Exhibit 1.1
_____________ SHARES
SANTARUS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 2004
XX XXXXX & CO., LLC
UBS SECURITIES LLC
XXXXXX XXXXXX PARTNERS LLC
RBC CAPITAL MARKETS CORPORATION
As Representatives of the several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Santarus, Inc., a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of ________ shares of Common Stock, $0.0001 par
value (the "Common Stock") of the Company. The aggregate of ________ shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 3 hereof, up to an additional ________ shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". XX Xxxxx & Co., LLC ("XX Xxxxx"), UBS
Securities LLC ("UBS"), Xxxxxx Xxxxxx Partners LLC and RBC Capital Markets
Corporation are acting as representatives of the several Underwriters and in
such capacity are hereinafter referred to as the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-______) (the
"Initial Registration Statement") in respect of the Stock has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations (the "Rules and Regulations") of the Commission
thereunder, which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the Rules and Regulations, is hereinafter called a "Preliminary
Prospectus"); the
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various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act and
deemed by virtue of Rule 430A under the Securities Act to be part of the
Initial Registration Statement at the time it was declared effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statements"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Securities Act, is hereinafter called the "Prospectus". No document has
been or will be prepared or distributed in reliance on Rule 434 under the
Securities Act. No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b) Registration
Statement, if any, the Prospectus and any amendments or supplements to
either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will
conform) in all material respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statements and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to information contained in or omitted from the
Registration Statements or the Prospectus or any such amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which
information the parties hereto agree is limited to the Underwriters'
Information (as defined in Section 16).
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its properties
and to conduct the businesses in which it is engaged, except where the
failure to so qualify or have such power or authority would not have,
singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of
the Company (a "Material Adverse Effect"). The Company has no subsidiaries
(as defined in Section 14).
(d) This Agreement has been duly authorized, executed and delivered by the
Company.
(e) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof contained in
the Prospectus.
(f) The Company has authorized capital stock as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company,
other than such rights that have been waived. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal
or other rights to
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purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company other than those
accurately described in the Prospectus.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, except any such
conflicts, breaches or violations which could not have a Material Adverse
Effect, nor will such actions result in any violation of the provisions of
the charter or by-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its properties or assets.
(h) Except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and applicable state securities laws and the Nasdaq
National Market in connection with the purchase and distribution of the
Stock by the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental agency
or body is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(i) Ernst & Young LLP, who have expressed their opinions on the audited
financial statements included in the Registration Statements and the
Prospectus, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(j) The financial statements, together with the related notes and any
schedules, included in the Prospectus and in each Registration Statement
fairly present the financial position and the results of operations and
changes in financial position of the Company at the respective dates or
for the respective periods therein specified. Such statements and related
notes and any schedules have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis except as may
be set forth in the Prospectus; provided, however, that statements that
are unaudited are subject to year-end adjustments and do not contain
footnotes required under generally accepted accounting principles. The
financial statements, together with the related notes and any schedules,
included in the Prospectus comply in all material respects with the
Securities Act and the Rules and Regulations thereunder. No other
financial statements or supporting schedules or exhibits are required by
the Securities Act or the Rules and Regulations thereunder to be included
in the Prospectus.
(k) The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since such date, there has
not been any change in the capital stock or long-term debt of the Company
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in
the Prospectus.
(l) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company is a party or of
which any property or assets of the Company is
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the subject which, singularly or in the aggregate, if determined adversely
to the Company, could have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(m) The Company (i) is not in violation of its charter or by-laws, (ii) is
not in default in any respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject and (iii) is not in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject except any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(n) The Company possesses all licenses, certificates, authorizations and
permits issued by, and has made all declarations and filings with, the
appropriate state, federal or foreign regulatory agencies or bodies which
are necessary or desirable for the ownership of its properties or the
conduct of its business as described in the Prospectus (including those
that may be required by the U.S. Food and Drug Administration and any
state, federal or foreign agencies or bodies engaged in the regulation of
pharmaceuticals) except where any failures to possess or make the same,
singularly or in the aggregate, would not have a Material Adverse Effect,
and the Company has not received notification of any revocation or
modification of any such license, authorization or permit and has no
reason to believe that any such license, certificate, authorization or
permit will not be renewed.
(o) The Company is not and, after giving effect to the offering of the
Stock and the application of the proceeds thereof as described in the
Prospectus, will not become an "investment company" within the meaning of
the Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder.
(p) Neither the Company nor any of its officers, directors or, to the
Company's knowledge, other affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, or which caused or resulted in, or
which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
(q) The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by it for
the conduct of its business as now conducted and as proposed to be
conducted or otherwise necessary or used in connection with the
commercialization of the existing product candidates of the Company and
the product candidates specifically described in the Prospectus as being
under development (collectively, the "Company Intellectual Property"),
and, except as described in the Prospectus, the Company is not aware of
any claim to the contrary or any challenge by any other person to the
rights of the Company with respect to the foregoing. To the best of the
Company's knowledge, none of the patents owned or licensed by the Company
is unenforceable or invalid, and none of the patent applications owned or
licensed by the Company would be unenforceable or invalid if issued as
patents. The Company is not obligated to pay a royalty, grant a license or
provide other consideration to any third person in connection with the
Company Intellectual Property other than as described in the Prospectus.
To the best of the Company's knowledge, the
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Company's business as now conducted and as proposed to be conducted does
not and will not infringe or conflict with any valid intellectual property
or franchise right, including patents, trademarks, service marks, trade
names, copyrights, trade secrets or licenses of any person, except as
described in the Prospectus or as would not have a Material Adverse
Effect. Except as described in the Prospectus and for claims relating to
trademarks that are not material to the business of the Company, no
written claim has been made against the Company alleging the infringement
by the Company of any patent, trademark, service xxxx, trade name,
copyright, trade secret, license in or other intellectual property right
or franchise right of any person.
(r) The studies, tests and preclinical and clinical trials conducted by or
on behalf of the Company that are described in the Prospectus were and, if
still pending, are being conducted in material compliance with applicable
regulatory requirements. The descriptions of the results of such studies,
tests and trials contained in the Prospectus are accurate and complete in
all material respects. The Company is not aware of any studies, tests or
trials the results of which the Company believes reasonably call into
question in any material respect the clinical trial results described or
referred to in the Prospectus when viewed in the context in which such
results are described and the clinical state of development. The Company
has not received any notices or correspondence from the U.S. Food and Drug
Administration (the "FDA") or any foreign, state or local governmental
body exercising comparable authority requiring the termination, suspension
or material modification of any studies, tests or preclinical or clinical
trials conducted by or on behalf of the Company. For the avoidance of
doubt, the Company makes no representation or warranty that the results of
any studies, tests or preclinical or clinical trials conducted by or on
behalf of the Company will be sufficient to obtain governmental approval
from the FDA or any foreign, state or local governmental body exercising
comparable authority.
(s) Except as described in the Prospectus, the Company has good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real or personal property which are material
to its business, in each case free and clear of all liens, encumbrances,
claims and defects that may result in a Material Adverse Effect.
(t) No labor disturbance by the employees of the Company exists or, to the
best of the Company's knowledge, is imminent which might be expected to
have a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company plans to
terminate employment with the Company.
(u) No "prohibited transaction" (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan which could have a Material Adverse Effect; each
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company has not incurred
and does not expect to incur liability under Title IV of ERISA with
respect to the termination of, or withdrawal from, any "pension plan"; and
each "pension plan" (as defined in ERISA) for which the Company would have
any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which could cause the loss of such
qualification.
(v) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of
toxic or other wastes or other hazardous
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substances by, due to, or caused by the Company (or, to the best of the
Company's knowledge, any other entity for whose acts or omissions the
Company is or may be liable) upon any of the property now or previously
owned or leased by the Company, or upon any other property, in violation
of any statute or any ordinance, rule, regulation, order, judgment, decree
or permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or liability
which would not have, singularly or in the aggregate with all such
violations and liabilities, a Material Adverse Effect; there has been no
disposal, discharge, emission or other release of any kind onto such
property or into the environment surrounding such property of any toxic or
other wastes or other hazardous substances with respect to which the
Company has knowledge, except for any such disposal, discharge, emission,
or other release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse
Effect.
(w) The Company (i) has filed all necessary federal, state and foreign
income and franchise tax returns, except where the failure to do so would
not have a Material Adverse Effect, (ii) has paid all federal, state,
local and foreign taxes due and payable for which it is liable, except to
the extent such taxes are being contested in good faith, and (iii) does
not have any tax deficiency or claims outstanding or assessed or, to the
best of the Company's knowledge, proposed against it which could
reasonably be expected to have a Material Adverse Effect.
(x) The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in
similar businesses in similar industries.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity in all material respects
with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(z) The minute books of the Company have been made available to the
Underwriters and counsel for the Underwriters, and such books (i) contain
a complete summary of all meetings and actions of the board of directors
(including each board committee) and stockholders of the Company since the
time of its incorporation through the date of the latest meeting and
action, and (ii) accurately in all material respects reflect all
transactions referred to in such minutes.
(aa) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration Statements are
accurate and complete descriptions of such documents in all material
respects. Other than as described in the Prospectus, no such franchise,
lease, contract or agreement has been suspended or terminated for
convenience or default by the Company or any of the other parties thereto,
and the Company has not received notice or any other knowledge of any such
pending or threatened suspension or termination, except for such pending
or threatened suspensions or terminations that would not reasonably be
expected to, singularly or in the aggregate, have a Material Adverse
Effect.
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(bb) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus and which is not so described.
(cc) Except as described in the Prospectus, no person or entity has the
right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statements or otherwise, except for persons and entities who
have expressly waived such right or who have been given timely and proper
notice and have failed to exercise such right within the time or times
required under the terms and conditions of such right.
(dd) The Company does not own any "margin securities" as that term is
defined in Regulation U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), and none of the proceeds of the sale
of the Stock will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry any margin security or for any other purpose which might cause any
of the Securities to be considered a "purpose credit" within the meanings
of Regulation T, U or X of the Federal Reserve Board.
(ee) Other than this Agreement, the Company is not a party to any
contract, agreement or understanding with any person that would give rise
to a valid claim against the Company or the Underwriters for a brokerage
commission, finder's fee or like payment in connection with the offering
and sale of the Stock.
(ff) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(gg) The Stock has been approved for quotation subject to notice of
issuance on the Nasdaq Stock Market's National Market ("Nasdaq National
Market").
(hh) The Company and its directors and officers (in their capacities as
such) are and will be in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "Xxxxxxxx-Xxxxx
Act") that are currently in effect and the Company is actively taking
steps to ensure that it and its directors and officers (in their
capacities as such) will be in compliance with other applicable provisions
of the Xxxxxxxx-Xxxxx Act not currently in effect upon and at all times
after the effectiveness of such provisions.
(ii) The Company is and will be in compliance with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace
Rules that are currently in effect and is actively taking steps to ensure
that it will be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in
effect upon and all times after the effectiveness of such requirements.
(jj) The Company has established and is maintaining disclosure controls
and procedures (as such term is defined in Rules 13a-15 and 15d-15 under
the Exchange Act); such disclosure controls and procedures have been
designed to ensure that material information relating to the Company is
made known to the Company's principal executive officer and its principal
financial officer by others within those entities, and such disclosure
controls and procedures are or will be effective to perform the functions
for which they were established; the Company has taken all necessary
actions to ensure that the Company's auditors and the Audit Committee of
the Board of
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Directors are or will be timely advised of: (i) any significant
deficiencies in the design or operation of internal controls which could
adversely affect the Company's ability to record, process, summarize, and
report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company's
internal controls; and the Company has taken all necessary actions to
ensure that any material weaknesses in internal controls are or will be
identified for the Company's auditors.
(kk) Neither the Company nor, to the best of the Company's knowledge, any
employee or agent of the Company, has made any contribution or other
payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.
(ll) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term is
defined in Rule 405 of the Securities Act) and any unconsolidated entity,
including, but not limited to, any structure finance, special purpose or
limited purpose entity that could reasonably be expected to materially
affect the Company's liquidity or the availability of or requirements for
its capital resources required to be described in the Prospectus which
have not been described as required.
(mm) There are no outstanding loans, advances (except normal advances for
business expense in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers
or directors of the Company, except as disclosed in the Prospectus.
3. PURCHASE SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx and UBS in their discretion, in order to avoid fractions)
obtained by multiplying ________ shares of Firm Stock by a fraction the
numerator of which is the number of shares of Firm Stock set forth opposite the
name of such Underwriter in Schedule A hereto and the denominator of which is
the total number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the Company
for the Stock will be $_____ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below) against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx
and UBS, payable to the order of the Company, all at the offices of Xxxxxx &
Xxxxxxx LLP, 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000. Time shall
be of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York time, on _____, 2004, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to as
the "First Closing Date". The First Closing Date and the location of delivery
of, and the form of payment for, the Firm Stock may be varied by agreement among
the Company, XX Xxxxx and UBS.
The Company shall make the certificates for the Firm Stock available to
the Representatives for examination on behalf of the Underwriters in New York,
New York at least twenty-four hours prior to the First Closing Date.
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For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx and UBS described below and
the Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company for the account of each Underwriter in the same proportion as the number
of shares of Firm Stock set forth opposite such Underwriter's name bears to the
total number of shares of Firm Stock (subject to adjustment by XX Xxxxx to
eliminate fractions). The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the date of this Agreement. No Optional Stock
shall be sold and delivered unless the Firm Stock previously has been, or
simultaneously is, sold and delivered. The right to purchase the Optional Stock
or any portion thereof may be surrendered and terminated at any time upon notice
by XX Xxxxx and UBS to the Company.
The option granted hereby may be exercised by written notice being given
to the Company by XX Xxxxx and UBS setting forth the number of shares of the
Optional Stock to be purchased by the Underwriters and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date against payment of the aggregate Purchase Price therefor
in federal (same day) funds by certified or official bank check or checks or
wire transfer to an account at a bank acceptable to XX Xxxxx and UBS payable to
the order of the Company all at the offices of Xxxxxx & Xxxxxxx LLP, 00000 Xxxx
Xxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Underwriter hereunder. The Company shall
make the certificates for the Optional Stock available to the Representatives
for examination on behalf of the Underwriters in New York, New York not later
than 10:00 A.M., New York Time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement among the Company, XX
Xxxxx and UBS.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representatives and file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later
than the second business day following the execution and delivery of this
Agreement; make no further amendment or any supplement to the Registration
Statements or to the Prospectus to which the Representatives shall
reasonably object by notice to the Company after a reasonable period to
review; advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to either Registration Statement
has been filed or becomes effective or any
10
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Representatives with copies thereof; advise the
Representatives, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statements or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, use
promptly its best efforts to obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered any event occurs as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Company will promptly notify the Representatives
thereof and upon their request will prepare an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance. The Company will furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may
from time to time reasonably request of such amended or supplemented
Prospectus; and in case any Underwriter is required to deliver a
prospectus relating to the Stock nine months or more after the effective
date of the Initial Registration Statement, the Company upon the request
of the Representatives and at the expense of such Underwriter will prepare
promptly an amended or supplemented Prospectus as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(c) To furnish promptly to each of the Representatives and to counsel for
the Underwriters a signed copy of each of the Registration Statements as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith.
(d) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statements as originally
filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) each Preliminary Prospectus, and (iii) the
Prospectus (not later than 10:00 A.M., New York time, of the business day
following the execution and delivery of this Agreement) and any amended or
supplemented Prospectus (not later than 10:00 A.M., New York City time, on
the business day following the date of such amendment or supplement).
(e) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries, if any (which need not be audited), complying with Section
11(a) of the Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representatives may designate and to continue such qualifications in
effect for so long as required for the distribution of the Stock; provided
that the
11
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to file a general consent
to service of process in any jurisdiction.
(g) During the period of five years from the date hereof, the Company will
deliver to the Representatives and, upon request, to each of the other
Underwriters, (i) as soon as they are available, copies of all reports or
other communications furnished to stockholders and (i) as soon as they are
available, copies of any reports and financial statements furnished or
filed with the Commission pursuant to the Exchange Act or any national
securities exchange or automatic quotation system on which the Stock is
listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of
Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock for a period of 90 days from the date of the Prospectus
without the prior written consent of XX Xxxxx and UBS other than the
Company's sale of the Stock hereunder and the issuance of shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock pursuant to (i) employee benefit plans, qualified stock
option plans or other employee compensation plans existing on the date
hereof or described in the Prospectus, (ii) currently outstanding options,
warrants or rights, (iii) a joint venture, collaboration, lending or
similar arrangement, or in connection with the acquisition or license by
the Company of any business, products or technologies or (iv) a strategic
partnership, joint venture, collaboration or similar arrangement for the
purposes of developing, promoting, marketing or distributing the Company's
current product candidates (which product candidates are described in the
Prospectus); provided, however, that (A) in the case of clause (iii)
above, the Company may not issue shares of Common Stock, or securities
convertible into or exercisable or exchangeable for shares of Common Stock
(and treating these securities as if converted into or exercised or
exchanged for Common Stock), in excess of 10% of the Stock, (B) in the
case of clause (iv) above, the Company may not issue shares of Common
Stock, or securities convertible into or exercisable or exchangeable for
shares of Common Stock (and treating these securities as if converted into
or exercised or exchanged for Common Stock), in excess of 10% of the
Company's outstanding capital stock, including the Stock to be issued
hereunder, and (C) in the case of clauses (iii) and (iv) above, the
transferee shall furnish to the Representatives, prior to any such
transfer, a letter, substantially in the form of Exhibit I hereto,
pursuant to which such transferee shall agree not to directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock for a period of 90
days from the date of the Prospectus, without the prior written consent of
XX Xxxxx and UBS; provided, further, that, if (1) during the period that
begins on the date that is 15 calendar days plus 3 business days before
the last day of the 90-day restricted period and ends on the last day of
the 90-day restricted period, the Company issues a earnings release or
material news or a material event relating to the Company occurs or (2)
prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed
by this section shall continue to apply until the expiration of the date
that is 15 calendar days plus 3 business days after the date on which the
issuance of the earnings release or the material news or material event
occurs. The Company will cause each officer, director and stockholder
listed in Schedule B to furnish to the Representatives, prior to the First
Closing Date, a letter, substantially in the form of Exhibit I hereto,
pursuant to which each such person shall agree not to directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock for a period of 90
days from the date of the Prospectus, without the prior written consent of
XX Xxxxx and UBS.
12
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for any
periods subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(k) Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business
and consistent with the past practices of the Company and of which the
Representatives are notified), without the prior written consent of the
Representatives, unless in the judgment of the Company and its counsel,
and after notification to the Representatives, such press release or
communication is required by law.
(l) In connection with the offering of the Stock, until XX Xxxxx and UBS
shall have notified the Company of the completion of the resale of the
Stock, the Company will not, and will cause its affiliated purchasers (as
defined in Regulation M under the Exchange Act) not to, either alone or
with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest,
any Stock, or attempt to induce any person to purchase any Stock, and not
to, and to cause its affiliated purchasers not to, make bids or purchase
for the purpose of creating actual, or apparent, active trading in or of
raising the price of the Stock.
(m) The Company will not take any action prior to the Option Closing Date
which would require the Prospectus to be amended or supplemented pursuant
to Section 4(b).
(n) The Company shall at all times comply with all applicable provisions
of the Xxxxxxxx-Xxxxx Act in effect from time to time.
(o) The Company will apply the net proceeds from the sale of the Stock as
set forth in the Prospectus under the heading "Use of Proceeds".
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus and any amendments and exhibits thereto; (d)
the costs of printing, reproducing and distributing the "Agreement Among
Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (e) the fees and expenses
(including related fees and expenses of counsel for the Underwriters) incurred
in connection with filings made with the National Association of Securities
Dealers; (f) any applicable listing or other fees; (g) the fees and expenses of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(f) and of preparing, printing and distributing Blue Sky
Memoranda and Legal Investment Surveys (including related fees and expenses of
counsel to the Underwriters); (h) all fees and expenses of the registrar and
transfer agent of the Stock; and (i) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the Company's counsel
and the Company's independent accountants); provided that,
13
except as otherwise provided in this Section 5 and in Section 9, the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either of the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be
included in the Registration Statements or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the
Representatives. The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in accordance
with Section 4(a).
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters,
is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary
to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock, the
Registration Statement and the Prospectus and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall
be reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) Xxxxxx & Xxxxxxx LLP shall have furnished to the Representatives such
counsel's (i) written opinion, as counsel to the Company, addressed to the
Underwriters and dated each Closing Date, in substantially the form
attached hereto as Exhibit II-A, (ii) written statement, as counsel to the
Company, addressed to the Underwriters and dated each Closing Date, in
substantially the form attached hereto as Exhibit II-B and (iii) written
tax letter, as counsel to the Company, addressed to the Underwriters and
dated each Closing Date, in substantially the form attached hereto as
Exhibit II-C.
(e) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, a Professional Corporation, shall
have furnished to the Representatives such counsel's written opinion, as
special patent counsel to the Company, addressed to the Underwriters and
dated each Closing Date, in substantially the form attached hereto as
Exhibit III.
(f) Xxxxx, Xxxxxx & XxXxxxxx, P.C. shall have furnished to the
Representatives such counsel's written opinion, as special regulatory
counsel to the Company, addressed to the Underwriters and dated each
Closing Date, in substantially the form attached hereto as Exhibit IV.
(g) The Representatives shall have received from Xxxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, and Xxxxxx Xxxxxx White & XxXxxxxxx LLP,
special patent counsel for the
14
Underwriters, such opinions, dated each Closing Date, with respect to such
matters as the Underwriters may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(h) At the time of the execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, addressed to the
Underwriters and dated such date, in form and substance satisfactory to
the Representatives (i) confirming that they are independent certified
public accountants with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations and (ii) stating the
conclusions and findings of such firm with respect to the financial
statements and certain financial information contained in the Prospectus.
(i) On each Closing Date, the Representatives shall have received a letter
(the "bring-down letter") from Ernst & Young LLP addressed to the
Underwriters and dated such Closing Date confirming, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus as of a date not more than three
business days prior to the date of the bring-down letter), the conclusions
and findings of such firm with respect to the financial information and
other matters covered by its letter delivered to the Representatives
concurrently with the execution of this Agreement pursuant to Section
6(h).
(j) The Company shall have furnished to the Representatives a certificate,
dated each Closing Date, of its Chairman of the Board, its President or a
Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statements and the
Prospectus and, in their opinion, the Registration Statements as of their
respective effective dates and the Prospectus, as of its date, did not
include any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) since the effective date of the
Initial Registration Statement, no event has occurred which should have
been set forth in a supplement or amendment to the Registration Statements
or the Prospectus, (iii) to the best of their knowledge after reasonable
investigation, as of such Closing Date, the representations and warranties
of the Company in this Agreement are true and correct and the Company has
complied with all agreements and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date, and
(iv) subsequent to the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change in
the financial position or results of operation of the Company or any
material adverse change, or any development including a prospective
material adverse change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
except as set forth in the Prospectus.
(k) (i) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) except for the exercise
of options in the ordinary course of the Company's business, since such
date there shall not have been any change in the capital stock, short-term
debt or long-term debt of the Company or any change, or any development
involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders' equity or results
of operations of the Company otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed
with the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
15
(l) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of each Closing Date, prevent the issuance
or sale of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company;
and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as
of each Closing Date which would prevent the issuance or sale of the Stock
or materially and adversely affect or potentially materially and adversely
affect the business or operations of the Company.
(m) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum or maximum prices or maximum range for prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, (iii) the United States shall
have become engaged in new hostilities, or the subject of an act of
terrorism, or there shall have been an escalation in existing hostilities
involving the United States, or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in
the judgment of the Representatives, impracticable or inadvisable to
proceed with the sale or delivery of the Stock on the terms and in the
manner contemplated in the Prospectus.
(n) The National Market System shall have approved the Stock for
inclusion, subject only to official notice of issuance.
(o) The Representatives shall have received the written agreements,
substantially in the form of Exhibit I hereto, of the officers, directors
and stockholders of the Company listed in Schedule B to this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if any,
who controls any Underwriter within the meaning of the Securities Act
(collectively the "Underwriter Indemnified Parties" and, each an
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or
supplement thereto a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act
or failure to act, or any alleged act or failure to act, by any
Underwriter in connection with, or relating in any
16
manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability
or action arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable in the case of
any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any
such act or failure to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct) and shall
reimburse each Underwriter Indemnified Party promptly upon demand for any
legal or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating or preparing to defend
or defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability
or action arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from the Preliminary
Prospectus, either of the Registration Statements or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriters'
Information (as defined in Section 16); provided, further, that the
foregoing indemnification agreement with respect to the Preliminary
Prospectus shall not inure to the benefit of any Underwriter from which
the person asserting any such loss, claim, damage or liability purchased
Stock, or any officers, employees, representatives, agents or controlling
persons of such Underwriters, if (1) a copy of the Prospectus (as then
amended or supplemented) was required by law to be delivered to such
person at or prior to the written confirmation of the sale of Stock to
such person, (2) a copy of the Prospectus (as then amended or
supplemented) was not sent or given to such person by or on behalf of such
Underwriter and such failure was not due to the Company's failure to make
available sufficient quantities of the Prospectus to such Underwriter, and
(3) the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage or liability. This
indemnity agreement is not exclusive and will be in addition to any
liability which the Company might otherwise have and shall not limit any
rights or remedies which may otherwise be available at law or in equity to
each Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company
within the meaning of the Securities Act (collectively the "Company
Indemnified Parties" and each a "Company Indemnified Party") against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company Indemnified Parties may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of that Underwriter
specifically for use therein, and shall reimburse the Company Indemnified
Parties for any legal or other expenses reasonably incurred by such
parties in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection with
any such loss, claim, damage, liability or action as such expenses are
incurred; provided that the parties hereto hereby agree that such written
information provided by the Underwriters consists solely of the
Underwriters' Information. This indemnity agreement is not exclusive and
will be in addition to any liability
17
which the Underwriters might otherwise have and shall not limit any rights
or remedies which may otherwise be available at law or in equity to the
Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 7
except to the extent it has been materially prejudiced by such failure;
and, provided, further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that any indemnified
party shall have the right to employ separate counsel in any such action
and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the indemnifying party and in the reasonable judgment of such counsel
it is advisable for such indemnified party to employ separate counsel or
(iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified
party, in which case, if such indemnified party notifies the indemnifying
party in writing that it elects to employ separate counsel at the expense
of the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time for
all such indemnified parties, which firm shall be designated in writing by
XX Xxxxx and UBS, if the indemnified parties under this Section 7 consist
of any Underwriter Indemnified Party, or by the Company if the indemnified
parties under this Section 7 consist of any Company Indemnified Parties.
Each indemnified party, as a condition of the indemnity agreements
contained in Sections 7(a) and 7(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. Subject to the provisions of Section 7(d) below, no indemnifying
party shall be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section 7 effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the request for
reimbursement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement
being
18
entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date
of such settlement.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a)
or 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Stock or, if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, 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 with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to the Stock purchased under this Agreement, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission;
provided that the parties hereto agree that the written information
furnished to the Company through the Representatives by or on behalf of
the Underwriters for use in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus consists solely of the
Underwriters' Information. The Company and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section
7(e) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7(e) shall be
deemed to include, for purposes of this Section 7(e), 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 7(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Stock underwritten by it and distributed to the public were
offered to the public less the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
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 Underwriters' obligations to contribute as provided in this Section
7(e) are several in proportion to their respective underwriting
obligations and not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx and UBS, in their absolute discretion by notice given to and
received by the Company prior to delivery of and payment for the Firm Stock if,
prior to that time, any of the events described in Sections 6(l) or 6(n) have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
19
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8 or 10, (b) the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason not permitted
under this Agreement, or (c) the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement, the Company shall reimburse
the Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to XX Xxxxx and UBS. If
this Agreement is terminated pursuant to Section 10 by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except expenses to be paid or
reimbursed pursuant to Sections 5 and 9 and except the provisions of Section 8
shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties, and the
indemnities of the several Underwriters shall also be for the benefit of the
Company Indemnified Parties. It is understood that the Underwriter's
responsibility to the Company is solely contractual in nature and the
Underwriters do not owe the Company, or any other party, any fiduciary duty as a
result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement,
20
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter, the Company or any person controlling any of
them and shall survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail to:
XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Equity Capital Markets Department
with copies to:
XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Legal and Compliance Department
and to:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Syndicate Department
with copies to:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal and Compliance Department
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Santarus, Inc., 00000 Xxxx Xxxxx Xxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, XX 00000, Attention: Chief Executive Officer (Fax:
(000) 000-0000).
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the "Underwriters' Information" consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements concerning the Underwriters contained in the third
paragraph (concerning the terms of the offering) and the tenth paragraph
(concerning short sales and stabilizing transactions) and the table of
Underwriters participating in the offering under the heading "Underwriting."
21
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
22
If the foregoing is in accordance with your understanding of the agreement
between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
SANTARUS, INC.
By:_______________________________________
Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
UBS SECURITIES LLC
XXXXXX XXXXXX PARTNERS LLC
RBC CAPITAL MARKETS CORPORATION
Acting on their own behalf
and as Representatives of the several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX & CO., LLC
By:_____________________________________
Name:
Title:
By: UBS SECURITIES LLC
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
23
SCHEDULE A
Name Number Number of
of Firm Optional
Shares Shares
to be to be
Purchased Purchased
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
--------- ---------
Total
--------- ---------
24
SCHEDULE B
LIST OF STOCKHOLDERS SUBJECT TO SECTION 4(H)
EXECUTIVE OFFICERS AND DIRECTORS:
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx III
Xxxxxx X. Xxxx
Xxxxxx Xxxxxxx
Xxxxx X. XxXxxxxx
E. Xxxxx Xxxxxxx II
Xxxxx X. Xxx
Xxxxxxxx X. Hee
Xxxxxx X. Xxxxx
X. Xxxxxxxxx Xxxxxxx
Xxxxx X. Xxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxxx Xxxxxxx van der Have
OTHER STOCKHOLDERS:
[To come]
25
EXHIBIT I
Form of Lock-Up Agreement
June __, 2004
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
As representatives of the
several Underwriters
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Santarus, Inc. Public Offering of Common Stock
Dear Sirs:
In order to induce XX Xxxxx & Co., LLC ("XX Xxxxx"), UBS Securities LLC
("UBS"), Xxxxxx Xxxxxx Partners LLC and RBC Capital Markets Corporation
(together, the "Representatives") to enter into a certain underwriting agreement
with Santarus, Inc., a Delaware corporation (the "Company"), with respect to the
public offering of shares of the Company's Common Stock, par value $0.0001 per
share ("Common Stock"), the undersigned hereby agrees that for a period of 90
days following the date of the final prospectus filed by the Company with the
Securities and Exchange Commission in connection with such public offering, the
undersigned will not, without the prior written consent of XX Xxxxx and UBS,
directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of ("Transfer"), any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (the "Securities Act") (such shares,
the "Beneficially Owned Shares")) or securities convertible into or exercisable
or exchangeable in Common Stock, (ii) enter into any swap, hedge or similar
agreement or arrangement that transfers in whole or in part, the economic risk
of ownership of the Beneficially Owned Shares or securities convertible into or
exercisable or exchangeable in Common Stock or (iii) engage in any short selling
of the Common Stock; provided that, if (1) during the period that begins on the
date that is 15 calendar days plus 3 business days before the last day of the
90-day restricted period and ends on the last day of the 90-day restricted
period, the Company issues a earnings release or material news or a material
event relating to the Company occurs or (2) prior to the expiration of the
90-day restricted period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the 90-day period,
the restrictions imposed by this Lock-Up Agreement shall continue to apply until
the expiration of the date that is 15 calendar days plus 3 business days after
the date on which the issuance of the earnings release or the material news or
material event occurs. For purposes of clarification, nothing herein shall
restrict the undersigned's ability to Transfer shares of Common Stock acquired
in open-market purchases; provided that any such Transfer is not required to be
reported under Section 16 of the Securities Exchange Act of 1934, as amended.
Notwithstanding the foregoing, the undersigned may Transfer the
undersigned's Beneficially Owned Shares (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein, (ii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that the trustee of the trust agrees to be bound in writing by the restrictions
set forth herein, and provided further that any such Transfer shall not
26
involve a disposition for value, or (iii) with the prior written consent of XX
Xxxxx and UBS on behalf of the Underwriters. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, if the undersigned is a corporation, the corporation may Transfer its
Beneficially Owned Shares to any wholly-owned subsidiary of such corporation or
if the undersigned is a limited liability company, to a member or affiliated
limited liability company or if the undersigned is a partnership, to a partner
or affiliated partnership; provided, however, that in any such case, it shall be
a condition to the Transfer that the transferee execute an agreement stating
that the transferee is receiving and holding such Beneficially Owned Shares
subject to the provisions of this Lock-Up Agreement and there shall be no
further Transfer of such Beneficially Owned Shares except in accordance with
this Lock-Up Agreement, and provided further that any such Transfer shall not
involve a disposition for value. The undersigned now has, and, except as
contemplated by the foregoing exceptions, for the duration of this Lock-Up
Agreement will have, good and marketable title to the undersigned's shares, free
and clear of all liens, encumbrances, and claims whatsoever.
In addition, the undersigned hereby waives, from the date hereof until the
expiration of the 90-day period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares. In order
to enable the aforesaid covenants to be enforced, the undersigned hereby
consents to the placing of legends and/or stop-transfer orders with the transfer
agent of the Common Stock with respect to any shares of Common Stock or
Beneficially Owned Shares.
By:_______________________________
Name:
Title:
27
EXHIBIT II-A
Form of Opinion of Counsel to the Company
______, 2004
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
As representatives of the several Underwriters
named in Schedule A
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Santarus, Inc.
Ladies and Gentlemen:
We have acted as counsel to Santarus, Inc., a Delaware corporation (the
"Company"), in connection with the sale to you and the several underwriters for
whom you are acting as representatives (the "Underwriters") on the date hereof
by the Company, of ________ shares (the "Shares") of common stock of the
Company, par value $0.0001 per share (the "Common Stock"), pursuant to a
registration statement on Form S-1 under the Securities Act of 1933, as amended
(the "Act"), filed with the Securities and Exchange Commission (the
"Commission") on June 24, 2004 (File No. 333-________), as amended to date (the
"Registration Statement"), a Prospectus dated ________, 2004 filed with the
Commission pursuant to Rule 424(b) under the Act (the "Prospectus") and an
underwriting agreement dated ________, 2004 between you, as representatives of
the several Underwriters named in the underwriting agreement, and the Company
(the "Underwriting Agreement"). This letter is being furnished to you pursuant
to Section 6(d) of the Underwriting Agreement.
As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of this letter, except where
a specific fact confirmation procedure is stated to have been performed (in
which case we have with your consent performed the stated procedure), and except
where a statement is qualified as to knowledge or awareness (in which case we
have with your consent made no or limited inquiry as specified below). We have
examined, among other things, the following:
(a) The Underwriting Agreement, the Registration Statement and Prospectus;
(b) The written agreements and instruments to which the Company is a
party, or to which its businesses or assets are subject, identified to us
by officers of the Company as material to the Company and listed in
Exhibit A hereto (the "Material Agreements");
(c) The Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws of the Company (the "Governing Documents") and certain
resolutions of the Board of Directors of the Company and the Pricing
Committee of the Board of Directors of the Company; and
28
(d) The court or administrative orders, writs, judgments or decrees
specifically directed to the Company that were identified to us by an
officer of the Company as material to the Company and listed in Exhibit B
hereto (the "Court Orders").
As to facts material to the opinions, statements and assumptions expressed
herein, we have, with your consent, relied upon oral or written statements and
representations of officers and other representatives of the Company and others,
including representations and warranties of the Company in the Underwriting
Agreement. We have not independently verified such factual matters.
Whenever a statement herein is qualified as to knowledge, awareness, or a
similar phrase, it is intended to indicate that those attorneys in the firm who
have rendered legal services in connection with the transaction referenced above
do not have current actual knowledge of the inaccuracy of such statement.
However, except as otherwise expressly indicated, we have not undertaken any
independent investigation to determine the accuracy of any such statement.
We are opining herein as to the effect on the subject transaction only of
the federal laws of the United States, the internal laws of the State of
California and, in numbered paragraphs 1, 2, 4 and 5 of this letter, the
Delaware General Corporation Law (the "DGCL"), and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any
other jurisdiction or, in the case of Delaware, any other laws, or as to any
matters of municipal law or the laws of any local agencies within any state. We
have informed you that we have not been retained by the Company to represent the
Company in connection with, and we are not experts regarding, matters arising
under the Hatch/Waxman Patent Term Extension Act and the other patent laws of
the United States or the rules and regulations of the U.S. Patent and Trademark
Office, the Federal Food, Drug and Cosmetic Act, the Public Health Service Act,
the Food and Drug Administration Modernization Act, the Orphan Drug Act or the
rules and regulations of the Federal Food and Drug Administration, or any other
federal or California laws pertaining to the regulation of the research,
development, testing, manufacture or sale of drugs.
Our opinions and confirmations herein are based upon our consideration of
only those statutes, rules and regulations which, in our experience, are
normally applicable to underwritten public offerings of common equity
securities, provided that no opinion or confirmation is expressed herein with
respect to federal or state securities laws (except to the extent stated in
paragraphs 6, 7, 8 and 9 herein and in our separate negative assurance letter),
tax laws (except to the extent stated in our separate tax letter), antitrust or
trade regulation laws, insolvency or fraudulent transfer laws, antifraud laws,
margin regulations, NASD rules, pension or employee benefit laws, compliance
with fiduciary duty requirements, usury laws, the Hatch/Waxman Patent Term
Extension Act and the other patent laws of the United States or the rules and
regulations of the U.S. Patent and Trademark Office, the Federal Food, Drug and
Cosmetic Act, the Public Health Service Act, the Food and Drug Administration
Modernization Act, the Orphan Drug Act or the rules and regulations of the
Federal Food and Drug Administration, or any other federal or California laws
pertaining to the regulation of the research, development, testing, manufacture
or sale of drugs or other laws excluded by customary practice. We express no
opinion as to any state or federal laws or regulations applicable to the subject
transaction because of the nature or extent of the business of any parties to
the Underwriting Agreement. Various issues concerning the Company's intellectual
property are addressed in the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, a
Professional Corporation, which have been separately provided to you, and we
express no opinion with respect to those matters; and various issues concerning
the Company's clinical trials and regulatory matters are addressed in the
opinion of Xxxxx, Xxxxxx & XxXxxxxx, P.C., which has been separately provided to
you, and we express no opinion with respect to those matters.
Subject to the foregoing and the other matters set forth herein, it is our
opinion that, as of the date hereof:
29
1. The Company is a corporation duly incorporated under the DGCL with
corporate power and authority to own its properties and to conduct its
business as described in the Registration Statement and the Prospectus.
Based on certificates from public officials, we confirm that the Company
is validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business in the following States: Arizona,
California, Kansas and Massachusetts.
2. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly authorized by all necessary corporate action of the Company
and validly issued and are non-assessable and, to the best of our
knowledge, fully paid. The Shares to be issued and sold by the Company
pursuant to the Underwriting Agreement have been duly authorized by all
necessary corporate action of the Company and, when issued to and paid for
by you and the other Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
non-assessable and free of preemptive rights arising from the Governing
Documents or, with your consent based solely on a review of the Material
Agreements and a certificate from an officer of the Company, similar
contractual obligations of the Company.
3. To the best of our knowledge, based solely on oral or written
statements and representations of officers and other representatives of
the Company, including the representations and warranties of the Company
in the Underwriting Agreement, and docket searches in the jurisdictions
set forth on Exhibit C hereto, there are no actions, suits, proceedings or
investigations pending against the Company before any court, governmental
agency or arbitrator which (i) are required to be disclosed in the
Prospectus pursuant to Item 103 of Regulation S-K under the Act, other
than those disclosed therein, or (ii) which seek to restrain or enjoin the
sale of the Shares by the Company.
4. The execution, delivery and performance of the Underwriting Agreement
have been duly authorized by all necessary corporate action of the
Company, and the Underwriting Agreement has been duly executed and
delivered by the Company.
5. The execution and delivery of the Underwriting Agreement and the
issuance and sale of the Shares by the Company to you and to the other
Underwriters pursuant to the Underwriting Agreement on the date hereof do
not:
(i) violate the Company's Governing Documents;
(ii) result in the breach of or a default under any of the Material
Agreements; or
(iii) violate any federal or California statute, rule or regulation
or Court Order applicable to the Company or the DGCL; or
(iv) require any consents, approvals, or authorizations to be
obtained by the Company, or any registrations, declarations or
filings to be made by the Company, in each case, under any federal
or California statute, rule or regulation applicable to the Company
that have not been obtained or made and such that may be required
under state securities laws in connection with the purchase and
distribution of such Shares by the Underwriters.
6. The Registration Statement has become effective under the Act. With
your consent, based solely on a telephonic confirmation by a member of the
Staff of the Commission on ________, 2004, no stop order suspending the
effectiveness of the Registration Statement has been issued under the Act
and, to the best of our knowledge, no proceedings therefor have been
30
initiated by the Commission. Any required filing of the Prospectus
pursuant to Rule 424 under the Act has been made in accordance with Rules
424 and 430A under the Act.
7. The Registration Statement, as of the date it was declared effective,
and the Prospectus, as of its date, complied as to form in all material
respects with the requirements for registration statements on Form S-1
under the Act and the rules and regulations of the Commission thereunder;
it being understood, however, that we express no opinion with respect to
Regulation S-T or the financial statements, schedules, or other financial
data, included in, or omitted from, the Registration Statement or the
Prospectus. In passing upon the compliance as to form of the Registration
Statement and the Prospectus, we have assumed that the statements made
therein are correct and complete.
8. The statements in the Prospectus under the caption "Description of
Capital Stock," insofar as they purport to constitute a summary of the
terms of the Common Stock, are accurate descriptions or summaries in all
material respects.
9. To the best of our knowledge, there are no contracts or documents of a
character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed.
10. With your consent based solely on a certificate of an officer of the
Company as to factual matters and a review of the Material Agreements, the
Company is not a party to any agreement that would require the inclusion
in the Registration Statement of shares owned by any person or entity
other than the Company.
11. With your consent, based solely on a review of the Governing Documents
and the Material Agreements, none of the Governing Documents or Material
Agreements contains any restriction on voting or limitation on transfer
affecting the Shares to be issued and sold to you, when so issued, which
are not described or referred to in the Prospectus, other than the
requirements of the DGCL and customary restrictions on transfer under
state and federal securities laws.
12. With your consent based solely on a certificate of an officer of the
Company as to factual matters, the Company is not, and immediately after
giving effect to the sale of the Shares in accordance with the
Underwriting Agreement and the application of the proceeds as described in
the Prospectus under the caption "Use of Proceeds," will not be required
to be registered as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
In rendering the opinions in clause (ii) of paragraph 5 above, insofar as
they require interpretation of the Material Agreements, with your consent, (i)
we have assumed that courts of competent jurisdiction would enforce such
agreements in accordance with their plain meaning, (ii) to the extent that any
questions of legality or legal construction have arisen in connection with our
review, we have applied the laws of the State of California in resolving such
questions, (iii) we express no opinion with respect to the effect of any
discretionary action or inaction by the Company (other than the actions
referenced in the introductory clause of paragraph 5 above) under the Material
Agreements that may result in a breach or default under any Material Agreement,
and (iv) we express no opinion with respect to any matters which would require
us to perform a mathematical calculation or make a financial or accounting
determination. Because certain of the Material Agreements may be governed by
other than California law, this opinion may not be relied upon as to whether a
breach or default would occur under the law actually governing such Material
Agreements.
31
This letter is furnished only to you in your capacity as Representatives
of the several Underwriters in their capacity as underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transactions covered hereby. This letter may not be relied
upon by you or them for any other purpose, or furnished to, assigned to, quoted
to, or relied upon by any other person, firm or other entity for any purpose
(including any person, firm or other entity that acquires Shares from you or the
other Underwriters) without our prior written consent, which may be granted or
withheld in our sole discretion.
32
EXHIBIT II-B
Form of Negative Assurances Statement of Counsel to the Company
______, 2004
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
As representatives of the several Underwriters
named in Schedule A
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Santarus, Inc.
Ladies and Gentlemen:
We have acted as counsel to Santarus, Inc., a Delaware corporation (the
"Company"), in connection with the sale to you and the several underwriters for
whom you are acting as representatives (the "Underwriters") on the date hereof
by the Company, of _______ shares (the "Shares") of common stock of the Company,
par value $0.0001 per share (the "Common Stock"), pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended (the "Act"),
filed with the Securities and Exchange Commission (the "Commission") on June 24,
2004 (File No. 333-______), as amended to date (the "Registration Statement"), a
Prospectus dated _______, 2004 filed with the Commission pursuant to Rule 424(b)
under the Act (the "Prospectus") and an underwriting agreement dated _______,
2004 between you, as representatives of the several Underwriters named in the
underwriting agreement, and the Company (the "Underwriting Agreement"). This
letter is being furnished to you pursuant to Section 6(d) of the Underwriting
Agreement.
The primary purpose of our professional engagement was not to establish or
confirm factual matters or financial or quantitative information. Therefore, we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except to the extent expressly set forth in the
numbered paragraphs 7 and 8 of our opinion letter to you of even date and as
provided below), and have not made an independent check or verification thereof
(except as aforesaid). However, in the course of acting as counsel to the
Company in connection with the preparation by the Company of the Registration
Statement and Prospectus, we reviewed the Registration Statement, and the
Prospectus, and participated in conferences and telephone conversations with
officers and other representatives of the Company, the independent public
accountants for the Company, your representatives, and your counsel, during
which conferences and conversations the contents of the Registration Statement
and the Prospectus and related matters were discussed. We also reviewed and
relied upon certain corporate records and documents, letters from counsel and
oral and written statements of officers and other representatives of the Company
and others as to the existence and consequence of certain factual and other
matters.
Based on our participation, review and reliance as described above, we
advise you that no facts came to our attention that caused us to believe that
the Registration Statement, at the time it 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 and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or
33
omits to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; it being
understood that we express no belief with respect to the financial statements,
schedules, or other financial data included in, or omitted from, the
Registration Statement or the Prospectus.
This letter is delivered only to you in your capacity as representatives
of the several Underwriters in their capacity as underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transactions covered hereby. This letter may not be relied
upon by you or them for any other purpose, or furnished to, assigned to, quoted
to, or relied upon by any other person, firm or other entity for any purpose
(including any person, firm or other entity that acquires Shares from you or the
other Underwriters) without our prior written consent, which may be granted or
withheld in our sole discretion.
34
EXHIBIT II-C
Form of Tax Letter of Counsel to the Company
_____, 2004
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
As representatives of the several Underwriters
named in Schedule A
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Santarus, Inc.
Ladies and Gentlemen:
We have acted as counsel to Santarus, Inc., a Delaware corporation (the
"Company"), in connection with the sale to you and the several underwriters for
whom you are acting as representatives (the "Underwriters") on the date hereof
by the Company, of _______ shares (the "Shares") of common stock of the Company,
par value $0.0001 per share (the "Common Stock"), pursuant to a registration
statement on Form S-1 under the Securities Act of 1933, as amended (the "Act"),
filed with the Securities and Exchange Commission (the "Commission") on June 24,
2004 (File No. 333-_______), as amended to date (the "Registration Statement"),
a Prospectus dated _______, 2004 filed with the Commission pursuant to Rule
424(b) under the Act (the "Prospectus") and an underwriting agreement dated
_______, 2004 between you, as representatives of the several Underwriters named
in the underwriting agreement, and the Company (the "Underwriting Agreement").
This letter is being furnished to you pursuant to Section 6(d) of the
Underwriting Agreement.
The facts, as we understand them, and upon which with your permission we
rely in rendering the opinion herein, are set forth in the Prospectus.
Based on such facts and subject to the limitations set forth in the
Prospectus, the statements in the Prospectus under the caption "Material U.S.
Federal Income Tax Consequences to Non-U.S. Holders," insofar as they purport to
summarize certain provisions of the statutes and regulations referred to
therein, are accurate summaries in all material respects.
No opinion is expressed as to any matter not discussed herein.
We are opining herein as to the federal tax laws of the United States, and
we express no opinion with respect to the applicability thereto, or the effect
thereon, of other federal laws, the laws of any state or any other jurisdiction
or as to any other matters of municipal law or the laws of any local agencies
within any state.
This opinion is rendered to you as of the date of this letter, and we
undertake no obligation to update this opinion subsequent to the date hereof.
This opinion is based on current provisions of the Internal Revenue Code of
1986, as amended, regulations promulgated thereunder and interpretations thereof
by the Internal Revenue Service and the courts having jurisdiction over such
matters. Our opinion is not binding upon the Internal Revenue Service or the
courts, and there can be no assurance that the
35
Internal Revenue Service will not assert a contrary position. Furthermore, no
assurance can be given that future legislative, judicial or administrative
changes, on either a prospective or retroactive basis, would not affect the
conclusions stated in this opinion.
This opinion is rendered only to you in your capacity as representatives
of the several Underwriters in their capacity as underwriters under the
Underwriting Agreement and is solely for the benefit of the Underwriters in
connection with the transaction described above. This opinion may not be relied
upon by you or them for any other purpose, or furnished to, quoted to, or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent, except that this opinion may be relied upon by persons entitled
to rely on it pursuant to applicable provisions of United States federal
securities laws and this opinion may be furnished or quoted to your or their
legal counsel and to judicial and regulatory authorities having jurisdiction
over you or them.
36
EXHIBIT III
Form of Opinion of Special Patent Counsel to the Company
_____, 2004
XX Xxxxx & Co., LLC
UBS Securities LLC
Xxxxxx Xxxxxx Partners LLC
RBC Capital Markets Corporation
As representatives of the several Underwriters named in
Schedule A to the Underwriting Agreement described below
c/o XX Xxxxx & Co., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Santarus, Inc.
Ladies and Gentlemen:
We act as intellectual property counsel for Santarus, Inc., a Delaware
corporation (the "Company"), with respect to intellectual property matters
referred to us by the Company from time to time. This opinion is delivered in
connection with the Underwriting Agreement, dated _______, 2004, between you, as
representatives of the several Underwriters named in such Underwriting
Agreement, and the Company (the "Underwriting Agreement"), relating to the
offering of Common Stock, par value $0.0001 per share, of the Company, pursuant
to the registration statement on Form S-1 filed under the Securities Act of 1933
(the "Act") with the Securities and Exchange Commission (the "Commission") (File
No. 333-_______), as amended to date (the "Registration Statement"), and the
related Prospectus dated _______, 2004 filed with the Commission pursuant to
Rule 424(b) under the Act (the "Prospectus"). Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in the
Underwriting Agreement.
In connection with this opinion, we have reviewed the portions of the
Prospectus under the following captions: "Risk Factors -- Risks Related to Our
Intellectual Property and Potential Litigation -- The protection of our
intellectual property rights is critical to our success and any failure on our
part to adequately secure such rights would materially affect our business;
"Risk Factors -- Risks Related to Our Intellectual Property and Potential
Litigation -- Our Rapinex products depend on technology licensed from the
University of Missouri and any loss of our license rights would harm our
business and seriously affect our ability to market our products"; "Risk Factors
-- Risks Related to Our Intellectual Property and Potential Litigation -- Our
ability to market our products is subject to the intellectual property rights of
third parties" except for the first sentence of the second paragraph under this
caption; the first, second, third, fourth and fifth paragraphs, the second
through sixth sentences of the seventh paragraph, and the first through sixth
sentences of the eighth paragraph under the caption "Business -- Intellectual
Property"; and "Business -- License Rights from the University of Missouri."
Such portions are herein collectively referred to as the "Covered Disclosure."
In addition, we have reviewed such corporate records, certificates and
other documents and such questions of law and have made such inquiries as we
have considered necessary or advisable for the purposes of this opinion. We have
assumed the conformity with the originals of all such materials submitted to us
as copies (whether or not certified and including facsimiles), the authenticity
of the originals of such materials and all materials submitted to us as
originals, the genuineness of all signatures and the legal capacity of all
natural persons. In rendering this opinion, as to factual matters not directly
within our actual knowledge, we have relied upon without independent
verification, and have assumed the
37
accuracy, completeness and genuineness of, certificates and statements of public
officials, certificates of officers of the Company and oral and written
representations made to us by officers of the Company.
Based upon the foregoing and subject to the assumptions, qualifications,
limitations, and exceptions set forth herein, we are of the opinion that:
1. To the best of our knowledge and limited to the United States and
except as set forth in the Prospectus, (A) the Company owns or is a
licensee of the patents, patent applications, trademark registrations and
trademark applications set forth in Appendix A attached hereto and/or set
forth in the Covered Disclosure as used or proposed to be used by the
Company in its business (collectively, the "IP Rights"), (B) the Company
has not received any written notice of any claims or threatened claims of
third parties to any ownership interest or recorded lien with respect to
any of the IP Rights, (C) there are no pending nor are there threatened in
writing any actions, suits, proceedings, or claims by others challenging
the validity, enforceability or scope of any of the IP Rights, (D) the
Company has not and no third party licensor of any of the IP Rights to the
Company has received any written notice of infringement of or conflict
with any valid intellectual property or proprietary rights of others with
respect to the IP Rights, (E) use of the IP Rights by the Company in its
business as set forth in the Covered Disclosure does not infringe or
otherwise violate any valid intellectual property or proprietary rights of
any third party, and the Company has meritorious defenses to the patent
rights, of which we are aware, of third parties, (F) the Company has not
received any written notice that, and the Company has not advised us in
writing of a concern that, it is in breach or default of any license under
which it derives any of the IP Rights, or that such license will terminate
or IP Rights under it will be altered, and (G) there is no infringement on
the part of any third party of any of the IP Rights.
2. To the best of our knowledge and limited to the United States and
except as set forth in the Prospectus, there are no legal or governmental
proceedings pending against the Company, any of its subsidiaries or
licensors relating to the IP Rights, other than the United States Patent
and Trademark Office's review of pending applications for patents and
trademark registrations, and no such proceedings are threatened in writing
by governmental authorities or others.
3. To the best of our knowledge and limited to the United States and
except as set forth in the Prospectus, the patents and trademark
registrations of the IP Rights are not invalid or unenforceable nor would
any currently pending patent or trademark application, if issued, be
invalid or unenforceable.
We have been retained by the Company to render legal advice in connection
with IP Rights and have read the documents referred to herein for the purpose of
providing a basis for the foregoing opinions. Accordingly, we have not
independently or as the Company's or your agent investigated the veracity or
completeness of statements contained in the Registration Statement or the
Prospectus, or any further amendment or supplement thereto filed with the
Commission by the Company prior to the Closing Date, or attempted to verify the
representations made by the Company in the foregoing documents. Similarly, we
have not independently or as the Company's or your agent investigated the
validity or enforceability of any United States patent or trademark registration
or any patent or trademark application, if issued, of the IP Rights. However, we
have read the Covered Disclosure and have considered the information contained
therein. In the course of our review of the Covered Disclosure and our
participation in the conferences with officers and employees of and counsel for
the Company and with you, no facts have come to our attention that lead us to
believe that the Covered Disclosure, 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 that the Covered Disclosure, as of the date
of the Prospectus or the Closing Date, contained or contains an untrue
38
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.
This opinion is subject to the following qualifications:
(a) Whenever a statement herein is qualified by "to the best of our
knowledge," "to our knowledge," or similar phrase, it indicates that in
the course of our representation of the Company no information that would
give us current actual knowledge of the inaccuracy of such statement has
come to the attention of the attorneys in this firm who have rendered
legal services in connection with the IP Rights and this transaction. We
have not made any independent investigation to determine the accuracy of
such statement, except as expressly described herein. No inference as to
our knowledge of any matters bearing on the accuracy of such statement
should be drawn from the fact of our representation of the Company in
other matters in which such attorneys are not involved. Without limiting
the generality of the foregoing, please note that we have not made a
specific search for patents or other intellectual property of third
parties that might be infringed by activities of the Company.
(b) For purposes of this opinion, it is understood that the term "claim"
refers to a cause of action in a pending legal or governmental proceeding.
A legal or governmental proceeding is considered to be threatened if, to
our knowledge, the claimant has manifested to the Company, in writing, a
present intention to bring such a proceeding against the Company in the
immediate future and has not subsequently indicated otherwise by
communication or conduct. An offer to license a patent, without more, is
not considered to manifest a present intention to bring a proceeding
against the Company.
(c) We represent and have represented the Company in certain intellectual
property matters as described herein, and would not necessarily expect to
be informed of matters relating to other aspects of the Company's
intellectual property.
(d) This opinion is limited in all respects to matters governed by the
laws of the State of California and the federal laws of the United States,
and we express no opinion concerning the laws of any other jurisdiction.
This opinion is furnished by us as intellectual property counsel for the
Company only to you as representatives of the several Underwriters and is solely
for your use and benefit and the use and benefit of the several Underwriters in
connection with the transaction described above. This opinion may not be used or
relied upon by you or the several Underwriters for any other purpose, or
furnished to, quoted to, or relied upon by any other person or entity for any
purpose, without our prior written consent.
39
EXHIBIT IV
Form of Opinion of Special Regulatory Counsel to the Company
(i) To the knowledge of such counsel as to factual matters, the statements
in the Prospectus under the caption "Business - Government Regulation,"
insofar as such statements concern the laws, regulations, documents or
proceedings referred to therein, fairly present the information called for
with respect to such laws, regulations, documents and proceedings and
fairly summarize the matters referred to therein.
(ii) To the knowledge of such counsel, there are no legal or governmental
proceedings relating to the Federal Food, Drug and Cosmetic Act, the
Public Health Service Act or any regulations of the FDA pending or
threatened to which the Company is a party, nor is such counsel aware of
any material violations of such Acts or regulations by the Company.
(iii) As to the sections of the Prospectus under the captions "Risk
Factors - Risks Related to Our Business and Industry - Our other products
under development may not be approved by the FDA, and any failure or delay
associated with our product development and clinical trials or the FDA's
approval of such products would increase our product development costs and
time to market," "Risk Factors - Risks Related to Our Business and
Industry - We will need to obtain FDA approval of the brand name for our
powder for oral suspension 20mg product and any other brand names under
which we plan to market our products, and any failure or delay associated
with such approval or relating to trademark registration of the brand name
may delay the commercial launch of our powder for oral suspension 20mg
product and adversely impact our business," "Risk Factors - Risks Related
to Our Business and Industry - Regulatory approval of our first product is
limited to those indications and conditions for which we are able to show
clinical safety and efficacy, and any approval we may received for our
products under development will be similarly limited" "Risk Factors -
Risks Related to Our Business and Industry - We are subject to ongoing
regulatory review of our approved product, and we will be subject to
ongoing regulatory review of any of our other products that may be
approved in the future," "Risk Factors - Risks Related to Our Business and
Industry - We are subject to new legislation, regulatory proposals and
managed care initiatives that may increase our costs of compliance and
adversely affect our ability to market our products, obtain collaborators
and raise capital," "Risk Factors - Risks Related to Our Business and
Industry - Our regulatory strategy currently depends upon a provision of
the Federal Food, Drug, and Cosmetic Act that is the subject of litigation
that may have the effect of delaying or preventing the regulatory approval
of our products" and "Business - Government Regulation," such counsel has
no reason to believe that such sections, at the time the Initial
Registration Statement became effective or at any time subsequent thereto
up to and as of such Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
