EXHIBIT 1.1
Salix Pharmaceuticals, Ltd.
4,000,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
___________ __, 2002
UNDERWRITING AGREEMENT
________ __, 2002
UBS Warburg LLC
Wachovia Securities
Xxxxxx Xxxxxx Partners LLC
Leerink Xxxxx & Company
SunTrust Xxxxxxxx Xxxxxxxx
As Representatives of the several Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Salix Pharmaceuticals, Ltd. a Delaware corporation (the "Company"),
proposes to issue and sell to the Underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of 4,000,000 shares of Common Stock,
$0.001 par value per share (the "Common Stock"), of the Company (the "Firm
Shares"). In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the
Company up to an additional 600,000 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the Shares. The Shares are described in the Prospectus
which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-82558),
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, that registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act, and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the "Registration Statement," and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the "Prospectus." Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the documents incorporated by reference
therein pursuant to Form S-3 (the "Incorporated Documents") and (ii) the copy of
the Registration Statement,
Preliminary Prospectus or Prospectus or Incorporated Documents filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX"). Any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act") after the
effective date of the Registration Statement, or the Prospectus, as the case may
be, deemed to be incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
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warranties and subject to the terms and conditions herein set forth, the Company
agrees to sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the respective
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A annexed hereto, in each case at a purchase price of $____ per Share.
The Company is advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Firm Shares as soon after the
effective date of the Registration Statement as in your judgment is advisable
and (ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. You may from time to time increase or decrease the public offering
price after the initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the
option to purchase, and upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company all or a
portion of the Additional Shares as may be necessary to cover over-allotments
made in connection with the offering of the Firm Shares, at the same purchase
price per share to be paid by the Underwriters for the Firm Shares. This option
may be exercised by you on behalf of the several Underwriters at any time and
from time to time on or before the 30th day following the date hereof by written
notice to the Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "additional time of purchase"); provided, however,
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that the additional time of purchase shall not be earlier than the time of
purchase (as defined below) nor earlier than the second business day after the
date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised. The
number of Additional Shares to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine solely to
eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the Firm
--------------------
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on __________ __, 2002 (unless another time shall be agreed to by
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you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are actually made
is hereinafter called the "time of purchase." Electronic transfer of the Firm
Shares shall be made to you at the time of purchase in such names and in such
denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Shares shall be made at the offices of Xxxxx Xxxxxxxxxx
LLP, 1301 Avenue of the Americas, New York, New York at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
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represents and warrants to each of the Underwriters that:
(a) The Company has not received nor has notice of any order of the
Commission preventing or suspending the use of any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act; and when the Registration
Statement becomes effective, the Registration Statement and the Prospectus
will conform in all material respects with the provisions of the Act, and
the Registration Statement 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, and the
Prospectus 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, in light of the circumstances under which they were
made, not misleading, provided, however, that the Company makes no
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representation or warranty with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity
with information concerning the Underwriters and furnished in writing by or
on behalf of any Underwriter through you to the Company expressly for use
in the Registration Statement or the Prospectus; and neither the Company
nor any of its affiliates has distributed any offering material in
connection with the offer or sale of the Shares other than the Registration
Statement, the Preliminary Prospectus, the Prospectus or any other
materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company's capitalization is
as set forth under the heading entitled "Actual" in the section of the
Registration Statement and the Prospectus entitled "Capitalization" and, as
of the time of purchase and the additional time of purchase, as the case
may be, the Company's capitalization shall be as set forth under the
heading entitled "As Adjusted" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" (subject, in each case, to the
issuance of shares of Common Stock upon exercise of stock options and
warrants disclosed as outstanding in the Registration Statement and the
Prospectus and grant of options under existing plans);
the number of shares of capital stock disclosed in the Registration
Statement and the Prospectus as being issued and outstanding as of December
31, 2001 and February 8, 2001 is accurate as of such dates; all of the
issued and outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with the requisite corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to so qualify could
not individually or in the aggregate reasonably be expected to have a
material adverse effect on the business, operations, prospects, properties,
condition (financial or otherwise) or results of operation of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole or on the
ability of the Company to consummate the transactions contemplated hereby
(a "Material Adverse Effect"). The Company has no subsidiaries (as defined
in the Act) other than as listed in Schedule B annexed hereto (the
"Subsidiaries"); except as described in the Registration Statement and the
Prospectus, the Company owns 100% of the outstanding capital stock of the
Subsidiaries; except for the Subsidiaries or as described in the
Registration Statement and the Prospectus, the Company does not own,
directly or indirectly, any long-term debt or any equity interest in any
firm, corporation, partnership, joint venture, association or other entity;
complete and correct copies of the charter and bylaws or other organization
documents of the Company and each of the Subsidiaries and all amendments
thereto have been made available to you; each of the Subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with the requisite
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus; each of the Subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
ownership or leasing of the properties or the conduct of its business
requires such qualification, except where the failure to so qualify could
not individually or in the aggregate reasonably be expected to have a
Material Adverse Effect; all of the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance with all
applicable securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or similar right;
(e) neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach or violation of,
or constitute a default under) (each such breach, violation, default or
event, a "Default Event"), (i) its charter, bylaws or other
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organizational documents, (ii) any obligation, agreement, covenant or
condition contained in any license, permit, indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which
any of them or any of their properties is bound or affected, (iii) any
federal, state, local or foreign law, regulation or rule or (iv) any
decree, judgment or order applicable to the Company, any of the
Subsidiaries or any of their respective properties, other than, in the
case of clauses (ii) or (iii), such Default Events as could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and the execution, delivery and performance
of this Agreement, including the issuance and sale of the Shares and
the consummation of the other transactions contemplated hereby, does
not constitute and will not result in a Default Event under (w) any
provisions of the charter, bylaws or other organizational documents of
the Company or any of the Subsidiaries, (x) under any provision of any
license, permit, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any
of the Subsidiaries or by which any of them or their respective
properties may be bound or affected, (y) under any federal, state,
local or foreign law, regulation or rule or (z) under any decree,
judgment or order applicable to the Company, any of the Subsidiaries
or any of their respective properties, except, in the case of clause
(x) for such Default Events as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(f) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
of the Company;
(g) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
in the Registration Statement and the Prospectus;
(h) the Shares have been duly and validly authorized by the
Company and, when issued and delivered by the Company against payment
therefor as provided herein, will be validly issued, fully paid and
non-assessable;
(i) no approval, authorization, consent or order of or filing
with any national, state, local or other governmental or regulatory
commission, board, body, authority or agency is required to be
obtained or made by the Company or any of the Subsidiaries in
connection with the issuance and sale of the Shares or the
consummation by the Company of the other transactions contemplated
hereby, other than registration of the offer and sale of the Shares
under the Act, which has been or will be effected, any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the
Underwriters, approval of the fairness of the underwriting
compensation by NASDR and listing of the Shares on the Nasdaq National
Market ("NASDAQ");
(j) except as set forth in the Registration Statement and the
Prospectus (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it
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any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no
person has the right to act as an underwriter, or as a financial
advisor to the Company, in connection with the offer and sale of the
Shares, in the case of each of the foregoing clauses (i), (ii) and
(iii), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated
thereby or otherwise; no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares
of Common Stock or shares of any other capital stock or other equity
interests of the Company, or to include any such shares or interests
in the Registration Statement or the offering contemplated thereby
whether as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise, except for such rights as have been complied with or
waived;
(k) Ernst & Young LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is filed with
the Commission as part of the Registration Statement and the
Prospectus, are independent public accountants as required by the Act;
(l) the Company and each of the Subsidiaries has all necessary
licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule (collectively, "Permits"), and has
obtained all necessary authorizations, consents and approvals from
other persons (collectively, "Approvals"), in order to conduct its
business as described in the Registration Statement and the
Prospectus, other than such Permits and Approvals the failure of which
to obtain could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; neither the Company nor
any of the Subsidiaries is in violation of, or in default under, any
such Permit or Approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries the effect of which could,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(m) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or any Incorporated Documents or to be
filed as an exhibit to the Registration Statement or any Incorporated
Documents have been so described or filed as required;
(n) except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company or any of the
Subsidiaries or any of their respective directors or officers is a
party or of which any of their respective properties is subject at law
or in equity, or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or
agency which, if adversely decided, could individually or in the
aggregate reasonably be expected to result in a judgment, decree or
order having a
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Material Adverse Effect or prevent consummation of the transactions
contemplated hereby;
(o) the financial statements, together with the related
schedules and notes, included in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiaries for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data
set forth in the Registration Statement and the Prospectus are
accurately presented and prepared on a basis consistent with such
financial statements and books and records of the Company; and there
are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement and the
Prospectus that are not included as required;
(p) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, operations,
properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries taken as a whole, (ii)
any transaction which is material to the Company and the Subsidiaries
taken as a whole, (iii) any obligation, direct or contingent, which is
material to the Company and the Subsidiaries taken as a whole,
incurred by the Company or any of the Subsidiaries, (iv) any change in
the capital stock or outstanding indebtedness of the Company or any of
the Subsidiaries (other than pursuant to the exercise of stock options
or warrants described in the Registration Statement and the Prospectus
as outstanding or the grant of stock options under stock option plans
described in the Registration Statement and the Prospectus) or (v) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company; neither the Company nor any of the
Subsidiaries has any material contingent obligation which is not
disclosed in the Registration Statement and the Prospectus;
(q) the Company has obtained for the benefit of the Underwriters
the agreement (a "Lock-Up Agreement"), in the form set forth as
Exhibit A hereto, of each of its officers and directors; and the
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Company will not release or purport to release any person from any
Lock-Up Agreement without the prior written consent of UBS Warburg
LLC;
(r) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) any statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the
extent required;
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(t) neither the Company nor any of the Subsidiaries nor any of
their respective affiliates has taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise,
in the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares;
(u) the Incorporated Documents, when they were filed with the
Commission, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents, when they were filed
with the Commission, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement and/or the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, as applicable, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading;
(v) the Company and each of the Subsidiaries maintain insurance
of the types and in amounts reasonably adequate for their respective
businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and each of the
Subsidiaries against theft, damage, destruction, acts of vandalism and
other risks customarily insured against, all of which insurance is in
full force and effect;
(w) neither the Company nor any of the Subsidiaries has
sustained since the date of the latest financial statements included
in the Prospectus any losses or interferences 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
Registration Statement and the Prospectus or other than any losses or
interferences which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(x) the Company and each of the Subsidiaries have good title to
all real and personal property owned by them as described in the
Registration Statement and the Prospectus, free and clear of all
liens, encumbrances and defects except such as are described in the
Registration Statement and the Prospectus or such as could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; except as described in the Registration
Statement and the Prospectus, any real property and buildings held
under lease by the Company or any of the Subsidiaries are held by it
under valid, subsisting and enforceable leases with such exceptions as
do not materially interfere with the use made and proposed to be made
of such property and buildings by the Company or any of the
Subsidiaries, as the case may be;
(y) neither the Company nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants, nor any
federal or state law relating to discrimination in the hiring,
8
promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement
Income Security Act or the rules and regulations promulgated
thereunder, which could, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect;
(z) the Company and each of the Subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences;
(aa) all tax returns required to be filed by the Company and each
of the Subsidiaries have been filed, other than those filings being
contested in good faith, and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due
pursuant to such returns or pursuant to any assessment received by the
Company or any of the Subsidiaries have been paid, other than those
being contested in good faith and for which adequate reserves have
been provided;
(bb) other than as set forth in the Registration Statement and
the Prospectus, or as could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect, the Company
and the Subsidiaries own, possess, license or have other rights to
use, all patents, trademarks, servicemarks, trade names, copyrights,
trade secrets, information, proprietary rights and processes
("Intellectual Property") necessary for their business as described in
the Registration Statement and the Prospectus and necessary in
connection with the commercialization of the existing products of the
Company and the Subsidiaries and the products described in the
Prospectus as being under development, without any conflict with or
infringement of the rights of others, and the Company and the
Subsidiaries have taken all reasonable steps necessary to secure
interests in such Intellectual Property; except as described in the
Registration Statement and the Prospectus, the Company is not aware of
any options, licenses or agreements of any kind relating to the
Intellectual Property of the Company or the Subsidiaries that are
outstanding and required to be described in the Registration Statement
and the Prospectus, and, except as described in the Registration
Statement and the Prospectus, neither the Company nor either of the
Subsidiaries is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other
person or entity required to be described in the Registration
Statement and the Prospectus; none of the technology employed by the
Company and the Subsidiaries has been obtained or is used or proposed
to be used by the Company or the Subsidiaries in violation of any
contractual obligation binding on the Company or the Subsidiaries or
any of their respective directors or executive officers or, to the
Company's knowledge, any employees of the Company or the Subsidiaries
or otherwise in violation of the rights of any persons, other than any
violation which could not individually or in the aggregate reasonably
be expected to have a Material Adverse Effect; except as described in
the Registration
9
Statement and the Prospectus, to the Company's knowledge neither the
Company nor either of the Subsidiaries has violated, infringed or
conflicted with, or, by conducting its business as described in the
Registration Statement and the Prospectus and commercializing the
products under development described therein, would violate, infringe
or conflict with any of the Intellectual Property of any other person
or entity other than any such violation, infringement or conflict
which could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect;
(cc) the clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company or any
Subsidiary or in which the Company, any Subsidiary or its products or
product candidates have participated that are described in the
Prospectus or the results of which are referred to in the Prospectus
were and, if still pending, are being conducted in accordance with
standard medical and scientific research procedures; the descriptions
in the Prospectus of the results of such studies and tests are
accurate and complete in all material respects and fairly present the
data derived from such studies and tests, and the Company and each
Subsidiary has no knowledge of any other studies or tests the results
of which are inconsistent with or otherwise call into question the
results described or referred to in the Prospectus; except to the
extent disclosed in the Registration Statement and the Prospectus, the
Company and each Subsidiary has operated and currently is in
compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and
comparable drug regulatory agencies outside of the United States
(collectively, the "Regulatory Authorities"); and except to the extent
disclosed in the Registration Statement and the Prospectus, the
Company has not received any notices or other correspondence from the
Regulatory Authorities or any other governmental agency requiring the
termination, suspension or modification of any clinical or
pre-clinical studies or tests that are described in the Prospectus or
the results of which are referred to in the Prospectus; and
(dd) neither the Company nor any of the Subsidiaries has sent or
received any notice of termination of any of the contracts or
agreements referred to or described in, or filed as an exhibit to, the
Registration Statement or any Incorporated Documents, and no such
termination has been threatened by the Company or any of the
Subsidiaries or any other party to any such contract or agreement.
4. Certain Covenants of the Company. The Company hereby agrees:
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(a) to furnish such information as reasonably required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
reasonably required for the distribution of the Shares; provided that
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the Company shall not be required to qualify as a foreign corporation
or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale
of the Shares); and to promptly advise you of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose;
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(b) to make available to the Underwriters in New York City,
as soon as practicable after the Registration Statement becomes
effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have
made any amendments or supplements thereto after the effective
date of the Registration Statement) as the Underwriters
reasonably request for the purposes contemplated by the Act; in
case any Underwriter is required to deliver a prospectus after
the nine-month period referred to in Section 10(a)(3) of the Act
in connection with the sale of the Shares, the Company will
prepare promptly upon request of such amendment or amendments to
the Registration Statement and such prospectuses as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration
Statement has become effective and when any post-effective
amendment thereto becomes effective and (ii) if Rule 430A under
the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees
to file in a timely manner under such Rules);
(d) to advise you promptly, confirming such advice in
writing (if requested by you), of any request by the Commission
for amendments or supplements to the Registration Statement or
the Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for, or the
entry of a stop order suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement,
to make every reasonable effort to obtain the lifting or removal
of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or
Prospectus and to file no such amendment or supplement to which
you shall object in writing;
(e) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(f) to make available to you and, upon request, to each of
the other Underwriters for a period of three years from the date
of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders
or shall from time to time publish or publicly disseminate, (ii)
copies of all annual, quarterly and current reports filed with
the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
forms, as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange
on which any class of securities of the Company is listed, and
(iv) such other information as you reasonably request regarding
the Company or any of the Subsidiaries, in each case as soon as
reasonably practicable after such reports, communications,
documents or information become available;
(g) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered
under the Act which would require the making of any change in
11
the Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading, and,
during such time, to prepare and furnish, at the Company's expense, to
the Underwriters promptly such amendments or supplements to such
Prospectus necessary to reflect any such change and to furnish you a
copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) of the Act) and
ending not later than 15 months thereafter;
(i) to furnish to you six conformed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
additional conformed copies (other than exhibits) for distribution of
a copy to each of the other Underwriters;
(j) to furnish to you as early as reasonably practicable prior
to the time of purchase and the additional time of purchase, as the
case may be, but not later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have
been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 6(e)
hereof;
(k) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the
Prospectus;
(l) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and any amendments or
supplements thereto, and the printing and furnishing of copies of each
thereof to the Underwriters and to dealers (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the
Shares, (iii) the printing of this Agreement, any Agreement Among
Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof
to the Underwriters and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as
aforesaid (including associated filing fees and the reasonable legal
fees and disbursements of counsel for the Underwriters) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing
of the Shares on any securities exchange or qualification of the
Shares for quotation on NASDAQ and any registration thereof under the
Exchange Act, (vi) review of the public offering of the Shares by NASD
Regulation, Inc. (including associated filing fees and the reasonable
legal fees and disbursements of counsel for the Underwriters), (vii)
the costs and
12
expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offer and sale of
the Shares to prospective investors and the Representatives' sales
forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the
Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show and (viii) the performance
of the other obligations of the Company hereunder;
(m) for so long as the delivery of the Prospectus is required in
connection with the offer or sale of the Shares, to furnish to you a
reasonable period of time before filing with the Commission, a copy of
any document proposed to be filed pursuant to Section 13, 14 or 15(d)
of the Exchange Act and to not make any filing to which you reasonably
object;
(n) to not take, directly or indirectly, any action designed to
or which may constitute or which might reasonably be expected to cause
or result, under the Exchange Act or otherwise, in the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(o) not to sell, offer or agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any such
securities or any other securities of the Company that are
substantially similar to Common Stock, or file or cause to be declared
effective a registration statement under the Act relating to the offer
and sale of any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock or other rights to
purchase Common Stock or any other securities of the Company that are
substantially similar to Common Stock, for a period of 90 days after
the date hereof (the "Lock-up Period"), without the prior written
consent of UBS Warburg LLC, except for (i) the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement,
(ii) issuances of Common Stock upon the exercise of options or
warrants disclosed as outstanding in the Registration Statement and
the Prospectus and (iii) the issuance of employee stock options not
exercisable during the Lock-up Period pursuant to stock option plans
described in the Registration Statement and the Prospectus; and
(p) subject to Section 4(m) hereof, to file promptly all reports
and any definitive proxy or information statement required to be filed
by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares, and to promptly notify you of such
filing.
5. Reimbursement of Underwriters' Expenses. If the Shares are
---------------------------------------
not delivered for any reason other than the termination of this Agreement
pursuant to the last paragraph of Section 8 hereof or the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company agrees, in addition to paying the amounts described in
13
Section 4(l) hereof, to reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of their
counsel.
6. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be),
the performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) You shall have received, at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxx
Xxxxxxx Xxxxx & Xxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to Xxxxx Xxxxxxxxxx LLP,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation with the corporate power and
authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement;
(iii) the Company and the Subsidiaries are duly qualified to do
business as a foreign corporation and are in good standing in each
jurisdiction in which such qualification is necessary, except where
the failure to so qualify could not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be duly and
validly issued and will be fully paid and non-assessable;
(vi) the Company has authorized and outstanding (as of the dates
indicated) shares of capital stock as set forth in the Registration
Statement and the Prospectus; the outstanding shares of capital stock
of the Company (A) have been duly and validly authorized and issued
and are fully paid and non-assessable, (B)
14
are free of preemptive rights, resale rights, rights of first
refusal and similar rights under the Delaware General
Corporation Law (the "DGCL") or the charter or bylaws or other
organizational documents of the Company or any contract,
commitment or instrument described in or filed as an exhibit
to the Registration Statement or any Incorporated Documents or
otherwise known to such counsel and (C) to such counsel's
knowledge, were issued in compliance with all applicable
federal and state securities laws; the Shares, when issued,
will be free of preemptive or similar rights under the DGCL or
any contract, commitment or instrument described in or filed
as an exhibit to the Registration Statement or any
Incorporated Documents or otherwise known to such counsel; the
holders of the Shares will not be subject to personal
liability by reason of being such holders; and the
certificates for the Shares are in due and proper form and
conform to the requirements of the DGCL and, NASDAQ;
(vii) all of the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable, are owned
of record by the Company, are not subject to any perfected
security interest or, to such counsel's knowledge, any other
encumbrance or adverse claim and, to such counsel's knowledge,
have been issued and sold in compliance with all applicable
federal and state securities laws; to such counsel's
knowledge, no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or
ownership interests in any of the Subsidiaries are
outstanding;
(viii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and
Prospectus;
(ix) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial and statistical data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(x) the Registration Statement has become effective
under the Act, and to such counsel's knowledge no stop order
with respect to the effectiveness thereof has been issued and
no stop order proceedings with respect thereto are pending or
threatened under the Act; and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424
under the Act has been made in the manner and within the time
period required by such Rule 424;
(xi) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the execution and delivery of this
Agreement and the issuance and sale of the Shares and
consummation of the other transactions contemplated hereby
other than those that have been obtained under the Act, the
Exchange Act and the rules of NASDAQ and other than any
necessary qualification under the state securities or blue sky
laws of the various
15
jurisdictions in which the Shares are being offered by the
Underwriters or any necessary approval of the Corporate
Financing Department of NASD Regulation, Inc., as to which
such qualification and approval such counsel need express no
opinion;
(xii) the execution, delivery and performance of this
Agreement by the Company, including the consummation of the
transactions contemplated hereby and by the Registration
Statement, do not constitute, and will not result in, a
Default Event pursuant to (A) any provision of the charter or
bylaws or other organizational documents of the Company or any
of the Subsidiaries, (B) any provision of any license, permit,
franchise, authorization, indenture, mortgage, deed of trust,
note, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument filed as an exhibit to the Registration Statement
or any Incorporated Documents and issued to the Company or any
of the Subsidiaries, or to which the Company or any of the
Subsidiaries is a party or by which any of them may be bound
or affected, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject or may be bound
or affected, (C) any applicable federal, state or local law,
regulation or rule or (D) any decree, judgment or order known
by such counsel to be applicable to the Company or any of the
Subsidiaries other than, in the case of clauses (B) or (C)
such Default Events as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect;
(xiii) to such counsel's knowledge, (A) neither the
Company nor any of the Subsidiaries is in violation of its
charter or bylaws or other organizational documents and (B) no
Default Event exists under any license, permit, franchise,
authorization, indenture, mortgage, deed of trust, note, bank
loan or credit agreement or other evidence of indebtedness, or
any lease, contract or other agreement or instrument filed as
an exhibit to the Registration Statement or any Incorporated
Document to which the Company or any of the Subsidiaries is or
was a party or by which it or its properties may be bound or
affected, other than such Default Events as could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, and (C) neither the Company
nor any of the Subsidiaries is in violation of any federal,
state or local law, regulation or rule or any decree, judgment
or order applicable to the Company or any of the Subsidiaries;
(xiv) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Prospectus which have not been so filed, summarized or
described;
(xv) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending
or threatened to which the Company or any of the Subsidiaries
is subject or of which any of their respective properties is
subject, whether at law, in equity or before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency,
16
which are required to be described in the Prospectus but are
not so described as required;
(xvi) the Incorporated Documents complied as to
form, at the time such documents were filed with the
Commission, with the requirements of the Exchange Act;
(xvii) the Company is not and, after giving effect to
the offer and sale of the Shares, will not be an "investment
company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act;
(xviii) those statements in the Registration Statement
and the Prospectus that are descriptions of contracts,
agreements or other legal documents or of legal proceedings,
or refer to statements of law or legal conclusions, excluding
those covered by the opinion delivered pursuant to clause
(b)(i) herein, are accurate in all material respects and
present fairly the information required to be shown;
(xix) no person has the right, pursuant to the terms
of any contract, agreement or other instrument described in or
filed as an exhibit to the Registration Statement or any
Incorporated Documents to have any securities issued by the
Company and owned by them registered pursuant to the Act,
included in the Registration Statement or sold in the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the
transactions contemplated by this Agreement or otherwise,
except for such rights as have been complied with or waived;
and
(xx) to such counsel's knowledge, except as
described in the Registration Statement and the Prospectus or
as would not individually or in the aggregate have a Material
Adverse Effect, (A) the Company (either directly or through
the Subsidiaries) has valid license rights or clear title to
the Intellectual Property referenced in the Prospectus, and
there are no rights of third parties to any such Intellectual
Property; (B) there is no infringement or other violation by
third parties of any of the Intellectual Property of the
Company referenced in the Prospectus; (C) there is no
infringement or other violation by the Company or the
Subsidiary of any Intellectual Property of others nor would
there be any such infringement upon commercialization of the
Company's products described as under development in the
Registration Statement and the Prospectus; (D) there is no
pending or threatened action, suit proceeding or claim by
governmental authorities or others that the Company or the
Subsidiary infringes or otherwise violates any Intellectual
Property of others; and (E) there is no pending or threatened
action, suit, proceeding or claim by governmental authorities
or others challenging the rights of the Company or the
Subsidiary in or to, or challenging the scope of, any
Intellectual Property of the Company referenced in the
Prospectus.
17
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and Prospectus were discussed and, although such counsel
is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectus (except as and to the extent stated in subparagraphs
(vi), (viii) and (xviii) above), on the basis of the foregoing nothing has come
to the attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such Registration
Statement or amendment became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or such
supplement, and at all times up to and including the time of purchase or
additional time of purchase, as the case may be, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and schedules and other financial or statistical data included in the
Registration Statement or Prospectus).
(b) You shall have received at the time of purchase and at
the additional time of purchase, as the case may be, the opinion of
Xxxxx, Xxxxxx & XxXxxxxx, P.C., regulatory counsel for the Company,
dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters
and in form reasonably satisfactory to the Underwriters, stating that:
(i) the statements in the Registration Statement and
the Prospectus and the Incorporated Documents regarding (a)
healthcare regulatory matters and (b) the receipt by the
Company (either directly or through the Subsidiary) of
governmental approvals or clearances and the applications for,
or the submissions with the FDA regarding, such approvals or
clearances, insofar as such statements constitute summaries of
legal documents or legal proceedings or refer to statements of
law and legal conclusions, as of the date of the Registration
Statement and the Prospectus and as of the date of such
opinion, are in all material respects accurate and complete
statements or summaries of the matters therein set forth; and
(ii) nothing has come to such counsel's attention
that causes them to believe that such above described portions
of the Registration Statement, at the time such Registration
Statement became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or that such above described portions of the
Prospectus and at the date of the Prospectus and at all times
leading up to and including the time of purchase and the
additional time of purchase, as the case may be, contained an
untrue statement of material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading.
18
(c) You shall have received at the time of purchase and at
the additional time of purchase, as the case may be, the opinion of
Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters require.
(d) You shall have received from Ernst & Young LLP letters
dated, respectively, the date of this Agreement and the time of purchase
and additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters.
(e) No amendment or supplement to the Registration Statement
or Prospectus, or document which upon filing with the Commission would be
incorporated by reference therein, shall at any time have been filed to
which you have objected in writing.
(f) The Registration Statement shall have become effective
not later than 5:30 PM New York City time on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have been
filed with the Commission pursuant to Rule 424(b) under the Act at or
before 5:30 PM New York City time on the second full business day after
the date of this Agreement.
(g) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(h) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may be,
(i) no material and adverse change or any development involving a
prospective material and adverse change (other than as specifically
described in the Registration Statement and Prospectus), in the business,
properties, condition (financial or otherwise) or results of operations
of the Company and the Subsidiaries, taken as a whole, shall occur or
become known and (ii) no transaction which is material and adverse to the
Company shall have been entered into by the Company or any of the
Subsidiaries.
(i) The Company will, at the time of purchase or additional
time of purchase, as the case may be, deliver to you a certificate signed
by two of the Company's executive officers to the effect that the
representations and warranties of the Company as set forth
19
in this Agreement are true and correct as of each such date, that the
Company has performed such of its obligations under this Agreement as are
to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be, and the conditions set
forth in paragraphs (g) and (h) of this Section 6 have been met.
(j) You shall have received at the time of purchase and at
the additional time of purchase, as the case may be, a certificate from
Xxxxxxx Xxxxxxxxx, general counsel to the Company, dated the time of
purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to the Underwriters, stating that nothing has
come to the attention of such counsel that causes him to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement thereto at the date
of such Prospectus or such supplement, and at all times up to and
including the time of purchase or additional time of purchase, as the
case may be, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(k) You shall have received the letters referred to in
Section 3(q).
(l) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the time
of purchase and the additional time of purchase, as the case may be, as
you reasonably request.
(m) The Shares shall have been approved for listing for
quotation on NASDAQ, subject only to notice of issuance at or prior to
the time of purchase or the additional time of purchase, as the case may
be.
7. Effective Date of Agreement; Termination. This Agreement
----------------------------------------
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, (i) if, since the time of execution
of this Agreement or the respective dates as of which information is given in
the Registration Statement and Prospectus, there has been any material adverse
change, financial or otherwise (other than as specifically described in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and the Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares or (ii) if, at any time prior to the
20
time of purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or NASDAQ shall have been
suspended or limitations or minimum prices shall have been established on the
New York Stock Exchange, the American Stock Exchange or NASDAQ, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram from such terminating
Underwriter.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(1), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to
-------------------------------------
Sections 6 and 7, if any Underwriter shall default in its obligation to purchase
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 7 hereof) and if the number of Firm Shares which all
Underwriters so defaulting shall have agreed but failed to purchase and pay for
does not exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall purchase and pay for (in addition to the aggregate number of
Firm Shares they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be purchased and paid
for by such non-defaulting Underwriter or Underwriters in such amount or amounts
as you may designate with the consent of each Underwriter so designated or, in
the event no such designation is made, such Shares shall be purchased and paid
for by all non-defaulting Underwriters pro rata in proportion to the aggregate
number of Firm Shares set opposite the names of such non-defaulting Underwriters
in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period
21
not exceeding five business days in order that any necessary changes in the
Registration Statement and Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
terminate without further act or deed and without any liability on the part of
the Company to any non-defaulting Underwriter and without any liability on the
part of any non-defaulting Underwriter to the Company. Nothing in this
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Indemnity and Contribution.
--------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person incurs under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term Prospectus for the purpose of this Section
9 being deemed to include any Preliminary Prospectus, the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use with reference to such
Underwriter in such Registration Statement or such Prospectus or arises out of
or is based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading, (ii) any untrue statement or alleged untrue statement made by the
Company in Section 3 of this Agreement or the failure by the Company to perform
when and as required any agreement or covenant contained herein or (iii) any
untrue statement or alleged untrue statement of any material fact contained in
any audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films, tape recordings, used in connection with the
marketing of the
22
Shares; provided, however, that the indemnity agreement contained in this
subsection (a) with respect to any Preliminary Prospectus or amended Preliminary
Prospectus shall not inure to the benefit of any Underwriter (or to the benefit
of any partner, director or officer of any Underwriter or person controlling
such Underwriter) from whom the person asserting any such loss, damage, expense,
liability or claim purchased the Shares which are the subject thereof if the
Prospectus corrected any such alleged untrue statement or omission and if such
Underwriter failed to give a copy of the Prospectus to such person at or prior
to the written confirmation of the sale of such Shares to such person, unless
the failure is the result of noncompliance by the Company with Section 4(b)
hereof.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
-------- -------
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise except
to the extent the Company is materially prejudiced thereby. Such Underwriter or
such person shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
Underwriter or of such person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
Proceeding or the Company shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from, additional to or in conflict with those available to the Company (in which
case the Company shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and paid as incurred
(it being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any Proceeding effected
without the written consent of the Company, but if settled with the written
consent of the Company, the Company agrees to indemnify and hold harmless any
Underwriter and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without the Company's
written consent if (i) such settlement is entered into more than 60 business
days after receipt by the indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
23
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and the successors and assigns of all of the foregoing persons from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which the Company or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with reference to such
Underwriter in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
-------- -------
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise,
except to the extent such Underwriter is materially prejudiced thereby. The
Company or such person shall have the right to employ their or its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Company or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding
24
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 9 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the
same respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company on the one hand and of the Underwriters on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (c) above. Notwithstanding
the provisions of this Section 9, in no case shall any Underwriter be required
to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter and distributed to the public
were offered to the public
25
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 9 are several in proportion to their respective underwriting commitments
and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Company contained in
this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, its partners, directors
or officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls any of the foregoing within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery of the
Shares. The Company and each Underwriter agree promptly to notify each other of
the commencement of any Proceeding against it and against any of the officers or
directors of the Company in connection with the issuance and sale of the Shares,
or in connection with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements, requests,
-------
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention: Syndicate
Department; and if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at Salix
Pharmaceuticals, Ltd., 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
Xxxxxxxx 00000 Attention: Xxxxxxx Xxxxxxxxx, Director of Legal.
11. Information Furnished by the Underwriters. The statements set forth in
-----------------------------------------
the last paragraph on the cover page of the Prospectus and the statements set
forth in the fifth, seventh, eighth, ninth, tenth and thirteenth paragraphs
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any claim, counterclaim
---------------------------
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
Section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
--------------------------
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and you and the Company
consent to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is
26
brought by any third party against an Underwriter or any indemnified party. Each
Underwriter and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives all right
to trial by jury in any action, proceeding or counterclaim (whether based upon
contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding thereupon, and may be enforced in any other courts in the jurisdiction
to which the Company is or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
-------------------
made solely for the benefit of the Underwriters, the Company and, to the extent
provided in Section 9 hereof, the controlling persons, directors and officers
referred to in such section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
------------
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary of
-------------
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC is a
separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships with
issuers of securities underwritten or privately placed by UBS Warburg LLC. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBS Warburg LLC
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of UBS
Warburg LLC.
27
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for the
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Company and the several Underwriters.
Very truly yours,
SALIX PHARMACEUTICALS, LTD.
By:_______________________________
Name:
Title:
Accepted and agreed to as of the date
first above written:
UBS WARBURG LLC
WACHOVIA SECURITIES
XXXXXX XXXXXX PARTNERS LLC
LEERINK XXXXX & COMPANY
SUNTRUST XXXXXXXX XXXXXXXX
As Representatives of the several Underwriters
By: UBS WARBURG LLC
By _________________________
Name:
Title:
By:_________________________
Name:
Title:
1
