5,000,000 Shares
DOV PHARMACEUTICAL, INC.
Common Stock
UNDERWRITING AGREEMENT
__________, 2002
CIBC World Markets Corp.
Xxxxxx Brothers, Inc.
Lazard Freres & Co. LLC
Fidelity Capital Markets LLC
c/o CIBC World Markets Corp.
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
DOV Pharmaceutical, Inc., a Delaware corporation (the "Company")
proposes, subject to the terms and conditions contained herein, to sell to you
and the other underwriters named on Schedule I to this Agreement (the
"Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of 5,000,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.0001 par value (the "Common Stock"). The respective
amounts of the Firm Shares to be purchased by each of the several Underwriters
are set forth opposite their names on Schedule I hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional 750,000 shares (the "Option Shares") of Common Stock from it for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at a price of $_____ per share (the "Initial Price"), the
number of Firm Shares set forth opposite the name of such Underwriter
under the column "Number of Firm Shares to be Purchased from the Company"
on Schedule I to this Agreement, subject to adjustment in accordance with
Section 10 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage (adjusted by the Representatives
to eliminate fractions) of the total number of Option Shares to be
purchased by the Underwriters as such Underwriter is purchasing of the
Firm Shares. Such option may be exercised only to cover over-allotments in
the sales of the Firm Shares by the Underwriters and may be exercised in
whole or in part at any time on or before 12:00 noon, New York City time,
on the business day before the Firm Shares Closing Date (as defined
below), and from time to time thereafter within 30 days after the date of
this Agreement, in each case upon written, facsimile or telegraphic
notice, or verbal or telephonic notice confirmed by written, facsimile or
telegraphic notice, by the Representatives to the Company no later than
12:00 noon, New York City time, on the business day before the Firm Shares
Closing Date or at least two business days before the Option Shares
Closing Date (as defined below), as the case may be, setting forth the
number of Option Shares to be purchased and the time and date (if other
than the Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Payment of the purchase price for, and
delivery of certificate for, the Firm Shares shall be made at the offices of
CIBC World Markets Corp., 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 10:00 a.m., New York City time, on the third business day following the date
of this Agreement or at such time on such other date, not later than ten (10)
business days after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and delivery of
the certificates, for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each date of delivery as specified in the notice from the
Representatives to the Company (such time and date of delivery and payment are
called the "Option Shares Closing Date"). The Firm Shares Closing Date and the
Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Payment shall be made to the Company by wire transfer of immediately
available funds or by certified or official bank check or checks payable in New
York Clearing House (same day) funds drawn to the order of the Company, against
delivery of the respective certificates to the Representatives for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by them.
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be delivered by or on behalf of the Company to the
Representatives through the facilities of the Depository Trust Company ("DTC")
for the account of such Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and packaging, at such
place as is designated by the Representatives, on the
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full business day before the Firm Shares Closing Date (or the Option Shares
Closing Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The
Company has prepared and filed in conformity in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the published rules and regulations thereunder (the "Rules") adopted by the
Securities and Exchange Commission (the "Commission") a Registration Statement
(as hereinafter defined) on Form S-1 (No. 333-81484), including a preliminary
prospectus relating to the Shares, and such amendments thereof as may have been
required to the date of this Agreement. Copies of such Registration Statement
(including all amendments thereof) and of the related Preliminary Prospectus (as
hereinafter defined) have heretofore been delivered by the Company to you. The
term "Preliminary Prospectus" means any preliminary prospectus (as described in
Rule 430 of the Rules) included at any time as a part of the Registration
Statement or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The term "Registration
Statement" as used in this Agreement means the initial registration statement
(including all exhibits, financial schedules and information deemed to be a part
of the Registration Statement through incorporation by reference or otherwise),
as amended at the time and on the date it becomes effective (the "Effective
Date") including the information (if any) deemed to be part thereof at the time
of effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an
abbreviated registration statement to register additional Shares pursuant to
Rule 462(b) under the Rules (the "462(b) Registration Statement") then any
reference herein to the Registration Statement shall also be deemed to include
such 462(b) Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
on, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a
public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and
on the date of the Prospectus, the date any post-effective amendment to
the Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with
the applicable provisions of the Securities Act and the Rules. The
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein
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not misleading; and on the Effective Date and the other dates referred to
above neither the Registration Statement nor the Prospectus, nor any
amendment thereof or supplement thereto, will contain any untrue statement
of a material fact or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which
they were made) not misleading. When any related Preliminary Prospectus
was first filed with the Commission (whether filed as part of the
Registration Statement or any amendment thereto or pursuant to Rule 424(a)
of the Rules) and when any amendment thereof or supplement thereto was
first filed with the Commission, such Preliminary Prospectus as amended or
supplemented complied in all material respects with the applicable
provisions of the Securities Act and the Rules (other than the absence of
pricing information and share information with respect to the Preliminary
Prospectus filed on January 28, 2002) and did not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If applicable, each Preliminary Prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T. If Rule 434 is used, the Company will comply with the requirements of
Rule 434 and the Prospectus shall not be "materially different," as such
term is used in Rule 434, from the Prospectus included in the Registration
Statement at the time it became effective. Notwithstanding the foregoing,
none of the representations and warranties in this paragraph 4(a) shall
apply to statements in, or omissions from, the Registration Statement or
the Prospectus made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by the Representatives on behalf
of the several Underwriters for use in the Registration Statement or the
Prospectus. With respect to the preceding sentence, the Company
acknowledges that the only information furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus is the statements contained in
the fourth, tenth, thirteenth and sixteenth paragraphs under the caption
"Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and, to the Company's knowledge, no proceedings
for that purpose have been instituted or are threatened under the
Securities Act. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) of the Rules has been or will be made in
the manner and within the time period required by such Rule 424(b).
(c) The financial statements of the Company and DOV (Bermuda), Ltd.
("DOV Bermuda") (including all notes and schedules thereto) included or
incorporated by reference in the Registration Statement and Prospectus
present fairly in all material respects the financial position, the
results of operations, the statements of cash flows and the statements of
stockholders' equity and the other information purported to be shown
therein of the Company and DOV Bermuda, respectively, at the respective
dates and for the respective periods to which they apply; and such
financial statements and related schedules and notes have been prepared in
conformity in all material respects with generally accepted accounting
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principles, consistently applied throughout the periods involved, and all
adjustments necessary for a fair presentation of the results for such
periods have been made. The summary and selected financial data included
in the Prospectus present fairly in all material respects the information
shown therein as at the respective dates and for the respective periods
specified and the summary and selected financial data have been presented
on a basis consistent with the financial statements so set forth in the
Prospectus and other financial information. The pro forma financial
information included in the Registration Statement and Prospectus has been
prepared in accordance with the applicable requirements of the Securities
Act and the Rules and includes all adjustments necessary to present fairly
in all material respects the pro forma financial position of the
respective entity or entities presented therein at the respective dates
indicated and the results of their operations for the respective periods
specified.
(d) PricewaterhouseCoopers LLP and PricewaterhouseCoopers, whose
reports are filed with the Commission as a part of the Registration
Statement, are and, during the periods covered by their reports, were
independent public accountants as required by the Securities Act and the
Rules.
(e) Each of the Company and its Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation. The Company and each such subsidiary or other entity
controlled directly or indirectly by the Company (collectively,
"Subsidiaries") is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which the nature of the
business conducted by it or location of the assets or properties owned,
leased or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify would not have a material
adverse effect on the assets or properties, business, results of
operations or financial condition of the Company and its Subsidiaries,
taken as a whole (a "Material Adverse Effect"). Each of the Company and
its Subsidiaries has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies
or any other person or entity (collectively, the "Permits"), to own, lease
and license its assets and properties and conduct its business, all of
which are valid and in full force and effect, as described in the
Registration Statement and the Prospectus, except where the lack of such
Permits, individually or in the aggregate, would not have a Material
Adverse Effect. Each of the Company and its Subsidiaries has fulfilled and
performed in all material respects all of its material obligations with
respect to such Permits and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the Company
thereunder. Except as may be required under the Securities Act and state
and foreign Blue Sky laws, no other Permits are required to enter into,
deliver and perform this Agreement and to issue and sell the Shares.
(f) Each of the Company and its Subsidiaries owns or possesses
adequate and enforceable rights to use all trademarks, trademark
applications, trade names, service marks, trademark registrations, service
xxxx registrations, copyrights, copyright applications, licenses, know-how
and other similar rights and proprietary knowledge (collectively,
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"Intangibles") described in the Prospectus as being owned by it necessary
for the conduct of its business. Neither the Company nor any of its
Subsidiaries has received any notice of, or is not aware of, any
infringement of or conflict with asserted rights of others with respect to
any Intangibles.
(g) Except as described in the Prospectus, each of the Company and
its Subsidiaries owns or possesses adequate and enforceable rights to use
all material patents and patent applications necessary for the conduct of
their respective businesses and have no reason to believe that the conduct
of their respective businesses will conflict with or infringe, and have
not received any notice of any claim of conflict with or infringement of,
any such rights of others.
(h) Except as described in the Prospectus, each of the Company and
its Subsidiaries has valid title in fee simple to all items of real
property and valid title to all personal property described in the
Prospectuses as being owned by it and which is material to the Company and
its Subsidiaries, taken as a whole. Any real property and buildings
described in the Prospectuses as being held under lease by the Company and
each of its Subsidiaries is held by it under valid, existing and
enforceable leases, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are described in the
Registration Statement and the Prospectus or would not have a Material
Adverse Effect.
(i) There are no litigation or governmental proceedings to which the
Company or its Subsidiaries is subject or which is pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which, individually or in the aggregate, might have a
Material Adverse Effect, affect the consummation of this Agreement or
which is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change with
regard to the assets or properties, business, results of operations or
financial condition of the Company; (b) neither the Company nor its
Subsidiaries has sustained any loss or interference with its assets,
businesses or properties (whether owned or leased) from fire, explosion,
earthquake, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other
governmental action, order or decree which would have a Material Adverse
Effect; and (c) since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as reflected therein,
neither the Company nor its Subsidiaries has (i) issued any securities or
incurred any liability or obligation, direct or contingent, for borrowed
money, except such liabilities or obligations incurred in the ordinary
course of business, (ii) entered into any transaction not in the ordinary
course of business or (iii) declared or paid any dividend or made any
distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any
shares of its stock.
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(k) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or Rules. Each
description of a contract, document or other agreement in the Registration
Statement and the Prospectus accurately reflects in all material respects
the material terms of the underlying document, contract or agreement. Each
agreement described in the Registration Statement and Prospectus or listed
in the exhibits to the Registration Statement or incorporated by reference
is in full force and effect and is valid and enforceable against the
Company or any Subsidiary, as the case may be, in accordance with its
terms and, to the Company's knowledge, by the Company against the other
parties thereto, except to the extent such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles. Neither the Company nor any Subsidiary,
if the Subsidiary is a party, nor to the Company's knowledge, any other
party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event
has occurred which, with notice or lapse of time or both, would constitute
such a default, in any such case which default or event, individually or
in the aggregate, would have a Material Adverse Effect. No default exists,
and no event has occurred which, with notice or lapse of time or both,
would constitute a default in the due performance and observance of any
term, covenant or condition, by the Company or any Subsidiary, if the
Subsidiary is a party thereto, of any other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company,
any Subsidiary or their respective properties or business may be bound or
affected which default or event, individually or in the aggregate, would
have a Material Adverse Effect.
(l) Neither the Company nor any of its Subsidiaries is in violation
of any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation, individually or in the
aggregate, would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale
by the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or result in the breach
of any term or provision of, or constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under,
or require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or any of its Subsidiaries pursuant to the terms of,
any indenture, mortgage, deed of trust, note or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which either the Company or any of its Subsidiaries or any of their
properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the
Company or any of its Subsidiaries or violate any provision of the charter
or by-laws of the Company or any of its Subsidiaries, except for such
consents or waivers which have already been obtained and are in full force
and effect and except where such termination, acceleration, conflict,
breach or default would not have a Material Adverse Effect.
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(n) The Company has authorized and outstanding capital stock as set
forth in the "Actual" column under the caption "Capitalization" in the
Prospectus. The certificates evidencing the Shares are in due and proper
legal form and have been duly authorized for issuance by the Company. All
of the issued and outstanding shares of Common Stock have been duly and
validly authorized and issued, were issued in compliance in all material
respects with federal and state securities laws, are fully paid and
nonassessable, and none of them was issued in violation of any preemptive
or other similar right. All of the Company's options, warrants and other
rights to purchase or exchange any securities for shares of the Company's
capital stock have been duly and validly authorized and issued, were
issued in compliance in all material respects with federal and state
securities laws, and conform to the description thereof contained in the
Prospectus. There are no statutory preemptive or other similar rights to
subscribe for or to purchase or acquire any shares of Common Stock of the
Company or its Subsidiaries or any such rights pursuant to its charter or
by-laws or any agreement or instrument to or by which the Company or any
of its Subsidiaries is a party or bound, which rights have not been duly
satisfied or waived. The Shares, when issued and sold pursuant to this
Agreement, will be duly and validly issued, fully paid and nonassessable,
and free and clear of any preemptive or other similar rights. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or its Subsidiaries or any security convertible into,
or exercisable or exchangeable for, such stock. The Common Stock and the
Shares conform in all material respects to all statements in relation
thereto contained in the Registration Statement and the Prospectus. All
outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, and are fully paid and nonassessable and,
except as described in the Registration Statement and the Prospectus with
respect to DOV (Bermuda) Ltd., are owned directly by the Company or by
another wholly-owned subsidiary of the Company free and clear of any
security interests, liens, encumbrances, equities or claims.
(o) Except as described in the Prospectus, no holder of any security
of the Company has the right to have any security owned by such holder
included in the Registration Statement or to demand registration of any
security owned by such holder during the period ending 180 days after the
date of the Prospectus. Except as disclosed in writing to the
Representatives, each stockholder, director and executive officer of the
Company has delivered to the Representatives a written lock-up agreement
substantially in the form attached to this Agreement ("Lock-Up
Agreement"), with such changes as have been approved by the
Representatives.
(p) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes and will constitute the legal,
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of
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creditors' rights generally and by general equitable principles and except
as the enforcement of indemnification for securities laws violations may
be limited as against public policy.
(q) Neither the Company nor any of its Subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect.
The Company is not aware of any threatened or pending litigation between
the Company or its Subsidiaries and any of its executive officers which,
if adversely determined, could have a Material Adverse Effect.
(r) Each of the Company and its Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of its
Subsidiaries would have any liability; neither the Company nor any
Subsidiary has incurred, liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and, to the knowledge of the Company, each "pension plan" for
which the Company or its Subsidiaries would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and, to the knowledge of the Company, nothing has
occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(s) No transaction has occurred between or among the Company and any
of its officers, directors or stockholders or any affiliate or affiliates
of any such officer, director or stockholder that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(t) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might reasonably
be expected to constitute, the stabilization or manipulation of the price
of the Common Stock to facilitate the sale or resale of any of the Shares.
(u) The Company and its Subsidiaries have filed all Federal, state,
local and foreign tax returns which are required to be filed through the
date hereof, which returns are true and correct in all material respects
or have received extensions thereof, and have paid all taxes shown on such
returns and all assessments received by it to the extent that the same are
material and have become due. There are no tax audits or investigations
pending, which if adversely determined would have a Material Adverse
Effect; nor are there any material proposed additional tax assessments
against the Company or any of its Subsidiaries.
(v) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System, subject to official notice of issuance. A
registration statement has been filed on Form 8-A
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pursuant to Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), which registration statement complies in all material
respects with the Exchange Act.
(w) The Company has taken no action designed to, or likely to have
the effect of, terminating the registration of the Common Stock under the
Exchange Act or the quotation of the Common Stock on the Nasdaq National
Market, nor has the Company received any notification that the Commission
or the Nasdaq National Market is contemplating terminating such
registration or quotation.
(x) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. Each of the Company and
its Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances 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 accordance 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.
(y) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are engaged
or propose to engage after giving effect to the transactions described in
the Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its Subsidiaries or the Company's or its
Subsidiaries' respective businesses, assets, employees, officers and
directors are in full force and effect; each of the Company and its
Subsidiaries is in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any
Subsidiary of the Company has any reason to believe that they will not be
able to renew their existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
Material Adverse Effect. Neither the Company nor any Subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.
(z) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made and
is in full force and effect.
(aa) There are no affiliations with the NASD among the Company's
officers, directors or, to the knowledge of the Company, any stockholder
of the Company, except as
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set forth in the Registration Statement or otherwise disclosed in writing
to the Representatives.
(bb) Each of the Company and its Subsidiaries possesses all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, including without limitation all such
certificates, authorizations and permits required by the United States
Food and Drug Administration (the "FDA") or any other federal, state or
foreign agencies or bodies engaged in the regulation of pharmaceuticals or
biohazardous materials, and neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decisions, ruling or finding, would have a Material Adverse Effect on the
Company and its Subsidiaries, taken as a whole.
(cc) Each Investigational New Drug ("IND") submission to the FDA or
similar application to foreign regulatory bodies, and related documents
and information, has been filed, approved and maintained in compliance in
all material respects with applicable statutes, rules, regulations,
standards, guides or orders administered or promulgated by the FDA or
other regulatory body, and all preclinical and clinical studies undertaken
to support approval of products for commercialization have been conducted
in compliance in all material respects with all applicable current Good
Laboratory and Good Clinical Practices. No filing or submission to the FDA
or any other regulatory body, that is intended to be the basis for any
approval, contains any material omission or material false information.
(dd) (i) Each of the Company and its Subsidiaries is in compliance
in all material respects with all rules, laws and regulations relating to
the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("Environmental Law") which are
applicable to its business; (ii) neither the Company nor its Subsidiaries
has received any notice from any governmental authority or third party of
an asserted claim under Environmental Laws; (iii) each of the Company and
its Subsidiaries has received all material permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any
such permit, license or approval; (iv) to the Company's knowledge, no
facts currently exist that will require the Company or its Subsidiaries to
make future material capital expenditures to comply with Environmental
Laws; and (v) to the Company's knowledge, no property which is or has been
owned, leased or occupied by the Company or its Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42 U.S.C.
Section 9601, et. seq.) or otherwise designated as a contaminated site
under applicable state or local law. Neither the Company nor any of its
Subsidiaries has been named as a "potentially responsible party" under the
CER, CLA of 1980.
(ee) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
-11-
(ff) Neither the Company, its Subsidiaries nor, to the Company's
knowledge, any other person associated with or acting on behalf of the
Company or its Subsidiaries including, without limitation, any director,
officer, agent or employee of the Company or its Subsidiaries has,
directly or indirectly, while acting on behalf of the Company or its
Subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment.
(gg) There are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder's fee or
other like payment in connection with this offering.
(hh) The statistical and market-related data included in the
Prospectus and the Registration Statement are based on or derived from
sources which the Company believes to be reasonably reliable and accurate.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters under this Agreement are several and not
joint. The respective obligations of the Underwriters to purchase the Shares
are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in accordance
with Section 6(a) of this Agreement.
(b) No order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to
the satisfaction of the Commission and the Representatives. If the Company
has elected to rely upon Rule 430A, Rule 430A information previously
omitted from the effective Registration Statement pursuant to Rule 430A
shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period and the Company shall have
provided evidence satisfactory to the Underwriters of such timely filing,
or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements
of Rule 430A. If the Company has elected to rely upon Rule 434, a term
sheet shall have been transmitted to the Commission for filing pursuant to
Rule 424(b) within the prescribed time period.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of each Closing Date as
if made on such date. The Company shall
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have performed all covenants and agreements contained in this Agreement
required to be performed by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date,
of the chief executive or chief operating officer and the chief financial
officer or chief accounting officer of the Company to the effect that (i)
the signers of such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that, to the knowledge of
such officers, the representations and warranties of the Company in this
Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has performed
all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to
such Closing Date, and (ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and to the best of their
knowledge, no proceedings for that purpose have been instituted or are
pending under the Securities Act.
(e) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from
PricewaterhouseCoopers LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) The Representatives shall have received on each Closing Date
from Xxxxxxx Procter LLP, counsel for the Company, an opinion, addressed
to the Representatives and dated such Closing Date, and stating in effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the Delaware
General Corporation Law ("DGCL"). The Company is duly qualified to
transact business and in good standing as a foreign corporation in
each jurisdiction listed on a schedule to such opinion.
(ii) The Company has all requisite corporate power and
authority to own, lease and license its assets and properties and
conduct its business as described in the Registration Statement and
the Prospectus and to enter into, deliver and perform its
obligations under this Agreement and to issue and sell the Shares.
(iii) The Company has authorized capital stock as set forth
in the Registration Statement and the Prospectus under the caption
"Capitalization." The certificates evidencing the Shares are in due
and proper legal form and have been duly authorized for issuance by
the Company. All of the issued and outstanding shares of Common
Stock of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable, and none of them was
issued in violation of any preemptive or other similar right set
forth in the DGCL, the Company's charter and by-laws, or any
agreement filed as an exhibit to the Registration Statement. All
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of the Company's options, warrants and other rights to purchase or
exchange any securities for shares of the Company's capital stock
have been duly and validly authorized and issued and conform to the
description thereof contained in the Prospectus. The Shares when
issued and sold pursuant to this Agreement will be duly and validly
issued, fully paid and nonassessable, and free and clear of any
preemptive or other similar right set forth in the DGCL, the
Company's charter and by-laws, or any agreement filed as an exhibit
to the Registration Statement. Except as disclosed in the
Registration Statement and the Prospectus and except rights which
have been satisfied or waived, there are no preemptive or other
rights to subscribe for or to purchase or any restriction upon the
voting or transfer of any securities of the Company pursuant to the
Company's charter or by-laws or other governing documents or any
agreements or other instruments filed as exhibits to the
Registration Statement. The Common Stock and the Shares conform in
all material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery
and performance of this Agreement and the issuance and sale of the
Shares. This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(v) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will (A) result in
the breach of any term or provision of, or constitute a default
under any indenture, mortgage, deed of trust, note or other
agreement or instrument to which the Company is a party or by which
the Company or any of its assets or properties or businesses are
bound and which is filed as an exhibit to the Registration
Statement; (B) violate any franchise, license, permit, judgment,
decree or order known to such counsel, or any New York, New Jersey,
Delaware (as it relates to the DGCL) or United States statute, rule
or regulation; or (C) violate any provision of the charter or
by-laws of the Company.
(vi) No consent, approval, authorization, order,
registration or qualification of or with any federal, New York, New
Jersey or Delaware (as it relates to the DGCL) governmental agency
or body is required to be obtained by the Company for the issuance
and sale of the Shares by the Company or the consummation by the
Company of the transactions contemplated by this Agreement, except
the registration of the Shares under the Securities Act and the
Rules and except as may be required under state securities or Blue
Sky laws (as to which such counsel need express no opinion). To such
counsel's knowledge, no consent, approval, authorization, order,
registration or qualification of or with any federal, New York, New
Jersey or Delaware (as it relates to the DGCL) court is required to
be obtained by the Company for the issuance and sale of the Shares
by the Company or the consummation by the Company of the
transactions contemplated by this Agreement.
-14-
(vii) The statements contained in the Prospectus under the
captions "Risk Factors -We are dependent on the successful outcome
of clinical trials for our five lead product candidates," "- We may
not receive regulatory approvals for our product candidates or
approvals may be delayed," " - A conditional litigation settlement
to which we are not a party, involving our DOV diltiazem patent, if
finalized, may circumvent our rights and adversely affect our
relationship with our licensee Biovail," " - The above conditional
litigation settlement involving our DOV diltiazem patent, if not
finalized, could lead to renewed litigation that may jeopardize our
DOV diltiazem patent and our license agreement with Biovail," " - An
investigation by the Federal Trade Commission may lead to a
reformation, or impair the value to us, of our license agreement
with Biovail," "Business - Collaborations and Licensing Agreements,"
"- Market Exclusivity, Patent Protection and Intellectual Property,"
"-Government Regulation," "-Legal Proceedings," "Management -
Benefit Plans," "-Employment Agreements," "Certain Transactions,"
"Description of Capital Stock" and "Shares Eligible for Future Sale"
in the Prospectus and Items 14 and 15 of the Registration Statement
insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries in all
material respects and accurately present the information called for
with respect to such documents and matters. Accurate copies of all
contracts and other documents required to be filed as exhibits to,
or described in, the Registration Statement have been so filed with
the Commission or are fairly described in all material respects in
the Registration Statement, as the case may be.
(viii) The Registration Statement, all Preliminary
Prospectuses and the Prospectus and each amendment or supplement
thereto (except for the financial statements and schedules and other
financial and statistical data included therein, as to which such
counsel expresses no opinion) as of their respective effective or
issue dates, appeared on their face to be appropriately responsive
in all material respects with the requirements of the Securities Act
and the Rules.
(ix) The Registration Statement has become effective under
the Securities Act, and to such counsel's knowledge no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are threatened, pending or contemplated. Any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b) under
the Securities Act has been made in the manner and within the time
period required by such Rule 424(b).
(x) The authorized capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
(xi) The Company is not an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
-15-
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel reasonably satisfactory to
the Representatives as to matters which are governed by laws other than the laws
of the State of New York, the State of New Jersey, the General Corporation Law
of the State of Delaware and the Federal laws of the United States; PROVIDED
that such counsel shall state that in their opinion the Underwriters and they
are justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
Such counsel shall also state that as counsel to the Company, they
have reviewed the Registration Statement and the Prospectus, participated in
discussions with your representatives, those of counsel for the Underwriters,
and those of the Company and its accountants. On the basis of the information
that such counsel gained in the course of the performance of the services
referred to above, considered in the light of such counsel's understanding of
the applicable law and the experience such counsel has gained through its
practice under the Securities Act, such counsel will confirm to you that nothing
that came to such counsel's attention in the course of such review has caused
such counsel to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained any untrue statement of
a material fact or omitted to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
In addition, such counsel shall state that such counsel does not
know of any litigation or any governmental proceeding instituted or threatened
against the Company or its Subsidiaries that would be required to be disclosed
in the Prospectus that is not so disclosed.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such, however, that such counsel need not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except as and to the extent referred to
in clause (vii) above. Also, such counsel need not express any belief as to the
financial statements, other financial, statistical industry or operating data
and related schedules contained in the Registration Statement or the Prospectus.
(g) The Representatives shall have received on each Closing Date
from Xxxxxxx Procter LLP, patent counsel to the Company, such opinion or
opinions with respect to the Company's intellectual property, the
disclosure with respect thereto in the Prospectus and other related
matters as the Representatives may reasonably require.
(h) The Representatives shall have received on each Closing
Date from [ ], counsel to DOV Bermuda, Ltd., such opinion or
opinions with respect to DOV (Bermuda) Ltd., the disclosure with
respect thereto in the Prospectus and other related matters as the
Representatives may reasonably require.
(i) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance
-16-
to the Representatives and their counsel, and the Underwriters shall have
received from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation,
a favorable opinion, addressed to the Representatives and dated such
Closing Date, with respect to the Shares, the Registration Statement and
the Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(j) The Representatives shall have received copies of the Lock-up
Agreements executed by each entity or person described in Section 4(o).
(k) The Company shall have furnished or caused to be furnished to
the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
(l) The Nasdaq National Market shall have approved the Shares for
quotation, subject only to official notice of issuance.
(m) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement or
the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the reasonable opinion of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, counsel to the Underwriters,
is material or omits to state a fact which, in the reasonable opinion of
such counsel, is material and is required to be stated therein or is
necessary to make the statements therein (in the case of the Prospectus,
in the light of the circumstances under which they were made) not
misleading.
6. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of
this Agreement, and any amendments thereto, to become effective as
promptly as possible. The Company shall prepare the Prospectus in a
form approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act.
(ii) The Company shall promptly advise the Representatives
in writing (i) when any amendment to the Registration Statement
shall have become effective, (ii) of any request by the Commission
for any amendment of the Registration Statement or the Prospectus or
for any additional information, (iii) of the prevention or
suspension of the use of any Preliminary Prospectus or the
Prospectus or of the issuance by the Commission of any stop order
suspending the effectiveness of the
-17-
Registration Statement or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company shall not file any amendment of the Registration Statement
or supplement to the Prospectus or any document incorporated by
reference in the Registration Statement unless the Company has
furnished the Representatives a copy for its review prior to filing
and shall not file any such proposed amendment or supplement to
which the Representatives reasonably object. The Company shall use
its best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and the
Rules, any event occurs as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make
the statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or
the Rules, the Company promptly shall prepare and file with the
Commission, subject to the second sentence of paragraph (ii) of this
Section 6(a), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such
compliance; PROVIDED that copies of any such amendment or supplement
made nine months or more after the issue date of the Prospectus
shall be at the expense of the Underwriters.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable,
but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earning statement
(which need not be audited) of the Company, covering such 12-month
period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and
amendments thereof) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and all amendments
thereof and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the Securities Act or the Rules, as
many copies of any Preliminary Prospectus and the Prospectus and any
amendments thereof and supplements thereto as the Representatives
may reasonably request, subject to the requirements of Section
6(a)(iii) above. If applicable, the copies of the Registration
Statement and Prospectus and each amendment and supplement thereto
furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
-18-
(vi) The Company shall cooperate with the Representatives
and their counsel in endeavoring to qualify the Shares for offer and
sale in connection with the offering under the laws of such
jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required for the
distribution of the Shares; PROVIDED, HOWEVER, that the Company
shall not be required in connection therewith, as a condition
thereof, to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction or subject itself
to taxation as doing business in any jurisdiction.
(vii) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act and the Rules or
the Exchange Act, will file all documents required to be filed with
the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the
regulations promulgated thereunder.
(viii) Without the prior written consent of CIBC World
Markets Corp., in prior consultation with Xxxxxx Brothers, Inc., for
a period of 180 days after the date of the Prospectus, the Company
and each of its individual directors and executive officers shall
not issue, sell or register with the Commission (other than on Form
S-8 or on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any securities
convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuances of Common Stock
pursuant to (i) this Agreement; (ii) the exercise of stock options
outstanding on the date hereof or granted subsequent to the date
hereof pursuant to the Company's stock option plans in existence on
the date hereof, as described in the Prospectus, (iii) the exercise
of warrants outstanding on the date hereof; (iv) the conversion of
the outstanding shares of the Company's series C and series D
convertible preferred stock, par value $1.00 per share, in
connection with the consummation of the transactions contemplated
hereby and by the Prospectus; (iv) the exercise of the convertible
exchangeable promissory note and the line of credit as described in
the Prospectus; (vi) the conversion of the outstanding shares of the
Company's series B convertible preferred stock; or (vii) in
connection with (A) a merger, acquisition or similar transaction,
(B) the purchase of technology or other assets pursuant to a bona
fide arms' length transaction, (C) any joint venture between the
Company and a third party with respect to the development, marketing
or distribution of the Company's products or product candidates or
(D) any transaction involving the licensing of intellectual property
for or to a third party or parties; PROVIDED that the terms of any
such issuance described in clauses (i) through (vii) above
contractually prohibit the resale or other disposition of such
shares of Common Stock for a period of 180 days after the date of
the Prospectus. In the event that during this period, (i) any shares
are issued pursuant to the Company's existing stock option plan or
bonus plan that are exercisable during such 180 day period or (ii)
any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 180 period, the
Company shall obtain the written agreement of such grantee or
purchaser or holder of such registered securities that, for a period
of 180 days after the date of the Prospectus, such person will not,
without the
-19-
prior written consent of CIBC World Markets Corp., in prior
consultation with Xxxxxx Brothers, Inc., offer for sale, sell,
distribute, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities
convertible into, exercisable for, or exchangeable for any shares of
Common Stock) owned by such person.
(ix) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
(x) Prior to the Closing Date, the Company will issue no
press release or other communications directly or indirectly and
hold no press conference with respect to the Company, the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of any of them, or the offering of the Shares
without the prior written consent of the Representatives unless in
the judgment of the Company and its counsel, and after notification
to the Representatives, such press release or communication is
required by law.
(xi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each Preliminary
Prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus and any document incorporated by
reference therein, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
various jurisdictions referred to in Section 6(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary and supplementary Blue
Sky memoranda; (iv) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of each
Preliminary Prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section
to be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by dealers
to whom Shares may be sold; (v) the filing fees of the NASD in connection
with its review of the terms of the public offering and reasonable fees
and disbursements of counsel for the Underwriters in connection with such
review; (vi) inclusion of the Shares for quotation on the Nasdaq National
Market; and (vii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters. Subject to the
provisions of Section 9, the Underwriters agree to pay, whether or not the
transactions
-20-
contemplated hereby are consummated or this Agreement is terminated, all
costs and expenses incident to the performance of the obligations of the
Underwriters under this Agreement not payable by the Company pursuant to
the preceding sentence, including, without limitation, the fees and
disbursements of counsel for the Underwriters.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and liabilities,
joint or several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted), to which they,
or any of them, may become subject under the Securities Act, the Exchange
Act or other Federal or state law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any amendment thereof or
supplement thereto, or in any Blue Sky application or other information or
other documents executed by the Company filed in any state or other
jurisdiction to qualify any or all of the Shares under the securities laws
thereof (any such application, document or information being hereinafter
referred to as a "Blue Sky Application") or arise out of or are based upon
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the
case of the Prospectus and each Preliminary Prospectus, in the light of
the circumstances under which they were made) not misleading, (ii) in
whole or in part upon any breach of the representations and warranties set
forth in Section 4 hereof, or (iii) in whole or in part upon any failure
of the Company to perform any of its obligations hereunder or under law;
PROVIDED, HOWEVER, that such indemnity shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of the
Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
Preliminary Prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement thereto, or in any Blue Sky Application in
reliance upon and in conformity with information furnished in writing to
the Company by the Representatives on behalf of any Underwriter
specifically for use therein; and PROVIDED, FURTHER that with respect to
any untrue statement or omission of material fact made in a Preliminary
Prospectus, the indemnity agreement contained in this Section 7(a) shall
not inure to the benefit of any Underwriter from whom the person asserting
such loss, claim, damage or liability purchased the Shares concerned, to
the extent that any such loss, claim, damage, or liability of such
Underwriter occurs under a circumstance where it shall be determined by a
court of competent jurisdiction by final and non-appealable judgment that
(i) the Company had previously and timely furnished copies of the
Prospectus, as amended and supplemented, to the Representatives, (ii) the
untrue statement or omission of a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus, as amended and
supplemented, and (iii) such loss, claim, damage or liability results from
the fact that there was not sent or given to such person at or prior to
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the written confirmation of the sale of such Shares to such person, a copy
of the Prospectus, as amended and supplemented.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, each director of the Company, and each officer of
the Company who signs the Registration Statement, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only
insofar as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or omission or alleged untrue statement or
omission which was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement
thereto, contained in the fourth, tenth, thirteenth and sixteenth
paragraphs under the caption "Underwriting" in the Prospectus; PROVIDED,
HOWEVER, that the obligation of each Underwriter to indemnify the Company
(including any controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 7(a) or 7(b) shall be available to
any party who shall fail to give notice as provided in this Section 7(c)
if the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or
otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and except
for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified
party shall have the right to employ its counsel in any such action, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized in writing by the indemnifying parties, (ii) the
indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the
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commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties; PROVIDED,
HOWEVER, that the Company shall only be responsible for the reasonable
fees and expenses of one (1) such additional counsel for the Underwriters.
An indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent,
which consent shall not be unreasonably withheld or delayed.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
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 which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
PROVIDED, HOWEVER, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement
-23-
and each director of the Company shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) in the immediately
preceding sentence of this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section, notify such party
or parties from whom contribution may be sought, but the omission so to notify
such party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to their
respective underwriting commitments and not joint.
9. TERMINATION. This Agreement may be terminated with respect
to the Shares to be purchased on a Closing Date by the Representatives by
notifying the Company at any time
(a) in the absolute discretion of the Representatives at or before
any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if there has occurred any new outbreak or
material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make
it, in the judgment of the Representatives, inadvisable to proceed with
the offering; (iii) if there shall be such a material adverse change in
general financial, political or economic conditions, including, without
limitation, as a result of terrorist activities after the date hereof, or
the effect of international conditions on the financial markets in the
United States is such as to make it, in the judgment of the
Representatives, inadvisable or impracticable to market the Shares; (iv)
if trading in the Shares has been suspended by the Commission or trading
generally on the New York Stock Exchange, Inc., on the American Stock
Exchange, Inc. or the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for securities shall have
been fixed, or maximum ranges for prices for securities have been
required, by said exchanges or by order of the Commission, the NASD, or
any other governmental or regulatory authority; or (v) if a banking
moratorium has been declared by any state or Federal authority; or (vi)
if, in the judgment of the Representatives, there has occurred a Material
Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required
by this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
the Company shall not be under any liability to any Underwriter, and no
Underwriter shall be under any liability to the Company, except that (y) if this
Agreement is terminated by the Representatives or the Underwriters because of
any failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to
-24-
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
or to the other Underwriters for damages occasioned by its failure or refusal.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the termination of
this Agreement under Section 9) to purchase on any Closing Date the Shares
agreed to be purchased on such Closing Date by such Underwriter or Underwriters,
the Representatives may find one or more substitute underwriters to purchase
such Shares or make such other arrangements as the Representatives may deem
advisable or one or more of the remaining Underwriters may agree to purchase
such Shares in such proportions as may be approved by the Representatives, in
each case upon the terms set forth in this Agreement. If no such arrangements
have been made by the close of business on the business day following such
Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; PROVIDED, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section
1 be increased pursuant to this Section 10 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to one additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares
upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
-25-
11. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 7 and 8 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and their respective successors and assigns, and, to
the extent expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o CIBC World Markets Corp., 000 Xxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx Xxxxxxx Xxxxxxxxx,
Managing Director, with a copy to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 Attention:
Xxxxxxxxx X. Xxxxx, Esq. and (b) if to the Company, to its agent for service as
such agent's address appears on the cover page of the Registration Statement
with a copy to Xxxxxxx Procter LLP, Exchange Place, Boston, MA 02109, Attention:
Xxxxxx X. Xxxxx, P.C.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, applicable to agreements made and to be fully
performed therein.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
-26-
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
DOV PHARMACEUTICAL, INC.
By:___________________________________
Name: Xxxxxx X. Xxxxx, Ph.D.
Title: Chief Executive Officer
Confirmed:
CIBC WORLD MARKETS CORP.
________________________________________
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
CIBC WORLD MARKETS CORP.
By:_____________________________________
Name:
Title:
-27-
SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
-------------------------------------------------------- ----------------------
CIBC World Markets Corp.
Xxxxxx Brothers, Inc.
Lazard Freres & Co. LLC
Fidelity Capital Markets LLC
---------------
Total 5,000,000
