Exhibit 1.1
Execution Copy
Medarex, Inc.
4.50% Convertible Subordinated Notes due 2006
____________
Underwriting Agreement
----------------------
June 21, 2001
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxx Xxxxxxxx Incorporated
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Medarex, Inc., a New Jersey corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters"), an aggregate of $175,000,000
principal amount of the 4.50% Convertible Subordinated Notes due 2006,
convertible into shares of Common Stock, $0.01 par value per share ("Stock") of
the Company, specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of $26,250,000 additional aggregate principal
amount (the "Optional Securities") (the Firm Securities and the Optional
Securities which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-52696) (the
"Initial Registration Statement") in respect of the Securities and shares
of the Stock issuable upon conversion thereof has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to the Underwriters and excluding exhibits
thereto but including all documents incorporated by reference in the
Prospectus (as hereinafter defined), have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, and other
than the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement, no other document with
respect to the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed or transmitted for filing with
the Commission (other than prospectuses filed pursuant to Rule 424(b) under
the Act, each in the form heretofore delivered to you); and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement, any post-effective
amendment thereto and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto but excluding Form T-1 and including the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time such
part of the Initial Registration Statement became effective or such part of
the Rule 462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Registration
Statement"; the preliminary and final forms of prospectus and prospectus
supplement, in the forms first filed pursuant to Rule 424(b) under the Act,
relating to the Securities are hereinafter collectively called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use in the Prospectus relating to the Securities;
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be
(except that no representation is made with respect to statements that have
been modified or superseded and consequently excluded from the Registration
Statement and Prospectus pursuant to Rule 412 under the Act), conformed in
all material respects to the requirements of the Act or the
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Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents 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 or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters through Xxxxxxx, Xxxxx & Co. expressly for use in the
Prospectus relating to the Securities;
(d) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by the Underwriters expressly for use in the
Prospectus relating to the Securities; and each Preliminary Prospectus and
the Prospectus delivered to the Underwriters relating to the Securities are
identical to any electronic copies thereof filed with the Commission
pursuant to the Commission's Electronic Data Gathering and Analysis
Retrieval System (XXXXX), except to the extent permitted by Regulation S-T;
(e) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the Prospectus;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of New Jersey,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties or
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conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company has
been duly incorporated or organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; the shares of Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture referred to below, will be duly and
validly issued, fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus; and all of the issued
shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, security
interests, equities or claims;
(h) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits provided by the
subordinated indenture to be dated as of June 26, 2001 (the "Indenture"),
between the Company and Wilmington Trust Company, as Trustee (the
"Trustee"), under which they are to be issued, which will be substantially
in the form filed as an exhibit to the Registration Statement; the
Indenture has been duly authorized and duly qualified under the Trust
Indenture Act and, when executed and delivered by the Company and the
Trustee, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform in all
material respects to the descriptions thereof in the Prospectus;
(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, except for any such conflict, breach, violation or default which
would not have a material adverse effect on the business, results of
operation or financial condition of the Company and its subsidiaries, taken
as a whole (a "Material Adverse Effect"), nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-
laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except the
registration under the Act of the
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Securities and the shares of Stock issuable upon conversion thereof, such
as have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(j) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound;
(k) The statements set forth in the Prospectus under the caption
"Description of Notes", "Description of Debt Securities", "Description of
Capital Stock", insofar as they purport to constitute a summary of the
terms of the Securities and the Stock, under the caption "Certain United
States Federal Income Tax Consequences", and under the captions
"Underwriting" (other than the statements made therein in conformity with
and in reliance on written information furnished by the Underwriters
expressly for use therein), "Plan of Distribution" and "Risk Factors -- We
depend on our patents and proprietary rights" and in the Company's Annual
Report on Form 10-K for the Fiscal Year Ended December 31, 2000 under the
captions "Business - Regulatory Issues" and " -- Patents, Trademarks, Trade
Secrets and Licenses", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate, complete and
fair in all material respects;
(l) Except as set forth in the Prospectus, there are no court,
arbitration, legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the current or future
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(m) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(n) The accountants who reported on the financial statements and any
required supporting schedules thereto included or incorporated by reference
in the Registration Statement and the Prospectus, are each independent
public accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(o) The Company and its subsidiaries own or possess or can acquire on
reasonable terms adequate licenses or other rights to use the patents and
patent applications, copyrights, trademarks, service marks, trade names,
technology and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary rights) necessary in any material respect
to conduct their business in the manner described in the Prospectus
(collectively, the "Company Intellectual Property"); and except as
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice of infringement (and the
5
Company does not know of any such infringement) of asserted rights of
others with respect to the Company Intellectual Property, which would
reasonably be expected to result in any material adverse effect on the
condition, financial or otherwise, or in the earnings, business or
operations of the Company;
(p) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their business as
presently conducted, including without limitation, all such certificates,
authorizations and permits required by the United States Food and Drug
Administration (the "FDA"), the Nuclear Regulatory Commission (the "NRC")
or any other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous substances, except where the
failure to possess such certificates, authorizations and permits would not,
singly or in the aggregate, have a material adverse effect on the Company;
neither the Company nor any subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could result in
a material adverse effect on the Company; the Company and its subsidiaries
are in compliance in all material respects with all applicable federal,
state, local and foreign laws, regulations, orders and decrees governing
its business as currently conducted, including without limitation, all
regulations prescribed by the FDA, the NRC or any other federal, state or
foreign agencies or bodies engaged in the regulation of pharmaceuticals,
biohazardous substances or radioactive materials, except where
noncompliance would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries; and to the knowledge of
the Company, other than as set forth in the Prospectus, no prospective
change in any applicable federal, state, local or foreign laws, rules or
regulations has been adopted which, when made effective, would have a
material adverse effect on the Company.
(q) Each contract, agreement and license set forth in Annex II hereto
is legal, valid, binding, enforceable, and in full force and effect against
the Company or its subsidiary party thereto, as the case may be, and to the
knowledge of the Company, each other party thereto; neither the Company nor
any of its subsidiaries nor, to the Company's knowledge, any other party is
in breach or default with respect to any such contract, agreement or
license, which breach or default could reasonably be expected to have a
Material Adverse Effect, and, to the Company's knowledge, no event has
occurred which with notice or lapse of time or both would constitute a
breach or default which could reasonably be expected to have a Material
Adverse Effect, or permit the termination, material modification, or
acceleration of a material obligation, under any such contract, agreement
or license; and no party has repudiated any material provision of any such
contract, agreement or license;
(r) Except as set forth in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Securities or the
Shares registered pursuant to the Registration Statement;
(s) None of the Company or any of its subsidiaries is in violation of
any statute, or any rule, regulation, decision or order of any governmental
agency or body or any court relating to
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the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances ("Environmental Laws"), is to its knowledge
liable for any off-site disposal or contamination pursuant to any
Environmental Laws and is subject to any claim relating to any
Environmental Laws in any such case the effect of which would result in a
Material Adverse Effect; hazardous or toxic substances include (i) any
"hazardous substance" as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (ii) any
"hazardous waste" as defined by the Resource Conservation and Recovery Act,
as amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under
or within the meaning of any other Environmental Law;
(t) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds form the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including without
limitation, Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System; and
(u) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the offering of the Securities.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 97% of the principal amount thereof, the principal amount of
Firm Securities set forth opposite its name on Schedule I hereto, and (b) in the
event and to the extent that you shall exercise the election to purchase
Optional Securities as provided below, the Company agrees to issue and sell to
each of the Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the same purchase price set forth in
clause (a) of this Section 2, that portion of the aggregate principal amount of
the Optional Securities as to which such election shall have been exercised
(adjusted by you to eliminate fractions of $1,000) determined by multiplying
such aggregate principal amount of Optional Securities by a fraction, the
numerator of which is the maximum aggregate principal amount of Optional
Securities which such Underwriter is entitled to purchase as set forth opposite
the name of such Underwriter in Schedule I hereto and the denominator of which
is the maximum aggregate principal amount of Optional Securities which all of
the Underwriters are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to $26,250,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of securities in
excess of the aggregate principal amount of Firm Securities. Any such election
to purchase Optional Securities may be exercised by written notice by you to the
Company, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Securities, the
Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Xxxxxxx, Xxxxx & Co., for the account of each Underwriter against
payment by or on behalf of such Underwriter of the purchase price therefore by
wire transfer of Federal (same-day) funds to the account specified by the
Company to you at least forty-eight hours in advance, by causing DTC to credit
the Securities to the account of Xxxxxxx, Sachs & Co. at DTC. The Company will
cause the certificates representing the Securities to be made available to you
for checking at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Securities, 9:30 a.m., New York City time, on June 26, 2001, or such
other time and date as you and the Company may agree upon in writing, and, with
respect to the Optional Securities, 9:30 a.m., New York City time, on the date
specified by the Underwriters in the written notice given by Xxxxxxx, Xxxxx &
Co. of the Underwriters' election to purchase such Optional Securities, or such
other time and date as the Underwriters and the Company may agree upon in
writing. Such time and date for delivery of the Firm Securities is herein
called the "First Time of Delivery", such time and date for delivery of the
Optional Securities, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7 hereof, will be delivered at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx, New York, New York (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location at 5 p.m., New York
City time, on the New York Business Day next preceding the Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters as follows:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any supplement to
the Registration Statement or Prospectus prior to such Time of Delivery which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering
8
or sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus, of the suspension of the
qualification of the Securities or the shares of Stock issuable upon conversion
of the Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
prospectus or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus in New York
City in such quantities as the Underwriters may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the offering
or sale of the Securities and the shares of Stock issuable upon conversion of
the Securities and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify you and upon your request to
file such document and to prepare and furnish without charge to the Underwriters
and to any dealer in securities as many written and electronic copies as the
Underwriters may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
or effect such compliance; and in case the Underwriters are required to deliver
a prospectus in connection with sales of any of the Securities and the shares of
Stock issuable upon conversion of the Securities at any time nine months or more
after the time of issue of the Prospectus, upon your request but at your
expense, to prepare and deliver to the Underwriters as many written and
electronic copies as the Underwriters may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than 90 days after the close of the
period covered thereby, an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158 under the Act) and covering each twelve-month
period beginning not later than the first day of the Company's fiscal quarter
following the effective date of the Registration Statement or a post-effective
amendment thereto (within the meaning of Rule 158 under the Act);
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(e) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of this Agreement, not to directly or
indirectly offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder, any securities of the Company that are substantially similar
to the Securities or the Stock, including but not limited to any securities that
are convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities, other than pursuant
to employee stock option and purchase plans existing on, or upon the conversion
or exchange of convertible or exchangeable securities outstanding as of, the
date of this Agreement, without your prior written consent;
(f) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to (i)
deliver or make available to you as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) deliver to you such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders generally
or to the Commission);
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds";
(i) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
(k) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities;
(l) To use its best efforts to list for quotation, subject to notice of
issuance, the shares of Stock issuable upon conversion of the Securities on the
Nasdaq National Market System (the "NASDAQ"); and
(m) To cause each executive officer or director of the Company to execute
and deliver an agreement substantially to the effect set forth in Section 5(e)
hereof in form and substance satisfactory to you.
10
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities and the shares of Stock
issuable upon conversion of the Securities under the Act and all other expenses
in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing this Agreement,
the Indenture, the Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the reasonable
fees and disbursements of counsel to the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) the cost of preparing the Securities; (v) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; and (vi)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, and Sections 8
and 12 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters hereunder shall be subject, in
your discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel to the Underwriters, shall have furnished
to the Underwriters such written opinion or opinions, dated such Time of
Delivery, with respect to the Securities, Stock issuable upon conversion of the
Securities, the Indenture, this Agreement, the Registration Statement, the
Prospectus and such other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Xxxxxxxxx Xxxxxxxx Xxxxx & Xxxxx, LLP, counsel for the Company, shall
have furnished to the Underwriters their written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
11
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of New Jersey, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and the shares of Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for issuance and,
when issued and delivered in accordance with the provisions of the Securities
and the Indenture, will be duly and validly issued and fully paid and non-
assessable, and will conform to the description of the Stock contained in the
Prospectus;
(iii) The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of the Company,
provided that such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(iv) Each domestic subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable, and (except for directors' qualifying shares) are held
of record by the Company, free and clear of all liens, encumbrances, security
interests, equities or claims (such counsel being entitled to rely in respect of
the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe that both
you and they are justified in relying upon such opinions and certificates);
(v) The Company and its domestic subsidiaries have good and marketable
title in fee simple to all real property owned by them, in each case free and
clear of all liens, encumbrances, security interests and defects except such as
are described in the Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries (in giving the
opinion in this clause, such counsel may state that no examination of record
titles for the purpose of such opinion has been made, and that they are relying
upon a general review of the titles of the Company and its domestic
subsidiaries, upon opinions of local counsel and abstracts, reports and policies
of title companies rendered or issued at or subsequent to the time of
acquisition of such property by the Company or its subsidiaries, upon opinions
of counsel to the lessors of such property and, in respect of matters of fact,
upon certificates of officers of the Company or its
12
subsidiaries, provided that such counsel shall state that they believe that both
you and they are justified in relying upon such opinions, abstracts, reports,
policies and certificates);
(vi) To the best of such counsel's knowledge and other than as set forth
in the Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its domestic subsidiaries is a party or of which any
property of the Company or any of its domestic subsidiaries is the subject
which, if determined adversely to the Company or any of its domestic
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its domestic subsidiaries;
and, to the best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and delivered by
the Company;
(viii) The Securities have been duly authorized, executed, authenticated,
issued and delivered and constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture; and the Securities
and the Indenture conform to the descriptions thereof in the Prospectus;
(ix) The Indenture has been duly authorized, executed and delivered by
the parties thereto and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles; and
the Indenture has been duly qualified under the Trust Indenture Act;
(x) The issue and sale of the Securities being deliver to the
Underwriters at such Time of Delivery and the compliance by the Company with all
of the provisions of the Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
any of the Company's filings with the Commission to which the Company or any of
its domestic subsidiaries is a party or by which the Company or any of its
domestic subsidiaries is bound or to which any of the property or assets of the
Company or any of its domestic subsidiaries is subject, nor will such actions
result in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties;
(xi) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities being issued at such Time of
Delivery or the consummation by the Company of the transactions contemplated by
this Agreement or the Indenture, except such as have been obtained under the Act
and the Trust Indenture Act, such as may be required under the Act in connection
with the shares of Stock issuable upon conversion of the Securities and such
consents, orders, approvals, authorizations, registrations or qualifications as
may be required
13
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(xii) The statements set forth in the Prospectus under the caption
"Description of Notes", "Description of Debt Securities", "Description of
Capital Stock", insofar as they purport to constitute a summary of the terms of
the Securities and the Stock, under the caption "Certain Federal United States
Income Tax Consequences", and under the captions "Underwriting" and "Plan of
Distribution", insofar as they purport to describe the provisions of the laws
and documents referred to therein, are accurate, complete and fair; and
(xiii) The Company is not, and after giving effect to the offer and sale
of the Securities will not be, an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act;
Such counsel shall also state that the documents incorporated by reference
in the Prospectus or any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and although they have not undertaken to investigate or
verify independently, and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in such documents no facts
have come to such counsel's attention that would lead them to believe that any
of such documents, when such documents became effective or were so filed, as the
case may be, contained, in the case of a registration statement which became
effective under the Act, 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, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading.
Such counsel shall further state the Registration Statement and the
Prospectus and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the Act and
the Trust Indenture Act and the rules and regulations thereunder; although they
have not undertaken to investigate or verify independently, and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (xiii) of this Section 7(c), they have
no reason to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) 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, as
of its date, the Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of
14
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus or any
further amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed or of any
contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required;
(d) Xxxx Xxxxxxxxxxx, general counsel of the Company, shall have furnished
to the Underwriters his written opinion, dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that neither the Company nor
any of its subsidiaries is in violation of its Certificate of Incorporation or
By-laws;
(e) Each of Lahive & Xxxxxxxxx, LLP and Xxxxxxxx and Xxxxxxxx and Crew
LLP, outside patent counsel for the Company, shall have furnished to the
Underwriters their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Such counsel is unaware of any facts which would preclude the
Company from having clear title to any of the Company's patents and patent
applications except as described in the Prospectus. To the best of its
knowledge, such counsel and the Company have complied with the required
duty of candor and good faith in dealing with the PTO, including the duty
to disclose to the PTO all information believed to be material to the
patentability of the Company's pending U.S. patent applications. Such
counsel has no knowledge of any facts that would form the basis for a
belief that the Company lacks any rights or licenses to use all patents and
patent applications, trade secrets, trademarks, service marks, or other
proprietary information or materials necessary to conduct the business now
conducted or proposed to be conducted by the Company as described in the
Prospectus, except as described in the Prospectus. Such counsel has no
knowledge of any facts which would form a basis for a belief that any of
the patents and patent applications owned or licensed by the Company are
unenforceable or invalid, or would be unenforceable or invalid if issued as
patents, except as described in the Prospectus. Such counsel knows of no
pending or threatened action, suit, proceeding or claim by others that the
Company is infringing any patent, trade secret, trade xxxx, service xxxx,
or other proprietary information or materials which could result in any
material adverse effect on the Company, except as described in the
Prospectus;
(ii) To the knowledge of such counsel the Company is identified in the
records of the PTO as the holder of record of the U.S. patents and patent
applications listed in the Patent Schedule; the Company is similarly listed
in the records of corresponding foreign agencies with respect to the
foreign counterparts of the foregoing as listed in the Patent Schedule; and
the patents and patent applications listed in the Patent Schedule have been
assigned to the Company;
15
(iii) To the knowledge of such counsel, there are no claims of third
parties to any ownership interest or lien with respect to any of the
Company's patents or patent applications, trade secrets, trade marks,
service marks or other proprietary information or materials or for any such
patents or patent applications, trade secrets, trade marks, service marks
or other proprietary information or materials licensed by the Company from
third parties;
(iv) To the knowledge of such counsel, neither the Company nor any
of its subsidiaries is infringing or otherwise violating any valid and
enforceable patents, trade secrets, trademarks, service marks or other
proprietary information or materials, of others. To our knowledge, there
are also no infringements by others of any of the Company's patents, trade
secrets, trademarks, service marks or other proprietary information or
materials which in our judgment could affect materially the use thereof by
the Company;
(v) To the knowledge of such counsel, there are no legal or
governmental proceedings pending against the Company relating to patents,
trade secrets, trademarks, service marks or other proprietary information
or materials, other than PTO review of pending applications for patents,
including appeal and reissue proceedings, and, to the best knowledge of
such counsel, no such proceedings are threatened or contemplated by
governmental authorities or others;
(vi) To the knowledge of such counsel, there are no contracts or
other documents material to the Company's patents, trade secrets,
trademarks, service marks or other proprietary information or materials
other than those described in the Prospectus; and
(vii) Although such counsel has not verified the accuracy or
completeness of the statements contained in the sections of the Prospectus,
nothing has come to the attention of such counsel that would form a basis
for a belief that, with respect to the Prospectus under the captions "Risk
Factors -- We depend on our patents and proprietary rights" and in the
Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31,
2000 under the caption "Business -- Patents, Trademarks, Trade Secrets and
Licenses", the Registration Statement or any further amendment thereto made
by the Company prior to such Time of Delivery 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, as of its date, the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as of
such Time of Delivery, either the Registration Statement or the Prospectus
or any further amendment or supplement thereto made by the Company prior to
such Time of Delivery contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(f) Xxxxxxxxx & Xxxxxxx, special counsel for the Company, shall have
furnished to the Underwriters their written opinion, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that the
statements set forth in the Company's Annual Report on Form 10-K for the Fiscal
Year Ended December 31, 2000 under the captions "Business -- Regulatory Issues",
"Risk Factors -- We are subject to extensive and costly government regulation"
and "Risk Factors --If we or our manufacturing partners do not obtain or
maintain current good manufacturing practices, we
16
may not be able to commercialize our product candidates" summarize the
provisions of the Federal Food, Drug and Cosmetic Act, the Prescription Drug
User Fee Act and the Public Health Service Act and the rules and regulations
thereunder that are material to the Company's business and, insofar as they
purport to describe the provisions of the laws and regulations referred to
therein, are accurate, complete and fair.
(g) Skadden, Arps, Slate, Xxxxxxx & Xxxx, special tax counsel for the
Company, shall have furnished to the Underwriters their written opinion, dated
such Time of Delivery, in form and substance satisfactory to you, to the effect
that the statements set forth in the Prospectus under the heading "Certain
United States Federal Income Tax Consequences" fairly and accurately describe
the matters referred to therein.
(h) On the date of this Agreement at a time prior to the execution of this
Agreement and also at each Time of Delivery, Ernst & Young LLP, who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Underwriters a letter or letters, dated the respective dates of delivery
thereof, in form and substance reasonably satisfactory to you, to the effect set
forth in Annex I hereto and, with respect to such letter or letters dated on
each Time of Delivery, as to such other matters as you may reasonably request;
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in your judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being issued at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(j) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York State authorities; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iv) in your judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being issued at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
or (v) the occurrence of any material adverse change in the existing, financial,
political or economic conditions in the United States or elsewhere which, in
your judgment, would materially and adversely affect the financial markets or
the markets for the Securities and other debt securities or the market for or
any equity securities;
17
(k) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed for quotation, subject to notice of issuance, on NASDAQ;
(l) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
(m) The Company shall have furnished or caused to be furnished to the
Underwriters at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and (i) of
this Section and as to such other matters as you may reasonably request; and
(n) The Company shall have obtained and delivered to the Underwriters
executed copies of agreements from each executive officer or director of the
Company, substantially to the effect set forth in Section 5(m) hereof in form
and substance satisfactory to you.
8. (a) The Company will indemnify each Underwriter and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement or the Prospectus,
as amended or supplemented, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Underwriters
through Xxxxxxx, Xxxxx & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement or the Prospectus, as amended or supplemented, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Underwriters through Xxxxxxx, Sachs & Co.
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred
18
by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party 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 the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
19
pursuant to this subsection (d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Underwriters
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to the Securities and not
joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for yourself or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed period, you notify the Company that they have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for such Securities for a period of not
more than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of you may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally
been a party to this Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of the Securities, then the Company shall have the
right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase under this
Agreement and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities which
such Underwriter agreed to purchase under this Agreement) of the Securities of
such
20
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of the Securities, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Securities of a defaulting Underwriter or
Underwriters, then this Agreement shall thereupon terminate, without liability
on the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in Section
6 hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of any Underwriter, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of you or any controlling person of any Underwriter, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If for any reason other than termination pursuant to Section 9 hereof,
any Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters for all of their out-of-
pocket expenses, including reasonable fees and disbursements of counsel,
reasonably incurred by you in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under no further
liability to the Underwriters except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by the Underwriters jointly or by Xxxxxxx, Xxxxx & Co. on behalf of the
Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxxx, Sachs & Co., 00 Xxx Xxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the Company
shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
9 hereof, the officers and directors of the Company and each person who controls
the Company or any Underwriter, and their and your respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
21
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
22
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement Among
Underwriters, the form of which shall be submitted for examination to the
Company upon request, but without warranty on your part as to the authority of
the signers thereof.
Very truly yours,
Medarex, Inc.
/s/ Xxxxxx X. Xxxxxxxx
By: ......................................
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Credit Suisse First Boston Corporation
X.X. Xxxxxx Securities Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxx Xxxxxxxx Incorporated
/s/ Xxxxxxx, Sachs & Co.
By: ......................................
(Xxxxxxx, Xxxxx & Co.)
23
EXECUTION COPY
SCHEDULE I
Principal Amount of
Optional Securities
Principal Amount of to be Purchased if
Firm Securities Maximum Option
to be Purchased Exercised
------------------- ------------------
Purchaser
---------
Xxxxxxx, Sachs & Co............................................ $112,000,000 $16,800,000
Credit Suisse First Boston Corporation......................... 26,250,000 3,937,500
X.X. Xxxxxx Securities Inc..................................... 11,375,000 1,706,250
Xxxxxx Xxxxxxx & Co. Incorporated.............................. 11,375,000 1,706,250
Bear, Xxxxxxx & Co. Inc........................................ 7,000,000 1,050,000
Xxxx Xxxxxxxx Incorporated..................................... 7,000,000 1,050,000
--------------- --------------
Total................................................ $175,000,000 $26,250,000
=============== ==============
ANNEX I
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants
shall furnish letters to you to the effect that:
(i) Such accountants are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to you);
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon, copies
of which have been furnished to you; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared selected information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing
I-1
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of Items
301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations, or (ii)
any material modifications should be made to the unaudited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by
you, or any increases in any items specified by you, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the
I-2
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
you, or any increases in any items specified by you, in each case as
compared with the comparable period of the preceding year and with any
other period of corresponding length specified by you, except in each
case for increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by you which are derived from
the general accounting records of the Company and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by you or in documents incorporated by reference in the Prospectus
specified by you, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex I to the Prospectus shall be deemed to refer to
the Prospectus (including the documents incorporated by reference therein), as
defined in the Underwriting Agreement, as of the date of the letter delivered on
the date of the Underwriting Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the Securities for purposes of the letter
delivered at the Time of Delivery for such Securities.
I-3
Annex II
Cross License Agreement, effective as of March 26, 1997, among Cell
Genesys, Inc., Abgenix, Inc., Xenotech, L.P., Japan Tobacco, Inc. and
GenPharm International, Inc.
Evaluation and Commercialization Agreement dated as of February 25, 1999
among Medarex, Inc., GenPharm International, Inc. and GenMab.
Collaboration Agreement dated as of June 1, 2000 among Medarex, Inc. and
Biosite Diagnostics, Inc., (as amended).
II-1
