EXHIBIT 1.1
ENCYSIVE PHARMACEUTICALS INC.
COMMON STOCK
UNDERWRITING AGREEMENT
December 17, 2003
XX XXXXX SECURITIES CORPORATION
RBC Xxxx Xxxxxxxx Inc.
Xxxxxxx & Company, Inc.
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Encysive Pharmaceuticals Inc., a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to the
several underwriters named in Schedule A hereto (the "Underwriters," or, each,
an "Underwriter"), an aggregate of 6,500,000 shares of common stock, $.005 par
value (the "Common Stock"), of the Company. The aggregate of 6,500,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The Company
also proposes to sell to the Underwriters, upon the terms and conditions set
forth in Section 3 hereof, up to an additional 975,000 shares of Common Stock
(the "Optional Stock"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "Stock". XX Xxxxx Securities Corporation ("XX
Xxxxx"), RBC Xxxx Xxxxxxxx Inc. and Xxxxxxx & Company, Inc. are acting as
representatives of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations of the Commission (the "Rules and Regulations")
thereunder. A registration statement on Form S-3 (File No. 333-108107)
(including all pre-effective amendments thereto, the "Initial
Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission") pursuant to
Rule 415 under the Securities Act; the Initial Registration Statement
and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained
therein, have been declared effective by the Commission in such form
and meet the requirements of the Securities Act and the Rules and
Regulations; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act and the Rules
and Regulations, which became effective upon filing, and any Form 8-K
to be filed under the Securities Act regarding the execution of this
Agreement and related matters, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been
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initiated or, to the Company's knowledge, threatened by the Commission
(any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the
Rules and Regulations, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the
form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act and deemed by virtue of Rule 430A under
the Securities Act to be part of the Initial Registration Statement at
the time it was declared effective and (ii) the documents incorporated
by reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statements"; and
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Securities Act, is hereinafter called the "Prospectus"; and
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statements shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Initial Registration Statement that
is incorporated by reference in the Registration Statements. No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Securities Act. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the
case may be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto) and
the First Closing Date (as defined below) and the Option Closing Date
(as defined below) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the foregoing representations and warranties shall not
apply to information contained in or omitted from the Registration
Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein, which information
the parties hereto agree is limited to the Underwriters' Information
(as defined in Section 16).
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations or the rules and regulations of the Commission under the
Exchange Act, as applicable, and none of such documents contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with Commission, as the case
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may be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the Rules
and Regulations or the rules and regulations of the Commission under
the Exchange Act, as applicable, and will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(d) The Company and each of its subsidiaries (as defined in Section 14)
have been duly organized and are validly existing as corporations or
other legal entities in good standing (or the foreign equivalent
thereof, if any) under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing as foreign corporations or other legal entities in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority would not have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The
Company owns or controls, directly or indirectly, only the following
corporations, partnerships, limited liability partnerships, limited
liability companies, associations or other entities: (i)
ImmunoPharmaceutics, Inc., a California corporation and wholly owned
subsidiary of the Company; (ii) EP-ET, LLC, a Delaware limited
liability company and wholly owned subsidiary of the Company; (iii)
Encysive, L.P., a Delaware limited partnership, of which the Company is
the sole limited partner and EP-ET, LLC is the sole general partner;
and (iv) Revotar Biopharmaceuticals, AG, a German corporation and
majority-owned subsidiary of the Company.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive
or similar rights and will conform to the description thereof contained
in the Prospectus.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company, have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal
and state securities laws, and conform to the description thereof
contained in the Prospectus. None of the outstanding shares of Common
Stock was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable
or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in the Prospectus.
The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted
thereunder, as described in the Prospectus accurately and fairly
present the information required to be shown with respect to such
plans, arrangements, options and rights.
(h) All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one
or more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
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(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such actions result in any violation of the provisions of the charter
or by-laws (or analogous governing instruments, as applicable) of the
Company or any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets.
(j) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, applicable
state securities laws and the Nasdaq National Market ("Nasdaq") in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body
is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(k) KPMG LLP, who has expressed its opinions on the audited financial
statements and related schedules included or incorporated by reference
in the Registration Statements and the Prospectus are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(l) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and
in each Registration Statement fairly present the financial position
and the results of operations and changes in financial position of the
Company and its consolidated subsidiaries and other consolidated
entities at the respective dates or for the respective periods therein
specified, except as noted therein and except, in the case of unaudited
financial statements, for normal year-end audit adjustments. Such
statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles recognized in
the United States ("GAAP") applied on a consistent basis except as may
be set forth in the Prospectus. The financial statements, together with
the related notes and schedules, included in the Prospectus comply in
all material respects with the Securities Act and the Rules and
Regulations thereunder. No other financial statements or supporting
schedules or exhibits are required by the Securities Act or the Rules
and Regulations thereunder to be included in the Prospectus.
(m) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Prospectus.
(n) Except as set forth in the Prospectus and except for the
modification of intellectual property rights pursuant to proceedings
involving the processing and examination of patent and
5
trademark applications and patents before governmental agencies or
bodies, there is no legal or governmental proceeding pending to which
the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject which is required to be described in the Registration Statement
or the Prospectus and is not described therein, or which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others. The Company and its subsidiaries
are in compliance with all applicable federal, state, local and foreign
laws, regulations, orders and decrees governing their business as
prescribed by the United States Food and Drug Administration (the
"FDA"), or any other federal, state or foreign agencies or bodies,
including those bodies and agencies engaged in the regulation of
pharmaceuticals or biohazardous substances or materials, except where
noncompliance would not, singly or in the aggregate, have a Material
Adverse Effect. All preclinical and clinical studies undertaken to
support approval of products for commercialization have been conducted
in compliance with all applicable federal, state or foreign laws,
rules, orders or regulations, including current Good Laboratory and
Good Clinical Practices in all material respects. No filing or
submission to the FDA or any other federal, state or foreign regulatory
body, that is intended to be the basis for any approval, contains any
material omission or material false information.
(o) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws (or analogous governing instrument, as
applicable), (ii) is in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets
is subject or (iii) is in violation in any respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject except, in the case of clauses
(ii) and (iii), any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(p) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate local, state, federal or
foreign regulatory agencies or bodies which are necessary or desirable
for the ownership of their respective properties or the conduct of
their respective businesses as described in the Prospectus, including
without limitation all such licenses, certificates, authorizations and
permits required by the FDA or any other federal, state or foreign
agencies or bodies engaged in the regulation of pharmaceuticals or
biohazardous materials, except where any failures to possess or make
the same, singularly or in the aggregate, would not have a Material
Adverse Effect; all of such licenses, certificates, authorizations and
permits are valid and in full force and effect, except where the
invalidity of such licenses, certificates, authorizations and permits
or the failure of such licenses, certificates, authorizations and
permits to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect; all such licenses,
certificates, authorizations and permits are free and clear of any
restrictions or conditions that are in addition to, or materially
different from, those normally applicable to similar licenses,
certificates, authorizations and permits; and neither the Company nor
any of its subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit
and has no reason to believe that any such license, certificate,
authorization or permit will not be renewed.
(q) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Stock and the application of the proceeds
thereof as described in the Prospectus will become
6
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended and the rules and regulations of the Commission
thereunder.
(r) The Company has not taken and will not take, directly or
indirectly, any action designed or intended to stabilize or manipulate
the price of any security of the Company, or which caused or resulted
in, or which might in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company.
(s) The Company and its subsidiaries own or possess the right to use
all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, know-how and other intellectual property
rights which are necessary for the conduct of their respective
businesses as described in the Prospectus, and the Company is not aware
of any claim to the contrary or any challenge by any other person to
the rights of the Company and its subsidiaries with respect to the
foregoing. The Company and its subsidiaries have made all declarations
and filings, including, without limitation, assignments and payment of
fees, with the appropriate local, state or federal regulatory bodies
which are necessary to maintain in full force and effect ownership and
possession of the intellectual property rights of the Company and its
subsidiaries, except where such failure to make the same would not,
singularly or in the aggregate, have a Material Adverse Effect, and,
except for the modification of intellectual property rights pursuant to
proceedings involving the processing and examination of patent and
trademark applications and patents before governmental agencies or
bodies, the Company has not received written notification of any
revocation or modification of any intellectual property right, and has
no reason to believe that any renewable intellectual property right
will not be renewed, other than any revocation, modification or failure
to renew that would not, singularly or in the aggregate, have a
Material Adverse Effect. The Company's and its subsidiaries' businesses
as now conducted and as currently proposed to be conducted do not and
will not infringe or conflict with any patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, know-how or
other intellectual property right or franchise right of any person.
Except as described in the Prospectus, no claim has been made against
the Company or any of its subsidiaries alleging the infringement by the
Company or any of its subsidiaries of any patent, trademark, service
xxxx, trade name, copyright, trade secret, license, know-how or other
intellectual property right or franchise right of any person.
(t) Except as disclosed in the Prospectus, the Company and each of its
subsidiaries have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and its
subsidiaries taken as a whole, in each case free and clear of all
liens, encumbrances, security interests, claims and defects that may
result in a Material Adverse Effect.
(u) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to, singularly or in the aggregate,
have a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any
subsidiary plans to terminate employment with the Company or any such
subsidiary.
(v) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan which could,
singularly or in the
7
aggregate, have a Material Adverse Effect; each employee benefit plan
of the Company and its subsidiaries is in compliance in all material
respects with applicable law, including ERISA and the Code; the Company
has not incurred and does not expect to incur liability under Title IV
of ERISA with respect to the termination of, or withdrawal from, any
"pension plan"; and each "pension plan" (as defined in ERISA) for which
the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to
act, which could cause the loss of such qualification.
(w) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the best of
the Company's knowledge, any other entity for whose acts or omissions
the Company or any of its subsidiaries is or may be liable) upon any of
the property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
(x) The Company and its subsidiaries each (i) have filed all necessary
federal, state and foreign income and franchise tax returns, all of
which, when filed, were true, complete and correct in all material
respects, (ii) have paid all federal state, local and foreign taxes due
and payable for which it is liable, and (iii) do not have any tax
deficiency or claims outstanding or assessed or, to the best of the
Company's knowledge, proposed against them which could reasonably be
expected to have a Material Adverse Effect.
(y) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(z) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP 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.
(aa) The minute books of the Company and each of its domestic
subsidiaries have been made available to the Underwriters and counsel
for the Underwriters, and such books (i) contain a complete summary of
all meetings and actions of the board of directors (including each
board committee) and shareholders (or analogous governing bodies and
interest holders, as applicable) of the Company and each of its
domestic subsidiaries since the time of its respective organization
8
through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such
minutes.
(bb) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration
Statements are accurate and complete descriptions of such documents in
all material respects, except for certain portions of such franchises,
leases, contracts, agreements or documents omitted in reliance on Rule
24b-2 under the Exchange Act. Other than as described in the
Prospectus, no such franchise, lease, contract or agreement has been
suspended or terminated for convenience or default by the Company or
any of the other parties thereto, and neither the Company nor any of
its subsidiaries has received notice or any other knowledge of any such
pending or threatened suspension or termination, except for such
pending or threatened suspensions or terminations that would not
reasonably be expected to, singularly or in the aggregate, have a
Material Adverse Effect. Further, other than as described in the
Prospectus, all such franchises, leases, contracts, agreements and
documents are in full force and effect and the Company and its
subsidiaries, as applicable, are not in breach, violation or default of
any such franchises, leases, contracts, agreements or documents and no
event has occurred which with notice or lapse of time or both would
constitute a breach, violation or default of any such franchises,
leases, contracts, agreements or documents. The Company has not
received any communication (whether written or oral) notifying the
Company as to the termination or threatened termination or modification
or threatened modification of any consulting, licensing, marketing,
research and development, cooperative or any similar agreement.
(cc) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus and which is not so
described.
(dd) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statements or
otherwise, except for persons and entities who have expressly waived
such right or who have been given timely and proper notice and have
failed to exercise such right within the time or times required under
the terms and conditions of such right.
(ee) Neither the Company nor any of its subsidiaries own any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Stock will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(ff) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or the Underwriters for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(gg) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
9
(hh) The Stock has been approved for listing subject to notice of
issuance on the Nasdaq.
(ii) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "Xxxxxxxx-Xxxxx
Act") that are then in effect and is actively taking steps to ensure
that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect upon and at all times after
the effectiveness of such provisions.
(jj) The Company has taken all necessary actions to ensure that, upon
and at all times after Nasdaq shall have approved the Stock for
inclusion, it will be in compliance with all applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules that
are then in effect and is actively taking steps to ensure that it will
be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in
effect upon and all times after the effectiveness of such requirements.
(kk) Neither the Company nor any of its subsidiaries nor, to the best
of the Company's knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the
Prospectus.
(ll) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term
is defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structure finance, special
purpose or limited purpose entity that could reasonably be expected to
materially affect the Company's liquidity or the availability of or
requirements for its capital resources required to be described in the
Prospectus which have not been described as required.
(mm) There are no outstanding loans, advances (except normal advances
for business expense in the ordinary course of business) or guarantees
or indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company, except as disclosed in the
Prospectus.
(nn) There are no rulemaking or similar proceedings before the FDA or
comparable federal, state, local or foreign government bodies which
involve the Company or any of its subsidiaries, which, if the subject
of an action unfavorable to the Company or any such subsidiary, could
result in a Material Adverse Effect.
(oo) The statements set forth in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the capital stock of the Company, including the
Common Stock, and under the captions "Risk Factors," "Encysive
Pharmaceuticals Inc." and "Prospectus Supplement Summary," insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying 6,500,000 shares of Firm Stock by a fraction the numerator of
which is the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
10
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $6.11 per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters through the facilities of The
Depository Trust Company or, at the election of the Representatives, in the form
of definitive certificates, in either case, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the First Closing Date against payment of the aggregate
Purchase Price therefor in federal (same day) funds by wire transfer to an
account at X.X. Xxxxxx Chase Bank - Houston, Texas, payable to the order of the
Company, all at the offices of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Underwriter hereunder. The time and date of
the delivery and closing shall be at 10:00 A.M., New York time, on December 23,
2003, in accordance with Rule 15c6-1 of the Exchange Act. The time and date of
such payment and delivery are herein referred to as the "First Closing Date".
The First Closing Date and the location of delivery of, and the form of payment
for, the Firm Stock may be varied by agreement between the Company and XX Xxxxx.
In the event the Representatives elect to have the Underwriters take
delivery of the certificates instead of delivery of the certificates through the
facilities of The Depository Trust Company, the Company shall make the
certificates for the Stock available to the Representatives for examination on
behalf of the Underwriters in New York, New York at least twenty-four hours
prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company for the account of each Underwriter in the same proportion as the number
of shares of Firm Stock set forth opposite such Underwriter's name bears to the
total number of shares of Firm Stock (subject to adjustment by XX Xxxxx to
eliminate fractions). The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the date of this Agreement. No Optional Stock
shall be sold and delivered unless the Firm Stock previously has been, or
simultaneously is, sold and delivered. The right to purchase the Optional Stock
or any portion thereof may be surrendered and terminated at any time upon notice
by XX Xxxxx to the Company.
The option granted hereby may be exercised by written notice being
given to the Company by XX Xxxxx setting forth the number of shares of the
Optional Stock to be purchased by the Underwriters and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Representatives for
the respective accounts of the several Underwriters through the facilities of
The Depository Trust Company or, at the election of the Representatives, in the
form of definitive certificates, in either case, issued in such names and in
such denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second full
business day preceding the Option Closing Date against
11
payment of the aggregate Purchase Price therefor in federal (same day) funds by
wire transfer to an account at X.X. Xxxxxx Xxxxx Bank - Houston, Texas, payable
to the order of the Company, all at the offices of Xxxxxx & Xxxxxx, L.L.P., 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of each Underwriter hereunder. In the
event the Representatives elect to have the Underwriters take delivery of the
certificates instead of delivery of the certificates through the facilities of
The Depository Trust Company, the Company shall make the certificates for the
Optional Stock available to the Representatives for examination on behalf of the
Underwriters in New York, New York not later than 10:00 A.M., New York Time, on
the business day preceding the Option Closing Date. The Option Closing Date and
the location of delivery of, and the form of payment for, the Optional Stock may
be varied by agreement between the Company and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representatives and
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the second business day following the execution and
delivery of this Agreement; make no further amendment or any supplement
to the Registration Statements or to the Prospectus prior to the Option
Closing Date to which the Representatives shall reasonably object by
notice to the Company after a reasonable period to review; advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statements or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, use
promptly its best efforts to obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered any event occurs as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
to comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Representatives thereof and upon their request will
prepare an amended or supplemented Prospectus or make an appropriate
filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission
12
or effect such compliance. The Company will furnish without charge to
each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of such
amended or supplemented Prospectus; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine months or
more after the effective date of the Initial Registration Statement,
the Company upon the request of the Representatives and at the expense
of such Underwriter will prepare promptly an amended or supplemented
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(d) To deliver promptly to the Representatives in New York City such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statements
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) each Preliminary Prospectus, (iii)
the Prospectus (not later than 10:00 A.M., New York time, of the
business day following the execution and delivery of this Agreement)
and any amended or supplemented Prospectus (not later than 10:00 A.M.,
New York City, on the business day following the date of such amendment
or supplement) and (iv) any document incorporated by reference in the
Prospectus (excluding exhibits thereto).
(e) To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as
the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to continue such
qualifications in effect for so long as required for the distribution
of the Stock; provided that the Company and its subsidiaries shall not
be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service
of process in any jurisdiction.
(g) During the period of five years from the date hereof, the Company
will deliver, upon request, to the Representatives and to each of the
other Underwriters, (i) as soon as they are available, copies of all
reports or other communications furnished to shareholders and (ii) as
soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission pursuant to the
Exchange Act or any national securities exchange or automatic quotation
system on which the Stock is listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of
the Prospectus without the prior written consent of XX Xxxxx other than
the Company's sale of the Stock hereunder, the issuance of restricted
Common Stock or options to acquire shares of Common Stock pursuant to
the Company's employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof and the
issuance of shares of Common Stock pursuant to valid exercises of
currently outstanding options, warrants or rights.
13
The Company will cause each officer and director listed in Schedule B
to furnish to the Representatives, prior to the First Closing Date, a
letter, substantially in the form of Exhibit I hereto, pursuant to
which each such person shall agree not to directly or indirectly offer,
sell, assign, transfer, pledge, contract to sell, or otherwise dispose
of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock for a period of 90 days
from the date of the Prospectus, without the prior written consent of
XX Xxxxx and not to engage in any short selling of the Common Stock.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates the Company will furnish to the
Representatives, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for
any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(k) Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the
Company and of which the Representatives are notified), without the
prior written consent, such consent not to be unreasonably withheld or
delayed, of the Representatives, unless in the judgment of the Company
and its counsel, and after notification to the Representatives, such
press release or communication is required by law.
(l) Without limiting the provisions of section 4(h), in connection with
the offering of the Stock, until XX Xxxxx shall have notified the
Company of the completion of the resale of the Stock, the Company will
not, and will cause its affiliated purchasers (as defined in Regulation
M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Stock, or
attempt to induce any person to purchase any Stock; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the
purpose of creating actual, or apparent, active trading in or of
raising the price of the Stock.
(m) The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented
pursuant to Section 4(b).
(n) The Company shall at all times comply with all applicable
provisions of the Xxxxxxxx-Xxxxx Act in effect from time to time.
(o) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds".
(p) The Company shall at all times engage and maintain, at its expense,
a registrar and transfer agent for the Stock.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriters to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus any amendments and exhibits thereto or any
document incorporated by reference
14
therein the costs of printing, reproducing and distributing, the "Agreement
Among Underwriters" between the Representatives and the Underwriters, the Master
Selected Dealers' Agreement, the Underwriters' Questionnaire and this Agreement
by mail, telex or other means of communications; (d) any applicable listing or
other fees; (e) the fees and expenses (including related fees and expenses of
counsel to the Underwriters) of qualifying the Stock under the securities laws
of the several jurisdictions as provided in Section 4(f) and of preparing,
printing and distributing Blue Sky Memoranda and Legal Investment Surveys
(including related fees and expenses of counsel to the Underwriters); (f) all
fees and expenses of the registrar and transfer agent of the Stock; and (g) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement (including, without limitation, the fees and
expenses of the Company's counsel and the Company's independent accountants);
provided that, except as otherwise provided in this Section 5 and in Section 9,
the Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the Commission,
and any request for additional information on the part of the
Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(a).
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement the Stock,
the Registration Statement and the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxx & Xxxxxx, L.L.P. or Wood, Phillips, Xxxx, Xxxxx & Mortimer
shall have furnished to the Representatives such counsel's or counsels'
written opinion or opinions, as counsel to the Company, addressed to
the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its domestic subsidiaries
have been duly incorporated and are validly existing
as corporations or other legal entities in good
standing under the laws of their respective
jurisdictions of organization, are duly qualified to
do business and are in good standing as foreign
corporations in each jurisdiction identified to us by
the Company as those in which their respective
15
ownership or lease of property or the conduct of
their respective businesses requires such
qualification, and have all power and authority
necessary to own or hold their respective properties
and to conduct the businesses in which they are
engaged, except where the failure to so qualify or
have such power or authority would not have,
singularly or in the aggregate, a Material Adverse
Effect.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares
of capital stock of the Company, including the Stock
being delivered on the Closing Date, have been duly
and validly authorized and issued, are fully paid and
nonassessable and conform to the description thereof
contained in the Prospectus.
(iii) All the outstanding shares of capital stock (or
analogous ownership interests, as applicable) of each
domestic subsidiary of the Company have been duly
authorized and validly issued, are fully paid and
nonassessable and, except to the extent set forth in
the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned domestic
subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon
voting or transfer or any other claim of any third
party.
(iv) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock
pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result
in a breach or violation of any of the terms or
provisions of, or constitute (with or without notice
or lapse of time or both) a default under any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel
after reasonable investigation to which the Company
or any of its domestic subsidiaries is a party or by
which the Company or any of its domestic subsidiaries
is bound or to which any of the properties or assets
of the Company or any of its domestic subsidiaries is
subject, nor will such actions result in any
violation of the Charter or by-laws (or analogous
governing instruments, as applicable) of the Company
or of any of its domestic subsidiaries or any statute
or any order, rule or regulation of any court or
governmental agency or body or court having
jurisdiction over the Company or any of its domestic
subsidiaries or any of their properties or assets.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable
state securities laws in connection with the purchase
and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any court or
governmental agency or body is required for the
execution, delivery and performance of this Agreement
by the Company and the consummation of the
transactions contemplated hereby.
16
(viii) The statements in the Prospectus under the heading
"Description of Capital Stock," "Risk Factors - Risks
Relating to Intellectual Property" and "Risk Factors
- Risks Related To Our Common Stock Outstanding," to
the extent that they constitute summaries of matters
of law or regulation or legal conclusions, have been
reviewed by such counsel and fairly summarize the
matters described therein in all material respects.
The statements set forth in the Company's Annual
Report on Form 10-K for the year ended December 31,
2002, as amended, set forth under "Part I -- Item 1 -
Business - Licenses and Patents," to the extent that
they constitute summaries of matters of law or
regulation or legal conclusions, have been reviewed
by such counsel and fairly summarize the matters
described therein in all material respects.
(ix) Except for descriptions with respect to statutes,
legal or governmental proceedings relating to the
FDA, the description in the Registration Statements
and Prospectus of statutes, legal or governmental
proceedings and contracts and other documents are
accurate in all material respects; and, except with
respect to statutes, legal or governmental
proceedings relating to the FDA, to the best of such
counsel's knowledge, there are no statutes, legal or
governmental proceedings, contracts or other
documents of a character required to be described in
the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which
are not described or filed as required.
(x) Neither the Company nor any of its domestic
subsidiaries (i) is in violation of its charter or
by-laws (or analogous governing instruments, as
applicable), (ii) is in default, and no event has
occurred, which, with notice or lapse of time or
both, would constitute a default, in the due
performance or observance of any term, covenant or
condition contained in any agreement or instrument to
which it is a party or by which it is bound or to
which any of its properties or assets is subject of
which we have knowledge or (iii) is in violation of
any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets
may be subject of which we have knowledge or has
failed to obtain any license, permit, certificate,
franchise or other governmental authorization or
permit necessary to the ownership of its property or
to the conduct of its business except, in the case of
clauses (ii) and (iii), for those defaults,
violations or failures which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(xi) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no
legal or governmental proceedings pending, except for
the modification of intellectual property rights
pursuant to proceedings involving the processing and
examination of patent and trademark applications and
patents before governmental agencies or bodies, to
which the Company or any of its domestic subsidiaries
is a party or of which any property or asset of the
Company or any of its domestic subsidiaries is the
subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its
domestic subsidiaries, might have a Material Adverse
Effect or would prevent or adversely affect the
ability of the Company to perform its obligations
under this Agreement; and, to the best of such
counsel's knowledge, no such proceedings are
threatened or contemplated by governmental
authorities or threatened by others.
(xii) To the best of such counsel's knowledge, the Company
and its domestic subsidiaries own or possess valid
and enforceable licenses or other rights to use
17
the Intellectual Property all patents, patent
applications, trademarks, trademark registrations,
service marks, service xxxx registrations, trade
names, domain names, domain name registrations,
copyrights, licenses, inventions, trade secrets and
rights used by the Company or its domestic
subsidiaries in connection with their respective
businesses (collectively, the "Intellectual
Property"). To the best of such counsel's knowledge
and other than as described in the Prospectus (A)
there are no third parties who have any rights in the
Intellectual Property that could preclude the Company
or any of its domestic subsidiaries, as applicable,
from conducting its business as currently conducted
or as presently contemplated to be conducted as
described in the Prospectus, (B) there are no pending
or threatened actions, suits, proceedings,
investigations or claims by others challenging the
rights of the Company or any of its domestic
subsidiaries, as applicable, or, if the Intellectual
Property is licensed to the Company or any of its
domestic subsidiaries, as applicable, in respect of
any third party licensor, and (C) neither the Company
nor any of its domestic subsidiaries has and, to the
extent any Intellectual Property is licensed to the
Company or any of its domestic subsidiaries, as
applicable, no third party licensor has, infringed,
or received any notice of infringement of or conflict
with, any rights of others with respect to the
Intellectual Property.
(xiii) The Registration Statement was declared effective
under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b)
Registration Statement, if any, was filed with the
Commission on the date specified therein, the
Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened
by the Commission.
(xiv) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date,
and any further amendments or supplements thereto, as
of their respective dates, made by the Company prior
to the Closing Date (other than the financial
statements and other financial data contained
therein, as to which such counsel need express no
opinion) complied as to form in all material respects
with the requirements of the Securities Act and the
Rules and Regulations and the documents incorporated
by reference in the Prospectus and any further
amendment or supplement to any such incorporated
document made by the Company prior to the Closing
Date (other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion), when they became effective or
were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Securities Act or the Exchange
Act, as applicable, and the Rules and Regulations and
the rules and regulations of the Commission under the
Exchange Act, as applicable.
(xv) To the best of such counsel's knowledge no person or
entity has the right to require registration of
shares of Common Stock or other securities of the
Company because of the filing or effectiveness of the
Registration Statements or otherwise, except for
persons and entities who have expressly waived such
right or who have been given proper notice and have
failed to exercise such right within the time or
times required under the terms and conditions of such
right.
18
(xvi) Neither the Company nor any of its domestic
subsidiaries is an "investment company" within the
meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder.
(xvii) The Company meets the requirements for the use of
Form S-3 under the Securities Act and the Rules and
Regulations. The Registration Statements meet the
requirements set forth in Rule 415(a)(1)(x) of the
Rules and Regulations.
(xviii) The Company and its domestic subsidiaries possess all
licenses, certificates, authorizations and permits
issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their
businesses, except for such licenses, certificates,
authorizations or permits the failure of which to
maintain would not have a Material Adverse Effect.
Neither the Company nor any of its domestic
subsidiaries has received any notice of proceedings
relating to the revocation or modification of any
such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a
Material Adverse Effect. To the best of such
counsel's knowledge, the Company and its domestic
subsidiaries are in compliance with all applicable
federal, state, local and foreign laws, regulations,
orders and decrees governing their business, except
where noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect.
Such counsel shall also have furnished to the Representatives
a written statement, addressed to the Underwriters and dated the
Closing Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statements (y) based on such counsel's examination of the
Registration Statements and such counsel's investigations made in
connection with the preparation of the Registration Statements and
"conferences with certain officers and employees of and with auditors
for and counsel to the Company", such counsel has no reason to believe
that (I) the Registration Statements, as of the respective effective
dates, contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that the
Prospectus contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (II) any document
incorporated by reference in the Prospectus or any further amendment or
supplement to any such incorporated document, when they became
effective or were filed with the Commission, as the case may be,
contained, in the case of a registration statement which became
effective under the Securities Act, any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus.
The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel has not independently
verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and takes no
responsibility therefor except to the extent set forth in the opinion
described in clauses (viii) and (ix) above.
19
(e) The Representatives shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(f) At the time of the execution of this Agreement, the Representatives
shall have received from KPMG LLP a letter, addressed to the
Underwriters and dated such date, in form and substance satisfactory to
the Representatives (i) confirming that they are independent certified
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the Rules and Regulations
and (ii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information contained
or incorporated by reference in the Prospectus.
(g) On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from KPMG LLP addressed to the
Underwriters and dated the Closing Date confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus as of a date not more than three
business days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Representatives concurrently with the execution of this Agreement
pursuant to Section 6(f).
(h) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating
that (i) such officers have carefully examined the Registration
Statements and the Prospectus and, in their opinion, the Registration
Statements as of their respective effective dates and the Prospectus,
as of each such effective date, did not include any untrue statement of
a material fact and did not omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (ii) since the effective date of the Initial Registration
Statement no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statements or the
Prospectus, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct and
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date, and (iv) subsequent to the date of the most
recent financial statements included or incorporated by reference in
the Prospectus, there has been no material adverse change in the
financial position or results of operation of the Company and its
subsidiaries, or any change, or any development including a prospective
change, in or affecting the condition (financial or otherwise), results
of operations, business or prospects of the Company and its
subsidiaries taken as a whole, except as set forth in the Prospectus.
(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment
20
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated in the
Prospectus.
(j) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Stock or materially and adversely affect or
potentially materially and adversely affect the business or operations
of the Company; and no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Stock or materially and adversely affect or
potentially materially and adversely affect the business or operations
of the Company.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange
or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities or a material
disruption has occurred in commercial banking or securities settlement
or clearance services in the United States, (iii) the United States
shall have become engaged in further hostilities, or the subject of any
further act or acts of terrorism, or there shall have been an
escalation in hostilities involving the United States, or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect
of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated in
the Prospectus.
(l) Nasdaq shall have approved the Stock for listing, subject only to
official notice of issuance.
(m) XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers and directors of the
Company listed in Schedule B to this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representatives and agents and each person, if
any, who controls any Underwriter within the meaning of the Securities
Act (collectively the "Underwriter Indemnified Parties" and, each an
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration
21
Statements or the Prospectus or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus or
in any amendment or supplement thereto a material fact required to be
stated therein or necessary to make the statements therein not
misleading and shall reimburse each Underwriter Indemnified Party
promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from the Preliminary Prospectus,
either of the Registration Statements or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriter's
Information (as defined in Section 16). This indemnity agreement is not
exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter
Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the
"Company Indemnified Parties" and each a "Company Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of that Underwriter specifically for use therein, and shall
reimburse the Company Indemnified Parties for any legal or other
expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing
as third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided that the
parties hereto hereby agree that such written information provided by
the Underwriters consists solely of the Underwriters' Information. This
indemnity agreement is not exclusive and will be in addition to any
liability which the Underwriters might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or
in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it
22
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable
for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by XX Xxxxx, if the indemnified parties
under this Section 7 consist of any Underwriter Indemnified Party, or
by the Company if the indemnified parties under this Section 7 consist
of any Company Indemnified Parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and
7(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. Subject
to the provisions of Section 7(d) below, no indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with its written consent or if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on the
one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in
23
respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Stock purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters
on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission; provided that the parties hereto agree that the
written information furnished to the Company through the
Representatives by or on behalf of the Underwriters for use in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus consists solely of the Underwriters' Information. The
Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(e) were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 7(e)
shall be deemed to include, for purposes of this Section 7(e), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(e), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public were offered to the public less the amount of
any damages which such Underwriter has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this Section
7(e) are several in proportion to their respective underwriting obligations and
not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 6(i) or 6(k) have occurred or if
the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8 or 10, (b) the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason not permitted
under this Agreement, or (c) the Underwriters shall decline to purchase the
Stock for any reason permitted under this Agreement the Company shall reimburse
the Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%)
24
of the total number of shares underwritten, the other Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the shares which such defaulting Underwriter or Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except expenses to be paid or
reimbursed pursuant to Sections 5 and 9 and except the provisions of Section 7
shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties, and the
indemnities of the several Underwriters shall also be for the benefit of the
Company Indemnified Parties. It is understood that each Underwriter's
responsibility to the Company is solely contractual in nature and the
Underwriters do not owe the Company, or any other party, any fiduciary duty as a
result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to XX Xxxxx Securities Corporation, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Capital Markets (Fax: 000-000-0000), with a copy to the same address,
Attention: Legal Department - General Counsel (Fax: 000-000-0000); and
25
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Encysive Pharmaceuticals Inc., 0000 Xxxx
Xxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxx 00000, Attention: Xxxxx X. Given, M.D.
(Fax: 000-000-0000).
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriters' Information consists
solely of the statements concerning the Underwriters contained in the third and
ninth paragraphs under the heading "Underwriting" in the Company's Preliminary
Prospectus Supplement dated December 3, 2003 and the Company's Prospectus
Supplement dated December 17, 2003.
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
26
If the foregoing is in accordance with your understanding of the
agreement between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
ENCYSIVE PHARMACEUTICALS INC.
By: /s/ Xxxxx X. Given
----------------------------------------
Name: Xxxxx X. Given, M.D.
Title: President and Chief Executive
Officer
Accepted as of
the date first above written:
XX XXXXX SECURITIES CORPORATION
RBC XXXX XXXXXXXX INC.
XXXXXXX & COMPANY, INC.
Acting on their own behalf
and as Representatives of several
Underwriters referred to in the
foregoing Agreement.
By: XX XXXXX SECURITIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Head of Equity Capital Markets
27
SCHEDULE A
Number
of Firm Number of
Shares Optional
to be Shares
Name Purchased Purchasable
---- ------------ ------------
XX Xxxxx Securities Corporation 2,628,000 394,200
RBC Xxxx Xxxxxxxx Inc. 2,044,000 306,600
Xxxxxxx & Company, Inc. 1,168,000 175,200
Xxxxx, Xxxxxxxx & Xxxx, Inc. 120,000 18,000
Xxxxx Xxxxxx & Co., Inc. 120,000 18,000
Leerink Xxxxx & Company 120,000 18,000
Punk, Xxxxxx & Company, L.P. 120,000 18,000
Xxxxxx & Xxxxxxx, Inc. 120,000 18,000
Arneson, Kercheville, Xxxxxxxxx & Associates, Inc. 30,000 4,500
Xxxxxxx Xxxxxx Xxxxxx 30,000 4,500
------------ ------------
TOTAL 6,500,000 975,000
============ ============
28
SCHEDULE B
Xxx X. Xxxxxxxx, M.D.
Xxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxxx X.X. Xxxxx
Xxxxx X. Given, M.D.
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx, M.D.
Xxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxx, Xx.
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxx, M.D.
29
EXHIBIT I
[Form of Lock-Up Agreement]
December ___, 2003
XX Xxxxx Securities Corporation
RBC Xxxx Xxxxxxxx Inc.
Xxxxxxx & Company, Inc.
As representatives of the
several Underwriters
c/o XX Xxxxx Securities Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re:
Encysive Pharmaceuticals Inc. Shares of Common Stock
Dear Sirs:
In order to induce XX Xxxxx Securities Corporation ("XX Xxxxx"), RBC
Xxxx Xxxxxxxx Inc. ("RBC") and Xxxxxxx & Company, Inc. (together with XX Xxxxx
and RBC, the "Representatives"), to enter in to a certain
underwriting agreement
with
Encysive Pharmaceuticals Inc., a Delaware corporation (the "Company"), with
respect to the public offering of shares of the Company's common stock, par
value $.005 per share ("Common Stock"), the undersigned hereby agrees that for a
period of 90 days following the date of the final prospectus filed by the
Company with the U.S. Securities and Exchange Commission in connection with such
public offering, the undersigned will not, without the prior written consent of
XX Xxxxx, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")) or securities convertible into or exercisable or exchangeable in
Common Stock, (ii) enter into any swap, hedge or similar agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of the Beneficially Owned Shares or securities convertible into or exercisable
or exchangeable in Common Stock or (iii) engage in any short selling of the
Common Stock[; provided, however, that notwithstanding the foregoing, the
undersigned may sell up to an aggregate of * shares of Common Stock within such
90-day period without the prior written consent of XX Xxxxx upon prior notice to
XX Xxxxx].
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the 90 day period following the date of the Company's final
prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of 1933, as the same may be amended or
supplemented from time to time, of any shares of Common Stock that are
registered in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the
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* As agreed with XX Xxxxx.
30
undersigned hereby consents to the placing of legends and/or stop-transfer
orders with the transfer agent of the Common Stock with respect to any shares of
Common Stock or Beneficially Owned Shares.
[Signatory]
By:
--------------------------------
Name:
Title:
