requirements of the Act; (B) the conditions
to the use of Form S-3 have been satisfied; and (C) the documents
incorporated by reference in the Registration Statements and the
Prospectus, at the time they became effective or were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act (except as to the financial statements and
the notes thereto and the schedules and other financial and accounting
data, and the statistical data derived therefrom, included or incorporated
by reference therein, as to all of which such counsel need express no
opinion and make no comment).
(iv) Each Registration Statement has been declared effective under the Act and,
to such counsel's knowledge, no stop order proceedings with respect thereto
are pending or threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act
has been made in the manner and within the time period required by such
Rule 424.
(v) No approval, authorization, consent or order of or filing with any U.S.
federal or New York or Delaware state governmental or regulatory
commission, board, body, authority, agency or subdivision is required in
connection with the issuance and sale of the Shares and consummation by the
Company of the transactions contemplated hereby other than registration of
the Shares under the Act and the filing of the Prospectus in Bermuda
(except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters).
D-1
(vi) The execution, delivery and performance of this Agreement by the Company,
the issuance and sale of the Shares by the Company and the consummation by
the Company of the transactions contemplated hereby do not and will not
conflict with, result in any breach or violation of or constitute a default
under (nor constitute any event which with notice, lapse of time or both
would result in any breach or violation of or constitute a default under)
the charter or bylaws or other organizational documents of XOMA (US) LLC or
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument filed as an exhibit to a document incorporated by
reference in the Registration Statements or the Prospectus to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound or affected, or any U.S.
federal or New York or Delaware state law, regulation or rule or any
decree, judgment or order applicable to the Company or any Subsidiary and
known to such counsel.
(vii) To such counsel's knowledge, there are no contracts, licenses, agreements,
leases or documents of a character which are required to be described in
any Registration Statement or the Prospectus or to be filed as an exhibit
to any Registration Statement which have not been so described or filed.
(viii) To such counsel's knowledge, there are no actions, suits, claims,
investigations or proceedings pending, threatened or contemplated to which
the Company or any of the Subsidiaries or any of their respective directors
or officers is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before or by any
governmental or regulatory commission, board, body, authority, agency or
subdivision which are required to be described in any Registration
Statement or the Prospectus but are not so described.
(ix) Each of the Company and the Subsidiaries is not and, after giving effect to
the offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act.
(x) The information in (A) the Prospectus under the captions "Risk factors --
The Terms of Our Financing Arrangements with Genentech and Millennium Could
Result In The Issuance Of A Significant Number Of Common Shares Shortly
After This Offering," "-- The Financial Terms Of Some Of Our Existing
Collaborative Arrangements Could Result In Dilution Of Share Value," "U.S.
federal income tax considerations" and "Description of share capital --
Preference Share Purchase Rights," (B) the Company's annual report for the
year ended December 31, 2002 on Form 10-K under the captions "Item 1.
Business -- Financial and Legal Arrangements of Product Collaborations --
Genentech," "--Millennium" and "Forward-Looking Statements And Cautionary
Factors That May Affect Future Results -- The Financial Terms of Some Of
Our
D-2
Existing Collaborative Arrangements Could Result In Dilution Of Our Share
Value," (C) the Company's quarterly report for the quarter ended March 31,
2003 on Form 10-Q under the caption "Forward-Looking Statements And
Cautionary Factors That May Affect Future Results -- The Financial Terms of
Some Of Our Existing Collaborative Arrangements Could Result In Dilution Of
Our Share Value," (D) the Company's quarterly report for the quarter ended
June 30, 2003 on Form 10-Q under the caption "Forward-Looking Statements
And Cautionary Factors That May Affect Future Results -- The Financial
Terms of Some Of Our Existing Collaborative Arrangements Could Result In
Dilution Of Our Share Value," (E) the Company's current report on Form 8-K
dated April 10, 2003 and amended on Xxxxx 00, 0000, (X) the Company's
current report on Form 8-K dated November 26, 2001 and amended on December
13, 2001, October 24, 2002 and May 21, 2003 and (G) the Company's current
report on Form 8-K dated June 30, 2003, insofar as such statements
constitute a summary of documents or matters of law, are descriptions of
contracts, agreements or other legal documents or of legal proceedings, or
refer to statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required to be shown.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company, other
counsel for the Company, counsel for the Underwriters, representatives of the
Underwriters and representatives of the independent public accountants of the
Company at which the contents of the Registration Statements and Prospectus and
related matters were discussed, and although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statements or
Prospectus (except as set forth in paragraph (x) above), on the basis of the
foregoing (relying as to materiality to the extent such counsel deems
appropriate upon the opinions of officers and other representatives of the
Company), no facts have come to such counsel's attention that lead such counsel
to believe that the Registration Statements or any amendment thereto at the time
such Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, as of the time of purchase or additional time of purchase, as
the case may be, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except as to the financial statements and the notes thereto and the
schedules and other financial and accounting data, and the statistical data
derived therefrom, included or incorporated by reference therein, as to all of
which such counsel need express no opinion and make no comment).
D-3
EXHIBIT E
OPINION OF XXXXXXX XXXX & XXXXXXX
(i) The Company has been duly continued to Bermuda and is existing under the
laws of Bermuda in good standing (meaning solely that it has not failed to
make any filing with any Bermuda governmental authority, or to pay any
Bermuda government fee or tax, which would make it liable to be struck off
the Register of Companies and thereby cease to exist under the laws of
Bermuda), with full corporate power to own, lease and operate its
properties and conduct its business as described in the Prospectus.
(ii) Each of XOMA (Bermuda) Ltd. and XOMA Technology Ltd. (each, a "Bermuda
Subsidiary" and collectively, the "Bermuda Subsidiaries") is duly
incorporated and existing under the laws of Bermuda in good standing
(meaning solely that it has not failed to make any filing with any Bermuda
governmental authority, or to pay any Bermuda government fee or tax, which
would make it liable to be struck off the Register of Companies and thereby
cease to exist under the laws of Bermuda), with full corporate power to
own, lease and operate its properties and conduct its business as described
in the Prospectus.
(iii) The Company has the necessary corporate power and authority to enter into
and perform its obligations under this Agreement, including the issuance,
sale and delivery of the Shares as contemplated herein. The execution and
delivery of this Agreement by the Company and the performance by the
Company of its obligations hereunder will not violate the memorandum of
continuance or bye-laws of the Company nor any applicable law, regulation,
order or decree in Bermuda.
(iv) The Company has taken all corporate action required to authorise its
execution, delivery and performance of this Agreement. This Agreement has
been duly executed and delivered by or on behalf of the Company and
constitutes the valid and binding obligations of the Company in accordance
with the terms thereof.
(v) No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or any
sub-division thereof is required to authorise or is required in connection
with the execution, delivery, performance and enforcement of this
Agreement, except such as have been duly obtained in accordance with
Bermuda law.
(vi) It is not necessary or desirable to ensure the enforceability in Bermuda of
this Agreement that it be registered in any register kept by, or filed
with, any governmental authority or regulatory body in Bermuda. However, to
the extent that this Agreement creates a charge over assets of the Company,
it may be desirable to ensure the priority
E-1
in Bermuda of the charge that it be registered in the Register of Charges
in accordance with Section 55 of the Companies Xxx 0000.
(vii) This Agreement will not be subject to ad valorem stamp duty in Bermuda and
no registration, documentary, recording, transfer or other similar tax, fee
or charge is payable in Bermuda in connection with the execution, delivery,
filing, registration or performance of this Agreement, other than in
connection with a registration described in paragraph (vi) above.
(viii) There is no income or other tax of Bermuda imposed by withholding or
otherwise on (i) any payment to be made to or by the Company pursuant to
this Agreement or (ii) any dividend to be paid by the Company to the
holders of the Shares or by a Bermuda Subsidiary to the Company.
(ix) The choice of the laws of the State of New York (the "Foreign Laws") as the
governing law of this Agreement is a valid choice of law and would be
recognised and given effect to in any action brought before a court of
competent jurisdiction in Bermuda, except for those laws (i) which such
court considers to be procedural in nature, (ii) which are revenue or penal
laws or (iii) the application of which would be inconsistent with public
policy, as such term is interpreted under the laws of Bermuda. The
submission in this Agreement to the jurisdiction of the courts referred to
in Section 13 hereof (the "Foreign Courts") is valid and binding upon the
Company.
(x) The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the Foreign Courts against the
Company based upon this Agreement under which a sum of money is payable
(other than a sum of money payable in respect of multiple damages, taxes or
other charges of a like nature or in respect of a fine or other penalty)
and would give a judgment based thereon, provided that (a) such courts had
proper jurisdiction over the parties subject to such judgment, (b) such
courts did not contravene the rules of natural justice of Bermuda, (c) such
judgment was not obtained by fraud, (d) the enforcement of the judgment
would not be contrary to the public policy of Bermuda, (e) no new
admissible evidence relevant to the action is submitted prior to the
rendering of the judgment by the courts of Bermuda and (f) there is due
compliance with the correct procedures under the laws of Bermuda.
(xi) None of the Underwriters will be deemed to be resident, domiciled or
carrying on business in Bermuda by reason only of the execution,
performance and/or enforcement of this Agreement by such Underwriter.
(xii) Each of the Underwriters has standing to bring an action or proceedings
before the appropriate courts in Bermuda for the enforcement of this
Agreement. It is not necessary or advisable in order for any Underwriter to
enforce its rights under this
E-2
Agreement, including the exercise of remedies thereunder, that it be
licensed, qualified or otherwise entitled to carry on business in Bermuda.
(xiii) The Company and each of the Bermuda Subsidiaries has been designated as
non-resident of Bermuda for the purposes of the Exchange Control Act, 1972
and, as such, is free to acquire, hold and sell foreign currency and
securities, and to pay dividends on their respective shares, without
restriction.
(xiv) Neither the Company nor either of the Bermuda Subsidiaries is entitled to
any immunity under the laws of Bermuda, whether characterised as sovereign
immunity or otherwise, from any legal proceedings to enforce this Agreement
in respect of itself or its property.
(xv) Based solely upon a review of the register of members of the Company dated
[Date], certified by the Secretary of the Company on 24 September, 2003,
the issued share capital of the Company consists of [________] common
shares par value US$0.0005, each of which is validly issued, fully paid and
non-assessable (which term when used herein means that no further sums are
required to be paid by the holders thereof in connection with the issue
thereof). When issued and paid for in accordance with this Agreement, the
Shares will be validly issued, fully paid and non-assessable and will not
be subject to any statutory pre-emptive rights.
(xvi) Based solely upon a review of the register of members of the each Bermuda
Subsidiary dated 24 September, 2003, certified by the Assistant Secretary
of the respective Bermuda Subsidiary on 24 September, 2003, the issued
share capital of each Bermuda Subsidiary consists of 12,000 common shares
par value US$1.00, each of which is validly issued, fully paid and
non-assessable and registered in the name of the Company.
(xvii) The statements contained in the Prospectus under the captions "We May Be
Subject To Increased Risks Because We Are A Bermuda Company," "If You Were
To Obtain A Judgment Against Us, It May Be Difficult To Enforce Against Us
Because We Are A Foreign Entity," "Our Shareholder Rights Agreement Or
Bye-Laws May Prevent Transactions That Could Be Beneficial To Our
Shareholders And May Insulate Our Management From Removal," and
"Description of share capital" (other than under the caption "Preference
Share Purchase Rights"), to the extent that they constitute statements of
Bermuda law, are accurate in all material respects.
(xviii) The Company has received consent from the Bermuda Monetary Authority for
(i) the issue of the Company's shares up to the amount of its authorised
capital from time to time, to persons non-resident of Bermuda for exchange
control purposes and the subsequent free transferability of such shares to
and between persons non-resident of Bermuda for exchange control purposes
without prior approval; (ii) the issue or
E-3
transfer of up to 20% of the Company's shares in issue from time to time to
persons resident in Bermuda for exchange control purposes without prior
approval; and (iii) the issue of options, warrants, depository receipts,
rights, loan notes and other securities of the Company and the subsequent
free transferability thereof without prior approval, provided in each case
that shares of the Company are listed on an appointed stock exchange (as
defined in the Companies Act 1981).
(xix) Pursuant to section 16 of the Companies Xxx 0000, the bye-laws of the
Company bind the Company and its shareholders to the same extent as if such
bye-laws had been signed and sealed by each such shareholder and contained
covenants on the part of each such shareholder to observe all the
provisions of the bye-laws of the Company. However, no shareholder of the
Company will be bound by an alteration made in the bye-laws of the Company
after the date on which he became a shareholder if and so far as the
alteration requires him to take or subscribe for more shares than the
number held by him at the date on which the alteration is made, or in any
way increases his liability as at that date to contribute to the share
capital of, or otherwise pay money to, the Company (unless such shareholder
agrees in writing, either before or after the alteration is made, to be
bound thereby).
(xx) The Company can xxx and be sued in its own name under the laws of Bermuda.
(xxi) The procedure for the service of process on the Company through
Xxxxxxxxxxx X. Xxxxxxxx in New York, New York, United States of America,
acting as agent for the Company, as provided in Section 13 of this
Agreement, is and would be effective, insofar as Bermuda law is concerned,
to constitute valid service of process on the Company in connection with
proceedings before the Foreign Courts.
E-4
EXHIBIT F
OPINION OF XXXXXXXXXXX X. XXXXXXXX
(i) The Company and each of the Subsidiaries is duly qualified to do business
as a foreign corporation or company and is in good standing in each U.S.
jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect.
(ii) No options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into
membership or other equity interests of the Subsidiaries are outstanding.
To such counsel's knowledge, all of the outstanding share capital or other
equity interests of each of the Bermuda Subsidiaries are owned by the
Company, in each case subject to no security interest, encumbrance or
adverse claim.
(iii) This Agreement has been duly delivered by the Company.
(iv) The execution, delivery and performance of this Agreement by the Company,
the issuance and sale of the Shares by the Company and the consummation by
the Company of the transactions contemplated hereby do not and will not
conflict with, result in any breach or violation of or constitute a default
under (nor constitute any event which with notice, lapse of time or both
would result in any breach or violation of or constitute a default under)
(A) the charter or bye-laws or other organizational documents of the
Company or any of the Subsidiaries, or (B) any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any license, lease, contract or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or
any of their respective properties may be bound or affected, or (C) any
state or local law, regulation or rule or any decree, judgment or order
known by such counsel to be applicable to the Company or any of the
Subsidiaries, except, in the case of clause (B), to the extent that any
such breach, violation or default would not, individually or in the
aggregate, have a Material Adverse Effect.
(v) Except as described in the Registration Statements and the Prospectus, no
person has the right, pursuant to the terms of any contract, agreement or
other instrument described in or filed as an exhibit to any Registration
Statement or otherwise known to such counsel, to cause the Company to
register under the Act any Common Shares or any other shares or other
equity interest of the Company, or to include any such shares or other
equity interest in either Registration Statement or the offering
contemplated thereby, whether as a result of the filing or effectiveness of
any Registration Statement or the sale of the Shares as contemplated
thereby or otherwise.
F-1
(vi) The Common Shares are listed for trading on NASDAQ.
(vii) To such counsel's knowledge, there are no affiliate transactions or
off-balance sheet transactions of a character which are required to be
described in any Registration Statement or the Prospectus or to be filed as
an exhibit to any Registration Statement which have not been so described
or filed.
(viii) The information in (A) the Company's proxy statement pursuant to Section
14(a) of the Exchange Act on Schedule 14A filed with the Commission on
April 10, 2003 under the captions "Employment Contracts and Termination of
Employment and Change-in-Control Arrangements" and "Certain Transactions"
and (B) the Company's quarterly report for the quarter ended June 30, 2003
on Form 10-Q under the caption "Part II. Item 1. Legal Proceedings,"
insofar as such statements constitute a summary of documents or matters of
law, are descriptions of contracts, agreements or other legal documents or
of legal proceedings, or refer to statements of law or legal conclusions,
are accurate in all material respects and present fairly the information
required to be shown.
F-2
EXHIBIT G
OPINION OF XxXXXXXXX, HELD & XXXXXX, LTD.
1. To such counsel's knowledge, the statements relating to the Patents and
Applications in the Registration Statements, as of the time of each
Registration Statement was declared effective, were, and in the Prospectus,
as of its date were and as of the time of purchase or the additional time
of purchase, as the case may be, are, accurate and complete statements or
summaries of the matters therein set forth. Such counsel is unaware of
facts that cause such counsel to believe that the above-described portions
of the Registration Statements, at the time each Registration Statement
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the above-described
portions of the Prospectus or any supplement thereto, at the date of such
Prospectus or such supplement and as of the time of purchase or the
additional time of purchase, as the case may be, contained an untrue
statement of material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
2. To such counsel's knowledge, other than those disclosed in the Registration
Statements and the Prospectus, (A) there are no legal or governmental
proceedings pending relating to the Patents and Applications, other than
proceedings in the U.S. and foreign patent offices relating to the
prosecution of pending patent applications, and (B) no such proceedings are
threatened or contemplated by governmental authorities or others.
3. To such counsel's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the
Prospectus, such counsel is unaware of facts which would form a reasonable
basis for a finding that: (i) the Patents are infringed by another party;
or (ii) the commercialization of the products described in the
Registrations Statements and the Prospectus as being under development by
the Company and relating to the Patents would infringe patents owned by
another party.
4. To such counsel's knowledge, such counsel is unaware of facts which (i)
would preclude the Company from having valid license rights or clear title
to the Patents and Applications; (ii) would cause such counsel to believe
that the Company lacks or will be unable to obtain the rights or licenses
to patents necessary to conduct the business now conducted or proposed to
be conducted by the Company as described in the Registration Statements and
the Prospectus; or (iii) would form a reasonable basis for a finding of
unenforceability or invalidity of the Patents.
G-1
5. To such counsel's knowledge, the Patents and Applications were filed and
are being or have been prosecuted in accordance with applicable rules and
regulations relating thereto. However, there is no assurance that patents
will issue from the Applications, or that claims will be allowed without
amendment or appeal to boards of appeal or higher courts.
G-2
EXHIBIT H
OPINION OF XXXXXXXX, GERSTEIN & BORUN
1. To such counsel's knowledge, the statements relating to the Patents and
Applications in the Registration Statements, as of the time of each
Registration Statement was declared effective, were, and in the Prospectus,
as of its date were and as of the time of purchase or the additional time
of purchase, as the case may be, are, accurate and complete statements or
summaries of the matters therein set forth. Such counsel is unaware of
facts that cause such counsel to believe that the above-described portions
of the Registration Statements, at the time each Registration Statement
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the above-described
portions of the Prospectus or any supplement thereto, at the date of such
Prospectus or such supplement and as of the time of purchase or the
additional time of purchase, as the case may be, contained an untrue
statement of material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
2. To such counsel's knowledge, other than those disclosed in the Registration
Statements and the Prospectus, (A) there are no legal or governmental
proceedings pending relating to the Patents and Applications, other than
proceedings in the U.S. and foreign patent offices relating to the
prosecution of pending patent applications, and (B) no such proceedings are
threatened or contemplated by governmental authorities or others.
3. To such counsel's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the
Prospectus, such counsel is unaware of facts which would form a reasonable
basis for a finding that: (i) the Patents are infringed by another party;
or (ii) the commercialization of the products described in the
Registrations Statements and the Prospectus as being under development by
the Company and relating to the Patents would infringe patents owned by
another party.
4. To such counsel's knowledge, such counsel is unaware of facts which (i)
would preclude the Company from having valid license rights or clear title
to the Patents and Applications; (ii) would cause such counsel to believe
that the Company lacks or will be unable to obtain the rights or licenses
to patents necessary to conduct the business now conducted or proposed to
be conducted by the Company as described in the Registration Statements and
the Prospectus; or (iii) would form a reasonable basis for a finding of
unenforceability or invalidity of the Patents.
H-1
5. To such counsel's knowledge, the Patents and Applications were filed and
are being or have been prosecuted in accordance with applicable rules and
regulations relating thereto. However, there is no assurance that patents
will issue from the Applications, or that claims will be allowed without
amendment or appeal to boards of appeal or higher courts. .
H-2
EXHIBIT I
OPINION OF XXXX X. XXXXXXX
1. To such counsel's knowledge, the statements relating to the Patents and
Applications in the Registration Statements, as of the time of each
Registration Statement was declared effective, were, and in the Prospectus,
as of its date were and as of the time of purchase or the additional time
of purchase, as the case may be, are, accurate and complete statements or
summaries of the matters therein set forth. Such counsel is unaware of
facts that cause such counsel to believe that the above-described portions
of the Registration Statements, at the time each Registration Statement
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the above-described
portions of the Prospectus or any supplement thereto, at the date of such
Prospectus or such supplement and as of the time of purchase or the
additional time of purchase, as the case may be, contained an untrue
statement of material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
2. To such counsel's knowledge, other than those disclosed in the Registration
Statements and the Prospectus, (A) there are no legal or governmental
proceedings pending relating to the Patents and Applications, other than
proceedings in the U.S. and foreign patent offices relating to the
prosecution of pending patent applications, and (B) no such proceedings are
threatened or contemplated by governmental authorities or others.
3. To such counsel's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the
Prospectus, such counsel is unaware of facts which would form a reasonable
basis for a finding that: (i) the Patents are infringed by another party;
or (ii) the commercialization of the products described in the
Registrations Statements and the Prospectus as being under development by
the Company and relating to the Patents would infringe patents owned by
another party.
4. To such counsel's knowledge, such counsel is unaware of facts which (i)
would preclude the Company from having valid license rights or clear title
to the Patents and Applications; (ii) would cause such counsel to believe
that the Company lacks or will be unable to obtain the rights or licenses
to patents necessary to conduct the business now conducted or proposed to
be conducted by the Company as described in the Registration Statements and
the Prospectus; or (iii) would form a reasonable basis for a finding of
unenforceability or invalidity of the Patents.
I-1
5. To such counsel's knowledge, the Patents and Applications were filed and
are being or have been prosecuted in accordance with applicable rules and
regulations relating thereto. However, there is no assurance that patents
will issue from the Applications, or that claims will be allowed without
amendment or appeal to boards of appeal or higher courts. .
I-2
EXHIBIT J
OPINION OF XxXXXXXXX, HELD & XXXXXX, LTD.
To such counsel's knowledge, except as would not, individually or in the
aggregate, have a Material Adverse Effect and other than as disclosed or
incorporated by reference in the Registration Statements and the Prospectus
(including the matters relating to Protein Design Laboratories, Inc. and
Columbia University), such counsel is unaware of facts which would form a
reasonable basis for a finding that: (i) the Anti-CD11a Patents are
unenforceable or invalid; (ii) the Anti-CD11a Patents are infringed by another
party; or (iii) Genentech's contemplated sales of RaptivaTM brand anti-CD11a
would infringe patents owned by another party.
J-1
EXHIBIT K
OPINION OF XXXXXX XXXXXX & XXXXXXX LLP
Such counsel is of the opinion that (i) the Company should not be
considered a "passive foreign investment company" within the meaning of Section
1297(a) of the Code (a "PFIC") for calendar year 2003 and (ii) if, in 2004 and
each subsequent year, the Company conducts its business and manages the
composition of its income and assets in accordance with Company management's
current plans and projections (as represented to such counsel in the
Certificate), the Company should not become a PFIC in any future year.
K-1
EXHIBIT L
1. Genentech - U.S. Patent No. 5,622,700
2. Genentech - U.S. Patent No. 6,037,454
3. Genentech/XOMA - U.S. Patent No. 6,582,698
L-1
