Exhibit 1.1
UNDERWRITING AGREEMENT
March __, 2000
Warburg Dillon Read LLC
Xxxxxxxxx Xxxxxxxx
Prudential Vector Healthcare
as Managing Underwriters
c/o Warburg Dillon Read LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Rigel Pharmaceuticals, Inc. a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of 9,000,000 shares (the "Firm
Shares") of Common Stock, $0.001 par value (the "Common Stock"), of the
Company. In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the
Company up to an additional 1,350,000 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Addtional 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 filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (Registration No.
333-96127) including a prospectus, relating to the Shares. The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one
or more preliminary prospectuses (each thereof being herein called a
"Preliminary Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it becomes
effective, including all documents filed as a part thereof, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430(A)
under the Act and also including any registration statement filed pursuant to
Rule 462(b) under the Act, is herein called the "Registration Statement," and
the prospectus, in the form filed by the Company with the Commission pursuant
to Rule 424(b) under the Act on or before the second business day after the
date hereof (or such earlier time as may be required under the Act) or, if no
such filing is required, the form of final prospectus included in the
Registration Statement at the time it became effective, is herein called the
"Prospectus."
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company
the aggregate number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A attached hereto in each case at a purchase price of
$ per Share. The Company is advised by you that the Underwriters intend (i)
to make a public offering of their respective portions of the Firm Shares as
soon after the effective date of the Registration Statement as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. You may from time to time increase or
decrease the public offering price after the initial public offering to such
extent as you may determine.
In addition, the Company hereby grants to the several Underwriters
the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly,
from the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may
be necessary to cover over-allotments made in connection with the offering of
the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares. This option may be exercised
by you on behalf of the several Underwriters at any time (but not more than
once) on or before the thirtieth (30th) day following the date hereof, by
written notice to the Company. Such notice shall set forth the aggregate
number of Additional Shares as to which the option is being exercised, and
the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "Additional Time of Purchase");
PROVIDED, HOWEVER, that the Additional Time of Purchase shall not be earlier
than the Time of Purchase (as defined below) nor earlier than the second
business day1 after the date on which the option shall have been exercised
nor later than the tenth (10th) business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold
to each Underwriter shall be the number which bears the same proportion to
the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A
hereto bears to the total number of Firm Shares (subject, in each case, to
such adjustment as you may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
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 April __, 2000 (unless another time shall be agreed to
by you and the Company or unless postponed in accordance with the provisions
of Section 8 hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the "Time of Purchase."
Certificates for the Firm Shares shall be delivered to
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1 As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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you in definitive form in such names and in such denominations as you shall
specify on the second business day preceding the Time of Purchase. For the
purpose of expediting the checking of the certificates for the Firm Shares by
you, the Company agrees to make such certificates available to you for such
purpose at least one full business day preceding the Time of Purchase.
Payment of the purchase price for the Additional Shares shall be
made at the Additional Time of Purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the Additional Time of Purchase. For the purpose of expediting the
checking of the certificates for the Additional Shares by you, the Company
agrees to make such certificates available to you for such purpose at least
one full business day preceding the Additional Time of Purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any
order of the Commission preventing or suspending the use of any
Preliminary Prospectus, or instituting proceedings for that purpose,
and each Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act;
and when the Registration Statement became effective, the
Registration Statement and the Prospectus fully complied in all
material respects with the provisions of the Act, and the
Registration Statement 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 not misleading,
and the Prospectus 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; any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been so described or filed; provided, however, that the Company
makes no warranty or representation with respect to any statement
contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; the documents incorporated
by reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements
of the Act and the Exchange Act, and do not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; and when the Registration Statement becomes
effective, the documents incorporated by reference in the
Prospectus, will comply in all material respects with the
requirements of the Act and the Exchange Act, and will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; and the Company has not distributed any
offering material in connection
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with the offering or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other
materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company has
an authorized capitalization as set forth under the heading entitled
"Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the Time of Purchase
and the Additional Time of Purchase, as the case may be, the Company
shall have an authorized capitalization as set forth under the
heading entitled "As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock including Common
Stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of
first refusal or similar right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement;
(d) the Company is qualified to do business as a foreign
corporation 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 so
qualify would not have a material adverse effect on the business,
properties, financial condition or results of operation of the
Company taken as a whole (a "Material Adverse Effect"). The Company
has no subsidiaries (as defined in the Rules and Regulations); 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; complete and correct copies of the
certificates of incorporation and of the bylaws of the Company and
all amendments thereto have been delivered to you, and except as set
forth in the exhibits to the Registration Statement no changes
therein will be made subsequent to the date hereof and prior to the
Closing Date or, if later, the Option Closing Date;
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(e) the Company is duly qualified or licensed by and is
in good standing in each jurisdiction in which it conducts its business
and in which the failure, individually or in the aggregate, to be so
licensed or qualified could have a Material Adverse Effect; and the
Company is in compliance in all material respects with the laws,
orders, rules, regulations and directives issued or administered by
such jurisdictions;
(f) The Company is not in breach of, or in default under
(nor has any event occurred which with notice, lapse of time, or
both would result in any breach of, or constitute a default under),
its charter or by-laws or in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company is a party or by which
it or its properties is bound, 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, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of
time, or both would result in any breach of, or constitute a default
under), any provisions of the charter or by-laws of the Company or
under any provision of any license, indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument to which the Company is a party or by which it or its
properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company;
(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company enforceable in accordance with its terms;
(h) the capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and Prospectus and the
certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of
being such holders;
(i) 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 and fully paid and non-assessable;
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(j) no approval, authorization, consent or order of or
filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required in
connection with the issuance and sale of the Shares or the
consummation by the Company of the transactions as contemplated
hereby other than registration of the Shares under the Act and any
necessary qualification under the securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the National
Association of Securities Dealers, Inc. (NASD);
(k) no person has the right, contractual or otherwise,
to cause the Company to issue to it, or register pursuant to the
Act, any shares of capital stock of the Company upon the issue and
sale of the Shares to the Underwriters hereunder, nor does any
person have preemptive rights, co-sale rights, rights of first
refusal or other rights to purchase any of the Shares other than
those that have been expressly waived prior to the date hereof;
(l) Ernst & Young LLP, whose report on the financial
statements of the Company is filed with the Commission as part of
the Registration Statement and Prospectus, are independent public
accountants as required by the Act;
(m) The Company has all necessary licenses,
authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations,
consents and approvals from other persons, in order to conduct its
business; the Company is not in violation of, or in default under,
any such license, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree, order
or judgment applicable to the Company the effect of which could have
a Material Adverse Effect;
(n) all legal or governmental proceedings, contracts,
leases or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement have been so described or
filed as required;
(o) there are no actions, suits, claims, investigations
or proceedings pending or threatened to which the Company or any of
its officers is a party or of which any of their respective
properties is subject at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which could result in a
judgment, decree or order having a Material Adverse Effect or prevent
consummation of the transactions contemplated hereby;
(p) the audited financial statements included in the
Registration Statement and the Prospectus present fairly the
financial position of the Company
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as of the dates indicated and the results of operations and cash flows
of the Company for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting
principles applied on consistent basis during the periods involved;
(q) subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been (i) any material adverse change, or
any development which, in the Company's reasonable judgment, is
likely to cause a material adverse change, in the business,
properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or
otherwise), business or operations of the Company taken as a whole,
(ii) any transaction which is material to the Company, except
transactions in the ordinary course of business, (iii) any
obligation, direct or contingent, which is material to the Company
and its Subsidiaries taken as a whole, incurred by the Company,
except obligations incurred in the ordinary course of business, (iv)
any change in the capital stock or outstanding indebtedness of the
Company or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company. The Company does
not have any material contingent obligation which is not disclosed
in the Registration Statement;
(r) the Company has obtained the agreement of (i) each
of its directors and officers, (ii) the holders of at least 98.0% of
the outstanding common stock and preferred stock, and (iii) the
holders of other securities convertible into or exercisable or
exchangeable for common stock or warrants or other rights to
purchase common stock (such that the aggregate of such securities
which are not subject to such agreement does not represent more than
1% of the outstanding common stock), and stockholders not to sell,
offer to sell, contract to sell, hypothecate, grant any option to
sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 180 days after the date of the
Prospectus;
(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 Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
(t) except as described in the Registration Statement
and Prospectus, the Company owns, or has obtained valid and
enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights and trade secrets described in
the Registration Statement and Prospectus as being owned or licensed
by it, which the Company reasonably believes are necessary for the
conduct of its business (collectively, "Intellectual Property") and
which the failure to own, license or have such rights could have a
Material Adverse Effect. Except as described in the Registration
Statement and Prospectus, (i) the Company believes that there are no
third parties who have or will be able to establish their rights to
any Intellectual Property, except for the ownership rights of the
owners of the Intellectual Property which is licensed to the
Company; (ii) to the Company's knowledge there is no infringement by
third parties of any Intellectual Property; (iii) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or
to any Intellectual Property, and
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the Company is unaware of any facts which would form a reasonable basis
for any such claim; (iv) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Intellectual Property, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates 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; (vi) to the Company's knowledge
there is no patent or patent application which contains claims that
interfere with the issued or pending claims of any of the patents
and patent applications owned by the Company which could have a
Material Adverse Effect; and (vii) there is no prior art of which
the Company is aware that may render any patent application owned by
the Company unpatentable which has not been disclosed to the U.S.
Patent and Trademark Office and which could have a Material Adverse
Effect.
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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 as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; PROVIDED that the
Company shall not be required to qualify as a foreign corporation or
to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and
sale of the Shares); and to promptly advise you of the receipt by
the Company of any notification with respect to the suspension of
the qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York
City, as soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time to furnish to
the Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made
any amendments or supplements thereto after the effective date of
the Registration Statement) as the Underwriters may request for the
purposes contemplated by the Act; in case any Underwriter is
required to deliver a prospectus within the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the
sale of the Shares, the Company will prepare promptly upon request,
but at the expense of such Underwriter, such amendment or amendments
to the Registration Statement and such prospectuses as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement
has become effective and when any post-effective amendment thereto
becomes effective and (ii) if Rule 430A under the Act is used, when
the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Act (which the Company agrees to file in a timely manner
under such Rules);
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission for amendments or
supplements to the Registration Statement or Prospectus or for
additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if
the Commission should enter a stop order suspending the
effectiveness of the Registration Statement, to make every
reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any
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proposal to amend or supplement the Registration Statement or
Prospectus and to file no such amendment or supplement to which you
shall object in writing;
(e) 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 promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the
other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which
the Company shall send to its stockholders or shall from time to
time publish or publicly disseminate, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms
10-K, 10-Q and 8-K, or such other similar form as may be designated
by the Commission, (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 information as you may
reasonably request regarding the Company, in each case as soon as
such communications, documents or information becomes available;
(h) to advise the Underwriters promptly of the happening
of any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under
the Act which, in the judgment of the Company, would 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, to prepare and furnish,
at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change and to furnish you a copy of such proposed
amendment or supplement before filing any such amendment or
supplement with the Commission;
(i) to make generally available to its stockholders, 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 Statement (as defined in Rule 158(c) of the Act) as
soon as is reasonably practicable after the termination of such
twelve-month period;
(j) to furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and of cash flow of the Company for such fiscal year,
accompanied
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by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants;
(k) to furnish to you signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(l) to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of Proceeds"
in the Prospectus;
(m) to pay all costs, expenses, fees and taxes (other
than any transfer taxes and fees and disbursements of counsel for
the Underwriters except as set forth under Section 5 hereof) in
connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the printing and furnishing
of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration,
issue, sale and delivery of the Shares, (iii) the producing, word
processing and/or 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 laws
and the determination of their eligibility for investment under
state law as aforesaid (including the legal fees and filing fees and
other disbursements of counsel 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 and (vii) the performance of the
Company's other obligations hereunder;
(n) to furnish to you, before filing with the Commission
subsequent to the effective date of the Registration Statement and
during the period referred to in paragraph (f) above, a copy of any
document proposed to be filed pursuant to Section 13, 14 or 15(d) of
the Exchange Act;
(o) not to sell, offer or agree to sell, contract to
sell, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible
into or exchangeable or exercisable for Common Stock or warrants or
other
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rights to purchase Common Stock or any other securities of the
Company that are substantially similar to Common Stock or permit the
registration under the Act of any shares of Common Stock, except for
(i) issuances of Common Stock upon the exercise of outstanding
options, warrants and debentures, (ii) the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement,
and (iii) the granting of stock options under the Company's 2000
Equity Incentive Plan and Non-Employee Directors' Plan for a period
of 180 days after the date hereof, without the prior written consent
of Warburg Dillon Read LLC ("WDR"); and
(p) to use its best efforts to cause the Common Stock to
be listed for quotation on the National Association of Securities
Dealers Automated Quotation National Market System ("NASDAQ").
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement
pursuant to the second paragraph of Section 7 hereof or the default by one or
more of the Underwriters in its or their respective obligations hereunder,
the Company shall, in addition to paying the amounts described in Section
4(n) hereof, reimburse the Underwriters for all of their reasonable
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
and at the Time of Purchase (and the several obligations of the Underwriters
at the Additional Time of Purchase are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof
and at the Time of Purchase (unless previously waived) and at the Additional
Time of Purchase, as the case may be), the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the Time of
Purchase and at the Additional Time of Purchase, as the case may be,
an opinion of Xxxxxx Godward LLP, counsel for the Company, addressed
to the Underwriters, and dated the Time of Purchase or the
Additional Time of Purchase, as the case may be, with reproduced
copies for each of the other Underwriters and in form satisfactory
to Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Underwriters,
stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and
conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
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(ii) the Company is duly qualified or licensed by
each jurisdiction in which it conducts its business and in
which the failure, individually or in the aggregate, to be so
licensed or qualified could have a Material Adverse Effect
and the Company is duly qualified, and in good standing, in
each jurisdiction in which it owns or leases real property or
maintain an office and in which such qualification is
necessary and except where failure to be so qualified would
not have a Material Adverse Effect;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Shares have been duly authorized and, when
issued and delivered to and paid for by the Underwriters,
will be validly issued and will be fully paid and
non-assessable;
(v) the Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus;
the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully
paid, nonassessable and free of any preemptive rights arising
under the Company's certificate of incorporation, as amended
and restated, or the Delaware General Corporate Law and, to
such counsel's knowledge, any contractual preemptive rights,
resale rights, rights of first refusal and similar rights;
the Shares when issued will be free of statutory and
contractual preemptive rights; the certificates for the
Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of
being such holders;
(vi) the capital stock of the Company, including the
Shares, conforms to the description thereof contained in the
Registration Statement and Prospectus;
(vii) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and
other financial and statistical data contained
13
or incorporated by reference therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(viii) the Registration Statement has become
effective under the Act and, to the best of such counsel's
knowledge, no stop order proceedings with respect thereto are
pending or threatened under the Act 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;
(ix) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Shares and consummation by the Company of the transactions as
contemplated hereby other than registration of the Shares
under the Act (except such counsel need express no opinion as
to any necessary qualification under the state securities or
blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters);
(x) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not and will not
conflict with, or result in any breach of, or constitute a
default under (nor constitute any event which with notice,
lapse of time, or both, would result in any breach of, or
constitute a default under), any provisions of the charter or
by-laws of the Company or under any provision of any license,
indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the
Company is a party or by which any of them or their
respective properties may be bound or affected and which are
listed on Schedule A attached to the opinion being provided
pursuant to this Section 6(a), or under any federal, state,
local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company;
(xi) to the best of such counsel's knowledge, the
Company is not in violation of its charter or by-laws or is
in breach of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any
breach of, or constitute a default under), any license,
indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the
Company is a party or by which it or its properties may be
bound or affected and which are listed on Schedule A attached
to the opinion being provided pursuant to this Section 6(a),
or under any federal, state, local or foreign law, regulation
or rule or any decree, judgment or order applicable to the
Company;
(xii) to the best of such counsel's knowledge, there
are no contracts, licenses, agreements, leases or documents
of a character which are required to be
14
filed as exhibits to the Registration Statement or to be
summarized or described in the Prospectus which have not been
so filed, summarized or described;
(xiii) to the best of such counsel's knowledge,
there are no actions, suits, claims, investigations or
proceedings pending, threatened or contemplated to which the
Company is subject or of which any of its properties is
subject at law or in equity or before or by any federal,
state, local or foreign governmental or regulatory
commission, board, body, authority or agency which are
required to be described in the Prospectus but are not so
described;
(xiv) the Company will not, upon consummation of the
transactions contemplated by this Agreement, be an
"investment company," or a "promoter" or "principal
underwriter" for, a "registered investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended; and
(xv) such counsel have participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants of the
Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated
in subparagraphs (vi) and (viii) above), on the basis of the
foregoing nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement
or any amendment thereto at the time such Registration
Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or
any supplement thereto at the date of such Prospectus or such
supplement, and at all times up to and including the Time of
Purchase or Additional Time of Purchase, as the case may be,
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical
data included in the Registration Statement or Prospectus).
15
(b) The Company shall furnish to you at the Time of
Purchase and at the Additional Time of Purchase, as the case may be,
an opinion of Flehr Xxxxxxx Test Xxxxxxxxx & Xxxxxxx LLP, patent
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,
substantially in the form attached hereto as EXHIBIT A and
satisfactory to Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the
Underwriters.
(c) You shall have received from Ernst & Young LLP,
letters dated, respectively, the date of this Agreement and the Time
of Purchase and Additional Time of Purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of
the Underwriters) in the forms heretofore approved by WDR.
(d) You shall have received at the Time of Purchase and
at the Additional Time of Purchase, as the case may be, the opinion
of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
dated the Time of Purchase or the Additional Time of Purchase, as
the case may be, as to the matters referred to in subparagraphs
(viii) (with respect to the Shares only), (ix) and (x) of paragraph
(a) of this Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of
the Company, counsel for the Company, representatives of the
independent public accountants of the Company and representatives of
the Underwriters at which the contents of the Registration Statement
and Prospectus and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and Prospectus (except as to matters
referred to with respect to the Shares under subparagraph (viii) of
paragraph (a) of this Section 6), on the basis of the foregoing
(relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Company), no facts have come
to the attention of such counsel which lead them to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus as of its date or any
supplement thereto as of its date contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no comment with respect to
the financial statements and schedules and other financial and
statistical data included in the Registration Statement or Prospectus).
(e) No amendment or supplement to the Registration
Statement or Prospectus shall be filed prior to the time the
Registration Statement becomes effective to which you object in
writing.
(f) The Registration Statement shall become effective,
or if Rule 430A under the Act is used, the Prospectus shall have
been filed with the Commission pursuant to
16
Rule 424(b) under the Act, at or before 5:00 P.M., New York City
time, on the date of this Agreement, unless a later time (but not
later than 5:00 P.M., New York City time, on the second full
business day after the date of this Agreement) shall be agreed to by
the Company and you in writing or by telephone, confirmed in
writing; PROVIDED, HOWEVER, that the Company and you and any group
of Underwriters, including you, who have agreed hereunder to
purchase in the aggregate at least 50% of the Firm Shares may from
time to time agree on a later date.
(g) Prior to the Time of Purchase or the Additional Time
of Purchase, as the case may be, (i) no stop order with respect to
the effectiveness of the Registration Statement shall have been
issued under the Act or proceedings initiated under Section 8(d) or
8(e) of the Act; (ii) the Registration Statement and all amendments
thereto, or modifications thereof, if any, shall not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments
or supplements thereto, or modifications thereof, if any, shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they are made, not misleading.
(h) Between the time of execution of this Agreement and
the Time of Purchase or the Additional Time of Purchase, as the case
may be, (i) no material and unfavorable change, financial or
otherwise (other than as referred to in the Registration Statement
and Prospectus), in the business, condition or prospects of the
Company and its Subsidiaries taken as a whole shall occur or become
known and (ii) no transaction which is material and unfavorable to
the Company shall have been entered into by the Company.
(i) The Company will, at the Time of Purchase or
Additional Time of Purchase, as the case may be, deliver to you a
certificate of two of its executive officers to the effect that the
representations and warranties of the Company as set forth in this
Agreement are true and correct as of each such date, that the
Company shall perform such of its obligations under this Agreement
as are to be performed at or before the Time of Purchase and at or
before the Additional Time of Purchase, as the case may be and the
conditions set forth in paragraphs (g) and (h) of this Section 6
have been met.
(j) You shall have received signed letters, dated the
date of this Agreement, from each of the directors and officers of
the Company and each stockholder of the Company designated by you to
the effect that such persons shall not sell, offer or agree to sell,
contract to sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock of the Company or
securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar
to the Common Stock for a period of 180 days after the date of the
Prospectus without WDR's prior written consent.
17
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of
any statement in the Registration Statement and the Prospectus as of
the Time of Purchase and the Additional Time of Purchase, as the
case may be, as you may reasonably request.
(l) The Shares shall have been approved for listing for
quotation on NASDAQ, subject only to notice of issuance at or prior
to the Time of Purchase or the Additional Time of Purchase, as the
case may be.
(m) Between the time of execution of this Agreement and
the Time of Purchase or Additional Time of Purchase, as the case may
be, there shall not have occurred any downgrading, nor shall any
notice or announcement have been given or made of (i) any intended
or potential downgrading or (ii) any review or possible change that
does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization," as that
term is defined in Rule 436(g)(2) under the Act.
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
Statement, or (ii) if Rule 430A under the Act is used, when the parties
hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if, since the time of execution of
this Agreement or the respective dates as of which information is given in
the Registration Statement and Prospectus, (y) there has been any material
adverse and unfavorable change, financial or otherwise (other than as
referred to in the Registration Statement and Prospectus), in the operations,
business, or condition of the Company which would, in your judgment or in the
judgment of such group of Underwriters, make it impracticable to market the
Shares, or (z) there shall have occurred any downgrading, or any notice shall
have been given of (i) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Company or any
Subsidiary by any "nationally recognized statistical rating organization", as
that term is defined in Rule 436(g)(2) under the Act or, if, at any time
prior to the Time of Purchase or, with respect to the purchase of any
Additional Shares, the Additional Time of Purchase, as the case may be,
trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or
limitations or minimum prices shall have been established on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market, or
if a banking moratorium shall have been declared either by the United States
or New York State authorities, or if the United States shall have declared
war in accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other national
or international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the
judgment of such group of Underwriters, to make it impracticable to market
the Shares.
18
If you 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 by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company 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, if any Underwriter shall default in its obligation to take up and pay for
the Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions
of Section 7 hereof) and if the number of Firm Shares which all Underwriters
so defaulting shall have agreed but failed to take up and pay for does not
exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall take up and pay for (in addition to the aggregate number
of Firm Shares they are obligated to purchase pursuant to Section 1 hereof)
the number of Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be taken up and paid
for by such non-defaulting Underwriter or Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in
proportion to the aggregate number of Firm Shares set opposite the names of
such non-defaulting Underwriters in Schedule A.
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 the Registration
Statement and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter
or Underwriters agreed to purchase exceeds 10% of the total number of Shares
which all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor
19
the Company shall make arrangements within the five business day period
stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement
shall be terminated without further act or deed and without any liability on
the part of the Company to any non-defaulting Underwriter and without any
liability on the part of any non-defaulting Underwriter to the Company.
Nothing in this paragraph, and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and
any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any
such Underwriter or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of
this Section 9 being deemed to include any Preliminary Prospectus,
the Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either
such Registration Statement or Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based
upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter through you to the
Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is
based upon any omission or alleged omission to state a material fact
in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Underwriter or such person shall promptly
notify the Company in writing of the institution of such Proceeding
and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all reasonable 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 such ommission is determined by a court of competent
jurisdiction to materially affect the Company's ability to defend
such proceeding. 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
20
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
reasonable fees and expenses shall be borne by the Company and paid
as incurred (it being understood, however, that the Company shall
not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company
shall not be liable for any settlement of any Proceeding effected
without 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 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 written 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, cupability 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 furnished in writing
by or on behalf of such Underwriter through you to the Company
expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
21
reasonable 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 such omission is
determined by a court of competent jurisdiction to materially affect
such Underwriter's ability to defend such Proceeding. The Company
or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of the Company or such person unless the employment of such
counsel shall have been authorized in writing by such Underwriter in
connection with the defense of such Proceeding or such Underwriter
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or
them which are different from or additional to or in conflict with
those available to such Underwriter (in which case such Underwriter
shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may
employ counsel and participate in the defense thereof but the fees
and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such reasonable 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 written 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 in respect of any losses, damages, expenses,
liabilities or claims referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above
22
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
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 Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if
to the Underwriters, shall be
23
sufficient in all respects if delivered or sent to Warburg Dillon Read LLC,
000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention: Syndicate Department
and, if to the Company, shall be sufficient in all respects if delivered or
sent to the Company at the offices of the Company at ____________________,
Attention: __________________.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall
be governed by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim
may be commenced, prosecuted or continued in any court other than the courts
of the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any Claim arising out of or in any
way relating to this Agreement is brought by any third party against Warburg
Dillon Read LLC or any indemnified party. Each of Warburg Dillon Read LLC and
the Company (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates) waives all right to trial by jury
in any action, proceeding or counterclaim (whether based upon contract, tort
or otherwise) in any way arising out of or relating to this Agreement. The
Company agrees that a final judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon
the Company and may be enforced in any other courts in the jurisdiction of
which the Company is or may be subject, by suit upon such judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser,
as such purchaser, from any of the Underwriters) shall acquire or have any
right under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one
or more counterparts which together shall constitute one and the same
agreement among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and any of
the Underwriters' respective businesses and/or assets.
16. MISCELLANEOUS. Warburg Dillon Read LLC, 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 Warburg Dillon Read LLC. Because
Warburg Dillon Read LLC is a
24
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 Warburg Dillon Read LLC 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.
17. A lending affiliate of Warburg Dillon Read LLC may have lending
relationships with issuers of securities underwritten or privately placed by
Warburg Dillon Read LLC. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by Warburg Dillon Read LLC will disclose the existence of any
such lending relationships and whether the proceeds of the issue will be used to
repay debts owed to affiliates of Warburg Dillon Read LLC.
25
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
RIGEL PHARMACEUTICALS, INC.
By: ________________________________
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the
other several Underwriters
named in Schedule A
WARBURG DILLON READ LLC
XXXXXXXXX XXXXXXXX
PRUDENTIAL VECTOR HEALTHCARE
By: WARBURG DILLON READ LLC
By: __________________________
Title:
By: __________________________
Title:
26
SCHEDULE A
Number of
UNDERWRITER FIRM SHARES
WARBURG DILLON READ LLC
XXXXXXXXX XXXXXXXX
PRUDENTIAL VECTOR HEALTHCARE
---------------
Total........................ ===============
EXHIBIT A
[LETTERHEAD OF FLEHR HOHBACK TEST XXXXXXXXX & XXXXXXX LLP]
WARBURG DILLON READ LLC
XXXXXXXXX XXXXXXXX
PRUDENTIAL VECTOR HEALTHCARE
AS MANAGING UNDERWRITERS
C/O WARBURG DILLON READ LLC
000 XXXX XXXXXX
XXX XXX, XXX XXXX 00000-0000
Ladies and Gentlemen:
We have acted as special patent counsel to Rigel Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), in connection with the entering
into by the Company of that certain Underwriting Agreement by and among
Warburg Dillon Read LLC, Xxxxxxxxx Xxxxxxxx and Prudential Vector Healthcare
as representatives of the several Underwriters named therein (collectively
the "Underwriters"), and the Company, dated March __, 2000 (the "Underwriting
Agreement"). This opinion is provided to you pursuant to Section 6(b) of the
Underwriting Agreement.
For the purposes of rendering the opinions set forth below, we have
reviewed or are otherwise familiar with the following (collectively the
"Documents"):
1. the Underwriting Agreement;
2. that certain Registration Statement on Form S-1, as filed by
the Company with the Securities and Exchange Commission on
February __, 2000, together with any and all exhibits;
Amendment No. 1 as filed by the Company with the Securities and
Exchange Commission (the "SEC") on March __, 2000, Amendment
No. 2 as filed with the SEC on March __, 2000, Amendment No. 3
as filed with the SEC on March __, 2000, Amendment No. 4 as
filed with the SEC on March __, 2000, and the amendment filed
pursuant to Rule 462(b) of the Securities Act of 1933, as
amended (collectively, the "Registration Statement");
3. the Company's Prospectus dated March 8, 2000;
4. the patent applications which we are prosecuting listed on
Schedule A attached hereto, which Schedule includes all of the
patent applications referred to in the Prospectus (the "Patent
Applications");
5. The results of a patent litigation search of the LitAlert
database conducted on, or about March 24, 2000, with respect to
the Company;
6. copies of assignments relevant to ownership of the Patent
Applications being prosecuted by us;
7. our internal files pertaining to Company.
Whenever our opinions herein are qualified by the phrase "to the best
of our knowledge," except as may be further qualified below, such language
means that based upon the actual knowledge of attorneys presently within our
firm (I.E., not including matters as to which such attorneys could be deemed
to have constructive knowledge and not including knowledge of attorneys or
patent agents outside of Patent Counsel who, at any time, may have had
responsibility for the Company matters, including responsibility for the
prosecution of the any of the Patent Applications) after reviewing of the
Documents or based on being otherwise familiar with the Documents, and such
review of or our familiarity with our files, including the prosecution file
histories for the Patent Applications being prosecuted by us, we believe that
such opinions are factually correct.
Based upon, and subject to the foregoing, and upon a review of such
matters of law as we have deemed appropriate, it is our opinion and judgment
that:
1. The statements in the Prospectus relating to U.S. patent
matters, under the captions "RISK FACTORS -- Our success is dependent on
intellectual property rights held by us and third parties and such rights are
difficult and costly to protect; Our success will depend partly on our
ability to operate without infringing on or misappropriating the proprietary
rights of others" and "BUSINESS -- Corporate Collaborations; Intellectual
Property", insofar as such statements constitute matters of law, legal
conclusions, or summaries of legal matters or proceedings, are correct in all
material respects and present fairly the facts and information purported to
be shown.
2. To the best of our knowledge, with respect to the Patent
Applications which we are prosecuting, referred to in the Registration
Statement, referred to in the Registration Statement which are listed in
Schedule A, the sections of the Registration Statement entitled "RISK FACTORS
-- Our success is dependent on intellectual property rights held by us and
third parties and such rights are difficult and costly to protect; Our
success will depend partly on our ability to operate without infringing on or
misappropriating the proprietary rights of others" and "BUSINESS -- Corporate
Collaborations; Intellectual Property", at the time the Registration
Statement became effective, did not contain any untrue statement of 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 in
which they were made, not misleading.
3. To the best of our knowledge, with respect to the Patent
Applications which we are prosecuting, referred to in the Prospectus which
are listed in Schedule A, the sections of the Prospectus entitled "RISK
FACTORS -- Our success is dependent on intellectual property rights held by us
and third parties and such rights are difficult and costly to protect; Our
success will depend partly on our ability to operate without infringing on or
misappropriating the proprietary rights of others" and "BUSINESS -- Corporate
Collaborations; Intellectual Property", as of its date and as of the Closing
Date (as defined in the Underwriting Agreement), do not contain any untrue
statement of 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 in which they were made, not misleading.
4. To the best of our knowledge, except as described in the
Prospectus, and with the exception of proceedings before the PTO, there are
no pending, or threatened, legal or governmental proceedings relating to any
of the Patent Applications which we are prosecuting.
5. To the best of our knowledge, the Company owns each of the
Patent Applications which we are prosecuting, with the exception of certain
patent applications exclusively licensed to the Company with respect to which
Stanford University may have ownership rights. To the best of our knowledge,
Stanford University has not assigned any rights to the Patent Applications to
any third party.
6. To the best of our knowledge, no security interests have been
recorded in the PTO with respect to any of the Patent Applications which we
are prosecuting.
7. To the best of our knowledge, no liens have been recorded
against the Company with respect to any of the Patent Applications which we
are prosecuting.
8. To the best of our knowledge, except as described in the
Prospectus, and except for any rights reserved to the United States
Government, no third party other than Stanford University has any rights to
any of the Patent Applications which we are prosecuting that are referred to
in the Prospectus and listed in Schedule A.
9. To the best of our knowledge, except as described in the
Prospectus, no interference has been declared or provoked with respect to any
of the Patent Applications which we are prosecuting.
10. To the best of our knowledge, the Company has not received any
notice challenging the validity or enforceability of any of the Patent
Applications.
11. While there can be no guarantee that any particular patent
application will issue as a patent, each of the U.S. Patent Applications that
are referred to in the Prospectus which we are prosecuting and listed in
Schedule A, was property filed, and is being properly and diligently
prosecuted, in the PTO.
12. For each U.S. patent application listed in Schedule A which we
are prosecuting, to the best of our knowledge all information known, to date,
to be "material to patentability", as defined in 37 C.F.R. Section 1.56(b),
has been disclosed, or will be disclosed pursuant to 37 C.F.R. Section 1.97,
to the PTO.
13. Without any searches specifically having been conducted, or
having been required to have been conducted, for the purpose of rendering
this opinion, and while there can be no guarantee that any particular patent
application will issue as a patent, each of the U.S. patent applications that
are referred to in the Prospectus and listed in Schedule A, discloses what we
believe to be patentable subject matter.
14. To the best of our knowledge, without any searches having been
conducted for the purpose of rendering this opinion, no third party is
infringing any of the Patent Applications.
15. To the best of our knowledge, except as described in the
Prospectus regarding M&E, no claim, which is presently pending, has been
asserted against the Company relating to the potential infringement of, or
conflict with, any patents, trademarks, copyrights, trade secrets, or
proprietary rights, of others.
Furthermore, we call to your attention that our opinion is limited
to such facts as they existed on March __, 2000, and does not take into
account any changes of circumstances, fact, or law, subsequent thereto.
This opinion is for Underwriters' information only, is to be relied upon only
by Underwriters, and is to be used only in connection with the transaction
reflected in the Underwriting Agreement. This opinion is not to be quoted,
or referred to, in whole or in part, in the Registration Statement or
Prospectus, or in any literature or oral presentations used in connection
with the sale of securities.
Very truly yours,
Fleh Xxxxxxx Test
Xxxxxxxxx & Xxxxxxx LLP
cc:
Schedule A
