EXHIBIT 1.1
MannKind Corporation
_____________ Shares
Common Stock
($0.01 par value per Share)
Underwriting Agreement
_________, 2004
EXHIBIT 1.1
UNDERWRITING AGREEMENT
_______________, 2004
UBS Securities LLC
Xxxxx Xxxxxxx & Co.
Wachovia Capital Markets, LLC
Xxxxxxxxx & Company, Inc.
Xxxxxx Xxxxxxx Corp.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
MannKind Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as representatives, an aggregate of
_________ shares (the "Firm Shares") of Common Stock, $0.01 par value per share
(the "Common Stock"), of the Company. In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant to the Underwriters the
option to purchase from the Company up to an additional __________ shares of
Common Stock (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the "Shares." The
Shares are described in the Prospectus which is referred to below.
The Company hereby acknowledges that, in connection with the proposed
offering of the Shares, it has requested UBS Financial Services Inc.
("UBS-FinSvc") to administer a directed share program (the "Directed Share
Program") under which up to ___________ Firm Shares, or __% of the Firm Shares
to be purchased by the Underwriters (the "Reserved Shares"), shall be reserved
for sale by UBS-FinSvc at the initial public offering price to the Company's
officers, directors, employees and consultants and other persons having a
relationship with the Company as designated by the Company (the "Directed Share
Participants") as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. ("NASD")
and all other applicable laws, rules and regulations. The number of Shares
available for sale to the general public will be reduced to the extent that
Directed Share Participants purchase Reserved Shares. The Underwriters may offer
any Reserved Shares not purchased by Directed Share Participants to the general
public on the same basis as the other Shares being issued and sold hereunder.
Without limiting the generality of the foregoing, any Reserved Shares not orally
confirmed for purchase by any Directed Share Participants by the end of the
business day immediately following the date hereof shall be deemed not to be
purchased by Directed Share Participants and may be offered by the Underwriters
to the general public on the same basis as the other Shares being issued and
sold hereunder. The Company has supplied UBS-FinSvc with the names, addresses
and telephone numbers of the individuals or other entities which the Company has
designated to be participants
in the Directed Share Program. It is understood that any number of those so
designated to participate in the Directed Share Program may decline to do so.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-________),
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each such preliminary prospectus being herein called a
"Preliminary Prospectus") relating to the Shares. Except where the context
otherwise requires, the registration statement, as amended when it became or
becomes effective, including all documents filed as a part thereof, and
including any information contained in a prospectus subsequently filed with the
Commission pursuant to Rule 424(b) under the Act and deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act and also including any registration statement filed pursuant to Rule
462(b) under the Act, is herein called the "Registration Statement," and the
prospectus in the form filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof
(or such earlier time as may be required under the Act), or, if no such filing
is required, the form of final prospectus included in the Registration Statement
at the time it became effective, is herein called the "Prospectus." As used
herein, "business day" shall mean a day on which the New York Stock Exchange is
open for trading.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8
hereof, in each case at a purchase price of $____ per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by UBS Securities LLC ("UBS") on
behalf of the several Underwriters at any time and from time to time on or
before the thirtieth day following the date of the Prospectus, by written notice
to the Company. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time
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when the Additional Shares are to be delivered (such date and time being herein
referred to as the "additional time of purchase"); provided, however, that the
additional time of purchase shall not be earlier than the time of purchase (as
defined below) nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the tenth business day after
the date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares),
subject to adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on _________, 2004 (unless another time shall be agreed to by you and
the Company or unless postponed in accordance with the provisions of Section 8
hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect
to the purchase of the Shares shall be made at the offices of Xxxxx Xxxxxxxxxx
LLP at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M., New
York City time, on the date of the closing of the purchase of the Firm Shares or
the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) the Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending
the use of any Preliminary Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge after due
inquiry, are contemplated by the Commission; each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Act, and the last Preliminary Prospectus
distributed in connection with the offering of the Shares did not, as
of its date, and does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; the Registration Statement
complied when it became effective, complies and, at the time of
purchase, any additional time of purchase and any time at which any
sales with respect to which the Prospectus is delivered, will comply
with the requirements of the Act, and the
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Prospectus will comply, as of its date and at the time of purchase and
any additional times of purchase, with the requirements of the Act, and
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the use
of Form S-1 have been satisfied; the Registration Statement did not
when it became effective, does not and, at the time of purchase, any
additional time of purchase and any time at which any sales with
respect to which the Prospectus is delivered, will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus will not, as of its date and
at the time of purchase, any additional time of purchase and any time
at which any sales with respect to which the Prospectus is delivered,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
warranty or representation with respect to any statement contained in
the last Preliminary Prospectus, the Registration Statement or the
Prospectus in reliance upon and in conformity with information
concerning an Underwriter and furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in the
last Preliminary Prospectus, the Registration Statement or the
Prospectus; and the Company has not distributed and will not distribute
any "prospectus" (within the meaning of the Act) or offering material
in connection with the offering or sale of the Shares other than the
Registration Statement, the then most recent Preliminary Prospectus and
the Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization" and "Description of capital stock," and, as of the
time of purchase and the additional time of purchase, as the case may
be, the Company shall have an authorized and outstanding capitalization
as set forth in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and "Description of capital
stock," (subject, in each case, to the issuance of shares of Common
Stock upon exercise of stock options and warrants disclosed as
outstanding in the Registration Statement and the Prospectus and the
grant of options under existing stock option plans described in the
Registration Statement and the Prospectus); all of the issued and
outstanding shares of capital stock, including the Common Stock, of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar
right; prior to the time of purchase, all outstanding shares of the
Company's Series A Preferred Stock, $0.01 par value per share, and
Series B Preferred Stock, $0.01 par value per share, and Series C
Preferred Stock, $0.01 par value per share, shall convert into the
number of shares of Common Stock, and shall convert in the manner, set
forth in the Registration Statement and the Prospectus; and, as of the
date of this Agreement, the Company has effected and completed a
1-for-__ reverse stock split of the Common Stock in the manner set
forth in the Registration Statement and the Prospectus;
(c) the Company has been duly incorporated and is validly
existing as
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a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and
to issue, sell and deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
and the Subsidiary (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) the Company has no subsidiaries (as defined under the Act)
other than Pharmaceutical Discovery Corporation (the "Subsidiary"); the
Company owns all of the issued and outstanding capital stock of the
Subsidiary; other than the capital stock of the Subsidiary, the Company
does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or
other entity; complete and correct copies of the certificates of
incorporation and the bylaws of the Company and the Subsidiary and all
amendments thereto have been delivered to you, and, except as set forth
in the exhibits to the Registration Statement, no changes therein will
be made on or after the date hereof or on or before the time of
purchase or, if later, the additional time of purchase; the Subsidiary
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus; the Subsidiary is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually
or in the aggregate, have a Material Adverse Effect; all of the
outstanding shares of capital stock of the Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company subject to no security interest, other
encumbrance or adverse claims; no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership
interests in the Subsidiary are outstanding; and the Company has no
"significant subsidiary," as that term is defined in Rule 1-02(w) of
Regulation S-X under the Act, and the Subsidiary would not constitute a
"significant subsidiary" of the Company;
(f) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
(g) the capital stock of the Company, including the Shares,
conforms to the description thereof contained in the Registration
Statement and the Prospectus, and
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the certificates for the Shares are in due and proper form and the
holders of the Shares will not be subject to personal liability by
reason of being such holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) neither the Company nor the Subsidiary is in breach or
violation of or in default under (nor has any event occurred which with
notice, lapse of time or both would result in any breach or violation
of, constitute a default under or give the holder of any indebtedness
(or a person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under) its respective charter or bylaws, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or the Subsidiary is a
party or by which any of them or any of their properties may be bound
or affected, and the execution, delivery and performance of this
Agreement, the issuance and sale of the Shares and the consummation of
the transactions contemplated hereby will not conflict with, result in
any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would
result in any breach or violation of or constitute a default under) the
charter or bylaws of the Company or the Subsidiary, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or the Subsidiary is a
party or by which any of them or any of their respective properties may
be bound or affected, or any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or the Subsidiary;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ"), or approval of the shareholders of the
Company, is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transactions
contemplated hereby other than registration of the Shares under the
Act, which has been effected, and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc.
("NASD");
(k) except as expressly set forth in the Registration
Statement and the Prospectus, (i) no person has the right, contractual
or otherwise, to cause the Company to issue or sell to it any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, (ii) no person has any preemptive rights,
resale rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock of or other
equity interests in the Company and (iii) no person has the right to
act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Shares, in the case of each
of the foregoing clauses (i), (ii) and (iii), whether as a result of
the filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise; no
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person has the right, contractual or otherwise, to cause the Company to
register under the Act any shares of Common Stock or shares of any
other capital stock of or other equity interests in the Company, or to
include any such shares or interests in the Registration Statement or
the offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiary has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign
law, regulation or rule, and has obtained all necessary licenses,
authorizations, consents and approvals from other persons, in order to
conduct its respective business; neither the Company nor the Subsidiary
is in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or the Subsidiary, except where such
violation, default, revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions (including, without
limitation, transactions related to, and the existence of, "variable
interest entities" within the meaning of Financial Accounting Standards
Board Interpretation No. 46), contracts, licenses, agreements, leases
or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed as
required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or threatened or contemplated to which the Company
or the Subsidiary or any of their respective directors or officers is
or would be a party or of which any of their respective properties is
or would be subject at law or in equity, before or by any federal,
state, local or foreign governmental or regulatory commission, board,
body, authority or agency, except any such action, suit, claim,
investigation or proceeding which would not result in a judgment,
decree or order having, individually or in the aggregate, a Material
Adverse Effect or preventing consummation of the transactions
contemplated hereby;
(o) each of Deloitte & Touche LLP and BDO Xxxxxxx, LLP, whose
report on the consolidated financial statements of the Company and the
Subsidiary is included the Registration Statement and the Prospectus,
are independent public accountants as required by the Act and by Rule
3600T of the Public Company Accounting Oversight Board;
(p) the financial statements included in the Registration
Statement and the Prospectus, together with the related notes and
schedules, present fairly the consolidated financial position of the
Company and the Subsidiary as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiary for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles
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applied on a consistent basis during the periods involved; any pro
forma financial statements or data included in the Registration
Statement and the Prospectus comply with the requirements of Regulation
S-X of the Act, including, without limitation, Article 11 thereof, and
the assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used
therein are appropriate to give effect to the transactions or
circumstances described therein and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data set forth
in the Registration Statement and the Prospectus are accurately
presented and prepared on a basis consistent with the financial
statements and books and records of the Company; there are no financial
statements (historical or pro forma) that are required to be included
in the Registration Statement and the Prospectus (including, without
limitation, as required by Rules 3-12 or 3-05 or Article 11 of
Regulation S-X under the Act) that are not included as required; the
Company and the Subsidiary do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations or any "variable interest entities" within the meaning of
Financial Accounting Standards Board Interpretation No. 46), not
disclosed in the Registration Statement and the Prospectus; and all
disclosures contained in the Registration Statement or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act") and Item 10
of Regulation S-K under the Act, to the extent applicable;
(q) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiary taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiary taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiary, which is
material to the Company and the Subsidiary taken as a whole, (iv) any
change in the capital stock or outstanding indebtedness of the Company
or the Subsidiary or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and officers and
each holder of shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock or any warrant or other
right to purchase Common Stock or any such security;
(s) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(t) the Company is not and, after giving effect to the
offering and sale
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of the Shares, will not be a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company," as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended (the "Public
Utility Holding Company Act");
(u) the Company and the Subsidiary have good and marketable
title to all property (real and personal) described the Registration
Statement or in the Prospectus as being owned by each of them, free and
clear of all liens, claims, security interests or other encumbrances;
all the property described in the Registration Statement and the
Prospectus as being held under lease by the Company or a Subsidiary is
held thereby under valid, subsisting and enforceable leases;
(v) the Company and the Subsidiary own, or have obtained valid
and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and
unregistered), tradenames, service names, copyrights, trade secrets and
other proprietary information described in the Registration Statement
or the Prospectus as being owned or licensed by them or which are
necessary for the conduct of their respective businesses, except where
the failure to own, license or have such rights would not, individually
or in the aggregate, have a Material Adverse Effect (collectively,
"Intellectual Property"); (i) there are no third parties who have or,
to the Company's knowledge after due inquiry, will be able to establish
rights to any Intellectual Property, except for the ownership rights of
the owners of the Intellectual Property which is licensed to the
Company; (ii) there is no infringement by third parties of any
Intellectual Property; (iii) there is no pending or threatened action,
suit, proceeding or claim by others challenging the Company's rights in
or to any Intellectual Property, and the Company is unaware of any
facts which could form a reasonable basis for any such action, suit,
proceeding or claim; (iv) there is no pending or threatened action,
suit, proceeding or claim by others challenging the validity or scope
of any Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (v) there is no pending or threatened action,
suit, proceeding or claim by others that the Company or the Subsidiary
infringes or otherwise violates any patent, trademark, tradename,
service name, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a
reasonable basis for any such action, suit, proceeding or claim; (vi)
there is no patent or patent application that contains claims that
interfere with the issued or pending claims of any of the Intellectual
Property; and (vii) there is no prior art that may render any patent
application owned by the Company or the Subsidiary of the Intellectual
Property unpatentable that has not been disclosed to the U.S. Patent
and Trademark Office;
(w) neither the Company nor the Subsidiary is engaged in any
unfair labor practice; except for matters which would not, individually
or in the aggregate, have a Material Adverse Effect, (i) there is (A)
no unfair labor practice complaint pending or, to the Company's
knowledge after due inquiry, threatened against the Company or the
Subsidiary before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under collective bargaining
agreements is pending or threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the
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Company's knowledge after due inquiry, threatened against the Company
or the Subsidiary and (C) no union representation dispute currently
existing concerning the employees of the Company or the Subsidiary, and
(ii) to the Company's knowledge after due inquiry, (A) no union
organizing activities are currently taking place concerning the
employees of the Company or the Subsidiary and (B) there has been no
violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder concerning the employees of the
Company or the Subsidiary;
(x) the Company and the Subsidiary and their properties,
assets and operations are in compliance with, and hold all permits,
authorizations and approvals required under, Environmental Laws (as
defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually
or in the aggregate, have a Material Adverse Effect; there are no past,
present or, to the Company's knowledge after due inquiry, reasonably
anticipated future events, conditions, circumstances, activities,
practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the
Company or the Subsidiary under, or to interfere with or prevent
compliance by the Company or the Subsidiary with, Environmental Laws;
except as would not, individually or in the aggregate, have a Material
Adverse Effect, neither the Company nor the Subsidiary (i) is the
subject of any investigation, (ii) has received any notice or claim,
(iii) is a party to or affected by any pending or threatened action,
suit or proceeding, (iv) is bound by any judgment, decree or order or
(v) has entered into any agreement, in each case relating to any
alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below) (as used herein, "Environmental
Law" means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common
law, relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or
threatened release of Hazardous Materials, and "Hazardous Materials"
means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any Environmental
Law);
(y) in the ordinary course of its business, each of the
Company and the Subsidiary conducts a periodic review of the effect of
the Environmental Laws on its business, operations and properties, in
the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for cleanup, closure of properties or compliance
with the Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential
liabilities to third parties);
(z) all tax returns required to be filed by the Company and
the Subsidiary have been filed, and all taxes and other assessments of
a similar nature (whether imposed directly or through withholding)
including any interest, additions to tax
- 10 -
or penalties applicable thereto due or claimed to be due from such
entities have been paid, other than those being contested in good faith
and for which adequate reserves have been provided;
(aa) each of the Company and the Subsidiary maintains
insurance covering its properties, operations, personnel and businesses
as the Company deems adequate; such insurance insures against such
losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Subsidiary
and their businesses; all such insurance is fully in force on the date
hereof and will be fully in force at the time of purchase and any
additional time of purchase;
(bb) neither the Company nor the Subsidiary has sustained
since the date of the last audited financial statements included in the
Registration Statement and the Prospectus any loss or interference with
its respective 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;
(cc) the Company has not sent or received any communication
regarding termination of, or intent not to renew, any of the contracts
or agreements referred to or described in, or filed as an exhibit to,
the Registration Statement, and no such termination or non-renewal has
been threatened by the Company or, to the Company's knowledge after due
inquiry, any other party to any such contract or agreement;
(dd) each of the Company and the Subsidiary maintains a system
of internal accounting controls sufficient to provide reasonable
assurance 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;
(ee) the Company has established and maintains and evaluates
"disclosure controls and procedures" (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) and "internal control over
financial reporting" (as such term is defined in Rule 13a-15 and 15d-15
under the Exchange Act); such disclosure controls and procedures are
designed to ensure that material information relating to the Company,
including its consolidated subsidiaries, is made known to the Company's
Chief Executive Officer and its Chief Financial Officer by others
within those entities, and such disclosure controls and procedures are
effective to perform the functions for which they were established; the
Company's auditors and the Audit Committee of the Board of Directors of
the Company have been advised of: (i) any significant deficiencies in
the design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize, and report
financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the
- 11 -
Company's internal controls; any material weaknesses in internal
controls have been identified for the Company's auditors; and since the
date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls
or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant
deficiencies and material weaknesses;
(ff) the Company has provided you true, correct and complete
copies of all documentation pertaining to any extension of credit in
the form of a personal loan made, directly or indirectly, by the
Company or the Subsidiary to any director or executive officer of the
Company, or to any family member or affiliate of any director or
executive officer of the Company; and on or after July 30, 2002, the
Company has not, directly or indirectly, including through the
Subsidiary: (i) extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the
Company; or (ii) made any material modification, including any renewal
thereof, to any term of any personal loan to any director or executive
officer of the Company, or any family member or affiliate of any
director or executive officer, which loan was outstanding on July 30,
2002;
(gg) all statistical or market-related data included in the
Registration Statement or the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required;
(hh) neither the Company nor the Subsidiary nor, to the
Company's knowledge after due inquiry, any employee or agent of the
Company or the Subsidiary has made any payment of funds of the Company
or the Subsidiary or received or retained any funds in violation of any
law, rule or regulation, which payment, receipt or retention of funds
is of a character required to be disclosed in the Registration
Statement or the Prospectus;
(ii) the preclinical tests and clinical trials that are
described in, or the results of which are referred to in, the
Registration Statement or the Prospectus were and, if still pending,
are being conducted in accordance with protocols filed with the
appropriate regulatory authorities for each such test or trial, as the
case may be; the description of the results of such tests and trials
contained in the Registration Statement or the Prospectus are accurate
and complete, and the Company has no knowledge of any other studies or
tests the results of which are inconsistent with, or otherwise call
into question, the results described or referred to in the Registration
Statement or the Prospectus; the Company has not received any notices
or other correspondence from the Food and Drug Administration of the
U.S. Department of Health and Human Services or any committee thereof
or from any other governmental agency requiring the termination,
suspension or modification of any clinical trials that are described or
referred to in the Registration Statement or the Prospectus;
(jj) except pursuant to this Agreement, neither the Company
nor the
- 12 -
Subsidiary has incurred any liability for any finder's or broker's fee
or agent's commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby or by the Prospectus;
(kk) neither the Company nor the Subsidiary nor any of their
respective directors, officers, affiliates or controlling persons has
taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares;
(ll) to the Company's knowledge after due inquiry, there are
no affiliations or associations between any member of the NASD and any
of the Company's officers, directors or securityholders, except as set
forth in the Registration Statement and the Prospectus;
(mm) the Registration Statement, the Prospectus and any
Preliminary Prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of any foreign jurisdiction in which the Prospectus or any
preliminary prospectus is distributed in connection with the Directed
Share Program; and no approval, authorization, consent or order of or
filing with any governmental or regulatory commission, board, body,
authority or agency, other than those heretofore obtained, is required
in connection with the offering of the Reserved Shares in any
jurisdiction where the Reserved Shares are being offered; and
(nn) the Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share Program
with the intent to influence unlawfully (i) a customer or supplier of
the Company or the Subsidiary to alter the customer's or supplier's
level or type of business with the Company or the Subsidiary or (ii) a
trade journalist or publication to write or publish favorable
information about the Company or the Subsidiary or any of their
respective products or services.
In addition, any certificate signed by any officer of the
Company or the Subsidiary and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company or the Subsidiary, as the case may
be, as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of
process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
offer or sale in any jurisdiction or the
- 13 -
initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective
amendment thereto to be declared effective before the Shares maybe
sold, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible,
and the Company will advise you promptly and, if requested by you, will
confirm such advice in writing, (i) when the Registration Statement and
any such post-effective amendment thereto has become effective, and
(ii) if Rule 430A under the Act is used, when the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus and to provide you and
Underwriters' counsel copies of any such documents for review and
comment a reasonable amount of time prior to any proposed filing and to
file no such amendment or supplement to which you shall object in
writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Shares; and
to provide you with a copy of such reports and statements and other
documents to be filed by the Company pursuant to Section 13, 14 or
15(d) of the Exchange Act during such period a reasonable amount of
time prior to any proposed filing, and to promptly notify you of such
filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act and pay the applicable
fees in accordance with the Act;
- 14 -
(g) to advise the Underwriters promptly of the happening of
any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which could require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, and, during such time, subject to Section 4(d) hereof, to
prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change;
(h) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is
reasonably practicable after the termination of such twelve-month
period but in any case not later than ___________;
(i) to furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
consolidated balance sheet and statements of income, shareholders'
equity and cash flow of the Company and the Subsidiary for such fiscal
year, accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants duly
registered with the Public Company Oversight Accounting Board);
(j) to furnish to you five copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(k) to furnish to you promptly and, upon request, to each of
the other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of
all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q or 8-K, or such other similar forms as may be
designated by the Commission, (iii) copies of documents or reports
filed with any national securities exchange on which any class of
securities of the Company is listed and (iv) such other information as
you may reasonably request regarding the Company or the Subsidiary;
(l) to furnish to you as early as practicable prior to the
time of purchase and any additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company and the Subsidiary which have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(e) hereof;
(m) to apply the net proceeds from the sale of the Shares in
the manner
- 15 -
set forth under the caption "Use of proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares including any stock or transfer taxes and stamp or similar
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of
this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility
for investment under state or foreign law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on the NASDAQ and any
registration thereof under the Exchange Act, (vi) any filing for review
of the public offering of the Shares by the NASD, including the legal
fees and filing fees and other disbursements of counsel to the
Underwriters, (vii) the fees and disbursements of any transfer agent or
registrar for the Shares, (viii) the costs and expenses of the Company
relating to presentations or meetings undertaken in connection with the
marketing of the offering and sale of the Shares to prospective
investors and the Underwriters' sales forces, including, without
limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations, travel, lodging and other
expenses incurred by the officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with
the road show, (ix) the offer and sale of the Reserved Shares,
including all costs and expenses of UBS-FinSvc and the Underwriters,
including the fees and disbursement of counsel for the Underwriters,
and (x) the performance of the Company's other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or warrants or other rights to purchase
Common Stock or any other securities of the Company that are
substantially similar to Common Stock for a period of 180 days after
the date hereof (the "Lock-Up Period"), without the prior written
consent of UBS, except for (i) the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration
- 16 -
Statement and the Prospectus, and (iii) the issuance of employee stock
options not exercisable during the Lock-Up Period pursuant to stock
option plans described in the Registration Statement and the
Prospectus;
(p) prior to the time of purchase or the additional time of
purchase, as the case may be, to issue no press release or other
communication directly or indirectly and hold no press conferences with
respect to the Company or the Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of
the Company or the Subsidiary, or the offering of the Shares, without
your prior consent;
(q) to use its best efforts to cause the Common Stock to be
listed for quotation on the NASDAQ and to maintain such listing;
(r) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Common Stock; and
(s) to ensure that the Reserved Shares will be restricted from
sale, transfer, assignment, pledge or hypothecation to such extent as
may be required by the NASD and its rules for a period of three (3)
months following the date of effectiveness of the Registration
Statement (or such longer period of time as may be required by the NASD
and its rules); provided, that UBS-FinSvc will notify the Company as to
which Directed Share Participants whose Reserved Shares are to be so
restricted; to direct the transfer agent to place stop transfer
restrictions upon such Reserved Shares for such period or time; and to
comply with all applicable securities and other applicable laws, rules
and regulations in each jurisdiction in which the Reserved Shares are
offered in connection with the Directed Share Program.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including
the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxxx Godward LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the
other Underwriters, and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in the form set forth in
Exhibit B hereto.
(b) The Company shall furnish to you at the time of purchase
and, if
- 17 -
applicable, at the additional time of purchase, an opinion of Xxxxxx
Godward LLP, special counsel for the Company with respect to patents
and proprietary rights, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may
be, with executed copies for each of the other Underwriters, and in
form and substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel for
the Underwriters, in the form set forth in Exhibit C hereto.
(c) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, special counsel for the Company with
respect to patents and proprietary rights, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the
other Underwriters, and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in the form set forth in
Exhibit D hereto.
(d) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxxx & Xxxxxxx L.L.P., special counsel for the Company with respect to
patents and proprietary rights, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the
case may be, with executed copies for each of the other Underwriters,
and in form and substance satisfactory to Xxxxx Xxxxxxxxxx LLP, counsel
for the Underwriters, in the form set forth in Exhibit E hereto.
(e) You shall have received from each of Deloitte & Touche LLP
and BDO Xxxxxxx, LLP letters dated, respectively, the date of this
Agreement, the time of purchase and, if applicable, the additional time
of purchase, and addressed to the Underwriters (with executed copies
for each of the Underwriters) in the forms heretofore approved by UBS.
(f) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion
of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be, in
form and substance reasonably satisfactory to UBS.
(g) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which
you object in writing.
(h) The Registration Statement shall become effective not
later than 5:30 P.M., New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement and any registration statement
pursuant to Rule 462(b) under the Act required in connection with the
offering and sale of the Shares shall have been filed and become
effective no later than 10:00 P.M., New York City time, on the date of
this Agreement.
(i) Prior to the time of purchase, and, if applicable, the
additional time
- 18 -
of purchase, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments or
supplements thereto shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(j) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, (A) no material adverse change or any development involving a
prospective material adverse change in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiary taken as a whole shall occur or become known and (B)
no transaction which is material and adverse to the Company has been
entered into by the Company or the Subsidiary.
(k) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial
Officer in the form attached as Exhibit F hereto.
(l) You shall have received signed Lock-up Agreements referred
to in Section 3(r) hereof.
(m) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
time of purchase and, if applicable, the additional time of purchase,
as you may reasonably request.
(n) The Shares shall have been approved for quotation on the
NASDAQ, subject only to notice of issuance at or prior to the time of
purchase or the additional time of purchase, as the case may be.
7. Effective Date of Agreement; Termination. This Agreement shall
become effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been any material adverse
change or any development involving a prospective material adverse change in the
business, properties, management, financial condition or results of operations
of the Company and the Subsidiary taken as a whole, which would, in UBS's
judgment or in the judgment of such group
- 19 -
of Underwriters, make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (y) since of
execution of this Agreement, there shall have occurred: (i) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the 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
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) 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 UBS's judgment or in the judgment of
such group of Underwriters makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (z) since the
time of execution of this Agreement, there shall have occurred any downgrading,
or any notice or announcement shall have been given or made of (i) any intended
or potential downgrading or (ii) any watch, review or possible change that does
not indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Company or the Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act.
If UBS or any group of Underwriters elects to terminate this Agreement
as provided in this Section 7, the Company and each other Underwriter shall be
notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement, or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm
- 20 -
Shares set forth opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A hereto.
If the aggregate number of Firm Shares which the defaulting Underwriter
or Underwriters agreed to purchase exceeds 10% of the total number of Firm
Shares which all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
five business day period stated above for the purchase of all the Firm Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns
of all of the foregoing persons, from and against any loss, damage,
expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 9 being deemed to
include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact
required to be stated in either such Registration Statement or such
Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability
or
- 21 -
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in, and in conformity
with information concerning such Underwriter furnished in writing by or
on behalf of such Underwriter through you to the Company expressly for
use in, such Registration Statement or such Prospectus or arises out of
or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading, (ii) any untrue statement or alleged untrue
statement made by the Company in Section 3 hereof or the failure by the
Company to perform when and as required any agreement or covenant
contained herein, (iii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual
materials provided by the Company or based upon written information
furnished by or on behalf of the Company including, without limitation,
slides, videos, films or tape recordings used in connection with the
marketing of the Shares, or (iv) the Directed Share Program, provided
that the Company shall not be responsible under this clause (iv) for
any loss, damage, expense, liability or claim that is finally
judicially determined to have resulted from the gross negligence or
willful misconduct of the Underwriters in conducting the Directed Share
Program.
If any action, suit or proceeding (each, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the
Company in writing of the institution of such Proceeding and the
Company shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party
and payment of all fees and expenses; provided, however, that the
omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to any Underwriter or any such
person or otherwise. Such Underwriter or such person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel
shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in
which case the Company shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the
Company shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company
shall not be liable for any settlement of any Proceeding effected
without its written consent but, if settled with the written consent of
the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses
- 22 -
of counsel as contemplated by the second sentence of this paragraph,
then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
The Company agrees to indemnify, defend and hold harmless
UBS-FinSvc and its partners, directors and officers, and any person who
controls UBS-FinSvc within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, UBS-FinSvc or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim (1) arises out of or
is based upon (a) any of the matters referred to in clauses (i) through
(iii) of the first paragraph of this Section 9(a), or (b) any untrue
statement or alleged untrue statement of a material fact contained in
any material prepared by or with the consent of the Company for
distribution to Directed Share Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; (2) caused by
the failure of any Directed Share Participant to pay for and accept
delivery of Reserved Shares that the Directed Share Participant has
agreed to purchase; or (3) otherwise arises out of or is based upon the
Directed Share Program, provided that the Company shall not be
responsible under this clause (3) for any loss, damage, expense,
liability or claim that is finally judicially determined to have
resulted from the gross negligence or willful misconduct of UBS-FinSvc
in conducting the Directed Share Program. The second paragraph of this
Section 9(a) shall apply equally to any Proceeding brought against
UBS-FinSvc or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing sentence, except
that the Company shall be liable for the expenses of one separate
counsel (in addition to any local counsel) for UBS-FinSvc and any such
person, separate and in addition to counsel for the Underwriters, in
any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, and any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company or any such person may incur
under the Act, the
- 23 -
Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus, or
arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to
be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or
otherwise. The Company or such person shall have the right to employ
its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless
the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to defend such Proceeding
or such indemnified party or parties shall have reasonably concluded
that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which
events such fees and expenses shall be borne by such Underwriter and
paid as incurred (it being understood, however, that such Underwriter
shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter
shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but, if settled with
the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company and any such person from and
against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying party
agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered
into more than 60 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request
prior to
- 24 -
the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of
this Section 9 or insufficient to hold an indemnified party harmless in
respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, damages, expenses, liabilities or claims (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such
losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportions as the total proceeds
from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether
the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection
with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Shares underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damage which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent
- 25 -
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to
their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly
to notify each other of the commencement of any Proceeding against it
and, in the case of the Company, against any of the Company's officers
or directors in connection with the issuance and sale of the Shares, or
in connection with the Registration Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth
in the ____ and ____ paragraphs under the caption "Underwriting" in the
Prospectus, insofar as such statements relate to (i) amount of selling
concession and reallowance and (ii) over-allotment and stabilization, constitute
the only information furnished by or on behalf of the Underwriters as such
information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 00000 Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx, XX 00000, Attention: ________.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against UBS or any indemnified party.
Each of UBS and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates)
- 26 -
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such Section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
- 27 -
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this agreement and your acceptance shall
constitute a binding agreement between the Company and the Underwriters,
severally.
Very truly yours,
MannKind Corporation
By:
---------------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves and the
other several Underwriters named
in Schedule A
UBS Securities LLC
Xxxxx Xxxxxxx & Co.
Wachovia Capital Markets, LLC
Xxxxxxxxx & Company, Inc.
Xxxxxx Xxxxxxx Corp.
as Managing Underwriters
By: UBS Securities LLC
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC.............................................. [____]
XXXXX XXXXXXX & CO.............................................. [____]
WACHOVIA CAPITAL MARKETS, LLC................................... [____]
XXXXXXXXX & COMPANY, INC........................................ [____]
XXXXXX XXXXXXX XXXXXX INC. ...................................... [____]
-----------
Total........................................................ [____]
===========
EXHIBIT A
MannKind Corporation
Common Stock
($0.01 Par Value)
, 2004
UBS Securities LLC
Xxxxx Xxxxxxx & Co.
Wachovia Capital Markets, LLC
Xxxxxxxxx & Company, Inc.
Xxxxxx Xxxxxxx Corp.
As Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by MannKind Corporation (the "Company") and you,
as Representatives of the several Underwriters named therein, with respect to
the public offering (the "Offering") of common stock, par value $0.01 per share,
of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period from the date hereof until the expiration
of 180 days after the date of the final prospectus relating to the Offering (the
"Lock-Up Period") the undersigned will not, without the prior written consent of
UBS Securities LLC, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable
2
for Common Stock, or warrants or other rights to purchase Common Stock, whether
any such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters of any
Common Stock pursuant to the Offering and the Underwriting Agreement, (b) bona
fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Agreement and confirms
that he, she or it has been in compliance with the terms of this Lock-Up
Agreement or (c) dispositions to any trust for the direct or indirect benefit of
the undersigned and/or the immediate family of the undersigned, provided that
such trust agrees in writing with the Underwriters to be bound by the terms of
this Lock-Up Agreement and confirms that it has been in compliance with the
terms of this Lock-Up Agreement. For purposes of this Lock-Up Agreement,
"immediate family" shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin.
If (1) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the Lock-Up Period and ends on
the last day of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (2) prior to
the expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this Lock-Up Agreement shall
continue to apply until the expiration of the date that is 15 calendar days plus
3 business days after the date on which the issuance of the earnings release or
the material news or material event occurs; provided, however, this paragraph
will not apply if, within 3 days of the termination of the Lock-Up Period, the
Company delivers to UBS Securities LLC a certificate, signed by the Chief
Financial Officer or Chief Executive Officer of the Company, certifying on
behalf of the Company that the Company's shares of Common Stock are "actively
traded securities," as defined in Regulation M, 17 CFR 242.101(c)(1) and such
notice is delivered in accordance with Section 11 of the Underwriting Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, during the Lock-Up Period, the undersigned will not,
without the prior written consent of UBS Securities LLC, make any demand for, or
exercise any right with respect to, the registration of Common Stock of the
Company or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock.
* * *
3
If (i) the Company notifies you in writing that it does not intend
to proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
-----------------------------------
Name:
4
EXHIBIT B
OPINION OF XXXXXX GODWARD LLP
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein.
2. The Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus.
3. The Company and the Subsidiary are duly qualified to do business as a
foreign corporation and are in good standing in each jurisdiction where
the ownership or leasing of their properties or the conduct of their
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect.
4. This Agreement has been duly authorized, executed and delivered by the
Company.
5. The Shares have been duly authorized and validly issued and are fully paid
and non-assessable.
6. The Company has an authorized and outstanding capitalization as set forth
in the Registration Statement and the Prospectus; all of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and are
free of statutory preemptive rights and, to such counsel's knowledge,
contractual preemptive rights, resale rights, rights of first refusal and
similar rights; the Shares are free of statutory preemptive rights and, to
such counsel's knowledge, contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the certificates for the
Shares are in due and proper form, and the holders of the Shares will not
be subject to personal liability by reason of being such holders; all
outstanding shares of the Company's Series A Preferred Stock, $0.01 par
value per share, and Series B Preferred Stock, $0.01 par value per share,
and Series C Preferred Stock, $0.01 par value per share, have converted
into the number of shares of Common Stock, and in the manner, set forth in
the Registration Statement and the Prospectus in compliance with
applicable law; and the Company has effected and completed a 1-for-__
reverse stock split of the Common Stock in the manner set forth in the
Registration Statement and the Prospectus in compliance with applicable
law.
7. All of the outstanding shares of capital stock of the Subsidiary have been
duly authorized and validly issued, are fully paid and non-assessable and,
except as otherwise stated in the Registration Statement and the
Prospectus, are owned by the Company, in each case subject to no security
interest, other encumbrance or adverse claim; and to such counsel's
knowledge, no options, warrants or other rights to purchase, agreements or
other
B-1
obligations to issue or other rights to convert any obligation into shares
of capital stock or ownership interests in the Subsidiary are outstanding.
8. The capital stock of the Company, including the Shares, conforms to the
description thereof contained in the Registration Statement and the
Prospectus.
9. The Registration Statement and the Prospectus (except as to the financial
statements and schedules and other financial data contained therein, as to
which such counsel need express no opinion) comply as to form with the
requirements of the Act; and (B) the conditions to the use of Form S-1
have been satisfied.
10. The Registration Statement has become effective under the Act and, to such
counsel's knowledge, no stop order proceedings with respect thereto are
pending or threatened under the Act, and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act
has been made in the manner and within the time period required by such
Rule 424.
11. No approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board,
body, authority or agency, or of or with the NASDAQ, or approval of the
shareholders of the Company, is required in connection with the issuance
and sale of the Shares or with the consummation by the Company of the
transactions contemplated hereby other than registration of the Shares
under the Act (except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters).
12. The execution, delivery and performance of this Agreement by the Company,
the issuance and sale of the Shares by the Company and the consummation by
the Company of the transactions contemplated hereby do not and will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of time
or both would result in any breach or violation of or constitute a default
under) the charter or bylaws of the Company or the Subsidiary, or any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or the Subsidiary is a party
or by which any of them or any of their respective properties may be bound
or affected, or any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company or the
Subsidiary.
13. To such counsel's knowledge, neither the Company nor the Subsidiary is in
breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach or
violation of, or constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) its respective charter or bylaws, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence
of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or the Subsidiary is a party or by which
any of them or any of their respective properties may be bound or
affected, or any
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federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or the Subsidiary.
14. To such counsel's knowledge, there are no affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character which are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement which have not been so described or filed.
15. To such counsel's knowledge, there are no actions, suits, claims,
investigations or proceedings pending, threatened or contemplated to which
the Company or the Subsidiary or any of their respective directors or
officers is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be described in the
Registration Statement or the Prospectus but are not so described.
16. The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment
Company Act.
17. The Company is not and, after giving effect to the offering and sale of
the Shares, will not be a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or of a
"subsidiary company," as such terms are defined in the Public Utility
Holding Company Act.
18. The information in the Registration Statement and the Prospectus under the
headings "Management," "Description of capital stock" and "_______,"
insofar as such statements constitute a summary of documents or matters of
law, and those statements in the Registration Statement or the Prospectus
that are descriptions of contracts, agreements or other legal documents or
of legal proceedings, or refer to statements of law or legal conclusions,
at the time such Registration Statement became effective, as of the date
of the Prospectus and at the time of purchase or the additional time of
purchase, as the case may be, are accurate and complete and present fairly
the information required to be shown.
19. No person has the right, pursuant to the terms of any contract, agreement
or other instrument described in or filed as an exhibit to the
Registration Statement or otherwise known to such counsel, to cause the
Company to register under the Act any shares of Common Stock or shares of
any other capital stock or other equity interest in the Company or to
include any such shares or interest in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise.
20. Such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at
which the contents of the Registration Statement and the Prospectus were
discussed and, although such counsel is not passing upon and
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does not assume responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus (except as and to the extent stated in subparagraphs 6, 8 and
18 above), on the basis of the foregoing nothing has come to the attention
of such counsel that causes such counsel to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement
or amendment became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at the time of purchase or the additional time of
purchase, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial statements
and schedules and other financial data included in the Registration
Statement or the Prospectus).
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EXHIBIT C
OPINION OF XXXXXX GODWARD LLP
1. Such counsel serves as special counsel to the Company with respect to
patents and proprietary rights.
2. To such counsel's knowledge, the statements in the Registration Statement
and the Prospectus relating to patents and proprietary rights
(collectively, the "Intellectual Property Information"), at the time such
Registration Statement became effective, as of the date of the Prospectus
and at the time of purchase or the additional time of purchase, as the
case may be, are accurate and complete statements or summaries of the
matters therein set forth and present fairly the information therein set
forth; nothing has come to such counsel's attention that causes such
counsel to believe that the Intellectual Property Information in the
Registration Statement at the time such Registration Statement became
effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus or any
supplement thereto, at the date of such Prospectus or such supplement and
at the time of purchase or the additional time of purchase, as the case
may be, contained an untrue statement of material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
3. To such counsel's knowledge, (i) there are no legal or governmental
proceedings pending relating to patent rights, trade secrets, trademarks,
service marks or other proprietary information or materials of the
Company, and (ii) no such proceedings are threatened or contemplated by
governmental authorities or others.
4. Such counsel does not know of any contracts or other documents, relating
to the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials, of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been so
described or filed.
5. To such counsel's knowledge, (i) the Company is not infringing or
otherwise violating any patents, trade secrets, trademarks, service marks
or other proprietary information or materials of others, and (ii) there
are no infringements by others of any of the Company's patents, trade
secrets, trademarks, service marks or other proprietary information or
materials which in such counsel's judgment could affect materially the use
thereof by the Company.
6. Such counsel has no knowledge of any facts which would preclude the
Company from having valid license rights or clear title to the patents
referenced in the Registration Statement and the Prospectus; except as
described in the Registration Statement and the Prospectus, such counsel
has no knowledge that the Company lacks or will be unable to obtain any
rights or licenses to use all patents and other material intangible
property and assets necessary to conduct the business now conducted or
proposed to be conducted by
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the Company as described in the Registration Statement and the Prospectus;
such counsel is unaware of any facts which form a basis for a finding of
unenforceability or invalidity of any of the Company's patents and other
material intellectual property and assets.
7. Such counsel is not aware of any material fact with respect to the patent
applications of the Company presently on file that (i) would preclude the
issuance of patents with respect to such applications, or (ii) would lead
such counsel to conclude that such patents, when issued, would not be
valid and enforceable in accordance with applicable regulations.
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EXHIBIT D
OPINION OF XXXXXXXXX XXXXX XXXXXXX & XXXXX
1. Such counsel serves as special counsel to the Company with respect to
patents and proprietary rights.
2. To such counsel's knowledge, the statements in the Registration Statement
and the Prospectus relating to patents and proprietary rights
(collectively, the "Intellectual Property Information"), at the time such
Registration Statement became effective, as of the date of the Prospectus
and at the time of purchase or the additional time of purchase, as the
case may be, are accurate and complete statements or summaries of the
matters therein set forth and present fairly the information therein set
forth; nothing has come to such counsel's attention that causes such
counsel to believe that the Intellectual Property Information in the
Registration Statement at the time such Registration Statement became
effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus or any
supplement thereto, at the date of such Prospectus or such supplement and
at the time of purchase or the additional time of purchase, as the case
may be, contained an untrue statement of material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
3. To such counsel's knowledge, (i) there are no legal or governmental
proceedings pending relating to patent rights, trade secrets, trademarks,
service marks or other proprietary information or materials of the
Company, and (ii) no such proceedings are threatened or contemplated by
governmental authorities or others.
4. Such counsel does not know of any contracts or other documents, relating
to the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials, of a character required to be
described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been so
described or filed.
5. To such counsel's knowledge, (i) the Company is not infringing or
otherwise violating any patents, trade secrets, trademarks, service marks
or other proprietary information or materials of others, and (ii) there
are no infringements by others of any of the Company's patents, trade
secrets, trademarks, service marks or other proprietary information or
materials which in such counsel's judgment could affect materially the use
thereof by the Company.
6. Such counsel has no knowledge of any facts which would preclude the
Company from having valid license rights or clear title to the patents
referenced in the Registration Statement and the Prospectus; except as
described in the Registration Statement and the Prospectus, such counsel
has no knowledge that the Company lacks or will be unable to obtain any
rights or licenses to use all patents and other material intangible
property and assets necessary to conduct the business now conducted or
proposed to be conducted by
D-1
the Company as described in the Registration Statement and the Prospectus;
such counsel is unaware of any facts which form a basis for a finding of
unenforceability or invalidity of any of the Company's patents and other
material intellectual property and assets.
7. Such counsel is not aware of any material fact with respect to the patent
applications of the Company presently on file that (i) would preclude the
issuance of patents with respect to such applications, or (ii) would lead
such counsel to conclude that such patents, when issued, would not be
valid and enforceable in accordance with applicable regulations.
D-2
EXHIBIT E
OPINION OF XXXXX & XXXXXXX L.L.P.
1. The statements (collectively, the "Regulatory Information") in the
Registration Statement and the Prospectus regarding (a) healthcare
regulatory matters or (b) the receipt by the Company or the Subsidiary of
governmental approvals or clearances, and the applications for, or the
submissions with the Food and Drug Administration regarding, such
approvals or clearances, insofar as such statement constitute summaries of
legal documents or legal proceedings or refer to statements of law or
legal conclusions, at the time such Registration Statement became
effective, as of the date of the Prospectus and at the time of purchase or
the additional time of purchase, as the case may be, are accurate and
complete and present fairly the information therein set forth.
2. Nothing has come to the attention of such counsel that causes such counsel
to believe that the Regulatory Information included in the Registration
Statement at the time such Registration Statement became effective
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Regulatory Information, at
the date of the Prospectus or any supplement thereto and at the time of
purchase or the additional time of purchase, as the case may be, contained
an untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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EXHIBIT F
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (i) and (j) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present the financial
condition, results of operations and cash flows of the Company as of, and
for, the periods presented in the Registration Statement.
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