EXHIBIT 1.1
GTX, INC.
COMMON STOCK
(PAR VALUE $0.001 PER SHARE)
UNDERWRITING AGREEMENT
......................, 2004
Xxxxxxx, Xxxxx & Co.,
XX Xxxxx Securities Corporation,
Lazard Freres & Co. LLC,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
GTx, Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of ........ shares
(the "Firm Shares") and, at the election of the Underwriters, up to ........
additional shares (the "Optional Shares") of common stock, par value $0.001 per
share ("Stock") of the Company (the Firm Shares and the Optional Shares that the
Underwriters elect to purchase pursuant to Section 2 hereof being collectively
called the "Shares").
1. The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-109700)
(the "Initial Registration Statement") in respect of the Shares 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 "Act"), 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 of the Commission under the Act is hereinafter called
a "Preliminary Prospectus"; the 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 Act
in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under
the 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 Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus";
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
(d) 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; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any change in the capital stock (other than as a result of
the cancellation or exercise of stock options described in the Registration
Statement and Prospectus), short-term debt 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 general affairs, management, financial
position, stockholders' equity or results of operations of the Company
("Material Adverse Effect"), otherwise than as set forth or contemplated in the
Prospectus;
(e) The Company does not own any real property; the Company has
good and marketable title to all personal property owned by it, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made of such property by the
Company; and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as would not result in a Material Adverse Effect;
(f) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
power and corporate authority to
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own its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified would not result in a
Material Adverse Effect; and GTx, Inc., a Tennessee corporation and predecessor
of the Company ("GTx Tennessee"), was duly incorporated in the State of
Tennessee and, until the merger of GTx Tennessee with and into the Company (the
"Merger") (all references to the Company herein shall, with respect to the
period prior to the Merger, include GTx Tennessee), validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
power and corporate authority to own its properties and conduct its business as
theretofore conducted;
(g) The Company does not control directly or indirectly or have
any direct or indirect equity participation or similar interest in any
corporation, partnership, limited liability company, joint venture, trust or
other business association or entity;
(h) 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 and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus;
(i) The unissued Shares to be issued and sold by the Company to
the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(j) The Company and GTx Tennessee, as applicable, have filed all
notices, reports, documents or other information required to be filed by them
pursuant to, and have obtained any and all authorizations, approvals, orders,
consents, licenses, certificates, permits, registrations or qualifications
required to be obtained under, and have otherwise complied with all requirements
of, all applicable laws of the State of Tennessee and the State of Delaware in
connection with the consummation of the Merger; the Merger is legal, effective
and valid and in accordance with the laws of the State of Tennessee and the
State of Delaware; and the consummation of the Merger did 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 it is bound or to which any of the properties or assets of the Company is
subject, other than any conflict, breach or violation that would not have a
Material Adverse Effect, and which will not affect the validity, performance or
consummation of the Merger or the transactions contemplated by this Agreement,
and has not resulted and will not result in any violation of the provisions of
the Fifth Amended and Restated Charter or By-laws of GTx Tennessee or the
Certificate of Incorporation or By-laws of the Company or any statute, rule or
regulation, or, to the Company's knowledge, any order or decree of any court or
regulatory authority or other governmental agency or body having jurisdiction
over GTx Tennessee, the Company or any of its properties;
(k) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated 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, other than any conflict, breach or violation that would not
have a Material Adverse Effect, nor will such
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action result in any violation of the provisions of the Certificate of
Incorporation 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; and no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(l) The Company is not (i) in violation of its Certificate of
Incorporation or By-laws or (ii) in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of its properties may be
bound, except in the case of clause (ii), any default that would not have a
Material Adverse Effect;
(m) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, and under the captions "Risk Factors - [__________]",
"Business - [___________]" and "Underwriting", insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair;
(n) There are no legal or governmental proceedings pending to
which the Company is a party or of which any property of the Company is the
subject which, if determined adversely to the Company, would individually or in
the aggregate have a Material Adverse Effect; and, to the Company's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(o) The Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act") and the rules and regulations of the Commission promulgated
thereunder;
(p) The Company does not do business with the government of Cuba
nor, to the Company's knowledge, with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(q) Ernst & Young LLP, who have certified certain financial
statements of the Company, are independent public accountants as required by the
Act and the rules and regulations of the Commission promulgated thereunder;
(r) The financial statements of the Company (together with the
related notes thereto) included in the Registration Statement and the Prospectus
(i) fairly present the financial condition and results of the operations and
cash flows of the Company as of the respective dates indicated and for the
respective periods specified, (ii) complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the Commission with respect thereto (including, without limitation,
Regulation S-X) and (ii) have been prepared in accordance with generally
accepted accounting principles in the United States applied on a consistent
basis during the periods and at the dates involved (except as may be indicated
in the notes thereto); the selected financial data included in the Registration
Statement and the Prospectus fairly present the information shown therein and
have been compiled on a consistent basis with that of the audited financial
information included in the Registration Statement and the Prospectus; the pro
forma financial information and the related
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notes thereto included in the Registration Statement and the Prospectus fairly
present the pro forma financial position of the Company after giving effect to
the pro forma transactions and assumptions described in the notes thereto as at
the respective dates thereof and have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
information; and the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein;
(s) The Company has made and keeps books, records and accounts,
which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Company; the Company has devised and 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 of the Company in conformity with
generally accepted accounting principles and to maintain accountability for
assets of the Company, (iii) access to assets of the Company is permitted only
in accordance with management's general or specific authorization and (iv) the
recorded accountability for assets of the Company is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences; the Company maintains "disclosure controls and procedures" (as
defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), and such controls and procedures are
(i) designed to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Commission's rules and forms and (ii) effective, in that they provide reasonable
assurance that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and regulations and forms; the Company does not have any significant
deficiencies or material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect
the Company's ability to record, process, summarize and report financial
information; there has been no fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting; and the Company is otherwise in
compliance in all material respects with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated by the
Commission thereunder;
(t) Except as disclosed in the Prospectus, the Company owns or has
valid, binding and enforceable licenses or other rights to use the patents and
patent applications, copyrights, trademarks, trade names, service marks, service
names, technology and know-how (including trade secrets and other unpatented
proprietary intellectual property rights) necessary or used in any material
respect to conduct its business in the manner in which it is being conducted and
in the manner in which it is contemplated to be conducted as set forth in the
Prospectus (collectively, the "Company Intellectual Property") and necessary in
connection with the commercialization of the products described in the
Prospectus as being under development; none of the patents owned or licensed by
the Company is unenforceable or invalid; the Company owns or possesses valid
licenses or other rights to use the patents and patent applications set forth on
the schedule (the "Patent Schedule") separately delivered to Xxxxxxx, Sachs &
Co. on behalf of the Underwriters prior to the date hereof and the Patent
Schedule lists all such patents and patent applications necessary or used in any
material respect to conduct the business of the Company in the manner described
in the Prospectus and necessary in connection with the commercialization of the
existing products of the Company and the products described in the Prospectus as
being under development; the Company's patent
5
applications were filed in compliance with relevant laws; the Company is not
obligated to pay a royalty, grant a license, or provide other consideration to
any third party in connection with the Company Intellectual Property other than
as disclosed in the Prospectus; and, the Company has not received any notice of
infringement or conflict with (and the Company is not aware of any infringement
or conflict with) the rights of others with respect to the Company Intellectual
Property; there are no pending nor has there been any notice of threatened
actions, suits, proceedings or claims by others that the Company is infringing
any patent, trade secret trademark, service xxxx, copyright or other proprietary
information or materials; none of the products described in the Prospectus as
being under development and processes of the Company referred to in the
Prospectus, to the Company's knowledge, infringe or conflict with any patent of
any third party, which could reasonably be expected to have a Material Adverse
Effect; to the Company's knowledge, the patents and patent applications within
Company Intellectual Property that cover the products described in the
Prospectus as being under development disclose patentable subject matter, and
the Company has not been notified of any inventorship challenges nor has any
interference been declared or provoked nor is any material fact known by the
Company with respect to such patents and patent applications that would preclude
the issuance of patents with respect to such applications or would render such
patents invalid or unenforceable; to the Company's knowledge, no third party,
including any academic or governmental organization, possesses rights to the
Company Intellectual Property which, if exercised, could enable such party to
develop products competitive to those of the Company as described in the
Prospectus or could reasonably be expected to have a Material Adverse Effect;
the Company is not in material breach of, and has complied in all material
respects with all terms of, any license agreement necessary to conduct the
Company's business in the manner in which it is described in the Prospectus;
there are no contracts or other documents material to the Company's patents,
trade secrets, trademarks, service marks, copyrights or other proprietary
information or materials of which the Company is aware other than those
described in the Prospectus; the Company is not aware that any of its employees
is obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of such
employee's best efforts to promote the interest of the Company or that would
conflict with the Company's business; none of the execution and delivery of this
Agreement, the carrying on of the Company's business by the employees of the
Company, and the conduct of the Company's business as proposed, will, to the
best of the Company's knowledge, conflict with or result in a breach of terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee is now obligated; and to
the Company's knowledge, it is not and will not be necessary to use any
inventions, trade secrets or proprietary information of any of its consultants,
or its employees (or persons it currently intends to hire) made prior to their
employment by the Company;
(u) The Company has complied with the required duty of candor and
good faith in dealing with the United States Patent and Trademark Office (the
"PTO"), including the duty to disclose to the PTO all information believed to be
material to the patentability of the Company's patents and pending U.S. patent
applications within Company Intellectual Property; the Company, the University
of Tennessee Research Corporation ("UTRC") and Orion Corporation ("Orion") are
identified in the records of the PTO as the holder of record of the U.S. patents
and patent applications as set forth in the Patent Schedule and, except as
indicated in the Patent Schedule, no other entity or individual has any rights,
title or interest in the patents or patent applications listed in the Patent
Schedule; the Company, UTRC and Orion are similarly listed in the records of
corresponding foreign agencies with respect to the foreign counterparts of the
foregoing as listed in the Patent Schedule; there are no legal or governmental
proceedings pending relating to Company Intellectual Property owned, controlled
or prosecuted by the
6
Company, other than PTO (or patent offices in other jurisdictions) review of
pending applications for patents, and, to the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
others; and the Company is diligently prosecuting, and shall continue to
diligently prosecute, claims in the patent applications within Company
Intellectual Property which claims cover products described in the Prospectus as
being under development;
(v) The Company possesses all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business as described in the Prospectus,
including without limitation, all such certificates, authorizations and permits
required by the United States Food and Drug Administration (the "FDA") or any
other federal, state, local or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous substances or materials, except
where the failure to possess such certificates, authorizations and permits,
singly or in the aggregate, would not have a Material Adverse Effect; and the
Company has not received any notice of proceedings relating to, and there are no
facts or circumstances, including without limitation facts or circumstances
relating to the revocation, suspension, modification or termination of any
certificate, authorization or permit held by others, known to the Company that
could lead to, the revocation, suspension, modification or termination of any
such certificate, authorization or permit, which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could result in a
Material Adverse Effect;
(w) The Company has been and is in compliance with all applicable
federal, state, local and foreign laws, rules, regulations, standards, orders
and decrees governing its business, including without limitation, all
regulations promulgated by the FDA or any other federal, state, local or foreign
agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous
substances or materials, except where noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect; and the Company has not received any
notice citing action or inaction by the Company that would constitute
non-compliance with any applicable federal, state, local or foreign laws, rules,
regulations or standards;
(x) The tests and preclinical and clinical studies conducted by or
on behalf of the Company that are described in the Registration Statement and
the Prospectus were and, if still pending, are being, conducted in all material
respects in accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional and scientific standards;
the descriptions of the tests and preclinical and clinical studies conducted by
or on behalf of the Company contained in the Registration Statement and the
Prospectus are accurate in all material respects; the Company has not received
any written notice or correspondence from the FDA or any foreign, state or local
governmental body exercising comparable authority or any Institutional Review
Board or comparable authority requiring the termination, suspension, material
modification or clinical hold of any tests or preclinical or clinical studies
conducted by or on behalf of the Company, which termination, suspension,
material modification or clinical hold would reasonably be expected to have a
Material Adverse Effect; and the Company has not received any written notices or
correspondence from others concerning the termination, suspension, material
modification or clinical hold of any tests or preclinical or clinical studies
conducted by others on any active ingredient contained in the existing products
of the Company or the products described in the Prospectus as being under
development, which termination, suspension, material modification or clinical
hold would reasonably be expected to have a Material Adverse Effect;
(y) The Company has all consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all declarations and
filings with, all foreign, federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
7
other tribunals necessary to own, lease, license and use its properties and
assets and to conduct its business in the manner in which it is described in the
Prospectus, except for such consents, authorizations, approvals, orders,
certificates, permits, declarations and filings the failure of which to have,
maintain or make would not have a Material Adverse Effect; the Company has not
received any notice of proceedings relating to the revocation or modification of
any such consent, authorization, approval, order, certificate or permit; and the
Company is in compliance with all applicable foreign, federal, state and local
laws and regulations, except for any noncompliance that, singly or in the
aggregate, would not have a Material Adverse Effect;
(z) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any securities of
the Company or to include any securities of the Company with the Shares
registered pursuant to the Registration Statement, except as otherwise disclosed
in the Prospectus or as have been waived in writing by such person in connection
with the offering of the Shares contemplated hereby;
(aa) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws, regulations and common law standards of
conduct relating to the protection of human health and safety, the environment
or hazardous or toxic substances, chemicals, wastes, pollutants and contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct its
businesses as described in the Prospectus, (iii) is in compliance with all terms
and conditions of any such permit, license or approval, (iv) is not subject to
any liability under any Environmental Law for the release or disposal of any
substance regulated pursuant to any Environmental Law, (v) has not received any
claim, notice or demand indicating that it may be in violation of, or subject to
liability or costs under, any Environmental Law and (vi) is not subject to any
order, decree, injunction or agreement with any governmental authority or any
third party concerning obligations or liabilities relating to any Environmental
Law, except where such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals or liabilities,
claims, orders or agreement would not, singly or in the aggregate, have a
Material Adverse Effect;
(ab) The Company is not involved in any labor dispute nor, to the
Company's knowledge, is any such dispute threatened; and the Company is not
aware that (i) any executive, key employee, key consultant or significant group
of employees or consultants of the Company plans to terminate his or her
employment or consulting arrangement with the Company or (ii) any such
executive, key employee or key consultant is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreement that
would be violated by the present or proposed business activities of the Company;
(ac) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the business in which the Company is engaged; the Company has
not been refused any insurance coverage sought or applied for; and the Company
does not have any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect;
(ad) Each material contract, agreement and license filed as an
exhibit to the Registration Statement to which the Company is bound is legal,
valid, binding, enforceable in accordance with its terms and in full force and
effect against the Company and, to the Company's knowledge, each other party
thereto; neither the Company nor, to the Company's
8
knowledge, any other party, is in material breach or default with respect to any
such contract, agreement and license, and, to the Company's knowledge, no event
has occurred which with notice or lapse of time would constitute a material
breach or default, or permit termination, modification, or acceleration, under
any such contract, agreement or license; and no party has repudiated any
material provision of any such contract, agreement or license;
(ae) The directed share program as referred to under the caption
"Underwriting" in the Prospectus (the "Directed Share Program"), when instituted
and administered in accordance with its terms, including the distribution of any
Preliminary Prospectus and the Prospectus to the participants in such program
and all communications and dealings by the Company, its officers, directors,
employees and affiliates and any person acting on its or their behalf in
connection therewith, do not and will not contravene applicable laws,
regulations or rules of the relevant jurisdictions; and no consent, approval,
authorization, order, registration, clearance or qualification of or with any
governmental agency or body of any of the relevant jurisdictions is required in
connection with the offering or sale of any shares of Stock pursuant to the
Directed Share Program;
(af) The Company has not offered, or caused the Underwriters or
their affiliates to offer, shares of Stock to any person pursuant to the
Directed Share Program with the intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or type of
business with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products; and
(ag) The statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and
accurate, and such data agree with the sources from which they are derived.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $................, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to ................... Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
sales of shares in excess of the number of Firm Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Company otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
9
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale upon
the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered
in such names as Xxxxxxx, Xxxxx & Co. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or
on behalf of the Company to Xxxxxxx, Sachs & Co., through the
facilities of the Depository Trust Company ("DTC"), for the account of
such Underwriter, against payment by or on behalf of such Underwriter
of the purchase price therefor by wire transfer of Federal (same-day)
funds to the account specified by the Company to Xxxxxxx, Xxxxx & Co.
at least forty-eight hours in advance. The Company will cause the
certificates representing the Shares to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) with respect thereto at the office of DTC or its
designated custodian Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30
a.m., New York City time, on ............., 2004 or such other time and
date as Xxxxxxx, Xxxxx & Co. and the Company may agree upon in writing,
and, with respect to the Optional Shares, 9:30 a.m., New York time, on
the date specified by Xxxxxxx, Sachs & Co. in the written notice given
by Xxxxxxx, Xxxxx & Co. of the Underwriters' election to purchase such
Optional Shares, or such other time and date as Xxxxxxx, Sachs & Co.
and the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of
Delivery", such time and date for delivery of the Optional Shares, if
not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a
"Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including
the cross receipt for the Shares and any additional documents requested
by the Underwriters pursuant to Section 7 hereof, will be delivered at
the offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at .......p.m., New York
City time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 4, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to
close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to
10
furnish you with copies thereof; to advise you, 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 prospectus, of the suspension of the
qualification of the Shares 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 Statement or 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 prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the Shares
and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such period to amend or supplement the Prospectus in
order to comply with the Act, to notify you and upon your request to
prepare and furnish without charge to each Underwriter and to any
dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders 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 Act), an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to
11
employee stock option plans described in the Registration Statement and
Prospectus, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement),
without the prior written consent of Xxxxxxx, Sachs & Co. on behalf of
the Underwriters;
(f) To cause each of the Company's directors, officers,
members of senior management, holders of preferred stock and holders of
Stock to execute and deliver to you a lock-up agreement in
substantially the form of Annex III attached hereto (a "Lock-up
Agreement");
(g) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of
the Company certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to its
stockholders consolidated summary financial information of the Company
for such quarter in reasonable detail;
(h) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available and upon your
request, copies of any reports and financial statements furnished to or
filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed; and (ii) such
additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
(i) To use the net proceeds received by it from the sale
of the Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(j) To use its best efforts to list for quotation the
Shares on the National Association of Securities Dealers Automated
Quotations National Market System ("NASDAQ");
(k) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act; and
(m) Upon request of any Underwriter, to furnish, or cause
to be furnished, to such Underwriter an electronic version of the
Company's trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the Shares (the "License");
provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be
assigned or transferred.
12
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the NASDAQ;
(v) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (vi) all expenses in connection with conducting the Directed Share
Program; (vii) the cost of preparing stock certificates; (viii) the cost and
charges of any transfer agent or registrar; and (ix) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Shares to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 P.M., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxx and Xxxx LLP, counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated
such Time of Delivery, with respect to such matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Bass, Xxxxx & Xxxx PLC, counsel for the Company,
shall have furnished to you their written opinion (a draft of their
opinion is attached as Annex II(a) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
13
(i) Immediately prior to the Merger, the Company
was duly incorporated and validly existing as a corporation in
good standing under the laws of the State of Tennessee; and
the Company has the corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Merger is legal, effective and valid and
was consummated in accordance with the laws of the State of
Tennessee and the State of Delaware;
(iii) To such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject
which, if determined adversely to the Company, would
individually or in the aggregate have a material adverse
effect on the current or future financial position,
stockholders' equity or results of operations of the Company;
and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others;
(iv) The consummation of the Merger, the issue
and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by the Company with
all of the provisions of this Agreement and the consummation
of the transactions herein contemplated have not conflicted
with or resulted in a breach or violation of any of the terms
or provisions of, or constituted a default under, and will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, the
Certificate of Incorporation or By-laws of the Company or any
agreement or other instrument filed by the Company as an
Exhibit to the Registration Statement, nor will such action
result in any violation of the provisions of 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;
(v) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares or the consummation by the Company of the
transactions contemplated by this Agreement, except the
registration of the offer and sale of the Shares under the
Act, registration of the Shares under the Exchange Act, and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Shares by the Underwriters;
(vi) To such counsel's knowledge, the Company is
not in violation of its Certificate of Incorporation or
By-laws or, to such counsel's knowledge, in default in the
performance or observance of any material obligation,
agreement, covenant or condition contained in any agreement or
other instrument filed by the Company as an Exhibit to the
Registration Statement;
(vii) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than
the financial statements and financial schedules and other
financial data derived therefrom, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; and, to such counsel's knowledge,
there are no contracts or other documents of a character
14
required to be filed as exhibits to the Registration Statement
or required to be described in the Registration Statement or
the Prospectus which are not filed or described as required;
and
*****
In the course of the preparation of the Registration
Statement and the Prospectus, such counsel has participated in
conferences with officers of the Company, representatives of
the Company's independent public accountants and
representatives of the Underwriters and their counsel during
which the contents of the Registration Statement and the
Prospectus were discussed, and while such counsel has not
independently verified, is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of
the Registration Statement or Prospectus, such counsel advises
you that nothing has come to such counsel's attention that
causes such counsel to believe that (A) the Registration
Statement (except for the financial statements and financial
schedules and other financial data derived therefrom, as to
which such counsel expresses no belief) at the time the
Registration Statement became effective contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or (B) the Prospectus
(except for the financial statements and financial schedules
and other financial data derived therefrom, as to which such
counsel expresses no belief) as of its date or as of such Time
of Delivery contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) Xxxxxx Godward LLP, counsel for the Company, shall
have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus under the caption
"Capitalization" (as of the date set forth therein); all of
the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable and conform in all material respects to the
description thereof contained in the Prospectus; and the
Shares being delivered at such Time of Delivery have been duly
authorized and, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued, fully
paid and non-assessable;
(iii) The Company has been duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in
respect of matters of fact
15
upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
(iv) To such counsel's knowledge, there are no
legal or governmental proceedings pending or overtly
threatened to which the Company is a party or to which any of
the properties of the Company is the subject that are required
to be described in the Registration Statement or Prospectus
and are not so described;
(v) This Agreement has been duly authorized,
executed and delivered by the Company;
(vi) The Registration Statement and the filing of
the Registration Statement have been duly authorized by and on
behalf of the Company and the Registration Statement has been
duly executed pursuant to authorization by and on behalf of
the Company;
(vii) The execution and delivery by the Company
of, and the performance by the Company of its obligations
under, this Agreement will not contravene any provision of any
applicable law (other than applicable state securities or blue
sky laws, as to which such counsel need not express an
opinion), the Certificate of Incorporation or By-laws of the
Company, any agreement or other instrument filed as an Exhibit
to the Registration Statement or, to such counsel's knowledge,
any judgment, order or decree of any governmental body or
agency or court having jurisdiction over the Company;
(viii) No consent, approval, authorization or order
of any court, governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except as may be required by (A) the Act, which
have been obtained, (B) the rules and regulations of the
National Association of Securities Dealers, Inc., as to which
such counsel need not express an opinion or (C) the securities
or Blue Sky laws of the various states in connection with the
offer and sale of the Shares, as to which such counsel need
not express an opinion;
(ix) The statements relating to legal matters,
documents or proceedings included in the Prospectus under the
captions "Description of Capital Stock", "Shares Eligible For
Future Sale" and "Underwriting" (only to the extent of a
description of the Underwriting Agreement) in each case fairly
summarize in all material respects such legal matters,
documents or proceedings;
(x) The Company is not and, after giving effect
to the offering and sale of the Shares, will not be an
"investment company" or a "company" controlled by an
"investment company", as such terms are defined in the
Investment Company Act, and the rules and regulations
promulgated by the Commission thereunder;
(xi) The Registration Statement and the
Prospectus and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery comply as
to form in all material respects with the requirements of the
Act and the rules and regulations thereunder; and such counsel
does not know of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to
16
be described in the Registration Statement or the Prospectus
which are not filed or described as required; and
*****
In the course of the preparation of the Registration
Statement and the Prospectus, such counsel has participated in
conferences with officers of the Company, representatives of
the Company's independent public accountants and
representatives of the Underwriters and their counsel during
which the contents of the Registration Statement and the
Prospectus were discussed, and while such counsel has not
independently verified, is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of
the Registration Statement or Prospectus, except for those
portions referred to in the opinion in subsection (ix) of this
section 7(d), such counsel advises you that nothing has come
to such counsel's attention that causes such counsel to
believe that (A) the Registration Statement (except for the
financial statements and financial schedules and other
financial data derived therefrom, as to which such counsel
expresses no belief) at the time the Registration Statement
became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading or (B) the Prospectus (except for the financial
statements and financial schedules and other financial data
derived therefrom, as to which such counsel expresses no
belief) as of its date or as of such Time of Delivery
contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) Eitan, Pearl, Xxxxxx & Xxxxx Zedek, LLP, special
patent counsel for the Company, shall have furnished to you their
written opinion (a draft of such opinion is attached as Annex II(c)
hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company owns or is the exclusive
licensee of the patents and/or patent applications that
disclose or claim the Company's product candidates as
described in the Prospectus (the "Product Candidates"), which
patents and patent applications are set forth in the Patent
Schedule (the "Company Patents"); no liens or other
encumbrances have been recorded in the PTO against the Company
Patents; to such counsel's knowledge, no liens or encumbrances
against the Company Patents have been recorded; none of the
Company Patents are invalid; and to such counsel's knowledge,
none of the Company Patents are unenforceable;
(ii) To such counsel's knowledge, the Company
does not lack any rights or licenses to use any Company
Patents;
(iii) The Company is diligently prosecuting claims
in the patent applications included in the Company Patents and
such claims cover the Product Candidates and Company's product
candidates described in the Prospectus as being under
development; for each U.S. patent application included in the
Company Patents, to such counsel's knowledge, all information
known by such counsel, to date, and for each U.S. patent
included in the Company Patents, all information known to such
counsel as of the date of issuance of such patent, to be
"material to patentability" as defined in 37
17
C.F.R. Section 1.56(b), has been disclosed, or will be
disclosed, if required pursuant to 37 C.F.R. Section 1.97, to
the PTO; the Company has complied and will comply with the
required duty of candor and good faith in dealing with the PTO
with respect to the Company Patents, including the duty to
disclose to the PTO all information believed to be material to
the patentability of the Company's pending U.S. patent
applications and issued patents included in the Company
Patents; and none of the pending patent applications included
in the Company Patents claiming any of the Product Candidates
is currently under final rejection;
(iv) The Company Patents disclose subject matter
encompassing the Product Candidates, or claim patentable
subject matter under the U.S. patent laws encompassing the
Product Candidates; to such counsel's knowledge, there is no
reason to believe that any of the patent applications included
in the Company Patents will not result in issued patents, or
that any patents issued in respect of any such patent
applications will not be valid or will not afford the Company
the patent protection described by the claims therein;
(v) Neither such counsel nor, to such counsel's
knowledge, the Company has been advised by the PTO that there
are any issued patents or pending applications that would
interfere with any of the Company Patents claiming any of the
Product Candidates; and to such counsel's knowledge, there are
no third party patents that would dominate the claims of any
of the Company Patents;
(vi) To such counsel's knowledge, there are no
legal or governmental proceedings pending involving the
Company Patents, other than PTO (or patent offices in other
jurisdictions) or WIPO review of pending patent applications
included in the Company Patents; except for PTO (or patent
offices in other jurisdictions) or WIPO review of pending
patent applications included in the Company Patents, the
Company has not received any other notice of a threatened or
contemplated legal proceeding by governmental authorities or
others challenging the validity or scope of the Company
Patents; none of the patents included in the Company Patents
is the subject of a reexamination or reissue proceeding in the
PTO; and to such counsel's knowledge, no interference has been
threatened, declared or provoked with respect to any of the
Company Patents;
(vii) The Company and/or its licensors are
identified in the records of the PTO as the holders of record
of the U.S. patents and patent applications included in the
Company Patents; the Company/or and its licensors are
similarly identified in the records of corresponding foreign
agencies with respect to the foreign counterparts of the
foregoing included in the Company Patents; and to such
counsel's knowledge, no other entity or individual (other than
the Company, its licensors as indicated on the Patent Schedule
and/or, with respect to Company Patents that disclose or claim
a Product Candidate other than Acapodene, the United States
Government pursuant to 35 U.S.C. Section 200 et seq) has any
right, title or interest in the Company Patents;
(viii) The Company has not received, and to such
counsel's knowledge, the Company has not been threatened with,
any claims of third parties to any inventorship, ownership
interest or lien with respect to any of the Company Patents;
18
(ix) To such counsel's knowledge, the Company
does not infringe any currently issued U.S. patents by the
Company's manufacture, use, sale, offer for sale or
importation of any of the Product Candidates; the Company has
not received any notice of any pending or threatened action,
suit, proceeding or claim by others that the Company is
infringing any patent rights of third parties by the Company's
manufacture, use, sale, offer for sale or importation of any
of the Product Candidates; and to such counsel's knowledge,
neither the manufacture, use nor sale of any product of any
third party is infringing any of the Company Patents;
(x) The statements set forth in the Prospectus
under the captions "Risk Factors - [____]" and "Business -
[___]", insofar as they purport to describe the filing,
prosecution and ownership of the Company Patents are accurate,
complete and fair; and
(xi) Such counsel have reviewed those portions of
the Registration Statement and Prospectus and any further
amendments and supplements thereto made by the Company prior
to such Time of Delivery that concern the Company Patents and,
such counsel have no reason to believe that (A) the
Registration Statement (except for the financial statements
and financial schedules and other financial data derived
therefrom, as to which such counsel expresses no belief) at
the time the Registration Statement became effective contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) the
Prospectus (except for the financial statements and financial
schedules and other financial data derived therefrom, as to
which such counsel expresses no belief) as of its date or as
of such Time of Delivery contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(f) Xxxxx & Xxxxxxx L.L.P., special regulatory counsel
for the Company, shall have furnished to you their written opinion (a
draft of such opinion is attached as Annex II(d) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The statements set forth in the Prospectus
under the captions "Risk Factors - [____]" and "Business -
[___]" (the "FDA Regulatory Sections"), insofar as such
statements purport to summarize applicable provisions of the
Federal Food, Drug, and Cosmetic Act, as amended (the "FDC
Act"), and the regulations promulgated thereunder, are
accurate summaries in all material respects of the provisions
purported to be summarized therein; and
(ii) To such counsel's knowledge, based on the
business of the Company as described in the Prospectus, there
is no provision of the FDC Act and the regulations promulgated
thereunder that would be material to an investor in the Shares
that is not summarized in the FDA Regulatory Sections.
(g) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Ernst & Young LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, to the effect set forth in
Annex I hereto (the executed
19
copy of the letter delivered prior to the execution of this Agreement
is attached as Annex I(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to
the Registration Statement and as of each Time of Delivery is attached
as Annex I(b) hereto);
(h) (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) since the respective dates as of which information
is given in the Prospectus there shall not have been any change in the
capital stock (other than as a result of the cancellation or exercise
of stock options described in the Registration Statement and
Prospectus), short-term debt or long-term debt of the Company or any
change, or any development involving a prospective change, in or
affecting the 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 public offering or the
delivery of the Shares being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectus;
(i) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities or
preferred stock, if any, by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(j) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange or on
NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on NASDAQ; (iii) a general moratorium on
commercial banking activities declared by either Federal authorities or
authorities of the State of New York or Commonwealth of Massachusetts
or a material disruption in commercial banking or securities settlement
or clearance services in the United States; (iv) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v)
the occurrence of any other calamity or crisis or any change in
financial, political or economic conditions in the United States or
elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(k) The Shares to be sold at such Time of Delivery shall
have been duly listed for quotation on NASDAQ;
(l) The Company has obtained and delivered to the
Underwriters executed copies of the Lock-up Agreement from each of the
directors, officers, members of senior management, holders of preferred
stock of the Company and holders of Stock in form and substance
satisfactory to the Underwriters;
20
(m) The Company shall have complied with the provisions
of Section 5(c) hereof with respect to the furnishing of prospectuses
on the New York Business Day next succeeding the date of this
Agreement; and
(n) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of
the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (h) of
this Section and as to such other matters as you may reasonably
request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon 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, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim 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 or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Sachs
& Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
21
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, 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 and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include 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
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged
22
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Shares, or the Company notifies you
that it has so arranged for the purchase of such Shares, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to 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 to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase
of the Shares of a defaulting Underwriter or Underwriters by you and the Company
as provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the
23
Company, except for the expenses to be borne by the Company and the Underwriters
as provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason, any
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
24
17. The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, and all materials of any kind (including tax opinions and
other tax analyses) related to those benefits, without the Underwriters imposing
any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
GTX, INC.
By:............................
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
XX Xxxxx Securities Corporation
Lazard Freres & Co. LLC
By:............................
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
25
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ------------------
Xxxxxxx, Sachs & Co...............................................
XX Xxxxx Securities Corporation...................................
Lazard Freres & Co. LLC...........................................
--------------- ------------------
Total...........................................
=============== ==================
26
ANNEX I
FORM OF COMFORT LETTER IN RELATION TO COMPANY
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies of which
have been separately furnished to the representatives of the
Underwriters (the "Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed statements of income, balance sheets and
statements of cash flows included in the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives and are attached hereto and on the basis of
specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects
with the applicable accounting requirements of the Act and the related
published rules and regulations, nothing came to their attention that
cause them to believe that the unaudited condensed financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with
respect to the results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after restatements
where applicable) in the audited financial statements for such five
fiscal years included in the Prospectus;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an examination in accordance with generally accepted auditing
standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Company,
inspection of the minute books of the Company since the date of the
latest audited financial statements included in the Prospectus,
inquiries of
officials of the Company responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited statements of income,
balance sheets and statements of cash flows included in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
statements of income, balance sheets and statements of cash
flows included in the Prospectus for them to be in conformity
with generally accepted accounting principles;
(B) any other unaudited income statement data
and balance sheet items included in the Prospectus do not
agree with the corresponding items in the unaudited financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited financial statements
included in the Prospectus;
(C) the unaudited financial statements which
were not included in the Prospectus but from which were
derived any unaudited condensed financial statements referred
to in clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to
in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements
included in the Prospectus;
(D) any unaudited pro forma condensed financial
statements included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than two
days prior to the date of such letter, there have been any
changes in the capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Prospectus) or any increase in the long-term debt of the
Company, or any decreases in net current assets or
stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included in the Prospectus to the
specified date referred to in clause (E) there were any
decreases in net revenues or operating profit or the total or
per share amounts of net income or other items specified by
the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
2
Representatives, except in each case for decreases or
increases which the Prospectus discloses have
occurred or may occur or which are described in such
letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company, which appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company
and have found them to be in agreement.
3
ANNEX II(a)
FORM OF OPINION OF BASS, XXXXX & XXXX PLC
ANNEX II(b)
FORM OF OPINION OF XXXXXX GODWARD LLP
ANNEX II(c)
FORM OF OPINION OF EITAN, PEARL, XXXXXX & XXXXX ZEDEK, LLP
ANNEX II(d)
FORM OF OPINION OF XXXXX & XXXXXXX L.L.P.
ANNEX III
GTX, INC.
LOCK-UP AGREEMENT
______________, 2003
Xxxxxxx, Sachs & Co.
XX Xxxxx Securities Corporation
Lazard Freres & Co. LLC
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: GTx, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement on behalf of
the several Underwriters named in Schedule I to such agreement (collectively,
the "Underwriters"), with GTx, Inc., a Tennessee corporation ("GTx"), or a newly
formed entity with which GTx may enter into a reorganization (GTx and such newly
formed entity are collectively referred to herein as the "Company"), providing
for a public offering of the Common Stock of the Company (the "Shares") pursuant
to a Registration Statement on Form S-1 (the "Registration Statement") to be
filed with the Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date of the final Prospectus covering the public
offering of the Shares and continuing to and including the date 180 days after
the date of such final Prospectus, the undersigned will not offer, sell,
contract to sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of any shares of Common Stock of the Company, or any options
or warrants to purchase any shares of Common Stock of the Company, or any
securities convertible into, exchangeable for or that represent the right to
receive shares of Common Stock of the Company, whether now owned or hereinafter
acquired, owned directly by the undersigned (including holding as a custodian)
or with respect to which the undersigned has beneficial ownership within the
rules and regulations of the SEC (collectively the "Undersigned's Shares"). The
foregoing restriction shall not prohibit the exercise by the undersigned of an
option to purchase shares of Common Stock of the Company issued under the
Company's stock incentive plans, provided that the shares of Common Stock issued
upon such exercise shall be Undersigned's Shares and shall be subject to the
foregoing restriction.
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation
any put or call option) with respect to any of the Undersigned's Shares or with
respect to any security that includes, relates to, or derives any significant
part of its value from such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's 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, or to a corporation, partnership,
limited partnership or limited liability company the stockholders, partners and
members of which are the undersigned or the immediate family of the undersigned,
provided that, in each case, the trustee of the trust or the transferee, as the
case may be, agrees to be bound in writing by the restrictions set forth herein,
and provided further that any such transfer shall not involve a disposition for
value, or (iii) with the prior written consent of Xxxxxxx, Xxxxx & Co. 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 the capital stock of the Company to
any wholly-owned subsidiary of such corporation; 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 capital
stock subject to the provisions of this Agreement and there shall be no further
transfer of such capital stock except in accordance with this Agreement, and
provided further that any such transfer shall not involve a disposition for
value. The undersigned now has, and, except as contemplated by clause (i), (ii),
or (iii) above, 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. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of the Undersigned's Shares except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
This Lock-Up Agreement shall be terminated and the undersigned shall be
released from the undersigned's obligations hereunder if (i) if the Company
notifies you in writing that it does not intend to proceed with the Offering or
(ii) the Registration Statement is not declared effective by the SEC prior to
March 31, 2004.
Very truly yours,
____________________________________
Exact Name of Shareholder
____________________________________
Authorized Signature
____________________________________
Title
