1
Exhibit 1
4,200,000 SHARES
ALTEON INC.
COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
July 24, 2001
U.S. BANCORP XXXXX XXXXXXX
U.S. Bancorp Center
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
ALTEON INC., a Delaware corporation (the "Company"), proposes to sell
to U.S. Bancorp Xxxxx Xxxxxxx (the "Purchaser") an aggregate of 4,200,000
authorized but unissued shares (the "Firm Shares") of common stock, $0.01 par
value per share (the "Common Stock"), of the Company.
The Company hereby confirms its agreement with respect to the sale of
the Firm Shares to the Purchaser.
1. Registration Statement and Prospectus. A registration statement (No.
333-56512), including a prospectus, relating to $50,000,000 of the Common Stock
has been filed with the Securities and Exchange Commission (the "Commission")
and has become effective. The registration statement, as amended or supplemented
at the time of this Agreement and including all material incorporated by
reference therein as of the date of this Agreement, is hereinafter referred to
as the "Registration Statement", and the prospectus included in the Registration
Statement, as supplemented as contemplated by Section 5(a) to reflect the terms
of the offering of the Firm Shares, as first filed with the Commission pursuant
to and in accordance with Rule 424(b) ("Rule 424(b)") or Rule 430A ("Rule 430A")
under the Securities Act of 1933, as amended (the "Act"), including all material
incorporated by reference therein as of the date of such filing, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
On the effective date of the Registration Statement, the Registration
Statement conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission (the "Rules and Regulations"),
except to the extent of the information permitted to be omitted pursuant to Rule
430A, and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and, on the date of this Agreement, the
Registration Statement conforms and, on the date of the filing of the
Prospectus, the Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents includes or will include any untrue statement of a
material fact or omits or will omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading,
except that the foregoing does not apply to statements in or omissions from any
of such documents based upon written information furnished to the Company by the
Purchaser, if any, specifically for use therein.
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2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, the
Purchaser as follows:
(i) The Company meets the requirements for use of Form
S-3 under the Act, the Registration Statement has been declared
effective by the Commission and no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or overtly threatened
by the Commission. On the effective date of the Registration Statement,
the Registration Statement conformed in all material respects to the
requirements of the Act and the Rules and Regulations, except to the
extent of the information permitted to be omitted pursuant to Rule
430A, and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and, on the
date of this Agreement, the Registration Statement conforms and, on the
date of the filing of the Prospectus, the Registration Statement and
the Prospectus will conform in all material respects to the
requirements of the Act and the Rules and Regulations, and neither of
such documents includes or will include any untrue statement of a
material fact or omits or will omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in
or omissions from any of such documents based upon written information
furnished to the Company by the Purchaser, if any, specifically for use
therein.
(ii) The financial statements of the Company, together
with the notes thereto, set forth in the Registration Statement and
Prospectus comply in all material respects with the requirements of the
Act and fairly present the financial condition of the Company as of the
dates indicated and the results of operations and changes in cash flows
for the periods therein specified in conformity with accounting
principles generally accepted in the United States consistently applied
throughout the periods involved (except as otherwise stated therein);
and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. No other
financial statements or schedules are required to be included in the
Registration Statement or Prospectus except such financial statements
or schedules that are disclosed therein. Xxxxxx Xxxxxxxx LLP, which has
expressed its opinion with respect to the audited financial statements
of the Company filed as a part of the Registration Statement and
included in the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the Rules and
Regulations.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification and in which the failure to so qualify would have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of the Company ("Material
Adverse Effect").
(iv) The Firm Shares and all of the outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Firm Shares
have been delivered and paid for in accordance with this Agreement on
the Closing Date, such Firm Shares will be validly issued, fully paid
and nonassessable and will conform to the description thereof contained
in the Prospectus. Except as set forth in the Registration Statement or
as contemplated or required by any document contained or incorporated
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by reference therein, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company's
charter, by-laws or any agreement or other instrument to which the
Company is a party or by which the Company is bound.
(v) Except for the engagement letter dated May 18, 2001,
between the Company and the Purchaser (the "Engagement Letter"), there
are no contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the Company or
the Purchaser for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(vi) Except with regard to the Stock Purchase Agreement
between Alteon Inc. and Genentech, Inc., dated as of December 1, 1997,
the Registration Rights Agreement dated as of April 24, 1997, between
Alteon Inc. and the investors named on the signature page thereof, and
the Registration Rights Agreement dated September 29, 2000 among the
Company and the Purchasers set forth on Exhibit A thereto, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or among any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(vii) The outstanding shares of Common Stock are listed on
The American Stock Exchange ("AMEX").
(viii) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Firm Shares by the
Company, except such as may be required under the Act and under state
securities laws.
(ix) Except as disclosed in the Prospectus, the Company
has good and marketable title to all real properties and all other
properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by it;
and except as disclosed in the Prospectus, the Company holds any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be
made thereof by it.
(x) The Company is not in violation of its articles of
incorporation, or by-laws, or other organizational documents, or of any
law, ordinance, administrative or governmental rule or regulation
applicable to the Company or of any decree of any court or governmental
agency or body having jurisdiction over the Company, which violation
would, if continued, have a Material Adverse Effect.
(xi) The Company is not in breach, default or violation in
the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in
any material agreement, indenture, lease or other instrument to which
the Company is a party or by which any of the Company's properties may
be bound (a "Company Contract") which breach, default or violation
would, if continued, have a Material Adverse Effect. To the Company's
knowledge, all of the parties to Company Contracts have
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complied in all material respects with the provisions thereof, and no
party is in material default thereunder.
(xii) To the Company's knowledge, no party to a Company
Contract (a "Third Party") is a party to any other agreement, lease or
other instrument (a "Third Party Contract") under which the failure by
the Third Party to perform under such Third Party Contract would
adversely affect the Company's rights under the express terms of any of
the Company Contracts.
(xiii) The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by it (except for
any such certificate, authority or permit with respect to which the
failure to obtain would not individually or in the aggregate have a
Material Adverse Effect) and has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect.
(xiv) The statements relating to the Federal Food and Drug
Administration ("FDA") and the Federal Food, Drug, and Cosmetic Act
("FFDCA") in the Company's Registration Statement, Prospectus and Form
10-K (the "Form 10-K") are, in all material respects, correct and
accurate statements or summaries of applicable FDA and FFDCA laws,
rules and regulations. Nothing has come to the Company's attention that
has caused it to believe that any of the aforementioned statements, at
the times that the Form 10-K and Prospectus were filed and at the time
that the Registration Statement became effective, and at all times
subsequent thereto, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Company represents that
its business (including all product candidates), as currently conducted
and as described in the Registration Statement, Prospectus, and Form
10-K, do not violate the FFDCA or any FDA law, rule or regulation.
There are no FDA judicial or administrative proceedings or
investigations pending or threatened against the Company.
(xv) No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent that might have
a Material Adverse Effect.
(xvi) Except as disclosed in the Prospectus, the Company is
not in violation of any statute, any rule, regulation, decision or
order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), does not own or, to its
knowledge, operate any real property contaminated with any substance
that is subject to any environmental laws, is not liable for any
off-site disposal or contamination pursuant to any environmental laws,
and is not subject to any claim relating to any environmental laws,
which violation, contamination, liability or claim would individually
or in the aggregate have a Material Adverse Effect; and the Company is
not aware of any pending investigation which might lead to such a
claim.
(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company
or any of its properties that, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse Effect,
or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Firm
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Shares; and no such actions, suits or proceedings are threatened or, to
the Company's knowledge, contemplated.
(xviii) Except as disclosed in the Prospectus, since the date
of the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company.
(xix) The Company is not and, after giving effect to the
offering and sale of the Firm Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(xx) Except as set forth in the Registration Statement or
as contemplated or required by any document contained or incorporated
by reference therein, subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company has not incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions,
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock; and there has not been any change in
the capital stock, or any material change in the short-term or
long-term debt, or any issuance by the Company of options (other than
options granted pursuant to the Company's Amended and Restated 1987
Stock Option Plan and the Company's Amended 1995 Stock Option Plan
(collectively, the "Stock Option Plans"), warrants, convertible
securities or other rights to purchase the capital stock of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, in the general affairs, condition
(financial or otherwise), business, key personnel, property, net worth
or results of operations of the Company.
(xxi) There are no contracts or documents of the Company
that are required to be filed as exhibits to the Registration Statement
by the Act or by the Rules and Regulations that have not been so filed.
(xxii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, agreement or instrument to which the Company is a party or by
which it is bound or to which any of its property is subject, the
Company's charter or by-laws, or any order, rule, regulation or decree
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company or for the consummation by the Company
of the transactions contemplated hereby, including the issuance or sale
of the Firm Shares by the Company, except such as may be required under
the Act or state securities or blue sky laws; and the Company has full
power and authority to enter into this Agreement and to authorize,
issue and sell the Firm Shares as contemplated by this Agreement.
(xxiii) The Company owns or possesses or has licenses to use
all patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx
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registrations, copyrights, licenses, inventions, trade secrets and
other similar rights (such patents referred to herein as the "Patents"
and all of such intellectual property referred to collectively as the
"Intellectual Property") necessary for the conduct of the business of
the Company as currently carried on and as described in the
Registration Statement and Prospectus; except as stated in the
Registration Statement and Prospectus, to the Company's knowledge, no
name which the Company uses and no other aspect of the business of the
Company as conducted on the date hereof involves or gives rise to any
infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets or other similar rights of others material to
the business of the Company and the Company has not received any notice
alleging any such infringement or fee. The Company or the licensor has
duly and properly filed or caused to be filed with the U.S. Patent and
Trademark Office (the "PTO") and applicable foreign and international
patent authorities all patent applications described in the
Registration Statement and the Prospectus (the "Patent Applications");
in connection with the filing of the Patent Applications, the Company
or the licensor has conducted reasonable investigations of the
published literature and patent references relating to the inventions
claimed in such applications; to the best of the Company's knowledge,
it has complied with the PTO's duty of candor and disclosure for the
Patent Applications and has made no misrepresentation in the Patent
Applications; the Company is not aware of any facts material to a
determination of patentability regarding the Patent Applications not
called to the attention of the PTO which would preclude the grant of a
patent for the Patent Applications; and the Company has no knowledge of
any facts which would preclude it from having an enforceable license or
clear title to the Patent Applications.
(xxiv) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed and is
not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than any
which the Company is contesting in good faith or which could result in
a material adverse effect on the financial condition of the Company.
(xxv) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Firm Shares other than the Prospectus or
other materials permitted by the Act to be distributed by the Company.
(xxvi) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxvii) The Company is not presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Purchaser shall be deemed a representation and
warranty by the Company to the Purchaser as to the matters covered thereby.
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3. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell the
Firm Shares to the Purchaser, and the Purchaser agrees to purchase from the
Company the Firm Shares. The purchase price for each Firm Share shall be $2.13
per share. Such purchase price reflects all of the compensation payable by the
Company to the Purchaser under Section 4(a) of the Engagement Letter in
connection with the offering of the Firm Shares.
The Firm Shares will be delivered by the Company to you
against payment of the purchase price therefor by same day funds payable to the
order of the Company, as appropriate, at the offices of U.S. Bancorp Xxxxx
Xxxxxxx, U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable, at 9:00 a.m.
Central time on the third (or if the Firm Shares are priced, as contemplated by
Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth)
full business day following the date hereof, or at such other time and date as
you and the Company determine pursuant to Rule 15c6-1(a) under the Exchange Act,
such time and date of delivery being herein referred to as the "Closing Date."
If you so elect, delivery of the Firm Shares may be made by credit through full
fast transfer to the accounts at The Depository Trust Company designated by the
Purchaser. Certificates representing the Firm Shares, in definitive form and in
such denominations and registered in such names as you may request upon at least
two business days' prior notice to the Company, will be made available for
checking and packaging not later than 10:30 a.m., Central time, on the business
day next preceding the Closing Date at the offices of U.S. Bancorp Xxxxx
Xxxxxxx, U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx, or such other location as may be mutually acceptable.
4. Covenants.
(a) The Company covenants and agrees with the Purchaser as follows:
(i) The Company will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2) (or, if
applicable and if consented to by the Purchaser, subparagraph (5)
thereto) not later than the second business day following the execution
and delivery of this Agreement.
(ii) The Company will advise the Purchaser promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Purchaser a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company
will also advise the Purchaser promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of
any part thereof and will use its best efforts to prevent the issuance
of any such stop order and to obtain as soon as possible its lifting,
if issued.
(iii) The Company will not take, directly or indirectly,
any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Common Stock.
(iv) If, at any time when a prospectus relating to the
Firm Shares is required to be delivered under the Act in connection
with sales by the Purchaser, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify the Purchaser of such event and will
promptly prepare and file with the Commission,
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at its own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Purchaser's consent to, nor its delivery of,
any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 5 hereof.
(v) As soon as practicable, but not later than 16 months
after the date of this Agreement, the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the Registration Statement relating to the Firm
Shares, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of this Agreement and (iii) the date of the Company's most
recent Annual Report on Form 10-K filed with the Commission prior to
the date of this Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(vi) The Company will furnish to the Purchaser copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the Purchaser
reasonably requests. The Company will pay the expenses of printing and
distributing all such documents.
(vii) The Company will use its best efforts to qualify the
Firm Shares for sale under the laws of such jurisdictions as the
Purchaser reasonably designates and to continue such qualifications in
effect so long as required for the distribution of the Firm Shares,
except that the Company shall not be required in connection therewith
to qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(viii) During the period of five years hereafter, the
Company will furnish to the Purchaser, as soon as practicable after the
end of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to the Purchaser (i) as
soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange
Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as the Purchaser may reasonably
request.
(ix) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated,
will pay or cause to be paid, upon receipt of a reasonably detailed
accounting, (A) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the delivery to the
Purchaser of the Firm Shares, (B) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and
counsel) in connection with the preparation, printing, filing,
delivery, and shipping of the Registration Statement (including the
financial statements therein and all amendments, schedules, and
exhibits thereto), the Firm Shares, the Prospectus, and any amendment
thereof or supplement thereto, and the printing, delivery, and shipping
of this Agreement and other underwriting documents, including any blue
sky memoranda, (C) all filing fees and fees and disbursements of the
Purchaser's counsel incurred in connection with the qualification of
the Firm Shares for offering and sale by the Purchaser or by dealers
under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section
4(a)(vii) hereof, (D) the fees and expenses of any transfer agent or
registrar, (E) the filing fees incident to any required review by the
National Association of Securities Dealers, Inc. of the terms of the
sale of the Firm Shares, (F) listing fees, if any, (G) all customary
and reasonable out-of-pocket expenses incurred by the Purchaser in
connection with its services to be rendered hereunder (including
without limitation the fees and disbursements of
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the Purchaser's legal counsel for all services relating to a placement
of the Company's shares, travel and lodging expenses, fees for
background checks for officers and directors, word processing charges,
messenger and duplicating services, facsimile expenses and other
customary expenditures); provided that such fees and expenses will not
exceed $50,000 without the consent of the Company, which consent shall
not be unreasonably withheld, and (H) other costs and expenses incident
to the performance of its obligations hereunder that are not otherwise
specifically provided for herein. If the sale of the Firm Shares
provided for herein is not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition
of the Purchaser's obligations hereunder required to be fulfilled by
the Company is not fulfilled, upon receipt of a reasonably detailed
accounting, the Company will reimburse the Purchaser for all
out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Purchaser in connection with their
investigation, preparing to market and marketing the Firm Shares or in
contemplation of performing their obligations hereunder, provided that
such fees and expenses will not exceed $50,000 without the consent of
the Company, which consent shall not be unreasonably withheld. The
Company shall not in any event be liable to the Purchaser for loss of
anticipated profits from the transactions covered by this Agreement.
(x) For a period of 90 days after the date hereof, the
Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares
of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of the Purchaser except for (A)
grants of stock options pursuant to the terms of the Company's Stock
Option Plans, (B) issuances of Common Stock pursuant to the exercise of
such options or the exercise of any other stock options or warrants or
the conversion of convertible securities outstanding on the date hereof
or issued as dividends on, convertible securities outstanding on the
date hereof or issued as permitted pursuant to subsection (D) hereof,
(C) the filing of a registration statement on Form S-8 with respect to
the Stock Option Plans, (D) issuance of shares of Series G Preferred
Stock and Series H Preferred Stock as dividends on Series G Preferred
Stock and Series H Preferred Stock, and (E) issuances of securities
pursuant to transactions contemplated by the Engagement Letter, (F)
issuances of securities in connection with a Strategic Alliance. For
purposes of subsection (F) above, "Strategic Alliance" shall mean a
transaction approved by the Board of Directors of the Company in which
the acquirer of the Company's capital stock has a business relationship
with the Company which is (i) material to the Company independent of
such acquirer's acquisition of the Company's capital stock, and (ii)
arises out of the transaction in which the acquirer acquired the
Company's capital stock.
(xi) Except as contemplated by this Agreement or the
Engagement Letter, the Company will not incur 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.
(xii) The Company will inform the Florida Department of
Banking and Finance at any time prior to the consummation of the
distribution of the Firm Shares by the Purchaser if it commences
engaging in business with the government of Cuba or with any person or
affiliate located in Cuba. Such information will be provided within 90
days after the commencement thereof or after a change occurs with
respect to previously reported information.
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5. Conditions of Purchaser's Obligations. The obligations of the Purchaser
hereunder are subject to the accuracy, as of the date hereof and at the Closing
Date (as if made at the Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this Agreement. No
stop order suspending the effectiveness of the Registration Statement or of any
part thereof shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of the Company or the Purchaser, shall
be contemplated by the Commission.
(b) The Purchaser shall not have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto, contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as set forth in the Registration Statement or as
contemplated or required by any document contained or incorporated by reference
therein , subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, the Company shall not have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock, or any material change in
the short-term or long-term debt of the Company, or any issuance of options
(other than options granted pursuant to the Company's Stock Option Plans),
warrants, convertible securities or other rights to purchase the capital stock
of the Company or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the ordinary
course of business), in the general affairs, condition (financial or otherwise),
business, key personnel, property, net worth or results of operations of the
Company, that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Firm Shares on the terms and in the manner contemplated in the
Prospectus.
(d) You shall have received an opinion substantially in the form
previously agreed upon, dated the Closing Date, of Smith, Stratton, Wise, Xxxxx
& Xxxxxxx, counsel for the Company.
(e) On the Closing Date, there shall have been furnished to you the
opinion of Dechert, special patent counsel for the Company substantially in the
form previously agreed upon, dated the Closing Date.
(f) On the Closing Date, there shall have been furnished to the
Purchaser, such opinion or opinions from Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel
for the Purchaser, dated such Closing Date and addressed to you, with respect to
the formation of the Company, the validity of the Firm Shares, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(g) On the Closing Date, the Purchaser shall have received a letter of
Xxxxxx Xxxxxxxx LLP, dated such Closing Date and addressed to you, confirming
that they are independent public accountants within the meaning of the Act and
are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the
Commission, and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the
11
execution of this Agreement or as soon as practicable thereafter, and the effect
of the letter so to be delivered on the Closing Date shall be to confirm the
conclusions and findings set forth in such prior letter.
(h) On the Closing Date, there shall have been furnished to you, as the
Purchaser, a certificate, dated such Closing Date and addressed to you, signed
by the chief executive officer and by the chief financial officer of the
Company, to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, in all material respects, as if
made at and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment thereof or
the qualification of the Firm Shares for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto, and (A) such documents
contain all statements and information required to be included therein,
the Registration Statement, or any amendment thereof, does not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented,
does not include any untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, (B) since
the effective date of the Registration Statement, there has occurred no
event required to be set forth in an amended or supplemented prospectus
which has not been so set forth, (C) subsequent to the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as set forth in the Registration Statement or as
contemplated or required by any document contained or incorporated by
reference therein, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, and except as disclosed in the
Prospectus, there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt,
or any issuance of options (other than options granted pursuant to the
Company's Stock Option Plans), warrants, convertible securities or
other rights to purchase the capital stock, of the Company, or any of
its subsidiaries, or any material adverse change or any development
involving a prospective material adverse change (whether or not arising
in the ordinary course of business) in the general affairs, condition
(financial or otherwise), business, key personnel, property, net worth
or results of operations of the Company and its subsidiaries, taken as
a whole, and (D) except as stated in the Registration Statement and the
Prospectus, there is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the
Company or any of its subsidiaries is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might
result in any material adverse change in the condition (financial or
otherwise), business or results of operations of the Company and its
subsidiaries, taken as a whole.
12
(i) The Purchaser shall have received duly executed lock up agreements,
in the form provided to the Company by counsel to the Purchaser, from each
officer and director of the Company.
(j) The Company shall have furnished to you and counsel for the
Purchaser such additional documents, certificates and evidence as you or they
may have reasonably requested.
(k) All necessary filings shall have been made as required and all
filing fees shall have been paid to effect the listing of the Firm Shares on the
AMEX.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and counsel for the Purchaser. The Company will furnish you
with such conformed copies of such opinions, certificates, letters and other
documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
the Purchaser may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company) insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or arise out of the
obligations of the Company under Section 3.3 of the Common Stock and Warrants
Purchase Agreement dated as of September 29, 2000 among the Company and the
Purchasers set forth on Exhibit A thereto, and will reimburse the Purchaser for
any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you specifically for use in the
preparation thereof.
In addition to its other obligations under this Section 6(a),
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 6(a), it will reimburse the Purchaser on a monthly basis for all
reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Purchaser for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Purchaser shall promptly return it to the party or parties that
made such payment, together with interest, compounded daily, determined on the
basis of the prime rate (or other commercial lending rate for borrowers of the
highest credit standing) announced from time to time by the Wall Street Journal
(the "Prime Rate"). Any such interim reimbursement payments which are not made
to the Purchaser within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which the Company may
otherwise have.
(b) The Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise (including
13
in settlement of any litigation, if such settlement is effected with the written
consent of the Purchaser), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you specifically for use in the
preparation thereof, and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending against any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have to any
indemnified party. In case any such action shall be brought against any
indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
if, in the sole judgment of the Purchaser, it is advisable for the Purchaser to
be represented by separate counsel, the Purchaser shall have the right to employ
a single counsel in which event the reasonable fees and expenses of such
separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Purchaser as incurred (in accordance with the provisions of
the second paragraph in subsection (a) above). An indemnifying party shall not
be obligated under any settlement agreement relating to any action under this
Section 6 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Purchaser on the other from the offering
of the Firm 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 the Purchaser on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchaser on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
the Purchaser. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Purchaser and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Purchaser agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were to be
14
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the first
sentence of this subsection (d). The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this subsection (d).
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Purchaser within the meaning of the Act; and the obligations of the Purchaser
under this Section 6 shall be in addition to any liability that the Purchaser
may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in
the Registration Statement as about to become a director of the Company), to
each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Purchaser and
the Company contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Purchaser or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, and shall survive delivery of, and
payment for, the Firm Shares to and by the Purchaser hereunder.
8. Effective Date of this Agreement and Termination.
(a) This Agreement shall immediately become effective upon execution by
all of the parties hereto.
(b) The Purchaser shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the Closing
Date, if (i) the Company shall have failed, refused or been unable, at or prior
to such Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any other condition of the Purchaser's obligations hereunder is
not fulfilled, (iii) trading of the Company's Common Stock or trading on the New
York Stock Exchange or the American Stock Exchange shall have been wholly
suspended, (iv) minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange or the American Stock Exchange, by such Exchange or by order
of the Commission or any other governmental authority having jurisdiction, (v) a
banking moratorium shall have been declared by Federal, New York or Minnesota
authorities, or (vi) there has occurred any material adverse change in the
financial markets in the United States or an outbreak of major hostilities (or
an escalation thereof) in which the United States is involved, a declaration of
war by Congress, any other substantial national or international calamity or any
other event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Firm Shares. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(a)(ix) and Section 6 hereof
shall at all times be effective.
(c) If you elect to terminate this Agreement as provided in this
Section, the Company shall be notified promptly by you by telephone or telegram,
confirmed by letter.
9. Default by the Company. If the Company shall fail at the Closing Date
to sell and deliver the number of Firm Shares which it is obligated to sell
hereunder, then this Agreement shall terminate
15
without any liability on the part of any non-defaulting party. No action taken
pursuant to this Section 9 shall relieve the Company from liability, if any, in
respect of such default.
10. Information Furnished by Purchaser. The statements set forth in the
second paragraph of text under the caption "Underwriting" concerning the terms
of the offering by the Purchaser in the Prospectus constitute, to the extent
such statements relate to the Purchaser, the written information furnished by or
on behalf of the Purchaser referred to in Section 6 hereof.
11. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Purchaser shall be
mailed, telegraphed or delivered to U.S. Bancorp Xxxxx Xxxxxxx, U.S. Bancorp
Center, 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000; if to the
Company, shall be mailed, telegraphed or delivered to it at 000 Xxxxxxxx Xxxxx,
Xxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxx, or to such other address as the
person to be notified may have requested in writing. All notices given by
telegram shall be promptly confirmed by letter. Any party to this Agreement may
change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the Purchaser in accordance with its terms.
Very truly yours,
ALTEON INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
Confirmed as of the date first
above mentioned
U.S. BANCORP XXXXX XXXXXXX
By: /s/ Xxxxx Parrot
----------------------------
XXXXX PARROT
PRINCIPAL
