EXHIBIT 1.1
5,000,000
ICOS CORPORATION
Common Stock
UNDERWRITING AGREEMENT
December ___, 2000
XX XXXXX SECURITIES CORPORATION
Banc of America Securities LLC
Prudential Securities Incorporated
Xxxxx XxxXxxxxx Incorporated
Xxxxxxxxx Xxxxxxxx, Inc.
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Introductory. ICOS Corporation, a Delaware corporation (the "Company"),
proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule A hereto (the "Underwriters," or, each, an
"Underwriter"), an aggregate of 5,750,000 shares of common stock, $.01 par value
(the "Common Stock") of the Company. The aggregate of 5,000,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock." The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section II hereof, up to an additional 750,000 shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". XX Xxxxx Securities Corporation ("XX
Xxxxx") and Banc of America Securities LLC, Prudential Securities Incorporated,
Xxxxxxxxx Xxxxxxxx, Inc., and Xxxxx XxxXxxxxx Incorporated are acting as
representatives of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives."
I. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-47750),
including all pre-effective amendments thereto (the "Initial Registration
Statement"), in respect of the Stock has been filed with the Securities and
Exchange Commission (the "Commission"); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto, but including all documents incorporated
by reference in the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such form; other
than a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the Commission thereunder, which
became effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein 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
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and Regulations, 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 (i) the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act and deemed by virtue of Rule
430A under the Securities Act to be part of the Initial Registration Statement
at the time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration Statement at
the time such part of the Initial Registration Statement became effective, each
as amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statements"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Securities Act, is hereinafter called the
"Prospectus," and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as
of the date of such Preliminary Prospectus or Prospectus, as the case may be;
any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; and any reference to any amendment to the Registration Statements
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statement that is incorporated by reference in the
Registration Statements. No document has been or will be prepared or distributed
in reliance on Rule 434 under the Securities Act. No order preventing or
suspending the use of any Preliminary Prospectus has been issued by the
Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or supplements
to either of the Registration Statements or the Prospectus, when they become
effective or are filed with the Commission, as the case may be, will conform) in
all material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statements and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or supplement
thereto) contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing representations
and warranties shall not apply to information contained in or omitted from the
Registration Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with Commission, as the case may
be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(d) The Company and each of its subsidiaries, and each of Suncos
Corporation, Lilly ICOS LLC and ICOS-Texas Biotechnology L.P. (the "JV
Partners") have been duly incorporated or organized and are validly existing as
corporations, partnerships or limited liability companies in good standing under
the laws of their respective jurisdictions of incorporation or organization, are
duly qualified to do business and are in good standing as foreign corporations,
partnerships or limited liability
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companies in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or authority would not
have, singularly or in the aggregate, a material adverse effect on the condition
(financial or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse Effect"). In
addition to the JV Partners, the Company owns or controls, directly or
indirectly, only the following corporations, associations or other entities:
ICOS Development Corporation, ICOS-ET-LP LLC and TBC-ET, Inc.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights and will conform to the description thereof contained in the Prospectus.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company,
including the Stock when issued and delivered in accordance with this Agreement,
have been duly and validly authorized and issued, are fully paid and non-
assessable and conform to the description thereof contained in the Prospectus.
(h) (a) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party, and (b) except to the extent set forth in the Prospectus, the
ownership interests in the JV Partners are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party.
(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries or the JV Partners is a party or by which the Company or
any of its subsidiaries or the JV Partners is bound or to which any of the
property or assets of the Company or any of its subsidiaries or the JV Partners
is subject, nor will such actions result in any violation of (a) the provisions
of the charter or by-laws of the Company or any of its subsidiaries or the JV
Partners or (b) 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
subsidiaries or the JV Partners or any of their properties or assets except in
the case of this clause (b) for such violations as would not have a Material
Adverse Effect.
(j) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws and
rules and regulations of the National Association of Securities Dealers, Inc.
("NASD") in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(k) KPMG LLP, who have expressed their opinions on the audited
financial statements and related schedules included or incorporated by reference
in the Registration Statements and
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the Prospectus are independent public accountants as required by the Securities
Act and the Rules and Regulations.
(l) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and in each
Registration Statement fairly present the financial position and the results of
operations and changes in financial position of the Company and its consolidated
subsidiaries at the respective dates or for the respective periods therein
specified. Such statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis except as may be set forth in the Prospectus.
(m) Neither the Company nor any of its subsidiaries or the JV
Partners has sustained, since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since such date, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or the JV Partners or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
business, general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries and the JV Partners
taken as a whole, otherwise than as set forth or contemplated in the Prospectus.
(n) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its subsidiaries
or the JV Partners is a party or of which any property or assets of the Company
or any of its subsidiaries or the JV Partners is the subject which, singularly
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries or the JV Partners, might have a Material Adverse Effect or would
prevent or adversely affect the ability of the Company to perform its
obligations under this Agreement; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(o) Neither the Company nor any of its subsidiaries or the JV
Partners (i) is in violation of its charter or by-laws, (ii) is in default in
any respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its property or assets is subject or
(iii) is in violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be subject
except any violations or defaults which, singularly or in the aggregate, would
not have a Material Adverse Effect.
(p) The Company and each of its subsidiaries and the JV Partners
possess all licenses, certificates, authorizations and permits issued by, and
have made all declarations and filings with, the appropriate state, federal or
foreign regulatory agencies or bodies which are necessary or desirable for the
ownership of their respective properties or the conduct of their respective
businesses as described in the Prospectus except where any failures to possess
or make the same, singularly or in the aggregate, would not have a Material
Adverse Effect, and the Company has not received notification of any revocation
or modification of any such license, authorization or permit and has no reason
to believe that any such license, certificate, authorization or permit will not
be renewed.
(q) Neither the Company nor any of its subsidiaries or the JV
Partners is or, after giving effect to the offering of the Stock and the
application of the proceeds thereof as described in the Prospectus will become
an "investment company" within the meaning of the Investment Company Act of
1940, as amended and the rules and regulations of the Commission thereunder.
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(r) Neither the Company nor any of its officers, directors or to the
Company's knowledge, affiliates has taken or will take, directly or indirectly,
any action designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(s) The Company and its subsidiaries and the JV Partners own or
possess the right to use all patents, trademarks, trademark registrations,
service marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as being owned
by them for the conduct of their respective businesses, and the Company is not
aware of any claim to the contrary or any challenge by any other person to the
rights of the Company and its subsidiaries and the JV Partners with respect to
the foregoing. Except as described in the Prospectus, the Company's business as
now conducted and as proposed to be conducted does not and will not infringe or
conflict with any patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses or other intellectual property or franchise right of any
person. Except as described in the Prospectus, no claim has been made against
the Company alleging the infringement by the Company of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person.
(t) The Company and each of its subsidiaries and the JV Partners have
good and marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, claims and defects that may result in a
Material Adverse Effect.
(u) No labor disturbance by the employees of the Company or any of
its subsidiaries or the JV Partners exists or, to the best of the Company's
knowledge, is imminent which might be expected to have a Material Adverse
Effect. The Company is not aware that any key employee or significant group of
employees of the Company or any subsidiary or the JV Partners plans to terminate
employment with the Company or any such subsidiary.
(v) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic
or other wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries or the JV Partners (or, to the best of the
Company's knowledge, any other entity for whose acts or omissions the Company or
any of its subsidiaries is or may be liable) upon any of the property now or
previously owned or leased by the Company or any of its subsidiaries or the JV
Partners, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any statute or any ordinance, rule (including rule of common law),
regulation, order, judgment, decree or permit, give rise to any liability,
except for any violation or liability which would not have, singularly or in the
aggregate with all such violations and liabilities, a Material Adverse Effect;
there has been no disposal, discharge, emission or other release of any kind
onto such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to which the
Company or any of its subsidiaries or the JV Partners have knowledge, except for
any such disposal, discharge, emission, or other release of any kind which would
not have, singularly or in the aggregate with all such discharges and other
releases, a Material Adverse Effect.
(w) The Company and its subsidiaries and the JV Partners each (i)
have filed all necessary federal, state and foreign income and franchise tax
returns, (ii) have paid all federal sate, local and foreign taxes due and
payable for which it is liable, and (iii) do not have any tax deficiency or
claims outstanding or assessed or, to the best of the Company's knowledge,
proposed against it which could reasonably be expected to have a Material
Adverse Effect.
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(x) The Company and each of its subsidiaries and the JV Partners
carry, or are covered by, insurance in such amounts and covering such risks as
is adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in similar
businesses in similar industries.
(y) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(z) The minute books of the Company and each of its subsidiaries and
the JV Partners have been made available to the Underwriters and counsel for the
Underwriters, and such books (i) contain a complete summary of all meetings and
actions of the directors and stockholders of the Company and each of its
subsidiaries since the time of its respective incorporation through the date of
the latest meeting and action, and (ii) accurately in all material respects
reflect all transactions referred to in such minutes.
(aa) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be described
in the Prospectus or to be filed as an exhibit to the Registration Statements
which is not described or filed or incorporated by reference therein as
required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained or incorporated by reference in the
Registration Statements are accurate and fair descriptions of such documents in
all material respects.
(bb) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus and which is not so described.
(cc) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statements or otherwise, except for persons
and entities who have expressly waived such right or who have been given proper
notice and have failed to exercise such right within the time or times required
under the terms and conditions of such right.
(dd) Neither the Company nor any of its subsidiaries or the JV
Partners own any "margin securities" as that term is defined in Regulations G
and U of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and none of the proceeds of the sale of the Stock will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Securities to be considered a "purpose
credit" within the meanings of Regulation G, T, U or X of the Federal Reserve
Board.
(ee) Neither the Company nor any of its subsidiaries or the JV
Partners is a party to any contract, agreement or understanding with any person
that would give rise to a valid claim against the Company or the Underwriters
for a brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Stock.
(ff) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
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II. Purchase Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying 5,000,000 shares of Firm Stock by a fraction the numerator of
which is the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the Company
for the Stock will be $_____ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below), against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company, all at the offices of Xxxxxxx Coie LLP,
0000 0xx Xxxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000. Time shall be of the essence,
and delivery of the Firm Stock at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter
hereunder. The time and date of the delivery and closing shall be at 10:00 A.M.,
New York time, on December ____, 2000, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery are herein referred
to as the "First Closing Date". The First Closing Date and the location of
delivery of, and the form of payment for, the Firm Stock may be varied by
agreement between the Company and XX Xxxxx.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York at least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. The option granted hereby may be exercised as to all or any part
of the Optional Stock at any time, and from time to time, not more than thirty
(30) days subsequent to the date of this Agreement. No Optional Stock shall be
sold and delivered unless the Firm Stock previously has been, or simultaneously
is, sold and delivered. The right to purchase the Optional Stock or any portion
thereof may be surrendered and terminated at any time upon notice by XX Xxxxx to
the Company.
The option granted hereby may be exercised by written notice being given to
the Company by XX Xxxxx setting forth the number of shares of the Optional Stock
to be purchased by the Underwriters and the date and time for delivery of and
payment for the Optional Stock. Each date and time for delivery of and payment
for the Optional Stock (which may be the First Closing Date, but not earlier) is
herein called the "Option Closing Date" and shall in no event be earlier than
two (2) business days nor later than five (5) business days after written notice
is given. (The Option Closing Date and the First Closing Date are herein called
the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date against payment of the aggregate Purchase Price therefor
in
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federal (same day) funds by certified or official bank check or checks or wire
transfer to an account at a bank acceptable to XX Xxxxx payable to the order of
the Company all at the offices of Xxxxxxx Coie LLP. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each Underwriter hereunder. The
Company shall make the certificates for the Optional Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York not later than 10:00 A.M., New York Time, on the business day preceding the
Option Closing Date. The Option Closing Date and the location of delivery of,
and the form of payment for, the Optional Stock may be varied by agreement
between the Company and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the terms
and conditions set forth in the Prospectus.
III. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement,
if necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof; prepare
the Prospectus in a form approved by the Representatives and file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the
second business day following the execution and delivery of this Agreement; make
no further amendment or any supplement to the Registration Statements or to the
Prospectus Option Closing Date to which the Representatives shall reasonably
object by notice to the Company after a reasonable period to review; advise the
Representatives, promptly after it receives notice thereof, of the time when any
amendment to either Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Representatives with copies thereof; file promptly all reports
and any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Stock; advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statements or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, use promptly its best efforts to obtain
its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus relating
to the Stock is required to be delivered any event occurs as a result of which
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact, or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
or to file under the Exchange Act any document incorporated by reference in the
Prospectus to comply with the Securities Act or the Exchange Act, the Company
will promptly notify the Representatives thereof and upon their request will
prepare an amended or supplemented Prospectus or make an appropriate filing
pursuant to Section 13 or 14 of the Exchange Act which will correct such
statement or omission or effect such compliance. The Company will furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of such
amended or supplemented Prospectus; and in case any Underwriter is required to
deliver a prospectus relating to the Stock nine months or more after the
effective date of the Initial Registration Statement, the Company upon the
request of the Representatives and at the expense of such Underwriter will
prepare promptly an amended or supplemented Prospectus as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the Securities
Act.
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(c) The Company will furnish promptly to each of the Representatives
and to counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment thereto
filed with the Commission, including all consents and exhibits filed therewith.
(d) The Company will deliver promptly to the Representatives in New
York City such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements as
originally filed with the Commission and each amendment thereto (in each case
excluding exhibits), (ii) each Preliminary Prospectus, (iii) the Prospectus (not
later than 10:00 A.M., New York time, of the second business day following the
execution and delivery of this Agreement) and any amended or supplemented
Prospectus (not later than 10:00 A.M., New York City time, on the second
business day following the date of such amendment or supplement) and (iv) any
document incorporated by reference in the Prospectus (excluding exhibits
thereto).
(e) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Securities Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company, Rule
158).
(f) The Company will promptly take from time to time such actions as
the Representatives may reasonably request to qualify the Stock for offering and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to continue such qualifications in effect for
so long as required for the distribution of the Stock; provided that the Company
and its subsidiaries shall not be obligated to qualify as foreign corporations
in any jurisdiction in which they are not so qualified or to file a general
consent to service of process in any jurisdiction;
(g) During the period of three years from the date hereof, the
Company will deliver to the Representatives and, upon request, to each of the
other Underwriters, (i) as soon as they are available, copies of all reports or
other communications furnished to stockholders and (ii) as soon as they are
available, copies of any reports and financial statements furnished or filed
with the Commission pursuant to the Exchange Act or any national securities
exchange or automatic quotation system on which the Stock is listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock for a period of 90 days from the date of the Prospectus without the prior
written consent of XX Xxxxx other than the Company's sale of the Stock
hereunder, the issuance of shares pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans existing on the date
hereof or pursuant to currently outstanding options, warrants or rights; the
Company will cause each officer, director and shareholder listed in Schedule C
to furnish to the Representatives, prior to the First Closing Date, a letter,
substantially in the form of Exhibit I hereto, pursuant to which each such
person shall agree not to directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 90 days from the date of the Prospectus, without the prior written
consent of XX Xxxxx.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the Commission
in connection with the registration of the Stock under the Securities Act.
(j) Prior to each of the Closing Dates the Company will furnish to
the Representatives, as soon as they have been prepared, copies of any unaudited
interim consolidated
9
financial statements of the Company for any periods subsequent to the periods
covered by the financial statements appearing in the Registration Statement and
the Prospectus.
(k) Prior to each of the Closing Dates, the Company will not issue
any press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Representatives are notified), without the prior written consent of the
Representatives, unless in the judgment of the Company and its counsel, and
after notification to the Representatives, such press release or communication
is required by law.
(l) In connection with the offering of the Stock, until XX Xxxxx
shall have notified the Company of the completion of the resale of the Stock,
the Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt to induce
any person to purchase any Stock; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
(m) The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented pursuant
to Section III(b).
(n) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus under the heading "Use of Proceeds."
IV. Payment of Expenses. The Company agrees with the Underwriter to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock and any taxes payable in that connection; (b) the costs
incident to the Registration of the Stock under the Securities Act; (c) the
costs incident to the preparation, printing and distribution of the Registration
Statement, Preliminary Prospectus, Prospectus any amendments and exhibits
thereto or any document incorporated by reference therein including the costs of
printing, reproducing and distributing the "Agreement Among Underwriters"
between the Representatives and the Underwriters, the Master Selected Dealers'
Agreement, the Underwriters' Questionnaire and this Agreement by mail, telex or
other means of communications; (d) the fees and expenses (including reasonable
related fees and expenses of counsel for the Underwriters not to exceed $15,000)
incurred in connection with filings made with the National Association of
Securities Dealers; (e) any applicable listing or other fees; (f) the fees and
expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section III(f) and of preparing, printing and
distributing Blue Sky Memoranda and Legal Investment Surveys (including
reasonable related fees and expenses of counsel to the Underwriters not to
exceed $10,000); (g) all fees and expenses of the registrar and transfer agent
of the Stock; and (h) all other costs and expenses incident to the performance
of the obligations of the Company under this Agreement (including, without
limitation, the fees and expenses of the Company's counsel and the Company's
independent accountants); provided that, except as otherwise provided in this
Section IV and in Section VIII, the Underwriters shall pay their own costs and
expenses, including the fees and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters.
V. Conditions of Underwriters' Obligations. The respective obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
10
(a) No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be included
in the Registration Statements or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of the Representatives. The Rule
462(b) Registration Statement, if any, and the Prospectus shall have been timely
filed with the Commission in accordance with Section III(a).
(b) None of the Underwriters shall have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the opinion of such counsel, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock, the
Registration Statement and the Prospectus and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(d) Xxxxxxx Coie LLP shall have furnished to the Representatives such
counsel's written opinion, as counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries and the JV Partners
have been duly incorporated or organized and are validly existing as
corporations, partnerships or limited liability companies in good standing under
the laws of their respective jurisdictions of incorporation or organization, are
duly qualified to do business and are in good standing as foreign corporations,
partnerships or limited liability corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to so qualify
or have such power or authority would not have, singularly or in the aggregate,
a Material Adverse Effect.
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Company,
including the Stock being delivered on the Closing Date, when issued and
delivered in accordance with this Agreement, have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus.
(iii) (a) All the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one or more
wholly-owned subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other claim of any
third party, and (b) except to the extent set forth in the Prospectus, the
ownership interests in the JV Partners are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer
or any other claim of any third party.
(iv) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any shares of
the Stock pursuant to the Company's charter or by-laws or any agreement or other
instrument known to such counsel.
11
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel after
reasonable investigation to which the Company or any of its subsidiaries or the
JV Partners is a party or by which the Company or any of its subsidiaries or the
JV Partners is bound or to which any of the properties or assets of the Company
or any of its subsidiaries or the JV Partners is subject, nor will such actions
result in any violation of the charter or by-laws of the Company or of any of
its subsidiaries or the JV Partners or any statute or any order, rule or
regulation known to such counsel after reasonable investigation of any court or
governmental agency or body or court having jurisdiction over the Company or any
of its subsidiaries or the JV Partners or any of their properties or assets.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, applicable state
securities laws or the NASD in connection with the purchase and distribution of
the Stock by the Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.
(viii) The statements set forth in the Prospectus under the
heading "Description of Common Stock", insofar as they purport to constitute a
summary of the terms of the Stock, are accurate, complete and fair.
(ix) The description in the Registration Statement and Prospectus
of statutes, legal or governmental proceedings and contracts and other documents
are accurate in all material respects; and to such counsel's knowledge, there
are no statutes, legal or governmental proceedings, contracts or other documents
of a character required to be described in the Registration Statement or
Prospectus or to be filed as exhibits to the Registration Statement which are
not described or filed as required.
(x) To such counsel's knowledge, neither the Company nor any of
its subsidiaries or the JV Partners (i) is in violation of its charter or by-
laws, (ii) is in default, and no event has occurred, which, with notice or lapse
of time or both, would constitute a default, in the due performance or
observance of any term, covenant or condition contained in any agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business except, in the case
of clauses (ii) and (iii), for those defaults, violations or failures which,
either individually or in the aggregate, would not have a Material Adverse
Effect.
(xi) To the best of 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 or any of its subsidiaries or the JV Partners is a
party or of which any property or asset of the Company or any of its
subsidiaries or the JV Partners is the subject which, singularly or in the
aggregate, if determined adversely to the Company or any of its subsidiaries or
the JV Partners, could have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations under
this Agreement; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
12
(xii) The Registration Statement was declared effective under
the Securities Act, the Rule 462(b) Registration Statement, if any, was filed
with the Commission on the date specified therein, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) of the Rules and
Regulations and no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no proceeding
for that purpose is pending or threatened by the Commission.
(xiii) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date, and any further amendments
or supplements thereto, as of their respective dates, made by the Company prior
to the Closing Date (other than the financial statements and other financial
data contained therein, as to which such counsel need express no opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the Rules and Regulations; and the documents incorporated by
reference in the Prospectus (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when they
were filed with the Commission complied as to form in all material respects with
the requirements of and the rules and regulations of the Commission thereunder.
(xiv) To the best of such counsel's knowledge no person or
entity has the right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the
Registration Statements or otherwise, except for persons and entities who have
expressly waived such right or who have been given proper notice and have failed
to exercise such right within the time or times required under the terms and
conditions of such right.
(xv) Neither the Company nor any of its subsidiaries or the JV
Partners is an "investment company" within the meaning of the Investment Company
Act and the rules and regulations of the Commission thereunder.
Such counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statements (y) based on such counsel's examination of the
Registration Statements and such counsel's investigations made in connection
with the preparation of the Registration Statements and conferences with certain
officers and employees of and with auditors for and counsel to the Company, such
counsel has no reason to believe that: (I) the Registration Statements, as of
the respective effective dates, contained or contains any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus as of its date or as of the Closing Date contained or
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (II) any document incorporated by reference in the Prospectus when
it was filed with the Commission contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that such counsel need express no opinion as
to the financial statements or other financial data contained in the
Registration Statement or the Prospectus.
The foregoing opinion and statement may be qualified by a statement to the
effect that such counsel has not independently verified the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and takes no responsibility therefor except to the
extent set forth in the opinions described in clauses (viii) and (ix) above.
(e) Xxxxxxxx, O'Toole, Gerstein, Xxxxxx & Borun LLP, special patent
counsel to the Company, shall have furnished to the Representatives such
counsel's written opinion, as special counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
13
(i) We have read the portions of the Registration Statement and
the Prospectus entitled "Risk Factors -If we are unable to protect our
intellectual property rights adequately, the value of our potential products
could be diminished," "Risk Factors - We may be subject to substantial costs and
liability or be prohibited from commercializing our potential products as a
result of patent infringement litigation and other proceedings relating to
patent rights," and "Business - Patents and Proprietary Rights," and it is our
opinion that such sections are accurate and complete statements or summaries of
the matters of law therein set forth.
(ii) Although we have not independently verified the accuracy
and completeness of the statements contained in the Registration Statement and
the Prospectus, nothing has come to our attention that would cause us to believe
that, at the time the Registration Statement became effective under the
Securities Act of 1933, as amended, the description and statements in the above-
referenced sections of the Registration Statement contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading; or as
of the date of the Prospectus or the date of this opinion, the description and
statements in the above-referenced sections of the Prospectus contained or
contain any untrue statement of a material fact or omitted or omit 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) The Representatives shall have received from Shearman & Sterling,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date,
with respect to such matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as they request for
enabling them to pass upon such matters.
(g) At the time of the execution of this Agreement, the
Representatives shall have received from KPMG LLP a letter, addressed to the
Underwriters and dated such date, in form and substance reasonably satisfactory
to the Representatives (i) confirming that they are independent certified public
accountants with respect to the Company and its subsidiaries within the meaning
of the Securities Act and the Rules and Regulations and (ii) stating the
conclusions and findings of such firm with respect to the financial statements
and certain financial information contained or incorporated by reference in the
Prospectus.
(h) On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from KPMG LLP addressed to the Underwriters and
dated the Closing Date confirming, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus as
of a date not more than three business days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Representatives concurrently with the execution of this Agreement pursuant to
Section V(g).
(i) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its President
or a Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statements and the Prospectus
and, in their opinion, the Registration Statements as of their respective
effective dates and the Prospectus, as of each such effective date, did not
include any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) since the effective date of the Initial
Registration Statement no event has occurred which should have been set forth in
a supplement or amendment to the Registration Statements or the Prospectus,
(iii) to the best of their knowledge after reasonable investigation, as of the
Closing Date, the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements included or incorporated by reference in the
Prospectus, there has been no material adverse change in the financial position
or results of operation of the Company and its subsidiaries, or any material
adverse change, or
14
any development involving a prospective material adverse change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, except as set
forth in the Prospectus.
(j) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference 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 (ii)
since such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the business,
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the Representatives, so
material and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner contemplated in
the Prospectus.
(k) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
or body which would, as of the Closing Date, prevent the issuance or sale of the
Stock; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance or sale of the Stock.
(l) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an announcement
with positive implications of a possible upgrading), its rating of any of the
Company's debt securities.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such), in any such case described in
clauses (iii) or (iv), as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the sale or delivery of the Stock
on the terms and in the manner contemplated in the Prospectus.
(n) The National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(o) XX Xxxxx shall have received the written agreements,
substantially in the form of Exhibit I hereto, of the officers, directors and
stockholders of the Company listed in Schedule C to this Agreement.
15
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
VI. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers, employees, representatives and agents and each person, if any, who
controls any Underwriter within the meaning of the Securities Act (collectively
the "Underwriter Indemnified Parties" and, each an "Underwriter Indemnified
Party") against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Underwriter Indemnified Party may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Prospectus, either of the Registration Statements or the Prospectus
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto a
material fact required to be stated therein or necessary to make the statements
therein not misleading and shall reimburse each Underwriter Indemnified Party
promptly upon demand for any legal or other expenses reasonably incurred by that
Underwriter Indemnified Party in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon (i) an untrue statement or alleged untrue statement in
or omission or alleged omission from the Preliminary Prospectus, either of the
Registration Statements or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any Underwriter
specifically for use therein, which information the parties hereto agree is
limited to the Underwriter's Information (as defined in Section XV), provided,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Stock, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Section III(d) hereof. This
indemnity agreement is not exclusive and will be in addition to any liability
which the Company might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to each
Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers, employees, representatives and agents,
each of its directors and each person, if any, who controls the Company within
the meaning of the Securities Act (collectively the "Company Indemnified
Parties" and each a "Company Indemnified Party") against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to which the
Company Indemnified Parties may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for use
therein, and shall reimburse the Company Indemnified Parties for any legal or
other expenses reasonably incurred by such parties in
16
connection with investigating or preparing to defend or defending against or
appearing as third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided that the
parties hereto hereby agree that such written information provided by the
Underwriters consists solely of the Underwriter's Information. This indemnity
agreement is not exclusive and will be in addition to any liability which the
Underwriters might otherwise have and shall not limit any rights or remedies
which may otherwise be available at law or in equity to the Company Indemnified
Parties.
(c) Promptly after receipt by an indemnified party under this Section
VI of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section VI, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section VI except to the extent it has
been materially prejudiced by such failure; and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section VI.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section VI for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all such indemnified
parties, which firm shall be designated in writing by XX Xxxxx, if the
indemnified parties under this Section VI consist of any Underwriter Indemnified
Party, or by the Company if the indemnified parties under this Section VI
consist of any Company Indemnified Parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections VI(a) and VI(b),
shall use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of Section VI(d)
below, no indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section VI effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
17
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section VI is
unavailable or insufficient to hold harmless an indemnified party under Section
VI(a) or VI(b) then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Stock purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission; provided that the parties hereto agree that the written information
furnished to the Company through the Representatives by or on behalf of the
Underwriters for use in any Preliminary Prospectus, either of the Registration
Statements or the Prospectus consists solely of the Underwriter's Information.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section VI(e) were to be determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section VI(e) shall be
deemed to include, for purposes of this Section VI(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section VI(e), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public were offered to the public less
the amount of any damages which such Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
The Underwriters' obligations to contribute as provided in this Section VI(e)
are several in proportion to their respective underwriting obligations and not
joint.
VII. Termination. The obligations of the Underwriters hereunder may be
terminated by XX Xxxxx, in its discretion by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections V(j), V(l) or V(m) have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
VIII. Reimbursement of Underwriters' Expenses. If: (a) this Agreement
shall have been terminated pursuant to Section VII or IX, (b) the Company shall
fail to tender the Stock for delivery to the Underwriters for any reason
permitted under this Agreement, or (c) the Underwriters shall decline to
purchase the Stock for any reason permitted under this Agreement the Company
shall reimburse the
18
Underwriters for the fees and expenses of their counsel and for such other out-
of-pocket expenses as shall have been reasonably incurred by them in connection
with this Agreement and the proposed purchase of the Stock, and upon demand the
Company shall pay the full amount thereof to the XX Xxxxx. If this Agreement is
terminated pursuant to Section IX by reason of the default of one or more
Underwriters, the Company shall not be obligated to reimburse any defaulting
Underwriter on account of those expenses.
IX. Substitution of Underwriters. If any Underwriter or Underwriters
shall default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent (10%) of
the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section IX, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section IX shall be without liability on the part of
any non-defaulting Underwriter or the Company, except expenses to be paid or
reimbursed pursuant to Sections IV and VIII and except the provisions of Section
VI shall not terminate and shall remain in effect.
X. Successors; Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties, and the
indemnities of the several Underwriters shall also be for the benefit of the
Company Indemnified Parties.
XI. Survival of Indemnities, Representations, Warranties, etc. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any person controlling any of them and
shall survive delivery of and payment for the Stock.
XII. Notices. All statements, requests, notices and agreements hereunder
shall be in writing, and:
19
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to SG Securities Corporation Attention:
[_________________] (Fax: 212-[___________]);
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to ICOS Corporation Attention: Xxxx Xxxxxx Fax: 425-485-
1911;
(c) provided, however, that any notice to an Underwriter pursuant to
Section VI shall be delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof.
XIII. Definition of Certain Terms. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
XIV. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
XV. Underwriters' Information. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: (i) the last paragraph on
the front cover page concerning the terms of the offering by the Underwriters;
and (ii) the statements concerning the Underwriters contained in the [references
to appropriate paragraphs to come] under the heading "Underwriting."
XVI. Authority of the Representatives. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
XVII. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
XVIII. General. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
XIX. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
20
If the foregoing is in accordance with your understanding of the agreement
between the Company, and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
ICOS CORPORATION
By:
-------------------------
Name:
Title:
Accepted as of
the date first above written:
XX XXXXX SECURITIES CORPORATION
Banc of America Securities LLC
Prudential Securities Incorporated
Xxxxxxxxx Xxxxxxxx Inc.
Xxxxx XxxXxxxxx Incorporated
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement
By: XX XXXXX SECURITIES CORPORATION
By:
-----------------------------
Name:
Title:
21
SCHEDULE A
Number Number of
of Firm Optional
Shares Shares
to be to be
Name Purchased Purchased
XX Xxxxx Securities Corporation
------------- -------------
Banc of America Securities LLC
------------- -------------
Prudential Securities Incorporated
------------- -------------
Xxxxxxxxx Xxxxxxxx Inc.
------------- -------------
Xxxxx XxxXxxxxx Incorporated
------------- -------------
TOTAL
============= =============
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