InKine Pharmaceutical Company, Inc.
10,000,000 Shares
Common Stock
($0.0001 Par Value)
UNDERWRITING AGREEMENT
December ___, 2003
UNDERWRITING AGREEMENT
December , 2003
UBS Securities LLC
First Albany Capital Inc.
Xxxxxx & Xxxxxxx, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
InKine Pharmaceutical Company, Inc., a New York corporation
(the "Company"), proposes to issue and sell to you (the "Underwriters"), an
aggregate of 10,000,000 shares (the "Firm Shares") of Common Stock, $0.0001 par
value (the "Common Stock"), of the Company. In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the Underwriters
the option to purchase from the Company up to an additional 1,500,000 shares of
Common Stock (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the "Shares." The
Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-110812)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"). The Company has furnished to you,
for use by the Underwriters and by dealers, copies of one or more preliminary
prospectuses and the documents incorporated by reference therein (each such
preliminary prospectus, including the documents incorporated therein by
reference, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it became or becomes effective, including all documents filed as
a part thereof or incorporated by reference therein, and including any
information contained in a prospectus subsequently filed with the Commission
pursuant to Rule 424(b) under the Act and deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430(A) under the Act and
also including any registration statement filed pursuant to Rule 462(b) under
the Act, is herein called the "Registration Statement," and the prospectus,
including all documents incorporated therein by reference, in the form filed by
the Company with the Commission pursuant to Rule 424(b) under the Act on or
before the second business day after the date hereof (or such earlier time as
may be required under the Act) or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the time it became
effective, is herein called the "Prospectus." As used herein, "business day"
shall mean a day on which the New York Stock Exchange is open for trading.
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8
hereof, in each case at a purchase price of $______ per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the price at which you offer and sell the
Firm Shares after the initial public offering to such extent as you may
determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by UBS
Securities LLC ("UBS") on behalf of the several Underwriters at any time and
from time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised,
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 8 hereof.
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2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on December ___, 2003 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of Xxxxxxxx &
Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective
under the Act; no stop order of the Commission preventing or suspending
the use of any Preliminary Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge after due
inquiry, are contemplated by the Commission; each Preliminary
Prospectus, at the time of filing thereof, complied in all material
respects to the requirements of the Act and the last Preliminary
Prospectus distributed in connection with the offering of the Shares
did not, as of its date, and does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; the
Registration Statement complied when it became effective, complies and
will comply, at the time of purchase and any additional time of
purchase, in all material respects with the requirements of the Act and
the Prospectus will comply, as of its date and at the time of purchase
and any additional times of purchase, in all material respects with the
requirements of the Act and any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement have been and will be so described or filed; the
conditions to the use of Form S-3 have been satisfied; the Registration
Statement did not when it became effective, does not and will not, at
the time of purchase and any additional time of purchase, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and the Prospectus will not, as of its date and
at the time of purchase and any additional time of purchase, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the last
Preliminary Prospectus, the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning an
Underwriter and furnished in writing by or on behalf of such
Underwriter to the Company expressly for use in the most recent
Preliminary Prospectus, the Registration Statement or the Prospectus;
the documents incorporated by reference in any Preliminary Prospectus,
the Registration Statement and the Prospectus, at the time they became
effective or were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act and did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Company has not distributed and will not distribute
any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the then most recent
Preliminary Prospectus and the Prospectus;
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(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional
time of purchase, as the case may be, the Company shall have an
authorized and outstanding capitalization as set forth in the section
of the Registration Statement and the Prospectus entitled
"Capitalization" (subject, in each case, to the issuance of shares of
Common Stock upon exercise of stock options and warrants disclosed as
outstanding in the Registration Statement and the Prospectus and grant
of options under existing stock option plans described in the
Registration Statement and the Prospectus); all of the issued and
outstanding shares of capital stock, including the Common Stock, of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable, have been issued in compliance with all federal and
state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar
right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of New York, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as contemplated
herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) the Company has no subsidiaries (as defined in the Act)
other than Corbec Pharmaceuticals, Inc., Sangen Pharmaceutical Company,
Inc. and InKine Pharmaceutical Ltd.(collectively, the "Subsidiaries");
the Company owns all of the issued and outstanding capital stock of
each of the Subsidiaries; other than the capital stock of the
Subsidiaries and a minority membership interest in Zabecor
Pharmaceutical Company, LLC, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity; complete and
correct copies of the certificates of incorporation and the by-laws of
the Company and the Subsidiaries and all amendments thereto have been
delivered to you, and except as set forth in the exhibits to the
Registration Statement no changes therein will be made subsequent to
the date hereof and prior to the time of purchase or, if later, the
additional time of purchase; each Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; each Subsidiary is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect; all of the outstanding
shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company subject to no security interest, other
encumbrance or adverse claims; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights
to convert any obligation into shares of capital stock or ownership
interests in the Subsidiaries are outstanding;
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(f) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus and the certificates
for the Shares are in due and proper form and the holders of the Shares
will not be subject to personal liability by reason of being such
holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) neither the Company nor any of the Subsidiaries is in
breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of
such indebtedness under) its respective charter or by-laws, or any
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their
properties may be bound or affected, and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and
the consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or constitute a
default under) the charter or by-laws of the Company or any of the
Subsidiaries, or any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or affected, or any federal,
state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of the Subsidiaries;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated hereby other than registration
of the Shares under the Act, which has been or will be effected, and
any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus, (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, resale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, and (iii) no person has the right to act as
an underwriter or as a financial advisor to the Company in connection
with the offer and sale of the Shares, in the case of each of the
foregoing clauses (i), (ii) and (iii), whether as a result of the
filing or effectiveness of the Registration Statement or the sale of
the Shares as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Company to register under
the Act any shares of Common Stock or shares of any other capital stock
or other equity interests of the Company, or to include any such shares
or interests in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated
thereby or otherwise;
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(l) each of the Company and the Subsidiaries has all necessary
licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
authorizations, consents and approvals from other persons, in order to
conduct its respective business; neither the Company nor any of the
Subsidiaries is in violation of, or in default under, or has received
notice of any proceedings relating to revocation or modification of,
any such license, permit, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any decree,
order or judgment applicable to the Company or any of the Subsidiaries,
except where such violation, default, revocation or modification would
not, individually or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement have been so described or filed
as required;
(n) the Company, its Subsidiaries and the products sold by and
services provided by them are in compliance with, and the Company and
its Subsidiaries conduct their businesses in conformity with, all
applicable federal, state, local and foreign laws, rules, regulations,
standards, guides or orders administered or issued by any court or
governmental agency or body, including without limitation the U.S. Food
and Drug Administration (the "FDA") and any agency of any foreign
government exercising comparable authority in a jurisdiction in which
the Company's products are sold or services are provided, except for
any noncompliance that is disclosed in the Prospectus and any non-
compliance that would not have a Material Adverse Effect; except
as disclosed in the Prospectus, no prospective change in any of such
laws, rules, regulations, standards, guides or orders has been adopted
which, when made effective, would have a Material Adverse Effect;
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(o) the studies, tests and preclinical and clinical trials
conducted by or on behalf of or sponsored by the Company and its
Subsidiaries or in which the Company, any Subsidiary or its products or
product candidates have participated that are described in the
Prospectus were and, if still pending, are being conducted in
accordance with experimental protocols, procedures and controls
pursuant to, where applicable, generally accepted medical and
professional scientific standards; the descriptions in the Prospectus
of the results of such studies, tests and preclinical or clinical
trials are accurate and complete in all material respects and fairly
present the results of such studies, tests and preclinical and clinical
trials, and the Company is not aware of any studies, tests or
preclinical or clinical trials the results of which the Company
reasonably believes call into question the results of studies, tests or
trials described or referred to in the Prospectus; and the Company has
not received any notices or correspondence from the FDA or any agency
of any foreign government exercising comparable authority requiring the
termination, suspension or material modification of any studies, tests
or preclinical or clinical trials conducted by or on behalf of the
Company;
(p) there are no actions, suits, claims, investigations or
proceedings pending or threatened or, to the Company's knowledge after
due inquiry, contemplated to which the Company or any of the
Subsidiaries or any of their respective directors or officers is or
would be a party or of which any of their respective properties is or
would be subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency, except any such action, suit, claim, investigation
or proceeding which would not result in a judgment, decree or order
having, individually or in the aggregate, a Material Adverse Effect or
preventing consummation of the transactions contemplated hereby;
(q) KPMG LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the
Commission as part of the Registration Statement and the Prospectus,
are independent public accountants as required by the Act;
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(r) the audited financial statements included in the
Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the financial position of the
Company as of the dates indicated and the consolidated results of
operations and cash flows of the Company for the periods specified and
have been prepared in compliance with the requirements of the Act and
in conformity with generally accepted accounting principles applied on
a consistent basis during the periods involved; the other financial and
statistical data set forth in the Registration Statement and the
Prospectus are accurately presented and prepared on a basis consistent
with the financial statements and books and records of the Company;
there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement and the
Prospectus that are not included as required; and the Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement and the Prospectus;
(s) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, (iii)
any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv) any
change in the capital stock or outstanding indebtedness of the Company
or the Subsidiaries or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company;
(t) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and executive
officers;
(u) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(v) the Company and each of the Subsidiaries has good and
marketable title to all property (real and personal) described the
Registration Statement and in the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or other
encumbrances; all the property described in the Registration Statement
and the Prospectus as being held under lease by the Company or a
Subsidiary is held thereby under valid, subsisting and enforceable
leases;
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(w) the Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered
and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in the Registration Statement and the
Prospectus as being owned or licensed by them or which are necessary
for the conduct of their respective businesses, except where the
failure to own, license or have such rights would not, individually or
in the aggregate, have a Material Adverse Effect (collectively,
"Intellectual Property"); (i) there are no third parties who have or,
to the Company's knowledge after due inquiry, will be able to establish
rights to any Intellectual Property, except for the ownership rights of
the owners of the Intellectual Property which is licensed to the
Company; (ii) there is no material infringement by third parties of any
Intellectual Property; (iii) there is no pending or threatened action,
suit, proceeding or claim by others challenging the Company's rights in
or to any Intellectual Property, and the Company is unaware of any
facts which could form a reasonable basis for any such claim; (iv)
there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any Intellectual Property,
and the Company is unaware of any facts which could form a reasonable
basis for any such claim; (v) there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes or
otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company is unaware of any
facts which could form a reasonable basis for any such claim; (vi)
there is no patent or patent application that contains claims that
interfere with the issued or pending claims of any of the Intellectual
Property; and (vii) there is no prior art that may render any patent
application owned by the Company of the Intellectual Property
unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office;
(x) neither the Company nor any of the Subsidiaries is engaged
in any unfair labor practice; except for matters which would not,
individually or in the aggregate, have a Material Adverse Effect, (i)
there is (A) no unfair labor practice complaint pending or, to the
Company's knowledge after due inquiry, threatened against the Company
or any of the Subsidiaries before the National Labor Relations Board,
and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, (B) no
strike, labor dispute, slowdown or stoppage pending or, to the
Company's knowledge after due inquiry, threatened against the Company
or any of the Subsidiaries and (C) no union representation dispute
currently existing concerning the employees of the Company or any of
the Subsidiaries, and (ii) to the Company's knowledge after due
inquiry, (A) no union organizing activities are currently taking place
concerning the employees of the Company or any of the Subsidiaries and
(B) there has been no violation of any federal, state, local or foreign
law relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder concerning the employees of the
Company or any of the Subsidiaries;
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(y) the Company and the Subsidiaries and their properties,
assets and operations are in compliance with, and hold all permits,
authorizations and approvals required under, Environmental Laws (as
defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually
or in the aggregate, have a Material Adverse Effect; there are no past,
present or, to the Company's knowledge after due inquiry, reasonably
anticipated future events, conditions, circumstances, activities,
practices, actions, omissions or plans that could reasonably be
expected to give rise to any material costs or liabilities to the
Company or the Subsidiaries under, or to interfere with or prevent
compliance by the Company or the Subsidiaries with, Environmental Laws;
except as would not, individually or in the aggregate, have a Material
Adverse Effect, neither the Company nor any of the Subsidiaries (i) is
the subject of any investigation, (ii) has received any notice or
claim, (iii) is a party to or affected by any pending or threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or
order or (v) has entered into any agreement, in each case relating to
any alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below) (as used herein, "Environmental
Law" means any federal, state, local or foreign law, statute,
ordinance, rule, regulation, order, decree, judgment, injunction,
permit, license, authorization or other binding requirement, or common
law, relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including those
relating to the distribution, processing, generation, treatment,
storage, disposal, transportation, other handling or release or
threatened release of Hazardous Materials, and "Hazardous Materials"
means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any Environmental
Law);
(z) [intentionally left blank];
(aa) all tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided;
(bb) the Company and each of the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses
as the Company deems adequate; such insurance insures against such
losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Subsidiaries
and their businesses; all such insurance is fully in force on the date
hereof and will be fully in force at the time of purchase and any
additional time of purchase;
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(cc) neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements
included in the Registration Statement and the Prospectus any loss or
interference with its respective business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree;
(dd) each license, lease, contract and other agreement or
instrument referred to or described in, or filed as an exhibit to, the
Registration Statement or set forth in Schedule B hereto is legal,
valid, binding, enforceable and in full force and effect against the
Company or the Subsidiary party thereto, and to the Company's
knowledge, no other party thereto is in breach or default with respect
to any such license, lease, contract or other agreement or instrument,
which breach or default could reasonably be expected to have a Material
Adverse Effect, and no event has occurred which with notice or lapse of
time or both would constitute a breach or default which could
reasonably be expected to have a Material Adverse Effect or permit the
termination, material modification or acceleration of a material
obligation under any such license, lease, contract or other agreement
or instrument, and no party has repudiated any provision of any such
license, lease, contract or other agreement or instrument; the Company
has not sent or received any communication regarding termination of, or
intent not to renew, any such license, lease, contract and other
agreement or instrument, and no such termination or non-renewal has
been threatened by the Company or, to the Company's knowledge after due
inquiry, any other party to any such license, lease, contract and other
agreement or instrument;
(ee) the Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
13
(ff) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 and
15d-14 under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the
Board of Directors have been advised of: (i) any significant
deficiencies in the design or operation of internal controls which
could adversely affect the Company's ability to record, process,
summarize, and report financial data; and (ii) any fraud, whether or
not material, that involves management or other employees who have a
role in the Company's internal controls; any material weaknesses in
internal controls have been identified for the Company's auditors; and
since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to
significant deficiencies and material weaknesses;
(gg) the Company has provided you true, correct, and complete
copies of all documentation pertaining to any extension of credit in
the form of a personal loan made, directly or indirectly, by the
Company to any director or executive officer of the Company, or to any
family member or affiliate of any director or executive officer of the
Company; and since July 30, 2002, the Company has not, directly or
indirectly, including through any subsidiary: (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of
the Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company, or
any family member or affiliate of any director or executive officer,
which loan was outstanding on July 30, 2002;
(hh) the Company and, to the best of its knowledge, each of
its directors and officers acting in his capacity as such are in
compliance with all applicable requirements of the Xxxxxxxx-Xxxxx Act
of 2002 and the rules and regulations of the Commission or the NASD
thereunder;
14
(ii) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required;
(jj) neither the Company nor any of the Subsidiaries nor, to
the Company's knowledge after due inquiry, any employee or agent of the
Company or the Subsidiaries has made any payment of funds of the
Company or the Subsidiaries or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Registration Statement or the Prospectus;
(kk) neither the Company nor any of the Subsidiaries nor any
of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or
which has constituted or might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares; and
(ll) to the Company's knowledge after due inquiry, there are
no affiliations or associations between any member of the NASD and any
of the Company's officers, directors or 5% or greater securityholders,
except as set forth in the Registration Statement and the Prospectus.
In addition, any certificate signed by any officer of the
Company or any of the Subsidiaries and delivered to the Underwriters or counsel
for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or Subsidiary, as the
case may be, as to matters covered thereby, to each Underwriter.
15
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the
laws of any such jurisdiction (except service of process with respect
to the offering and sale of the Shares); and to promptly advise you of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered,
it is necessary for the Registration Statement or any post-effective
amendment thereto to be declared effective before the Shares maybe
sold, the Company will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible
and the Company will advise you promptly and, if requested by you, will
confirm such advice in writing, (i) when the Registration Statement and
any such post-effective amendment thereto has become effective, and
(ii) when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely
manner under such Rule);
16
(d) to advise you promptly, confirming such advice in writing,
of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its
best efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, including by filing any
documents that would be incorporated therein by reference, and to
provide you and Underwriters' counsel copies of any such documents for
review and comment a reasonable amount of time prior to any proposed
filing and to file no such amendment or supplement to which you shall
object in writing;
(e) subject to Section 4(d) hereof, to file promptly all
reports and any definitive proxy or information statement required to
be filed by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; and to provide you with a copy of such
reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such
period a reasonable amount of time prior to any proposed filing, and to
promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of
any event within the time during which a prospectus relating to the
Shares is required to be delivered under the Act which could require
the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not
misleading, and, during such time, subject to Section 4(d) hereof, to
prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change;
17
(h) to make generally available to its security holders, and
to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is
reasonably practicable after the termination of such twelve-month
period but not later than March 1, 2005;
(i) to furnish to its shareholders as soon as practicable
after the end of each fiscal year an annual report (including a
consolidated balance sheet and statements of income, shareholders'
equity and cash flow of the Company and the Subsidiaries for such
fiscal year, accompanied by a copy of the certificate or report thereon
of nationally recognized independent certified public accountants);
(j) to furnish to you four copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents
incorporated by reference therein);
(k) to furnish to you promptly for a period of five years from
the date of this Agreement (i) copies of any reports, proxy statements,
or other communications which the Company shall send to its
stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other
similar forms as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on
which any class of securities of the Company is listed, and (iv) such
other information as you may reasonably request regarding the Company
or the Subsidiaries;
(l) to furnish to you as early as practicable prior to the
time of purchase and any additional time of purchase, as the case may
be, but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly financial statements, if
any, of the Company which have been read by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 6(d) hereof;
(m) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of Proceeds" in the
Prospectus;
18
(n) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares including any stock or transfer taxes and stamp or similar
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of
this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and (except
closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility
for investment under state or foreign law as aforesaid (including the
legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on NASDAQ and any
registration thereof under the Exchange Act, (vi) any filing for review
of the public offering of the Shares by the NASD, including the legal
fees and filing fees and other disbursements of counsel to the
Underwriters, (vii) the fees and disbursements of any transfer agent or
registrar for the Shares, (viii) the costs and expenses of the Company
relating to presentations or meetings undertaken in connection with the
marketing of the offering and sale of the Shares to prospective
investors and the Underwriters' sales forces, including, without
limitation, the fees and expenses of any consultants engaged with the
Company's consent in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the
Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show, and (ix) the performance of
the Company's other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common
Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares of
Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock
or any other securities of the Company that are substantially similar
to Common Stock for a period of 90 days after the date hereof (the
"Lock-Up Period"), without the prior written consent of UBS, except for
(i) the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement, (ii) issuances of Common Stock upon the
exercise of options or warrants disclosed as outstanding in the
Registration Statement and the Prospectus, and (iii) the issuance of
employee stock options not exercisable during the Lock-Up Period
pursuant to stock option plans described in the Registration Statement
and the Prospectus;
19
(p) to use its best efforts to cause the Common Stock to be
listed for quotation on the National Association of Securities Dealers
Automated Quotation Small Cap Market ("NASDAQ"); and
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for all of their out-of-pocket expense incurred,
including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase
and, if applicable, at the additional time of purchase, an opinion of
Xxxx Xxxxx LLP, counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as
the case may be, in form and substance satisfactory to Xxxxxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New York, with full corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement and
the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(ii) each of the Subsidiaries has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with full corporate power and authority to own, lease and
operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus;
20
(iii) each of the Company and the Subsidiaries is
duly qualified to do business as a foreign corporation and are
in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in
the aggregate, have a Material Adverse Effect;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Shares have been duly authorized and validly
issued and are fully paid and non-assessable;
(vi) the Company has an authorized and outstanding
capitalization as set forth in the Registration Statement and
the Prospectus; all of the issued and outstanding shares of
capital stock of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and are free
of statutory preemptive rights and, to such counsel's
knowledge, contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the Shares are
free of statutory preemptive rights and, to such counsel's
knowledge, contractual preemptive rights, resale rights,
rights of first refusal and similar rights; the certificates
for the Shares are in due and proper form and the holders of
the Shares will not be subject to personal liability by reason
of being such holders;
(vii) all of the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and, except
as otherwise stated in the Registration Statement and the
Prospectus, are owned by the Company, in each case subject to
no security interest, other encumbrance or adverse claim; and
to such counsel's knowledge, no options, warrants or other
rights to purchase, agreements or other obligations to issue
or other rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are
outstanding;
(viii) the capital stock of the Company, including
the Shares, conforms to the description thereof contained in
the Registration Statement and the Prospectus;
21
(ix) (A) the Registration Statement and the
Prospectus (except as to the financial statements and
schedules and other financial data contained therein, as to
which such counsel need express no opinion) comply as to form
in all material respects with the requirements of the Act; (B)
the conditions to the use of Form S-3 have been satisfied; and
(C) the documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they
became effective or were filed with the Commission, complied
as to form in all material respects with the requirements of
the Exchange Act (except as to the financial statements and
schedules and other financial data contained therein, as to
which such counsel need express no opinion);
(x) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(xi) no approval, authorization, consent or order of
or filing with any federal, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of the
Shares and consummation by the Company of the transactions
contemplated hereby other than registration of the Shares
under the Act and the listing of the Shares on NASDAQ (except
such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of
the various jurisdictions in which the Shares are being
offered by the Underwriters);
22
(xii) the execution, delivery and performance of this
Agreement by the Company, the issuance and sale of the Shares
by the Company and the consummation by the Company of the
transactions contemplated hereby do not and will not conflict
with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice,
lapse of time or both would result in any breach or violation
of or constitute a default under) the charter or by-laws of
the Company or any of the Subsidiaries, or to such counsel's
knowledge any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be
bound or affected, or any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order
applicable to the Company or any of the Subsidiaries;
(xiii) to such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in breach or violation
of or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach or
violation of, or constitute a default under or give the holder
of any indebtedness (or a person acting on such holder's
behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness under) its
respective charter or by-laws, or any indenture, mortgage,
deed of trust, bank loan or credit agreement or other evidence
of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of
their respective properties may be bound or affected, or any
federal, state, local or foreign law, regulation or rule or
any decree, judgment or order applicable to the Company or any
of the Subsidiaries;
(xiv) to such counsel's knowledge, there are no
affiliate transactions, off-balance sheet transactions,
contracts, licenses, agreements, leases or documents of a
character which are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which have not been so
described or filed;
(xv) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending,
threatened or contemplated to which the Company or any of the
Subsidiaries or any of their respective directors or officers
is or would be a party or to which any of their respective
properties is or would be subject at law or in equity, before
or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which
are required to be described in the Registration Statement or
the Prospectus but are not so described;
23
(xvi) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act;
(xvii) the information in the Company's Annual Report
on Form 10-K for the year ended December 31, 2002 under the
headings "Business--Manufacturing," and
"Business--Collaborative Arrangements; Research and Licensing
Agreements," insofar as such statements constitute a summary
of documents or matters of law, and those statements in the
Registration Statement and the Prospectus that are
descriptions of contracts, agreements or other legal documents
or of legal proceedings, or refer to statements of law or
legal conclusions, are accurate in all material respects and
present fairly the information required to be shown; and
(xviii) no person has the right, pursuant to the
terms of any contract, agreement or other instrument described
in or filed as an exhibit to the Registration Statement or
otherwise known to such counsel, to cause the Company to
register under the Act any shares of Common Stock or shares of
any other capital stock or other equity interest of the
Company, or to include any such shares or interest in the
Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as
contemplated thereby or otherwise.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent public accountants of
the Company and representatives of the Underwriters at which the
contents of the Registration Statement and the Prospectus were
discussed and, although such counsel is not passing upon and does not
assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
(except as and to the extent stated in subparagraphs (vi), (viii) and
(xvii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at the
time of purchase or the additional time of purchase, as the case may
be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need express no belief with respect to the financial statements and
schedules and other financial data included in the Registration
Statement or the Prospectus).
24
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, the opinion of the Company's
United States patent and trademark counsel, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, in form and
substance satisfactory to Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
stating that:
(i) to such counsel's knowledge, the statements in the
Registration Statement and the Prospectus under the headings
"Prospectus Summary--About our Company--Additional development," "Risk
Factors--Risks Related to Our Business--Risks Related to Our
Operations--If we are unable to protect our intellectual property, then
our competitors may develop similar products that could render our
products obsolete" and "Risk Factors--Risks Related to Our
Business--Risks Related to Our Operations--Claims by others that we
infringe their intellectual property could be costly to us" are
accurate and complete statements or summaries of the matters therein
set forth;
(ii) to such counsel's knowledge, (A) there are no legal or
governmental proceedings pending relating to U.S. patents issued or
licensed to the Company or to trade secrets, U.S. trademarks or service
marks of the Company, (B) there are no oppositions, interferences or
public protests pending in connection with any U.S. patent or trademark
application of the Company currently on file and (C) no such
proceedings are threatened or contemplated by governmental authorities
or others;
(iii) to such counsel's knowledge, (A) the Company is not
infringing or otherwise violating any U.S. patents, trademarks or
service marks of others, and (B) there are no infringements by others
of any of the Company's U.S. patents (including, without limitation,
patents licensed by the Company), trademarks or service marks which in
such counsel's judgment could affect materially the use thereof by the
Company;
(iv) such counsel is unaware of any facts which form a basis
for a finding of unenforceability or invalidity of any of the Company's
issued U.S. patents; and
(v) such counsel is not aware of any material fact with
respect to the U.S. patent applications of the Company presently on
file and set forth on a schedule to such opinion that (A) would
preclude the issuance of patents with respect to such applications, or
(B) would lead such counsel to conclude that such patents, when issued,
would not be valid and enforceable in accordance with applicable
regulations.
(c) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you an opinion of Xxxxx, Xxxxxx &
XxXxxxxx P.C., counsel for the Company with respect to FDA matters, addressed to
the Underwriters, and dated the time of purchase or additional time of purchase,
as the case may be, in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx
LLP, counsel for the Underwriters, stating that:
25
(i) (A) the statements set forth in the Prospectus under the
heading "Risk Factors--Risks Relating to Regulatory Matters," (B) the
statements incorporated by reference in the Prospectus from the
Company's Annual Report on Form 10-K for the year ended December 31,
2002 under the headings "Business--Government Regulation" and "Other
Factors to Be Considered--Risks Relating to Regulatory Matters" and (C)
the statements incorporated by reference in the Prospectus from the
Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2003 under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Certain Risks Related to
Our Business--Risks Relating to Regulatory Matters," in each case,
insofar as such statements summarize legal matters, agreements,
documents or proceedings discussed therein, are accurate, complete and
fair; and
(ii) such counsel has reviewed the Registration Statement and
the Prospectus and any further amendments and supplements thereto made
by the Company prior to such time of delivery, and insofar as they
concern matters relating to the FDA, such counsel has no reason to
believe that either the Registration Statement or the Prospectus as
amended or supplemented or any such further amendment and supplement
thereto contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein not
misleading.
(d) You shall have received from KPMG LLP letters dated, respectively,
the date of this Agreement, the time of purchase and, if applicable, the
additional time of purchase, and addressed to the Underwriters in the forms
heretofore approved by UBS.
(e) You shall have received at the time of purchase and, if applicable,
at the additional time of purchase, the favorable opinion of Xxxxxxxx & Xxxxxxxx
LLP, counsel for the Underwriters, dated the time of purchase or the additional
time of purchase, as the case may be, with respect to the issuance and sale of
the Shares by the Company, the Registration Statement, the Prospectus (together
with any amendment or supplement thereto) and other related matters as the
Underwriters require and the Company shall have furnished to Xxxxxxxx & Xxxxxxxx
LLP such documents as they may request for the purpose of enabling them to pass
upon such matters.
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus, including documents deemed to be incorporated by
reference therein, shall have been filed to which you object in writing.
26
(g) The Registration Statement shall become effective not later than
5:30 P.M. New York City time, on the date of this Agreement and the Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) under the Act
at or before 5:30 P.M., New York City time, on the second full business day
after the date of this Agreement and any registration statement pursuant to Rule
462(b) under the Act required in connection with the offering and sale of the
Shares shall have been filed and become effective no later than 10:00 p.m., New
York City time, on the date of this Agreement.
(h) Prior to the time of purchase, and, if applicable, the additional
time of purchase, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and (iii) the Prospectus and all
amendments or supplements thereto shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole shall occur
or become known.
(j) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer in the form attached as
Exhibit B hereto.
(k) You shall have received signed Lock-up Agreements referred to in
Section 3(t) hereof.
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably request.
(m) The Shares shall have been approved for quotation on NASDAQ subject
only to notice of issuance at or prior to the time of purchase or the additional
time of purchase, as the case may be.
27
7. Effective Date of Agreement; Termination. This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS or any group of
Underwriters (which may include UBS) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (x) since the time of execution of
this Agreement or the earlier respective dates as of which information is given
in the Registration Statement and the Prospectus, there has been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole, which would,
in UBS' judgment or in the judgment of such group of Underwriters, make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus, or (y) since of execution of this Agreement, there
shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ National Market System; (ii) a suspension or material limitation
in trading in the Company's securities on the NASDAQ; (iii) a general moratorium
on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a
declaration by the United States of a national emergency or war; or (v) any
other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS' judgment or in the judgment of such
group of Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly in writing.
28
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(n), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
29
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or such Prospectus or necessary
to make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information concerning such Underwriter furnished in writing
by or on behalf of such Underwriter to the Company expressly for use in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company in Section 3 hereof or
the failure by the Company to perform when and as required any agreement or
covenant contained herein, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or visual materials
provided by the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos, films or
tape recordings used in connection with the marketing of the Shares.
30
If any action, suit or proceeding (each, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph, such
Underwriter or such person shall promptly notify the Company in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to any Underwriter or any such person or
otherwise, except to the extent the Company is materially prejudiced by such
omission in its ability to defend or otherwise participate in the Proceeding.
Such Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without its written consent but if settled
with the written consent of the Company, the Company agrees to indemnify and
hold harmless any Underwriter and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have fully reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
31
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, the Company or
any such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter to the
Company expressly for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company) or
in a Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise,
except to the extent such Underwriter is materially prejudiced by such omission
in its ability to defend or otherwise participate in the Proceeding. The Company
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Company
or such person unless the employment of such counsel shall have been authorized
in writing by such Underwriter in connection with the defense of such Proceeding
or such Underwriter shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to or in
conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may employ
counsel and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding effected
without the written consent of such Underwriter but if settled with the written
consent of such Underwriter, such Underwriter agrees to indemnify and hold
harmless the Company and any such person from and against any loss or liability
by reason of such settlement. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding.
32
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an indemnified party harmless in respect of
any losses, damages, expenses, liabilities or claims referred to therein, then
each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by such Underwriter and distributed to the public were offered to
the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
33
(e) The indemnity and contribution agreements contained in this Section
9 and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its partners, directors
or officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the Shares.
The Company and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page of the Prospectus and the statements set
forth in the second and third sentences under the caption
"Underwriting--Commissions and Discounts" the statements under the caption
"Underwriting--Price, Stabilization, Short Positions" in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters as
such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 0000 Xxxxxx
Xxxxxxx West, Building 18, Xxxxx 000, Xxxx Xxxx, XX 00000, Attention: Xxxxxxx X.
Xxxxx, M.D., Ph.D.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may
be commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against UBS or any indemnified party.
Each of UBS and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives all right
to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
34
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG,
is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this agreement and your
acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
Very truly yours,
INKINE PHARMACEUTICAL COMPANY, INC.
By:
-----------------------------------
Title:
35
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
FIRST ALBANY CAPITAL INC.
XXXXXX & XXXXXXX, INC.
By: UBS SECURITIES LLC
By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
36
Schedule A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC
FIRST ALBANY CAPITAL INC.
XXXXXX & XXXXXXX, INC.
----------
Total............... 10,000,000
==========
Schedule B
Material Leases, Contracts, Licenses and Other Agreements
Exhibit A
InKine Pharmaceutical Company, Inc.
Common Stock
($0.0001 Par Value)
[Date]
UBS Securities LLC
First Albany Capital Inc.
Xxxxxx & Xxxxxxx, Inc.
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by InKine Pharmaceutical Company, Inc. (the
"Company") and you with respect to the public offering (the "Offering") of
Common Stock, par value $0.0001 per share, of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period of 90 days after the date of
the final prospectus relating to the Offering the undersigned will not, without
the prior written consent of UBS, (i) sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters of any
Common Stock pursuant to the Offering and the Underwriting Agreement, (b) bona
fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement or (c)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Letter
Agreement.
2
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus relating to the Offering, the undersigned will not, without the prior
written consent of UBS, make any demand for, or exercise any right with respect
to, the registration of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock.
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is withdrawn
or (iii) for any reason the Underwriting Agreement shall be terminated prior to
the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Letter Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
Yours very truly,
--------------------------
Name:
Exhibit B
Officers' Certificate
Each of __________, Chief Executive Officer, and __________,
Chief Financial Officer, of InKine Pharmaceutical Company, Inc., a New York
corporation (the "Company"), pursuant to Section 6(j) of the Underwriting
Agreement, dated December __, 2003, between the Company and the several
Underwriters named therein (the "Underwriting Agreement"), hereby certifies, in
such capacity, as follows:
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in the
Underwriting Agreement are true and correct as of the time of purchase and,
if applicable, the additional time of purchase.
3. The Company has performed all of its obligations under the Underwriting
Agreement as are to be performed at or before the time of purchase and at
or before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (h) and (i) of Section 6 of the
Underwriting Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
Capitalized terms used and not defined in this certificate shall have the
meanings given to them in the Underwriting Agreement.
