Exhibit 1.1
NeoPharm, Inc.
3,000,000 Shares (1)
Common Stock
UNDERWRITING AGREEMENT
September ___, 2000
Prudential Securities Incorporated
U.S. Bancorp Xxxxx Xxxxxxx, Inc.
As Representatives of the several Underwriters
listed in Schedule I hereto
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
NeoPharm, Inc., a Delaware corporation (the "Company") and Xxxxxxx
Xxxxxx (the "Selling Securityholder"), hereby confirm their agreement with the
several underwriters named in Schedule I hereto (the "Underwriters"), for whom
you have been duly authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. SECURITIES. Subject to the terms and conditions herein contained,
the Company and the Selling Securityholder propose to issue and sell to the
several Underwriters an aggregate of 3,000,000 shares (the "Firm Securities") of
the Company's Common Stock, par value $.0002145 per share ("Common Stock"), of
which 2,800,000 shares will be issued and sold by the Company (the "Company's
Firm Securities") and 200,000 shares will be sold by the Selling Securityholder
(the "Selling Securityholder's Firm Securities"). The Company also proposes to
issue and sell to the several Underwriters not more than 450,000 additional
shares of Common Stock if requested by the Representatives as provided in
Section 3 of this Agreement. Any and all shares of Common Stock to be purchased
by the Underwriters pursuant to such option are referred to herein as the
"Option Securities," and the Firm Securities and any Option Securities are
collectively referred to herein as the "Securities."
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(1) Plus an option to purchase from NeoPharm, Inc. up to 450,000 additional
shares to cover over-allotments.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SECURITYHOLDER. The Company represents and warrants to, and agrees with, each
of the several Underwriters that:
(i) The Company meets the requirements for use of
Form S-3 under the Securities Act of 1933, as amended (the "Act").
A registration statement on such Form (File No. 333-44396) with
respect to the Securities, including a prospectus subject to
completion, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Act, and one or
more amendments to such registration statement may also have been
so filed. After the execution of this Agreement, the Company will
file with the Commission either (A) if such registration
statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, either: (1) if the
Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall
identify the Preliminary Prospectus (as hereinafter defined) that
it supplements and, if required to be filed pursuant to Rules
434(c)(2) and 424(b), an Integrated Prospectus (as hereinafter
defined), in either case, containing such information as is
required or permitted by Rules 434, 430A and 424(b) under the Act,
or (2) if the Company does not rely on Rule 434 under the Act, a
prospectus in the form most recently included in an amendment to
such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or
insertions as are required by Rule 430A under the Act or permitted
by Rule 424(b) under the Act, and in the case of either clause
(A)(1) or (A)(2) of this sentence, as have been provided to and
approved by the Representatives prior to the execution of this
Agreement, or (B) if such registration statement, as it may have
been amended, has not been declared by the Commission to be
effective under the Act, an amendment to such registration
statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The
Company may also file a related registration statement with the
Commission pursuant to Rule 462(b) under the Act for the purpose
of registering certain additional Securities, which registration
shall be effective upon filing with the Commission. As used in
this Agreement, the term "Original Registration Statement" means
the registration statement initially filed relating to the
Securities, as amended at the time when it was or is declared
effective, including (A) all financial schedules and exhibits
thereto, (B) all documents incorporated by reference therein filed
under the Securities Ex-
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change Act of 1934, as amended (the "Exchange Act") and (C) any
information omitted therefrom pursuant to Rule 430A under the Act and
included in the Prospectus (as hereinafter defined) or, if required to be
filed pursuant to Rule 434(c)(2) and 424(b), in the Integrated
Prospectus; the term "Rule 462(b) Registration Statement" means any
registration statement filed with the Commission pursuant to Rule 462(b)
under the Act (including the Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means
each prospectus subject to completion filed with such registration
statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any
amendment thereto at the time it was or is declared effective), including
all documents incorporated by reference therein filed under the Exchange
Act; the term "Prospectus" means:
(A) if the Company relies on Rule 434
under the Act, the Term Sheet relating to the
Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the
Preliminary Prospectus identified therein that such
Term Sheet supplements;
(B) if the Company does not rely on Rule
434 under the Act, the prospectus first filed with
the Commission pursuant to Rule 424(b) under the
Act; or
(C) if the Company does not rely on Rule
434 under the Act and if no prospectus is required
to be filed pursuant to Rule 424(b) under the Act,
the prospectus included in the Registration
Statement, including, in the case of clauses (A),
(B) or (C) of this sentence, all documents
incorporated by reference therein filed under the
Exchange Act;
the term "Integrated Prospectus" means a prospectus first filed
with the Commission pursuant to Rules 434(c)(2) and 424(b) under
the Act; and the term "Term Sheet" means any term sheet that
satisfies the requirements of Rule 434 under the Act. Any
reference in this Agreement to an "amendment or supplement" to any
Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or an "amendment" to any registration statement (including the
Registration
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Statement) shall be deemed to include any document incorporated by
reference therein that is filed with the Commission under the Exchange
Act after the date of such Preliminary Prospectus, Prospectus, Integrated
Prospectus or registration statement, as the case may be; any reference
herein to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment to a
registration statement shall, if such amendment is effected by means of
the filing with the Commission under the Exchange Act of a document
incorporated by reference in such registration statement, be deemed to
refer to the date on which such document was so filed with the
Commission.
(ii) The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
When any Preliminary Prospectus and any amendment or supplement
thereto was filed with the Commission, it (A) contained all
statements required to be stated therein in accordance with, and
complied in all material respects with the requirements of, the
Act, the Exchange Act and the respective rules and regulations of
the Commission promulgated thereunder, and (B) did not include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment
thereto was or is declared effective, it (A) contained or will
contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with
the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission promulgated thereunder and
(B) did not or will not include any untrue statement of a material
fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any
Term Sheet that is a part thereof or any Integrated Prospectus or
any amendment or supplement to the Prospectus is filed with the
Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or
is declared effective), on the date when the Prospectus is
otherwise amended or supplemented and on the Firm Closing Date and
any Option Closing Date (both as hereinafter defined), each of the
Prospectus, and, if required to be filed pursuant to Rules
434(c)(2) and 424(b) under the Act, the Integrated Prospectus,
each as amended or supplemented at any such time, (A) contained or
will contain all
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statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the
Act, the Exchange Act and the respective rules and regulations of the
Commission promulgated thereunder, and (B) did not or will not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (ii) do not apply to statements or
omissions made in any Preliminary Prospectus or any amendment or
supplement thereto, the Registration Statement or any amendment thereto,
the Prospectus or, if required to be filed pursuant to Rules 434(c)(2)
and 424(b) and the Act, the Integrated Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(iii) If the Company has elected to rely on Rule 462(b)
and the Rule 462(b) Registration Statement has not been declared
effective (A) the Company has filed a Rule 462(b) Registration
Statement in compliance with and that is effective upon filing
pursuant to Rule 462(b) and has received confirmation of its
receipt and (B) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the
filing of the Rule 462(b) Registration Statement, in compliance
with Rule 111 promulgated under the Act, or the Commission has
received payment of such filing fee.
(iv) The Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the state of Delaware and is duly qualified to transact
business as a foreign corporation and is in good standing under
the laws of all other jurisdictions 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 does
not amount to a material liability or disability to the Company.
The Company has no subsidiaries and does not control, directly or
indirectly, any corporation, partnership joint venture,
association or other business organization.
(v) The Company has full power (corporate and other)
to own or lease its properties and to conduct its business as
described in each of the Registration Statement, the Prospectus
and any Integrated Prospectus or, if the Prospectus or any
required Integrated Prospectus are not in existence, the most
recent Preliminary Pro-
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spectus; and the Company has full power (corporate and other) to enter
into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it hereunder.
(vi) The Company has an authorized, issued and
outstanding capitalization as set forth in each of the Prospectus
and any Integrated Prospectus or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable. None of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any person.
The shares of the issued and outstanding capital stock of the
Company have been issued in compliance with all federal and state
securities laws.
(vii) The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the
related Option Closing Date (as the case may be), after payment
therefor in accordance herewith, will be validly issued, fully
paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities,
and no holder of securities of the Company has any right (which
has not been fully exercised or waived) to require the Company to
register the offer or sale of any securities owned by such holder
under the Act in the public offering contemplated by this
Agreement.
(viii) The capital stock of the Company conforms to the
description thereof contained in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus.
(ix) Except as disclosed in each of the Prospectus and
any Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), there are no outstanding: (A) securities
or obligations of the Company convertible into or exchangeable for
any capital stock of the Company, (B) warrants, rights or options
to subscribe for or purchase from the Company any such capital
stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company to issue any shares
of capital stock,
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any such convertible or exchangeable securities or obligations, or any
such warrants, rights or options.
(x) The financial statements and schedules of the
Company included in the Registration Statement and the Prospectus
and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus) fairly present the financial
position of the Company and the results of operations and changes
in financial condition as of the dates and periods therein
specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved
(except as otherwise noted therein). The selected financial data
set forth under the caption "Prospectus Summary--Summary Financial
Data," "Capitalization" and "Selected Financial Data" in each of
the Prospectus and any Integrated Prospectus (or, if the
Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus) and "Selected
Financial Data," in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999, (the "Annual Report")
fairly present, on the basis stated in each Prospectus and any
Integrated Prospectus (or such Preliminary Prospectus) and such
Annual Report, the information included therein.
(xi) Xxxxxx Xxxxxxxx LLP, who have certified certain
financial statements of the Company and delivered their report
with respect to the audited financial statements and schedules
included in the Registration Statement and each of the Prospectus
and any Integrated Prospectus (or, if the Prospectus or any
required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus), are independent public accountants
as required by the Act, the Exchange Act and the applicable rules
and regulations promulgated thereunder.
(xii) The execution and delivery of this Agreement have
been duly authorized by the Company and this Agreement has been
duly executed and delivered by the Company, and is the valid and
binding agreement of the Company, enforceable against the Company
in accordance with its terms.
(xiii) No legal or governmental proceedings are pending
to which the Company is a party or to which the property of the
Company is subject that are required to be described in the
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Registration Statement or each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated Prospectus
are not in existence, the most recent Preliminary Prospectus) and are not
described therein, and no such proceedings have been threatened against
the Company or with respect to any of its assets, technologies or
properties; and no contract or other document is required to be described
in the Registration Statement or the Prospectus or any Integrated
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described therein (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus) or filed as required.
(xiv) The Company is not (A) in violation of any
provisions of its charter documents or by-laws, as the case may
be, or in breach of any of the terms or provisions of or in
default (or would be in default with notice or lapse of time or
both) under any indenture, mortgage, deed of trust, lease or other
agreement or instrument to which the Company is a party or by
which the Company or any of its properties are bound, which
breach, violation, default or defaults could result, individually
or in the aggregate, in a material adverse change in the condition
(financial or otherwise), management, business prospects, net
worth or results of operations of the Company (a "Material Adverse
Change"), or (B) in violation of any statute or any judgment,
decree, order, rule or regulation of any court or other
governmental authority or any arbitrator applicable to the Company
or any of its properties, assets, technologies or operations, the
violation of which could result, individually or in the aggregate,
in a Material Adverse Change.
(xv) The issuance, offering and sale of the Securities
to the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this
Agreement and the consummation of the other transactions herein
contemplated do not and will not (A) require the consent,
approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained,
such as may be required under state securities or blue sky laws
and, if the registration statement filed with respect to the
Securities (as amended) is not effective under the Act as of the
time of execution hereof, such as may be required (and shall be
obtained as provided in this Agreement) under the Act, or (B)
conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under (whether
with or without the giving of notice or
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passage of time or both), (1) any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company is a party or
by which the Company or any of its properties are bound, or the charter
documents or by-laws of the Company, or (2) any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company.
(xvi) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus
or any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus), the Company has not sustained any
material loss or interference with its business or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding and there has not been any Material
Adverse Change, or any development involving a prospective
Material Adverse Change.
(xvii) The Company has not, directly or indirectly, (A)
taken any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or
(B) since the filing of the Registration Statement (1) sold, bid
for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities, or (2) paid or agreed to pay to any
person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of the
Selling Securityholder's Firm Securities by the Selling
Securityholder under this Agreement).
(xviii) The Company has not distributed and, prior to the
later of (A) the Option Closing Date and (B) the completion of the
distribution of the Securities, will not distribute any offering
materials in connection with the offering and sale of the
Securities, other than the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or
other materials, if any permitted by the Act.
(xix) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus and any Integrated Prospectus (or, if the Prospectus or
any Integrated Prospectus are not in existence, the most recent
9
Preliminary Prospectus), (A) the Company has not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (B) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; and (C) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company,
except in each case as described in or contemplated by the Registration
Statement and the Prospectus and any Integrated Prospectus (or, if the
Prospectus or any Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus).
(xx) The Company has good and marketable title in fee
simple to all items of real property and marketable title to all
personal property owned by it, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely
affect the value of such property and do not interfere with the
use made or proposed to be made of such property by the Company
and any real property and buildings held under lease by the
Company are held under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with
the use made or proposed to be made of such property and buildings
by the Company, in each case except as described in or
contemplated by the Prospectus and any Integrated Prospectus (or,
if the Prospectus or any Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus).
(xxi) No labor dispute with the employees of the
Company exists or is threatened or imminent that could result in a
Material Adverse Change.
(xxii) The Company owns or is licensed to use all
patents, patent applications, inventions, trademarks, applications
for registration of trademarks, service marks, service xxxx
applications, trade names, copyrights, know-how, manufacturing
processes, formulae, trade secrets, licenses, proprietary or other
confidential information and rights in any thereof and any other
intangible property and assets (herein called the "Proprietary
Rights") which are employed by it in connection with its business
as now conducted and as proposed to be conducted, in each case as
described in the Registration Statement and the Prospectus and any
Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus). The
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description of the Proprietary Rights is correct and fairly and correctly
describes the Company's rights with respect thereto. The Company does
not have any knowledge of, and the Company has not given or received any
notice of, any pending conflicts with or infringement of the rights of
others with respect to any Proprietary Rights or with respect to any
license of Proprietary Rights. No adversarial action, suit, arbitration,
or legal, administrative or other proceeding, or investigation is
pending, or, to the best knowledge of the Company, threatened, which
involves any Proprietary Rights. The Company is not subject to any
judgment, order, writ, injunction or decree of any court or any federal,
state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
arbitrator, or has entered into or is a party to any contract which
restricts or impairs the use of any such Proprietary Rights in a way
which would have a material adverse effect on the Company's use of any of
the Proprietary Rights. To the best of our knowledge, no Proprietary
Rights used by the Company, and no services or products proposed to be
sold by the Company, conflict with or infringe upon any proprietary
rights available to any third party. The Company has not entered into
any consent, indemnification, forbearance to xxx or settlement agreement
with respect to Proprietary Rights. No claims have been asserted by any
person with respect to the validity of the Company's ownership or right
to use the Proprietary Rights and, to the best knowledge of the Company,
there is no reasonable basis for any such claim to be successful. The
Proprietary Rights are valid and enforceable and no registration relating
thereto has lapsed, expired or been abandoned or cancelled or is the
subject of cancellation or other adversarial proceedings, and all
applications therefore are pending and are in good standing. The Company
has complied with its contractual obligations relating to the protection
of the Proprietary Rights used pursuant to licenses. No person is
infringing on or violating the Proprietary Rights owned or used by the
Company.
(xxiii) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it
is engaged; the Company has not been refused any insurance
coverage sought or applied for; and the Company has no reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not cause a Material Adverse Change.
The officers and directors of the Company are insured by insurers
of
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recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary for officers and directors
liability insurance of a public company and as would cover claims which
could be made in connection with the issuance of the Securities; and the
Company has no reason to believe that it will not be able to renew its
existing directors and officers liability insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to cover its officers and directors.
(xxiv) The Company possesses all certificates,
authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities (including, without
limitation, the United States Food and Drug Administration (the
"FDA")) necessary to conduct its business, and the Company has not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a
Material Adverse Change.
(xxv) The Company conducts and will conduct its
operations in a manner that will not subject it to registration as
an investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the transactions
contemplated by this Agreement will not cause the Company to
become an investment company subject to registration under the
Investment Company Act.
(xxvi) The Company has filed all foreign, federal, state
and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the
failure so to file would not result in a Material Adverse Change)
and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Registration
Statement and the Prospectus and any Integrated Prospectus (or, if
the Prospectus or any Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus).
(xxvii) The Company is not in violation of any federal or
state law or regulation relating to occupational safety and health
or to the storage, handling or transportation of hazardous or
toxic materials,
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and the Company has received all permits, licenses or other approvals
required of it under applicable federal and state occupational safety and
health and environmental laws and regulations to conduct its business,
and the Company is in compliance with all terms and conditions of any
such permit, license or approval, except for any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the
aggregate, result in a Material Adverse Change.
(xxviii) The statistical and market-related data included
in the Registration Statement and the Prospectus and any
Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus) are derived from sources which the Company reasonably
and in good faith believes to be accurate, reasonable and
reliable; such data agrees in all material respects with the
sources from which they were derived, and to the best of the
Company's knowledge, such data reasonably describes the markets or
industries in which the Company conducts or proposes to conduct
its business.
(xxix) Each certificate signed by any officer of the
Company and delivered to the Representatives or counsel for the
Underwriters shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered
thereby and shall also be deemed incorporated herein its entirety
and shall be effective as if such representation and warranty were
made herein.
(xxx) The Company does not own any shares of stock or
any other equity securities of any corporation or have any equity
interest in any firm, partnership, association or other entity,
except as described in or contemplated by the Prospectus and any
Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus). The Company is not, and at the Firm Closing Date, or
at the Option Closing Date, as applicable, will not be, engaged in
any discussions or a party to any agreement or understanding,
written or oral, regarding the acquisition of an interest in any
corporation, firm, partnership, joint venture, association or
other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to
applicable securities laws.
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(xxxi) There are no holders of securities of the
Company, who, by reason of the filing of the Registration
Statement, have the right (and have not waived such right) to
request the Company to register under the Act, or to include in
the Registration Statement, securities held by them.
(xxxii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance
that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general
or specific authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxxiii) Each of (a) the license agreement between the
Company and Pharmacia & Upjohn Company (n/k/a Pharmacia
Corporation), dated as of February 19, 1999, as amended from time
to time, (b) the license agreement between the Company and
Georgetown University, dated as of April 18, 1994, as amended from
time to time, (c) the license agreement between the Company and
Georgetown University, dated as of September 29, 1999, as amended
from time to time, (d) the license agreement between the Company
and the National Institutes of Health, the Centers for Disease
Control and Prevention, or the Food and Drug Administration
(collectively, "PHS"), dated as of September 23, 1997, as amended
from time to time and (e) the license agreement between the
Company and PHS, dated as of March 1999, as amended from time to
time, has been duly authorized, executed and delivered by the
Company, is a valid and binding agreement of the Company and, to
the best knowledge of the Company, the other parties thereto, and
is currently in full force and effect in accordance with its
terms. The Company has not received any communication (whether
written or oral) relating to the termination or threatened
termination or modification or threatened modification of any
material consulting, licensing, marketing, research and
development, cooperative or any similar agreement, including,
without limitation, the agreements listed under the section of the
Prospectus and any Integrated Prospectus entitled,
"Business-Collaborative Relationships and Licenses."
14
(b) The Selling Securityholder represents and warrants to,
and agrees with, each of the several Underwriters that:
(i) The Selling Securityholder has full legal right,
power and authority, and all authorization and approval required
by law, to enter into this Agreement and to sell, assign, transfer
and deliver to the Underwriters the Selling Securityholder's Firm
Securities to be sold by the Selling Securityholder hereunder in
accordance with the terms of this Agreement.
(ii) This Agreement has been duly executed and
delivered by Selling Securityholder, and is the valid and binding
agreement of the Selling Securityholder, enforceable against the
Selling Securityholder in accordance with its terms, except (A) as
enforceability hereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and by
general equitable principles and (B) that enforcement of rights to
indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy.
(iii) The Selling Securityholder has duly executed and
delivered a power of attorney and custody agreement (with respect
to such Selling Securityholder, the "Power Attorney" and the
"Custody Agreement", respectively), each in the form heretofore
delivered to the Representatives, appointing Xxxxx X. Xxxxxx as
the Selling Securityholder's attorney-in-fact (the
"Attorney-in-Fact") with authority to execute, deliver and perform
this Agreement on behalf of such Selling Securityholder and
appointing ______________________, as custodian thereunder
(the "Custodian"). Certificates in negotiable form, endorsed in
blank or accompanied by blank stock powers duly executed, with
signatures appropriately guaranteed, representing the Securities
to be sold by the Selling Securityholder hereunder have been
deposited with the Custodian pursuant to the Custody Agreement for
the purpose of delivery pursuant to this Agreement. The Selling
Securityholder has full power to enter into the Custody Agreement
and the Power of Attorney and to perform its obligations under the
Custody Agreement. The execution and delivery of the Custody
Agreement and the Power of Attorney have been duly authorized by
all necessary action of the Selling Securityholder; the Custody
Agreement and the Power of Attorney have been duly executed and
delivered by the Selling Securityholder and, assuming due
authorization, execution and delivery by the Custodian, are the
legal, valid, binding and enforceable instruments of the Selling
15
Securityholder. The Selling Securityholder agrees that each of the
Securities represented by the certificates on deposit with the Custodian
is subject to the interests of the Underwriters hereunder, that the
arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement, to agree on the
price at which the Selling Securityholder's Firm Securities are to be
sold to the Underwriters, and to carry out the terms of this Agreement,
are to that extent irrevocable and that the obligations of the Selling
Securityholder hereunder shall not be terminated, except as provided in
this Agreement or the Custody Agreement, by any act of the Selling
Securityholder, by operation of law or otherwise, whether in the case of
the Selling Securityholder by the death or incapacity of such Selling
Securityholder or in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of
such trust or estate. If the Selling Securityholder, trustee or executor
should die or become incapacitated or any such trust should be terminated
or if any other event should occur, before the delivery of such Selling
Securityholder's Firm Securities hereunder, the certificates for such
Selling Securityholder's Firm Securities deposited with the Custodian
shall be delivered by the Custodian in accordance with the respective
terms and conditions of this Agreement as if such death, incapacity,
termination or other event had not occurred, regardless of whether or not
the Custodian or the Attorney-in-Fact shall have received notice thereof.
(iv) The Selling Securityholder is the lawful owner of
the Selling Securityholder's Firm Securities to be sold by the
Selling Securityholder hereunder and upon sale and delivery of,
and payment for such Selling Securityholder's Firm Securities, as
provided herein, the Selling Securityholder will convey good and
marketable title to such Selling Securityholder's Firm Securities,
free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(v) There are no outstanding options, warrants,
rights or other agreements or arrangements requiring such Selling
Securityholder at any time to transfer any Selling
Securityholder's Firm Securities to be sold hereunder by it.
(vi) The Selling Securityholder has not, directly or
indirectly, (A) taken any action designed to cause or result in,
or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the
16
Company to facilitate the sale or resale of the Selling Securityholder's
Firm Securities or (B) since the filing of the Registration Statement (1)
sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Selling Securityholder's Firm Securities or (2) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Selling Securityholder's Firm Securities by the Selling Securityholder
under this Agreement).
(vii) To the extent that any statements or omissions
are made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by the Selling
Securityholder specifically for use therein, such Preliminary
Prospectus did, and the Registration Statement and the Prospectus
and any Integrated Prospectus and any amendments or supplements
thereto, when they become effective or are filed with the
Commission, as the case may be, will conform in all material
respects to the requirements of the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and
will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The
Selling Securityholder has reviewed the Prospectus and any
Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus is not in existence, the most recent Preliminary
Prospectus) and the Registration Statement, and the information
regarding the Selling Securityholder set forth therein under the
caption "Principal and Selling Stockholder" is complete and
accurate.
(viii) The Registration Statement, when it became
effective, or any amendment or supplement thereto, did not contain
any 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 and any
Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus is not in existence, the most recent Preliminary
Prospectus) or any amendment or supplement thereto does not
contain any untrue statement of a material fact or omits to state
any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, except that the representations and warranties in this
Section 2(b)(viii) do not apply to statements or omissions in the
Registration Statement or the Prospectus based
17
upon any information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you for use therein.
(ix) The sale by the Selling Securityholder of the
Selling Securityholder's Firm Securities pursuant hereto is not
prompted by any adverse information concerning the Company that is
not set forth in the Registration Statement or the Prospectus or
any Integrated Prospectus (or, if the Prospectus or any Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus).
(x) The execution and delivery of this Agreement, the
sale of the Selling Securityholder's Firm Securities to the
Underwriters by the Selling Securityholder pursuant to this
Agreement, the compliance by the Selling Securityholder with the
other provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do not
(i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such
as have been obtained, such as may be required under state
securities or blue sky laws and, if the registration statement
filed with respect to the Selling Securityholder's Firm Securities
(as amended) is not effective under the Act as of the time of
execution hereof, such as may be required (and shall be obtained
as provided in this Agreement) under the Act, the Exchange Act, or
(ii) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under any
indenture, mortgage, license, deed of trust, bank loan, lease or
other agreement or instrument to which the Selling Securityholder
is a party or by which the Selling Securityholder or any of the
Selling Securityholder's properties are bound, or any statute law,
or ordinance or any judgment, decree, order, rule or regulation of
any court or other governmental authority or any arbitrator
applicable to the Selling Securityholder.
(xi) The Selling Securityholder has not distributed
and, prior to the later of (A) the Firm Closing Date and (B) the
completion of the distribution of the Selling Securityholder's
Firm Securities, will not distribute any offering materials in
connection with the offering and sale of the Selling
Securityholder's Firm Securities, other than materials, if any,
permitted by the Act.
(xii) Any certificate signed by the Selling
Securityholder and delivered to the Representatives or counsel for
the Underwriters shall be deemed a representation and warranty by
the Selling Securityholder to each Underwriter as to the matters
covered there.
18
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. (a) On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell, and the Selling Securityholder agrees to sell, to each of the
Underwriters, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company and the Selling Securityholder, at a purchase price of
$ ___ per share, the number of Firm Securities set forth opposite the name of
such Underwriter in Schedule I hereto. The Company's Firm Securities shall
consist of 2,800,000 shares of Common Stock and the Selling Securityholder's
Firm Securities shall consist of 200,000 shares of Common Stock. The number of
Firm Securities to be purchased by each Underwriter from the Company and the
Selling Securityholder shall be as nearly as practicable in the same proportion
to the total number of Firm Securities being sold by the Company and the Selling
Securityholder (with the number of shares to be sold by the Selling
Securityholder being set forth opposite such Selling Securityholder's name in
Schedule II hereto) as the total number of Firm Securities to be purchased by
such Underwriter bears to the total number of Firm Securities to be purchased by
the Underwriters hereunder. One or more certificates in definitive form for the
Firm Securities that the several Underwriters have agreed to purchase hereunder,
and in such denomination or denominations and registered in such name or names
as the Representatives request upon notice to the Company and the Selling
Securityholder at least 48 hours prior to the Firm Closing Date, shall be
delivered by or on behalf of the Company and the Selling Securityholder to the
Representatives for the respective accounts of the Underwriters, against payment
by or on behalf of the Underwriters of the purchase price therefor by wire
transfer in same-day funds (the "Wired Funds") to the account of the Company, in
the case of the Company's Firm Securities, and to the order of the Custodian, in
the case of the Selling Securityholder's Firm Securities. Such delivery of and
payment for the Firm Securities shall be made at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000-0000 at 9:30 A.M., Chicago time, on ___, 2000, or at such other place,
time or date as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and date
of delivery against payment being herein referred to as the "Firm Closing Date".
The Company will make such certificate or certificates for the Firm Securities
available for checking and packaging by the Representatives at the offices in
New York, New York of the Company's transfer agent or registrar or at the
offices of Prudential Securities Incorporated at least 24 hours prior to the
Firm Closing Date.
(b) For the purpose of covering any over-allotments in
connection with the distribution and sale of the Firm Securities as contemplated
by the Prospectus, the Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, the Option Securities. The
purchase price to be paid for any Option Securities shall be the same price per
share as the price per
19
share for the Firm Securities set forth above in paragraph (a) of this Section
3, plus if the purchase and sale of any Option Securities takes place after the
Firm Closing Date and after the Firm Securities are trading "ex-dividend," an
amount equal to the dividend payable on such Option Securities. The option
granted hereby may be exercised as to all or any part of the Option Securities
from time to time within thirty (30) days after the date of the Prospectus (or,
if such 30th day shall be a Saturday or Sunday or a holiday, on the next
business day thereafter when the New York Stock Exchange is open for trading).
The Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such option. The Representatives may from
time to time exercise the option granted hereby by giving notice in writing or
by telephone (confirmed in writing) to the Company setting forth the aggregate
number of Option Securities as to which the several Underwriters are then
exercising the option and the date and time for delivery of and payment for such
Option Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after notice of such exercise of the option and, in any
event, shall not be earlier than the Firm Closing Date. The time and date set
forth in such notice, or such other time on such other date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 9 hereof, is herein called the "Option Closing
Date" with respect to such Option Securities. Upon exercise of the option as
provided herein, the Company shall become obligated to sell to each of the
several Underwriters, and, subject to the terms and conditions herein set forth,
each of the Underwriters (severally and not jointly) shall become obligated to
purchase from the Company the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the option
as such Underwriter is obligated to purchase of the aggregate number of Firm
Securities, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares. If the option is exercised as to all or
any portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered on the
related Option Closing Date in the manner, and upon the terms and conditions,
set forth in paragraph (a) of this Section 3, except that reference therein to
the Firm Securities and the Firm Closing Date shall be deemed, for purposes of
this paragraph (b), to refer to such Option Securities and Option Closing Date,
respectively.
(c) The Company and the Selling Securityholder hereby
acknowledge that the wire transfer by or on behalf of the Underwriters of the
purchase price for any Securities does not constitute closing of a purchase and
sale of the Securities. Only execution and delivery of a receipt for the
Securities by the Underwriters indicates completion of the closing of a purchase
of the Securities from the Company and the Selling Securityholder. Furthermore,
in the event that the Underwriters wire funds to the Company and the Selling
Securityholder prior to the completion of the closing of a purchase of
Securities, the Company and the Selling
20
Securityholder hereby acknowledge that until the Underwriters execute and
deliver a receipt for the Securities, by facsimile or otherwise, the Company and
the Selling Securityholder will not be entitled to the Wired Funds and shall
return the Wired Funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of a
purchase of Securities is not completed and the Wired Funds are not returned by
the Company and the Selling Securityholder to the Underwriters on the same day
the Wired Funds were received by the Company and the Selling Securityholder,
each of the Company and the Selling Securityholder agree to pay to the
Underwriters in respect of each day the Wired Funds are not returned by it, in
same-day funds, interest on the amount of such Wired Funds in an amount
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not
as one of the Representatives, may (but shall not be obligated to) make payment
on behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall relieve
such Underwriter or Underwriters from any of its or their obligations hereunder.
4. OFFERING BY THE UNDERWRITERS. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
5. COVENANTS OF THE COMPANY AND THE SELLING SECURITYHOLDER. (a) The
Company covenants and agrees with each of the Underwriters that:
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto to become
effective as promptly as possible. If required, the Company will
file the Prospectus or any Term Sheet that constitutes a part
thereof and any Integrated Prospectus and any amendment or
supplement thereto with the Commission in the manner and within
the time period required by Rules 434 and 424(b) under the Act.
During any time when a prospectus relating to the Securities is
required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the
Exchange Act and the respective rules and regulations of the
Commission promulgated thereunder to the extent necessary to
permit the continuance of sales of or dealings in the Securities
in accordance with the provisions hereof and of each of the
Prospectus and any Integrated Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the
Prospectus, Term Sheet or the amendment referred to in the second
sentence of Section 2(a) hereof, any amendment or
21
supplement to such Prospectus, Term Sheet or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of which
the Representatives shall not previously have been advised and furnished
with a copy for a reasonable period of time prior to the proposed filing
and as to which filing the Representatives shall not have given their
consent. The Company will prepare and file with the Commission, in
accordance with the rules and regulations of the Commission, promptly
upon request by the Representatives or counsel for the Underwriters, any
amendments to the Registration Statement or amendments or supplements to
the Prospectus and any Integrated Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed
or declared effective or the Prospectus and any Integrated Prospectus or
any amendment or supplement thereto has been filed and will provide
evidence satisfactory to the Representatives of each such filing or
effectiveness.
(ii) The Company will advise the Representatives,
promptly after receiving notice or obtaining knowledge thereof, of
(i) the issuance by the Commission of any stop order suspending
the effectiveness of the Original Registration Statement or any
Rule 462(b) Registration Statement or any amendment thereto or any
order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any required Integrated
Prospectus or any amendment or supplement thereto or any order
preventing or suspending the use of any Preliminary Prospectus,
the Prospectus and any Integrated Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, (iii) the
institution, threatening or contemplation of any proceeding for
any such purpose, or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b)
Registration Statement, for amending or supplementing any
Preliminary Prospectus, the Prospectus or any Integrated
Prospectus or for additional information. The Company will use
its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal
thereof as promptly as possible.
22
(iii) The Company will arrange for the qualification of
the Securities for offering and sale under the securities or blue
sky laws of such jurisdictions as the Representatives may
designate and will continue such qualifications in effect for as
long as may be necessary to complete the distribution of the
Securities; PROVIDED, HOWEVER, that in connection therewith, the
Company shall not be required to qualify as a foreign corporation
or to execute a general consent to service of process in any
jurisdiction where it is not otherwise qualified or subject to
jurisdiction.
(iv) If, at any time prior to the later of (A) the
final date when a prospectus relating to the Securities is
required to be delivered under the Act or (B) the Option Closing
Date, any event occurs as a result of which each of the Prospectus
and any Integrated Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary
at any time to amend or supplement each of the Prospectus and any
Integrated Prospectus to comply with the Act, the Exchange Act or
the respective rules or regulations of the Commission promulgated
thereunder, the Company will promptly notify the Representatives
thereof and, subject to Section 5(a) hereof, will prepare and file
with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the
Prospectus or any Integrated Prospectus that corrects such
statement or omission or effects such compliance.
(v) The Company will, without charge, provide (A) to
the Representatives and to counsel for the Underwriters a
conformed copy of the registration statement originally filed with
respect to the Securities and each amendment thereto (in each case
including exhibits thereto) or any Rule 462(b) Registration
Statement, certified by the Secretary or an Assistant Secretary of
the Company to be true and complete copies thereof as filed with
the Commission by electronic transmission, (B) to each other
Underwriter, a conformed copy of such registration statement or
any Rule 462(b) Registration Statement and each amendment thereto
(in each case without exhibits thereto), and (C) so long as a
prospectus relating to the Securities is required to be delivered
under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any Integrated Prospectus or any amendment or
supplement thereto as the
23
Representatives may reasonably request; without limiting the application
of clause (C) of this sentence, the Company, no later than (1) 6:00 P.M.,
New York City time, on the date of determination of the public offering
price, if such determination occurred at or prior to 10:00 A.M., New York
City time, on such date or (2) 2:00 P.M., New York City time, on the
business day following the date of determination of the public offering
price, if such determination occurred after 10:00 A.M., New York City
time, on such date, will deliver to the Underwriters, without charge, as
many copies of the Prospectus and any amendment or supplement thereto as
the Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
(vi) As soon as practicable, the Company will make
generally available to its securityholders and to the
Representatives an earnings statement of the Company that
satisfies the provisions of Section 11(a) of the Act and Rule 158
thereunder.
(vii) The Company will apply the net proceeds from the
sale of the Securities as set forth under "Use of Proceeds" in the
Prospectus or any Integrated Prospectus.
(viii) The Company will obtain the agreements described
in Section 7(j) hereof prior to the Firm Closing Date.
(ix) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to
the Option Closing Date, any rumor, publication or event relating
to or affecting the Company shall occur as a result of which in
your opinion the market price of the Common Stock has been or is
likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or
amendment of the Prospectus or any Integrated Prospectus), the
Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you
concerning the substance of, and disseminate a press release or
other public statement, reasonably satisfactory to you, responding
to or commenting on such rumor, publication or event.
(x) Prior to the Option Closing Date, the Company
will issue no press release or other communications directly or
indirectly and hold no press conferences with respect to the
Company, the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company, or the
offering of the Securities,
24
without the prior consent of the Representatives unless in the judgment
of the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by law.
(xi) If the Company elects to rely on Rule 462(b), the
Company shall both file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) and pay the
applicable fees in accordance with Rule 111 promulgated under the
Act by the earlier of (A) 10:00 P.M. Eastern time on the date of
this Agreement and (B) the time confirmations are sent or given,
as specified by Rule 462(b)(2).
(xii) The Company will cause the Securities to be duly
included for quotation on the Nasdaq National Market prior to the
Firm Closing Date. The Company will ensure that the Securities
remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
(xiii) The Company will not, directly or indirectly,
without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for,
shares of Common Stock for a period of 90 days after the date
hereof, except pursuant to this Agreement, including the sale of
Option Securities, and except for issuances pursuant to the
exercise of employee stock options of the Company outstanding on
the date hereof or pursuant to the terms of convertible securities
of the Company outstanding on the date hereof, in each case
pursuant to any plans described in the Prospectus or any
Integrated Prospectus.
(xiv) The Company will not, directly or indirectly, (A)
take any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or
(B) (1) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities, or (2) pay or agree
to pay to any person any compensation for soliciting another to
purchase any other securities
25
of the Company (except for the sale of Securities by the Selling
Securityholder under this Agreement).
(a) The Selling Securityholder covenants and agrees with
each of the Underwriters that:
(i) The Selling Securityholder will not, directly or
indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of any option
to purchase or other sale or disposition) of any shares of Common
Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 90 days
after the date hereof, except (A) pursuant to this Agreement or
(B) as consented to in writing by Prudential Securities
Incorporated.
(ii) The Selling Securityholder will not, directly or
indirectly, (A) take any action designed to cause or to result in,
or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (B) (1) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities, or (2)
pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company (except
for the sale of the Selling Securityholder's Firm Securities by
the Selling Securityholder under this Agreement).
(iii) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity
and Fiscal Responsibility Act of 1982 with respect to the
transactions herein contemplated, the Selling Securityholder will
deliver to the Representatives prior to or at the Firm Closing
Date a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
6. EXPENSES.
(a) The Company and the Selling Securityholder covenant and
agree with one another and with the Underwriters that (i) the Company will pay
all costs and expenses incident to the performance of the Company's obligations
under
26
this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (a) the printing or other
production of documents with respect to the transactions, including any costs of
printing the registration statement originally filed with respect to the
Securities and any amendment thereto, any Rule 462(b) Registration Statement,
any Preliminary Prospectus, the Prospectus or any Integrated Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (b)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (c) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company, (d)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (e)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (f) the filing fees of the Commission and the National
Association of Securities Dealers, Inc. relating to the Securities, (g) any
quotation of the Securities on the Nasdaq National Market, (h) any meetings with
prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (i) advertising relating to the offering of the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters); (j) the preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees and (k) all other costs and expenses incident to
the performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this section; and (ii) such Selling Securityholder
will pay all costs and expenses incident to (x) any fees and expenses of counsel
for such Selling Securityholder, (y) the fees and expenses of the
Attorney-in-Fact and the Custodian, and (z) all expenses and taxes incident to
the sale and delivery of the Selling Securityholder's Firm Securities to be sold
by the Selling Securityholder to the Underwriters hereunder.
(b) If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company or the Selling Securityholder to perform all obligations
and satisfy all conditions on their respective parts to be performed or
satisfied hereunder other than by reason of a default by any of the
Underwriters, the Company and the Selling Securityholder will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
counsel fees and disbursements) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities in accordance
with the provisions of Section 6(a) hereof. Neither, the Company nor the
Selling Securityholder shall in any event be liable to any of the
27
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and the Selling Securityholder
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's officers and the Selling Securityholder made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Securityholder of their respective covenants and agreements hereunder and to the
following additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared effective as
of the time of execution hereof, the Original Registration Statement or such
amendment and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement, shall have been declared effective not later than
the earlier of: (i) 11:00 A.M., New York time, on the date on which the
amendment to the registration statement originally filed with respect to the
Securities or to the Registration Statement, as the case may be, containing
information regarding the initial public offering price of the Securities has
been filed with the Commission, and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been consented
to in writing by the Representatives; if required, the Prospectus or any Term
Sheet that constitutes a part thereof and any Integrated Prospectus and any
amendment or supplement thereto shall have been filed with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the Act
and in accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement, the Prospectus or any Integrated Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement, the Prospectus or any
Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Xxxxx, Xxxxxx, XxxXxx & Xxxxxxxxxx, P.C.,
counsel for the Company, to the effect that:
28
(i) the Company has been duly organized and is
validly existing as a corporation in good standing under the laws
of the state of Delaware and is duly qualified to transact
business as a foreign corporation and is in good standing under
the laws of all other jurisdictions 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 or be
in good standing does not amount to a material liability or
disability to the Company.
(ii) The Company has full power (corporate and
otherwise) and authority to own or lease its properties and
conduct its business as described in the Registration Statement
and the Prospectus or any Integrated Prospectus, and the Company
has full power (corporate and otherwise) and authority to enter
into and perform its obligations under this Agreement and to carry
out all the terms and provisions hereof and thereof to be carried
out by it.
(iii) The authorized, issued and outstanding capital
stock of the Company is as set forth in each of the Prospectus and
any Integrated Prospectus. All of the issued shares of capital
stock of the Company have been duly authorized and validly issued
and are fully paid and nonassessable. The shares of issued and
outstanding capital stock of the Company have been issued in
compliance with all applicable federal and state securities laws
and none of the outstanding shares of capital stock of the Company
were issued in violation of the preemptive rights or other similar
rights of any person. To the best of such counsel's knowledge,
except as described in the Prospectus and any Integrated
Prospectus, there are no outstanding options, warrants or other
rights to purchase, agreements to issue or other rights to convert
any obligations into shares of capital stock of the Company.
(iv) The Company's Firm Securities and the Option
Securities have been duly authorized by all necessary corporate
action on the part of the Company and, when issued and delivered
to and paid for by the Underwriters pursuant to this Agreement,
will be validly issued, fully paid and nonassessable. The
Company's Firm Securities and the Option Securities have been duly
included for trading on the Nasdaq National Market; no person is
entitled to any preemptive or similar rights in connection with
the issuance of the Company's Firm Securities and the Option
Securities; and no holder of securities of the Company is entitled
to have such securities registered under the Registration
Statement.
29
(v) (A) The statements set forth under the heading
"Description of Capital Stock" in each of the Prospectus and any
Integrated Prospectus, insofar as such statements purport to
summarize certain provisions of the capital stock of the Company,
provide a fair summary of such provisions; and (B) the statements
set forth under the headings "Risk Factors - Risks Relating to
This Offering - Future sales by existing stockholders could result
in a decrease in our stock price and make it more difficult for us
to raise funds in future equity offerings," "Business-Collaborative
Relationships and Licenses," and "Certain Relationships and Related
Transactions" in each of the Prospectus and any Integrated
Prospectus and in Item 14 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, provide a fair summary
of such legal matters, documents and proceedings.
(vi) To such counsel's knowledge, accurate copies of
all contracts and other documents required to be filed as exhibits
to, or described in, the Registration Statement have been so filed
with the Commission or are correctly described in the Registration
Statement, the Prospectus and any Integrated Prospectus, as the
case may be.
(vii) The execution and delivery of this Agreement and
the consummation by the Company of the transactions contemplated
hereby, have been duly authorized by all necessary corporate
action on the part of the Company and this Agreement has been duly
executed and delivered by the Company.
(viii) No legal or governmental proceedings are pending
to which the Company is a party or to which the property of the
Company is subject that are required to be described in the
Registration Statement, the Prospectus or any Integrated
Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been
threatened against the Company or with respect to any of its
properties.
(ix) To the best of such counsel's knowledge, the
Company possesses such certificates, authorities or permits issued
by the appropriate regulatory agencies or bodies necessary to the
conduct of the business now operated by it, and the Company has
not received any notice of proceedings relating to the revocation
of modification of any such certificate, authority or permit that,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect
the condition, financial
30
or otherwise, or the earnings, business affairs or business prospects of
the Company.
(x) The issuance, offering and sale of the Company's
Firm Securities and the Option Securities to the Underwriters by
the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not
and will not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental
authority, except such as have been obtained and such as may be
required under state securities or blue sky laws, or (B) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument,
known to such counsel, to which the Company is a party or by which
the Company or any of its properties are bound, or the charter
documents or by-laws of the Company, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company.
(xi) The Registration Statement is effective under the
Act; any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, and any Integrated Prospectus,
pursuant to Rules 434 and 424(b) has been made in the manner and
within the time period required by Rules 434 and 424(b); and no
stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order
directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any Integrated
Prospectus or any amendment or supplement thereto has been issued,
and no proceedings for that purpose have been instituted or
threatened or, to the best knowledge of such counsel, are
contemplated by the Commission.
(xii) The Registration Statement originally filed with
respect to the Securities and each amendment thereto, any Rule
462(b) Registration Statement, the Prospectus and any Integrated
Prospectus (in each case, including the documents incorporated by
reference therein but not including the financial statements and
other financial information contained therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the applicable requirements of the Act, the Exchange
Act and the respective rules and regulations of the Commission
promulgated thereunder.
31
(xiii) The Company is not an "investment company"
required to register as such under the Investment Company Act.
(xiv) If the Company elects to rely on Rule 434, the
Prospectus is not "materially different", as such term is used in
Rule 434, from the prospectus included in the Registration
Statement at the time of its effectiveness or any effective
amendment thereto (including such information that is permitted to
be omitted pursuant to Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date and the date of such opinion,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus and any
Integrated Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and public officials.
References to the Registration Statement and the Prospectus and any
Integrated Prospectus in this paragraph (b) shall include any amendment or
supplement thereto at the date of such opinion.
(c) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Leydig, Xxxx & Xxxxx, Ltd., intellectual
property counsel for the Company, to the effect that:
(i) such counsel is familiar with the technology used
by the Company in its business and the manner of its use thereof
and have read the Registration Statement and the Prospectus, and
any Integrated Prospectus, including particularly the portions of
the Registration Statement and the Prospectus, and any Integrated
Prospectus, referring to patents, trade secrets, trademarks,
service marks or other proprietary information or materials and
the information in the Prospectus or any Integrated Prospectus
under "Risk Factors--We may not be able to protect our patents and
proprietary information and the use of our technologies could
potentially conflict with the rights of others," and
"Business--Patents
32
and Proprietary Rights" to the extent that such portions constitute
matters of law, summaries of legal matters documents, proceedings, or
legal conclusions has been reviewed by them and is correct in all
material respects and fairly and correctly presents the information
called for with respect thereto.
(ii) To the best of such counsel's knowledge, there
are no pending or threatened legal or governmental proceedings,
nor allegations on the part of any person of infringement,
relating to patent rights, trade secrets, trademarks, service
marks, copyrights or other proprietary information or know-how of
the Company and, to the best of their knowledge, no such
proceedings are threatened or contemplated.
(iii) To the best of such counsel's knowledge, the
Company is not infringing or otherwise violating any patents,
trade secrets, trademarks, service marks, copyrights or other
proprietary information or know-how or valid patent claims of any
persons, and no person is infringing or otherwise violating any of
the Company's patents, trade secrets, trademarks, service marks,
copyrights or other proprietary information or know-how of the
Company.
(iv) To the best of such counsel's knowledge, the
Company owns or possesses sufficient licenses or other rights to
use all technologies covered by patents, trade secrets,
trademarks, service marks or other proprietary information or
know-how necessary to conduct the business now being or proposed
to be conducted by the Company as described in the Prospectus and
any Integrated Prospectus.
(v) The Company's United States and foreign patents
are valid and enforceable and are entitled to a statutory
presumption of validity and of ownership by the assignee. The
Company is listed in the records of the United States Patent and
Trademark Office ("PTO") as the sole assignee of record of each of
the patents listed on Schedule III hereto (herein called the
"Patents") and each of the applications listed on Schedule IV
hereto (herein called the "Applications"). To the best of such
counsel's knowledge, there are no asserted or unasserted claims of
any persons relating to the scope or ownership of any of the
Patents or the Applications, there are no liens which have been
filed against any of the Patents or the Applications, there are no
material defects of form in the preparation or filing of the
Applications, the Applications are being diligently
33
prosecuted, and none of the Applications have been finally rejected or
abandoned.
(vi) The Company is listed on the records of the PTO
or appropriate foreign patent offices as the sole assignee of
record of each of the foreign patents listed on Schedule VI hereto
(herein called the "Foreign Patents") and each of the foreign
applications listed on Schedule I hereto (herein called the
"Foreign Applications"). To the best of their knowledge, there are
no asserted or unasserted claims of any persons relating to the
scope or ownership of the Foreign Patents or the Foreign
Applications, there are no liens which have been filed against any
of the Foreign Patents or the Foreign Applications, the Foreign
Patents are valid and enforceable, there are no material defects
of form in the preparation or filing of the Foreign Applications,
the Foreign Applications are being diligently prosecuted, and none
of the Foreign Applications has been finally rejected or
abandoned.
(vii) Nothing has come to such counsel's attention that
leads such counsel to believe that any of the Applications and
Foreign Applications will not eventuate in issued patents, or that
any patents issued in respect of any such Applications or Foreign
Applications will not be valid or will not afford the Company
reasonable patent protection relative to the subject matter
thereof.
(viii) The Company is the non-exclusive licensee of the
United States and foreign patents and patent applications listed
on Schedule VII and is the exclusive licensee of the United States
and foreign patents and patent applications listed on Schedule
VIII. All such licenses are duly executed, validly binding and
enforceable in accordance with their terms and, to the best of
their knowledge, the Company is not in default (declared or
undeclared) of any material provision of any such licenses.
(ix) To the best of their knowledge, all pertinent
prior art references known to the Company or its counsel during
the prosecution of the Patents and the Applications were disclosed
to the PTO and, to the best of their knowledge, neither such
counsel nor the Company made any misrepresentation to, or
concealed any material fact from, the PTO during such prosecution.
(x) To the best of their knowledge, the Company takes
security measures adequate to assert trade secret protection in
its non-patented technology.
34
(xi) The agreements executed by the Company's
employees, consultants and other advisers respecting trade
secrets, confidentiality, or intellectual property rights are
valid, binding and enforceable in accordance with their express
terms.
Such counsel shall also state that nothing has come to their attention
that leads them to believe that, with respect to licenses, patents, trade
secrets, copyrights or other proprietary information or know-how owned or used
by the Company which are the subject of the foregoing opinions, the Registration
Statement, at the time it 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 Integrated Prospectus, as of its date or the date of the
opinion included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(d) The Representatives shall have received an opinion,
dated as of the Firm Closing Date, of ___, regulatory counsel for the Company,
to the effect that:
(i) the statements in the Registration Statement
under the captions "Risk Factors - If we are unsuccessful in
developing our products, our business, financial condition and
operating results will be adversely affected, " Risk Factors -
Risks Related to Our Business - Our business is subject to
extensive governmental regulation, which can be costly, time
consuming and subject us to unanticipated delays; even if we
obtain regulatory approval for some of our products, those
products may still face regulatory difficulties," and
"Business-Government Regulation" are accurate and complete
statements or summaries of the FDA laws and regulations therein
set forth and nothing has come to such counsel's attention that
causes them to believe that the above-referenced portions of the
Registration Statement and the Prospectus or any Integrated
Prospectus contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(ii) There are no adverse legal or governmental
proceedings pending relating to products or potential products of
the Company, or any such proceedings, to the knowledge of such
35
counsel, threatened or contemplated by governmental authorities or
others.
(e) The Selling Securityholder shall have furnished to the
Representatives the opinion of Xxxxxx Xxxxxx & Xxxxx, counsel for the Selling
Securityholder, dated the Option Closing Date, to the effect that:
(i) the Selling Securityholder has full power to
enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Selling
Securityholder's Firm Securities being sold by the Selling
Securityholder hereunder in the manner provided in this Agreement
and to perform its obligations under the Custody Agreement; this
Agreement, the Custody Agreement and the Power of Attorney have
been duly executed and delivered by the Selling Securityholder;
assuming due execution and delivery by the Custodian, the Custody
Agreement and the Power of Attorney are the legal, valid, binding
and enforceable instruments of the Selling Securityholder, subject
to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law).
(ii) The delivery by the Selling Securityholder to the
several Underwriters of certificates for the Selling
Securityholder's Firm Securities being sold hereunder by the
Selling Securityholder against payment therefor as provided
herein, will convey good and marketable title to such Securities
to the several Underwriters, free and clear of all security
interests, liens, encumbrances, equities, claims or other defects.
(iii) The sale of the Selling Securityholder's Firm
Securities to the Underwriters by the Selling Securityholder
pursuant to this Agreement, the compliance by the Selling
Securityholder with the other provisions of this Agreement, the
Custody Agreement and the consummation of the other transactions
herein contemplated do not and will not (i) require the consent,
approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and
such as may be required under state securities or blue sky laws,
or (ii) conflict with or result in a breach or violation of any of
the terms and provisions of, or constitute a default under any
indenture, mortgage, license, deed of trust, bank loan, lease or
other agreement or instrument to which the Selling Securityholder
is a party or by which the Selling
36
Securityholder or any of the Selling Securityholder's properties are
bound, or any statute, law or ordinance or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any
arbitrator applicable to the Selling Securityholder.
In rendering such opinion, such counsel may rely, as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials.
References to the Registration Statement and the Prospectus or any
Integrated Prospectus in this paragraph (e) shall include any amendment or
supplement thereto at the date of such opinion.
(f) The Representatives shall have received an opinion,
dated the Firm Closing Date, of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois),
counsel for the Underwriters, with respect to the issuance and sale of the Firm
Securities, the Registration Statement, the Prospectus and any Integrated
Prospectus, and such other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(g) The Representatives shall have received from Xxxxxx
Xxxxxxxx LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the Representatives, to
the effect that:
(i) they are independent accountants with respect to
the Company within the meaning of the Act, the Exchange Act and
the applicable rules and regulations thereunder.
(ii) In their opinion, the audited financial
statements and schedules examined by them and included in the
Registration Statement, the Prospectus and any Integrated
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act
and the related published rules and regulations promulgated
thereunder.
(iii) On the basis of a reading of the latest available
interim unaudited financial statements of the Company, carrying
out certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees
37
thereof of the Company, and inquiries of certain officials of the Company
who have responsibility for financial and accounting matters, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements
of the Company included in the Registration
Statement, the Prospectus and any Integrated
Prospectus do not comply in form in all material
respects with the applicable accounting requirements
of the Act, the Exchange Act and the related
published rules and regulations thereunder, or are
not in conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included in the Registration Statement
and the Prospectus and any Integrated Prospectus;
and
(B) at a specific date not more than
five business days prior to the date of such letter,
(1) there were any changes in the capital stock or
long-term debt of the Company or any decreases in
net current assets or stockholders' equity of the
Company, in each case compared with amounts shown on
the June 30, 2000 unaudited balance sheet included
in the Registration Statement, the Prospectus and
any Integrated Prospectus, (2) or for the period
from July 1, 2000 to such specified date there were
any decreases, as compared with the period from July
1, 1999 to the date one year before such specified
date, in sales, net revenues, net income before
income taxes or total or per share amounts of net
income of the Company, except in all instances set
forth in clauses (1) and (2) above, for changes,
decreases or increases set forth in such letter.
(iv) They have carried out certain specified
procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information that are derived
from the general accounting records of the Company and are
included in the Registration Statement, the Prospectus and any
Integrated Prospectus under the captions "Prospectus
Summary--Summary Financial Data," "Capitalization," "Selected
Financial Data," and "Management's Discussion and Analysis of
Financial Condition and
38
Results of Operations" and elsewhere in the Prospectus or any Integrated
Prospectus, in Exhibit II to the Registration Statement or under
"Available Information" item number (1) incorporated by reference in the
Registration Statement, the Prospectus and any Integrated Prospectus, and
have compared such amounts, percentages and financial information with
such records of the Company and with information derived from such
records and have found them to be in agreement, excluding any questions
of legal interpretation; and
(v) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in Statement
of Auditing Standards No. 71, Interim Financial Information, on
the unaudited financial statements included or incorporated by
reference in the Registration Statement.
In the event that the letters referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (g) with respect to either letter
referred to above shall include any amendment or supplement thereto at the date
of such letter.
(h) The Representatives shall have received a certificate,
dated the Firm Closing Date, executed by the chief executive officer and the
chief financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company
in this Agreement are true and correct as if made on and as of the
Firm Closing Date; the Registration Statement, as amended as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein not misleading, and the Prospectus and any
Integrated Prospectus, as amended or supplemented as of the Firm
Closing Date, does not include any untrue statement of a material
fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the
39
circumstances under which they were made, not misleading; and the Company
has performed all covenants and agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to the Firm Closing
Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued,
no order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or
supplement thereto has been issued, and no proceedings for that
purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission.
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement, the Prospectus
and any Integrated Prospectus, the Company has not sustained any
material loss or interference with its business or properties from
fire, flood, hurricane, accident or other calamity, whether or not
covered by insurance, or from any labor dispute or any legal or
governmental proceeding, and there has not been any Material
Adverse Change, or any development involving a prospective
Material Adverse Change.
(i) The Representatives shall have received a certificate
from the Selling Securityholder, signed by the Selling Securityholder, dated the
Firm Closing Date, to the effect that:
(i) the representations and warranties of the Selling
Securityholder in this Agreement are true and correct as if made
on and as of the Firm Closing Date.
(ii) To the extent that any statements or omissions
are made in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by the Selling
Securityholder specifically for use therein, the Registration
Statement, as amended as of the Firm Closing Date, does not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus or
any Integrated Prospectus, as amended or supplemented as of the
Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the
40
statements therein, in the light of the circumstances under which they
were made, not misleading.
(iii) The Selling Securityholder has performed all
covenants and agreements on its part to be performed or satisfied
at or prior to the Firm Closing Date.
(j) The Representatives shall have received from each person
listed in Schedule IX an agreement to the effect that such person will not,
directly or indirectly, without the prior written consent of Prudential
Securities Incorporated, on behalf of the Underwriters, offer, sell, offer to
sell, contract to sell, pledge, grant any option to purchase or otherwise sell
or dispose (or announce any offer, sale, offer of sale, contract of sale,
pledge, grant of any option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 90 days after the date
of this Agreement.
(k) On or before the Firm Closing Date, the Representatives
and counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(l) Prior to the commencement of the offering of the
Securities, the Securities shall have been included for trading on the Nasdaq
National Market.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or
41
such controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 2(a) of this Agreement;
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement
or any amendment or supplement thereto, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or the Selling Securityholder or based upon written
information furnished by or on behalf of the Company or the
Selling Securityholder filed in any jurisdiction (foreign or
domestic) in order to qualify the Securities under the securities
or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an
"Application");
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment or supplement thereto, any
Preliminary Prospectus, the Prospectus and any Integrated
Prospectus or any amendment or supplement thereto, or any
Application a material fact required to be stated therein or
necessary to make the statements therein not misleading; or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials
including, without limitation, slides, videos, films or tape
recordings, used in connection with the marketing of the
Securities, including, without limitation, statements communicated
to securities analysts employed by the Underwriters;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement or
any amendment thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, or any Application
in reliance upon and in
42
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and PROVIDED, FURTHER,
that the Company will not be liable to any Underwriter or any person controlling
such Underwriter with respect to any such untrue statement or omission made in
any Preliminary Prospectus that is corrected in the Prospectus (or any amendment
or supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or given a
copy of the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Section 5(a)(i) and (a)(iv) of
this Agreement. This Underwriting Agreement will be in addition to any
liability which the Company may otherwise have. The Company will not, without
the prior written consent of the Underwriter or Underwriters purchasing, in the
aggregate, more than fifty percent (50%) of the Securities, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action, suit or proceeding in respect of which indemnification may be sought
hereunder (whether or not any such Underwriter or any person who controls any
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) The Selling Securityholder agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made in Section 2(b) of this Agreement;
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus or any amendment or
supplement thereto or (B) any Application; or
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus and any Integrated Prospectus or any
43
amendment or supplement thereto, or any Application, a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse, as incurred, each Underwriter and
each such controlling person or any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection
with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or
action; provided, however, that the Selling Securityholder will be liable
in the case of (b) (ii) and (iii) above only to the extent that any such
loss, claim, damage or liability arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or any amendment thereto,
any Preliminary Prospectus, the Prospectus and any Integrated Prospectus
or any amendment or supplement thereto, or any Application in reliance
upon and in conformity with written information furnished to the Company
by such Selling Securityholder specifically for use therein; and
provided, further, that the Selling Securityholder will not be liable to
any Underwriter or any person controlling such Underwriter with respect
to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage
or liability purchased Securities from such Underwriter but was not sent
or given a copy of the Prospectus (as amended or supplemented), other
than the documents incorporated by reference therein, at or prior to the
written confirmation of the sale of such Securities to such person in any
case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company
with Section 5(a)(i) and (a)(iv) of this Agreement. This indemnity
agreement will be in addition to any liability which the Selling
Securityholder may otherwise have. The Company and the Selling
Securityholder may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to their respective
amounts of such liability for which they each shall be responsible. The
Selling Securityholder will not, without the prior written consent of the
Underwriter or Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder
(whether or not any such Underwriter or any person who controls any such
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange
44
Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of
all of the Underwriters and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.
(c) Each Underwriter will, severally and not jointly,
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, the Selling Securityholder and
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act against any losses, claims, damages
or liabilities to which the Company, any such director or officer of the
Company, the Selling Securityholder or any such controlling person of the
Company may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment
or supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company, any
such director, officer or controlling person or the Selling Securityholder in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party or parties under this Section 8, notify the indemnifying party or parties
of the commencement thereof; but the omission so to notify the indemnifying
party or parties will not relieve any party from any liability which they may
have to any indemnified party otherwise than under this Section 8. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party or parties of the commencement thereof, the indemnifying
party or parties will be entitled to participate therein and, to the extent that
they may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party
or parties; PROVIDED, HOWEVER, that if the
45
defendants in any such action include both the indemnified party and the
indemnifying party or parties and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party or parties, the indemnifying party or
parties shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. After notice from the indemnifying party or
parties to such indemnified party of its election so to assume the defense
thereof and approval by such indemnified party of counsel appointed to defend
such action, the indemnifying party or parties will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless: (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representatives in the case of paragraph (a) of this Section
8, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party or parties do not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party or parties have authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party or parties. After
such notice from the indemnifying party or parties to such indemnified party,
the indemnifying party or parties will not be liable for the costs and expenses
of any settlement of such action effected by such indemnified party without the
consent of the indemnifying party or parties.
(e) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 8 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect: (i) the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in
46
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Securityholder on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion (i) with respect to the Company, the total proceeds from the
offering (before deducting expenses received by the Company) and (ii) with
respect to the Selling Securityholder, the sum or the total proceeds from the
offering (before deducting expenses) received by the Selling Securityholder,
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Securityholder or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Securityholder and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations
referred to above in this paragraph (e). Notwithstanding any other provision
of this paragraph (e), no Underwriter shall be obligated to make
contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, no Selling Securityholder shall be required to contribute an
amount in excess of the total proceeds received by the Selling Securityholder
from the Underwriters for the Option Securities sold by the Selling
Securityholder hereunder, and 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
hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (e), each
person, if any, who controls an Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, shall have the same rights to contribution
as the Company.
(f) Notwithstanding the other provisions of this Section 8,
the Selling Securityholder shall not be liable for indemnification under this
Section 8 for an amount exceeding the total proceeds received by the Selling
Securityholder from
47
the Underwriters for the Selling Securityholder's Firm Securities sold by the
Selling Securityholder hereunder.
9. DEFAULT OF UNDERWRITERS. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder and
the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters
as described in this Section 9, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. SURVIVAL. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company, its officers, the
Selling Securityholder and the several Underwriters set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Selling
Securityholder, any Underwriter or any controlling person referred to in Section
8 hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and
48
other statements set forth in Sections 6 and 8 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated with respect to
the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and the Selling Securityholder given
prior to the Firm Closing Date or the related Option Closing Date, respectively,
in the event that the Company and the Selling Securityholder shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Firm Closing Date or such Option Closing Date, respectively,
(i) the Company shall have, in the sole judgment of
the Representatives, sustained any material loss or interference
with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any Material Adverse Change,
or any development involving a prospective Material Adverse Change
(including, without limitation, a change in management or control
of the Company);
(ii) trading in the Common Stock shall have been
suspended by the Commission or the Nasdaq National Market or
trading in securities generally on the New York Stock Exchange or
the Nasdaq National Market shall have been suspended or minimum or
maximum prices shall have been established on any such exchange or
market system;
(iii) a banking moratorium shall have been declared by
New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any
foreign power, (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or (C)
any other calamity or crisis or material adverse change in general
economic, political or financial conditions having an effect on
the U.S. financial markets that, in the sole judgment of the
Representatives, makes it impractical or inadvisable to proceed
with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended as of the
date hereof.
49
(b) Termination of this Agreement pursuant to this Section
11 shall be without liability of any party to any other party except as provided
in Section 10 hereof.
12. INFORMATION SUPPLIED BY UNDERWRITERS. The statements set forth in
paragraphs 1,3,7,8 and 10 under the heading "Underwriting" in any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus (to the extent such
statements relate to the Underwriters) constitute the only information furnished
by any Underwriter through the Representatives to the Company for the purposes
of Sections 2(b) and 8 hereof. The Underwriters confirm that such statements
(to such extent) are correct.
13. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxx-Xxxxxx Canfin; if sent to the Company, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to the Company at Xxxxx
X. Xxxxxx, NeoPharm, Inc., 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxx
00000; with a copy to Xxxxx, Xxxxxx, Xxxxxx & Xxxxxxxxxx, P.C., 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxxxx,
Esq.; and if sent to the Selling Securityholder, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Selling
Security holder at the foregoing address for the Company.
14. SUCCESSORS. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Securityholder and their respective successors and legal Representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company and the Selling
Securityholder contained in Section 8 of this Agreement shall also be for the
benefit of any person or persons who control any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and (ii) the
indemnities of the Underwriters contained in Section 8 of this Agreement shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
15. APPLICABLE LAW. The validity and interpretation of this
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in
50
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
16. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each of the Company and the Selling
Securityholder accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
Each of the Company and the Selling Securityholder designates and appoints ___,
and such other persons as may hereafter be selected by the Company and the
Selling Securityholder irrevocably agreeing in writing to so serve, as their
agent to receive on their behalf service of all process in any such proceedings
in any such court, such service being hereby acknowledged by the Company and the
Selling Securityholder to be effective and binding service in every respect. A
copy of any such process so served shall be mailed by registered mail to the
Company and the Selling Securityholder at the Company's address provided in
Section 13 hereof; PROVIDED, HOWEVER, that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity of
service of such process. If any agent appointed by the Company and the Selling
Securityholder refuses to accept service, the Company and the Selling
Securityholder hereby agrees that service of process sufficient for personal
jurisdiction in any action against the Company or the Selling Securityholder in
the State of New York may be made by registered or certified mail, return
receipt requested, to the Company and the Selling Securityholder at the
Company's address provided in Section 13 hereof, and the Company and the Selling
Securityholder hereby acknowledge that such service shall be effective and
binding in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law or shall limit the right of any
Underwriter to bring proceedings against the Company or any Selling
Securityholder in the courts of any other jurisdiction.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
51
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company, the Selling
Securityholder and each of the several Underwriters.
Very truly yours,
NEOPHARM, INC.
By:
-----------------------------
Xxxxx Xxxxxx
President and Chief Executive Officer
SELLING SECURITYHOLDER
By:
-----------------------------
Xxxxxxx Xxxxxx
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
PRUDENTIAL SECURITIES INCORPORATED
U.S. BANCORP XXXXX XXXXXXX, INC.
By: PRUDENTIAL SECURITIES INCORPORATED
By:
------------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
52
SCHEDULE I
UNDERWRITERS
Number of Firm
Securities to
Underwriter Be Purchased
----------- -------------
Prudential Securities Incorporated..........................
U.S. Bancorp Xxxxx Xxxxxxx, Inc.............................
[Insert names of other
Underwriters, if any,
alphabetically by bracket
or in other order
determined by Prudential
Securities Incorporated - Equity
Transactions Group]
=============
Total.......................................................
53
SCHEDULE II
NUMBER OF FIRM SECURITIES TO BE
SOLD BY SELLING SECURITYHOLDER
Name No. Of Shares
---- -------------
Xxxxxxx Xxxxxx . . . . . . . . . . 200,000
54
SCHEDULE III
PATENTS
55
SCHEDULE IV
APPLICATIONS
56
SCHEDULE V
FOREIGN PATENTS
57
SCHEDULE VI
FOREIGN APPLICATIONS
58
SCHEDULE VII
LICENSED (NON-EXCLUSIVE) PATENTS
59
SCHEDULE VIII
LICENSED (EXCLUSIVE) PATENTS
60
SCHEDULE IX
LOCK-UP AGREEMENTS
EJ Financial/NEO Management, X.X.
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxx X. Xxxxxx 1994-A Annuity Trust
Xxxx X. Xxxxxx Charitable Trust
Xxxx X. Xxxxxx, Ph.D.
Xxxxxxx Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxx, M.D.
Xxxxx X. Xxxxxx, M.D.
Xxxxx Xxxxxxx, M.D.
The 4 trusts established for
Xx. Xxxxxx'x children
61
