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Exhibit 1.1
2,875,000 SHARES
IMCLONE SYSTEMS INCORPORATED
COMMON STOCK, $.001 PAR VALUE
UNDERWRITING AGREEMENT
___________, 1999
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[___________], 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Prudential Securities Incorporated
Warburg Dillon Read LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
IMCLONE SYSTEMS INCORPORATED, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "UNDERWRITERS") 2,500,000 shares of its Common Stock, $.001 par
value (the "FIRM SHARES"). The Company also proposes to issue and sell to the
several Underwriters not more than an additional 375,000 shares of Common Stock,
$.001 par value, of the Company (the "ADDITIONAL SHARES"), if and to the extent
that you shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "SHARES." The shares of Common Stock, $.001 par
value, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (File No. 333-87489),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS." The term "preliminary prospectus" as used in
this Agreement shall mean each preliminary prospectus included in the
Registration Statement prior to the time it becomes effective. Unless otherwise
indicated, any reference herein to the Registration Statement, the Prospectus or
the preliminary prospectus shall include all documents incorporated therein by
reference. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement.
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1. Representations and Warranties. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and incorporated by reference in the Prospectus complied, or
will comply when so filed, in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission
thereunder, (ii) the Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain any 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, (iii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iv)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not
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have a material adverse effect on the Company and its subsidiaries,
taken as a whole; all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or conflict with,
result in a breach of any of the terms and provisions of, or constitute
a default under the certificate of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
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(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (including, without limitation, all laws and regulations
relating to biohazardous materials) ("ENVIRONMENTAL LAWS"), (ii) have
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (i) the
Company and its
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subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (ii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock other
than ordinary and customary dividends; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt
of the Company and its consolidated subsidiaries, except in each case
as described or contemplated in the Prospectus.
(q) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real or personal property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with 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 and its
subsidiaries, in each case except as described in the Prospectus.
(r) Except as set forth in the Prospectus under the caption
"Business Patents and Trade Secrets - Patents Rights; Licenses - C225",
the Company and its subsidiaries own or possess all material patents,
patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks and trade names ("INTELLECTUAL PROPERTY") currently employed by
them in connection with the business now operated by them and necessary
for the conduct of their business as described in the Prospectus (the
"COMPANY INTELLECTUAL PROPERTY"), and, except as described in the
Prospectus, neither the Company nor any of its subsidiaries has
received any notice of any infringement of or conflict with the
Intellectual Property rights of others, which, singly or in the
aggregate would result in any material adverse effect on the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole. To the best of
the Company's knowledge, the Company Intellectual Property does not
infringe upon or conflict with the Intellectual Property rights of
others, in a manner which, singly or in the aggregate would result in
any material adverse effect on the Company and its subsidiaries, taken
as a whole.
(s) The Company and its subsidiaries have duly and properly
filed or caused to be filed with the United States Patent and Trademark
Office (the "PTO")
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and applicable foreign and international patent authorities all patent
applications described or referred to in the Prospectus (the "COMPANY
PATENT APPLICATIONS"), and believe they have complied with the PTO's
duty of candor and disclosure for the Company Patent Applications; the
Company and its subsidiaries are unaware of any facts material to a
determination of patentability regarding the Company Patent
Applications not called to the attention of the PTO; the Company and
its subsidiaries are unaware of any facts not called to the attention
of the PTO which would preclude the grant of a patent for the Company
Patent Applications; the Company and its subsidiaries have no knowledge
of any facts which would preclude them from having valid license rights
or clear title to the Company Patent Applications.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which
they are engaged (including, without limitation, the aspects of its
business involving biohazardous substances); neither the Company nor
any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, except as described
in the Prospectus.
(v) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, including without limitation, all such certificates,
authorizations and permits required by the United States Food and Drug
Administration (the "FDA") or any other federal, state or foreign
agencies or bodies engaged in the regulation of pharmaceuticals or
biohazardous substances, except where the failure to obtain any such
certificate, authorization or permit, singly or in the aggregate, would
not have a material adverse effect on the Company or its subsidiaries,
taken as a whole; and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate could result in a material adverse effect on
the
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condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole. The
Company and its subsidiaries are in compliance in all material respects
with all applicable federal, state, local and foreign laws,
regulations, orders and decrees, including without limitation, all
regulations prescribed by the FDA or any other federal, state or
foreign agencies or bodies engaged in the regulation of pharmaceuticals
or biohazardous substances, except where noncompliance would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(w) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (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 the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(x) KPMG LLP are, and during the periods covering their report
included in the Registration Statement and the Prospectus were,
independent accountants with respect to the Company as required by the
Securities Act. The financial statements of the Company and its
subsidiaries (together with the related notes thereto) included in the
Registration Statement present fairly the financial position and
results of operations of the Company and its subsidiaries at the
respective dates and for the respective periods to which they apply,
subject to normal year-end adjustments. Such financial statements
(together with the related notes thereto) have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved except as otherwise stated
therein.
(y) The Shares have been approved for quotation on the Nasdaq
National Market, subject to official notice of issuance.
(z) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement. All persons who possess such rights have effectively waived
them with respect to the offering of the Shares.
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(aa) Each material contract, agreement and license to which
the Company or any of its subsidiaries is bound is in full force and
effect and is legal, valid, binding and enforceable against the
Company, and to the Company's knowledge, against each other party. The
Company is not and to the Company's knowledge no other party is in
breach or default with respect to any such contract, agreement or
license, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination,
modification, or acceleration, under any such contract, agreement or
license. No party has repudiated any provision of any such contract,
agreement or license.
(bb) The Company has reviewed its operations and that of its
subsidiaries to evaluate the extent to which the business or operations
of the Company or any of its subsidiaries will be affected by the Year
2000 Problem (that is, any significant risk that computer hardware or
software applications used by the Company and its subsidiaries will
not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000); as a result of such
review, (i) the Company has no reason to believe, and does not believe,
that (A) there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or Prospectus
which have not been accurately described in the Registration Statement
or Prospectus and (B) the Year 2000 Problem will have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or result in any material loss or interference with
the business or operations of the Company and its subsidiaries, taken
as a whole; and (ii) the Company reasonably believes, after due
inquiry, that the suppliers, vendors, customers or other material third
parties used or served by the Company and such subsidiaries are
addressing or will address the Year 2000 Problem in a timely manner,
except to the extent that a failure to address the Year 2000 Problem by
any supplier, vendor, customer or material third party would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth in Schedule I hereto
opposite its name at [$________] a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the
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Additional Shares, and the Underwriters shall have a one-time right to purchase,
severally and not jointly, up to 375,000 Additional Shares at the Purchase
Price. If you, on behalf of the Underwriters, elect to exercise such option, you
shall so notify the Company in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 4
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter agrees, severally and not jointly, to purchase the
number of Additional Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Additional Shares to be purchased as the number of Firm Shares set forth in
Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (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 the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, (C) the issuance by the Company of
additional options or warrants under the Company's existing stock-based
compensation plans, provided that such stock options or warrants are not
exercisable during such 90-day period or (D) the issuance by the Company of
shares of Common Stock to employees pursuant to the existing ImClone Systems
Incorporated 1998 Employee Stock Purchase Plan.
3. Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Shares are to be offered to the public initially at
[$_______] a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected
by you at a price that represents a concession not in excess of [$_______] a
share under the Public Offering Price, and that any Underwriter may allow,
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and such dealers may reallow, a concession, not in excess of [$______] a share,
to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on [___________], 1999, or at
such other time on the same or such other date, not later than [__________],
1999, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE". The Closing of the
offering and sale of the Firm Shares will be held at the offices of Ropes &
Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000.
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than [________], 1999, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE". The Closing of the offering and sale of the
Additional Shares will be held at the offices of Ropes & Xxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX 00000.
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date and the
Option Closing Date, as the case may be, are subject to the condition that the
Registration Statement shall have become effective not later than [________]
(New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date and the Option Closing Date, as the case
may be:
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(i) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, a certificate, dated
such date and signed by an executive officer of the Company, to the
effect set forth in Section 5(a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of such date and that the Company has
complied with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before such
date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion of Xxxxx
Xxxx & Xxxxxxxx, outside counsel for the Company, dated such date, in
the form attached hereto as EXHIBIT B.
(d) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion of Xxxx X.
Xxxxxx, Esq., General Counsel of the Company, dated such date in the
form attached hereto as EXHIBIT C.
(e) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion dated such
date of Xxxxxxxx & Xxxxx, patent counsel to the Company, in the form
attached hereto as EXHIBIT D.
(f) The Underwriters shall have received on the Closing Date
and the Option Closing Date, as the case may be, an opinion of Ropes &
Xxxx, counsel for the Underwriters, dated such date, in a form to be
agreed by the Underwriters.
The opinions of Xxxxx Xxxx & Xxxxxxxx, Xxxx X. Xxxxxx, Esq.
and Xxxxxxx & Baron described, respectively, in Sections 5(c), 5(d) and
5(e) above
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shall be rendered to the Underwriters at the request of the Company and
shall so state therein.
(g) The Underwriters shall have received, on each of the date
hereof, the Closing Date and the Option Closing Date, a letter dated
such date, in form and substance satisfactory to the Underwriters, from
KPMG, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in or incorporated by reference
into the Registration Statement and the Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date and the Option Closing Date, as the case
may be.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the
Option Closing Date of such other documents as you may reasonably
request with respect to the good standing of the Company, the due
authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
6. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish you, without charge, three signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto but
including documents incorporated by reference) and to furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time
on the business day next succeeding the date of this Agreement and
during the period mentioned in Section 6(c) below, as many copies of
the Prospectus, any documents incorporated by reference, and any
supplements and amendments thereto or to the Registration Statement as
you may reasonably request. The terms "supplement" and "amendment" or
"amend" as used in this Agreement shall include all documents
subsequently filed by the Company with the Commission pursuant to the
Exchange Act that are deemed to be incorporated by reference in the
Prospectus.
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14
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense for nine months following
the first date of the public offering of Shares, to the Underwriters
and to the dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending December 31, 2001 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
7. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Securities Act and
all other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to
14
15
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky memorandum in connection with the offer and sale of the Shares
under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all costs
and expenses incident to listing the Shares on the Nasdaq National Market, (vi)
the cost of printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Shares,
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 with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show, and (ix) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution", and
the last paragraph of Section 10 below, the Underwriters will pay all
of their costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
8. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based
upon information relating to any
15
16
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein; provided, however, that the
foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with Section 6(a)
hereof.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a), or 8(b) such
person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in
16
17
the same jurisdiction, be liable for the fees and expenses of more than
one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of parties
indemnified pursuant to Section 8(a), and by the Company, in the case
of parties indemnified pursuant to Section 8(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. 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.
(d) To the extent the indemnification provided for in Section
8(a) or 8(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (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) of this
sentence is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) of this sentence but also the relative fault of the Company
on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims,
damages or liabilities, 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 hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or
17
18
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 8 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 Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, 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 it and distributed
to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
8 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in
this Section 8 and the representations, warranties and other statements
of the Company contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of
the Shares.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in
18
19
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
9(a)(i) through 9(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bears to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you and the Company for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
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20
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
20
21
[Underwriting Agreement]
Very truly yours,
IMCLONE SYSTEMS INCORPORATED
By:____________________________
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Prudential Securities Incorporated
Warburg Dillon Read LLC
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:__________________________
Name:
Title:
22
COMPANY PATENT APPLICATIONS
SCHEDULE I
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Prudential Securities Incorporated
Warburg Dillon Read LLC
[NAMES OF OTHER UNDERWRITERS]
---------
Total....................................................... 2,500,000
23
EXHIBIT A
[FORM OF LOCK-UP LETTER]
_____________, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Prudential Securities Incorporated
Warburg Dillon Read LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with ImClone Systems Incorporated, a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx (the
"UNDERWRITERS"), of up to 2,875,000 shares (the "SHARES") of the Common Stock,
$.001 par value of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting
24
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
25
EXHIBIT B
[Xxxxx Xxxx & Xxxxxxxx Opinion]
__________, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Prudential Securities Incorporated
Warburg Dillon Read LLC
As representatives of the several underwriters
named in Schedule I to the Underwriting
Agreement referred to below
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel for ImClone Systems Incorporated, a Delaware
corporation (the "Company"), in connection with the Underwriting Agreement dated
________, 1999 (the "Underwriting Agreement") between the Company and you, as
representatives of the several underwriters named in Schedule I thereto (the
"Underwriters"). Pursuant to the Underwriting Agreement, the Company proposes to
sell, and you severally propose to purchase, 2,500,000 shares (the "Firm
Shares") of its common stock, par value $.001 per share, and 375,000 additional
shares (the "Additional Shares," and, collectively with the Firm Shares, the
"Shares"). This opinion is delivered pursuant to Section 5(c) of the
Underwriting Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for the
purposes of rendering this opinion.
We have participated in the preparation of the registration statement
of the Company on Form S-3 (File No. 333-87489) and Amendment Nos. 1, 2, 3 [and
4] thereto (other than the documents incorporated by reference therein (the
"Incorporated Documents")) relating to the registration of the offering of
Shares filed with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), and have
reviewed the
26
Xxxxxx Xxxxxxx & Co. Incorporated 2 __________, 1999
Incorporated Documents. In addition, we have been advised that the Shares have
been approved for quotation on the Nasdaq National Market, subject to official
notice of issuance.
The registration statement on Form S-3, as amended at the time it was
declared effective, including the Incorporated Documents and the information
deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A
under the Securities Act, is hereinafter referred to as the "Registration
Statement", and the related prospectus (including the Incorporated Documents) in
the form first used to confirm sales of the Shares is hereinafter referred to as
the "Prospectus".
We have assumed the conformity of the documents filed with the
Commission via the Electronic Data Gathering, Analysis and Retrieval System
("XXXXX"), except for required XXXXX formatting changes, to physical copies of
the documents delivered to the Company and submitted for our examination.
Capitalized terms used but not otherwise defined herein are used as
defined in the Underwriting Agreement.
Based upon the foregoing, we are of the opinion that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of Delaware with corporate power and
authority to own its properties and conduct its business as described in the
Prospectus;
(ii) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(iii) The Shares have been duly authorized and when issued and
delivered in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
is not subject to any preemptive or, to our knowledge, other similar rights.
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(v) The execution and delivery by the Company of, and the performance
of its obligations under, the Underwriting Agreement will not contravene any
provision of United States federal or New York state law that in our experience
is normally applicable to general business corporations in relation to
transactions of the type contemplated by the
27
Xxxxxx Xxxxxxx & Co. Incorporated 3 __________, 1999
Underwriting Agreement, or the certificate of incorporation or by-laws of the
Company, or any agreement, indenture, lease or other instrument to which the
Company is a party, or by which any of them or any of its respective properties
is bound that is an exhibit to the Registration Statement, including any exhibit
incorporated by reference therein.
(vi) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency under United States federal or New York
state law that in our experience is normally applicable to general business
corporations in relation to transactions of the type contemplated by the
Underwriting Agreement (except that we express no opinion regarding intellectual
property law) is required for the performance by the Company of its obligations
under the Underwriting Agreement, except such as have been obtained and such as
may be required under state securities or Blue Sky laws in connection with the
offer and sale of the Shares.
(vii) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be required to register as an "investment company", as
such term is defined in the Investment Company Act of 1940, as amended.
(viii) There is no contract or agreement that is an exhibit to the
Registration Statement, including any exhibit incorporated by reference therein,
between the Company and any person granting such person the right to require the
Company to include any securities owned or to be owned by such person in the
securities registered pursuant to the Registration Statement, except for such
rights for which a waiver has been obtained with respect to the offering of the
Shares.
(ix) We do not know of any legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the properties of
the Company is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or 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 an exhibit to the
Registration Statement that are not described or filed as required (except that
we express no opinion with respect to matters of intellectual property law or
environmental law).
(x) We have been advised by the staff of the Commission that the
Registration Statement was declared effective under the Securities Act and, to
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
28
Xxxxxx Xxxxxxx & Co. Incorporated 4 __________, 1999
instituted or are pending under the Securities Act.
We have considered the statements relating to legal matters or
documents included in (A) the Prospectus under the captions "Business --
Research Collaborations and Clinical Collaborations -- Collaborations with Merck
KGaA," "Description of Capital Stock" and "Underwriting" and (B) the
Registration Statement in Item 15. In our opinion, such statements fairly
summarize in all material respects such matters or documents.
We have not ourselves checked the accuracy, completeness or fairness
of, or otherwise verified, the information furnished with respect to other
matters in the Registration Statement or the Prospectus. We have generally
reviewed and discussed with your representatives, and with certain officers and
employees of, and counsel and independent public accountants for, the Company
the information furnished, whether or not subject to our check and verification.
On the basis of such consideration, review and discussion, but without
independent check or verification except for the matters referred to in the
immediately preceding paragraph, nothing has come to our attention that causes
us to believe that (i) the Registration Statement and Prospectus (except for the
financial statements and financial schedules and other financial and statistical
data included therein, as to which we express no belief) do not comply as to
form in all material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder or (ii) (x)
the Registration Statement and the prospectus included therein (except for the
financial statements and financial schedules and other financial and statistical
data included therein, as to which we express no belief ) at the time the
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 (y) the
Prospectus (except as stated) as of its date and as of the date hereof contained
or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the General Corporation
Law of the State of Delaware and the federal laws of the United States.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
29
EXHIBIT C
[Xxxx Xxxxxx Esq. Opinion]
(i) the Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(iv) all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and,
are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(v) (A) the statements in the Prospectus under the
caption "Business -- Government Regulation" and (B) the
description of agreements under which the Company has licensed
technology from third parties in the Prospectus under the
caption "Business --Patent Rights; Licenses", in each case
insofar as such statements or descriptions constitute
summaries of the legal matters documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings
and fairly summarize the matters referred to therein; and
30
(vi) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described, of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required.
(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable
law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Shares;
(viii) except as described in the Prospectus, there
are no contracts, agreements or understandings between the
Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement, and
all persons who possess such rights have effectively waived
them with respect to the offering of the Shares;
31
EXHIBIT D
[Xxxxxxxx & Xxxxx, LLP Opinion]
At the request of ImClone Systems Incorporated (the "Company"), to
which we are and have acted as patent counsel, and in accordance with Section
5(e) of the underwriting agreement between the Company and the underwriters,
Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Prudential Securities Incorporated, and Warburg Dillon Read LLC
regarding the selling by the Company of shares of stock (the "Underwriting
Agreement"), we have reviewed and given careful consideration to the sections
entitled "Risk Factors-Our Success Depends Upon Our Ability to Protect Our
Intellectual Property and Our Proprietary Technology" and "Business-Patents and
Trade Secrets" in the Registration Statement and Prospectus.
Intellectual Property shall mean all patents, patent rights, licenses,
inventions and other proprietary rights, including trade secrets. Company
Intellectual Property shall mean the Intellectual Property sufficient to conduct
the Company's business as now, or as proposed to be, conducted by the Company as
described in the Prospectus. The Company's patent estate is made up of the
patent applications listed in Exhibit A (Company Patent Applications) and the
issued patents listed in Exhibit B (Company Patents).
In the opinion below, any reference to the term "to the best of our
knowledge" shall mean within the conscious awareness of the existence or absence
of any facts or other information by any lawyer at Xxxxxxxx and Xxxxx, LLP who
has performed substantive legal work for the Company. Statements said to be made
"after due inquiry" are based solely on our personal knowledge, and on
information and representations received from the Company after inquiry
sufficient to express a reasonably informed opinion.
It is our opinion that:
(i) the statements in the Registration Statement and Prospectus under
the captions "Risk Factors-Our Success Depends Upon Our Ability to Protect Our
Intellectual Property and Our Proprietary Technology" and "Business-Patents and
Trade Secrets" insofar as such matters constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ii) to the best of our knowledge, after due inquiry, there are no
legal or governmental proceedings pending (other than prosecution of the Company
Patent Applications) relating to the Company, the claimed inventions of the
Company Patents, or the Company Patent Applications, and no such proceedings are
threatened or contemplated by governmental authorities or others;
(iii) to the best of our knowledge, after due inquiry, there are no
facts which would preclude the Company from having valid license rights or clear
title to the Company Patents or the Company Patent Applications, and based on
representations by the Company that the Company has not conveyed to third
parties any rights which have not been recorded in the PTO, the
32
Company has valid license rights or clear record title to the Company
Intellectual Property free and clear of any liens or encumbrances;
(iv) (A) to the best of our knowledge, after due inquiry, the Company
has complied with the PTO duty of candor and disclosure for each of the Company
Patents and Company Patent Applications, and (B) we have no knowledge, after due
inquiry, that the Company lacks or will be unable to obtain any rights or
licenses to use all Company Intellectual Property;
(v) to the best of our knowledge: (A) there is no reasonable basis for
a finding of invalidity of any of the Company Patents that could have a material
adverse effect on the business, results of operations, or financial condition of
the Company; and (B) we have no reason to believe that any of the Company Patent
Applications will not issue as a patent, except to the extent that such failure
to issue as a patent would not have a material adverse effect on the business,
results of operations, or financial condition of the Company;
(vi) to the best of our knowledge, after due inquiry, the Company has
not received any notice of conflict with intellectual property rights or claims
of others with respect to any products or proposed products of the Company
described in the Prospectus, except for one notice of potential conflict of
which we notified you in writing;
(vii) except for third party rights described in the Prospectus to
which the company may require licenses, and other third party rights of which we
notified you in writing, licenses to which are, after due inquiry, available on
acceptable terms generally known in the industry, based upon a review of the
third party rights known to us, there are no patent rights of others which are
or would be infringed by the manufacture, sale or use of specific products or
processes referred to in the Prospectus, and therefore, in the event of
litigation, a court should find that no such third party rights are infringed by
the manufacture, sale or use of specific products or processes referred to in
the Prospectus; and
(viii) (A) we have no reason to believe that the portions of the
Registration Statement and the Prospectus under the captions "Risk Factors-Our
Success Depends on Our Ability to Protect Our Intellectual Property and Our
Proprietary Technology" and "Business-Patents and Trade Secrets" included
therein at the time the Registration Statement became effective contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (B) we have no reason to believe that the portions of the Prospectus under
the captions "Risk Factors-Our Success Depends on Our Ability to Protect Our
Intellectual Property and Our Proprietary Technology," and "Business-Patents and
Trade Secrets" contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
