Exhibit 1.1
[ ] SHARES
ADERIS PHARMACEUTICALS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[______], 2003
Xxxxxx Brothers Inc.
As Representative of the
several underwriters named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Aderis Phramaceuticals, Inc., a Delaware corporation (the "COMPANY")
propose to sell an aggregate of [ ] shares (the "FIRM STOCK") of the Company's
Common Stock, par value $0.001 per share (the "COMMON STOCK"). In addition, the
Company proposes to grant to the Underwriters named in Schedule 1 hereto (the
"UNDERWRITERS") an option to purchase up to an additional [ ] shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.
Section 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the United States Securities and
Exchange Commission (the "COMMISSION") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and each of the amendments
thereto have been delivered by the Company to you as the representative (the
"REPRESENTATIVE") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representative pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the prospectus in the form first used to confirm sales of
Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462 Registration
Statement. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements of the Securities
Act and the Rules and Regulations and do not and will not, as of the applicable
effective date (as to the Registration Statement and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section 15)
have been duly incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and have
all power and authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged, to execute and deliver this
Agreement and to issue, sell and deliver the Stock as contemplated in this
Agreement; and none of the subsidiaries of the Company is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, were issued in compliance with federal
and state securities laws, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus. 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 with federal and state securities laws, and conform to
the description thereof contained in the Prospectus. All of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the descriptions thereof contained in the Prospectus. Upon payment
for and delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities, preemptive
rights, subscription rights, other rights to purchase, voting or transfer
restrictions and other claims.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries
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is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") and applicable state securities laws in connection
with the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(h) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act. The holders of outstanding shares of
the Company's capital stock are not entitled to preemptive or other rights to
subscribe for the Stock. Except for (i) options to purchase 1,081,697 shares of
Common Stock granted to officers, directors and employees under the Company's
1995 stock option plan; (ii) options to purchase 1,044,000 shares of Common
Stock to be granted to officers, directors and employees under the Company's
2001 stock incentive plan; and (iii) warrants to purchase 225,060 shares of
Common Stock, upon completion of the offering, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(i) The Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act
other than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(j) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such date, there
has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(l) Deloitte & Touche LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus and who have
delivered the letters referred to in Section 7(f)
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hereof, are independent public accountants as required by the Securities Act and
the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and all assets held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(o) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses (collectively, the "INTELLECTUAL PROPERTY") necessary
for the conduct of their respective businesses and have no reason to believe
that the conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of others.
(p) There are no actions, suits, claims, investigations or legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, might have a material adverse effect on the general
affairs, management, consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company and its subsidiaries
(a "MATERIAL ADVERSE EFFECT"); and to the best of the Company's knowledge, no
such actions, suits, claims, investigations or proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which might be expected to have a
Material Adverse Effect.
(t) The Company 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
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan" or
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(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "Code");
and each "pension plan" for which the Company 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 nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Company or any of its subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, might have) a Material Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
non-material liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital stock.
(w) The Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any material respect, and no
event has occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by which it
is bound or to which any of its properties or assets is subject or (iii) is in
violation in any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be subject
or has failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(y) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(z) The Company and its subsidiaries possess such permits, licenses,
provider numbers, certificates, approvals (including certificate of need
approvals), consents, orders, certifications, accreditations and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by, and have made
all declarations and filings with, the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct the businesses now operated
by them, except where the failure to so declare or file would not, singly and in
the aggregate, have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly and in the
aggregate, have a Material Adverse Effect; all of the
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Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(aa) Neither the Company nor any of its subsidiaries has failed to file
with applicable regulatory authorities any statement, report, information or
form required by any applicable law, regulation or order, except where the
failure to so file would not, singly and in the aggregate, have a Material
Adverse Effect. Except as described in the Prospectus and except for any
failures to be in compliance or deficiencies which would not, singly and in the
aggregate, have a Material Adverse Effect, all such filings or submissions were
in compliance with applicable laws when filed and no deficiencies have been
asserted by any regulatory commission, agency or authority with respect to any
such filings or submissions.
(bb) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(cc) Neither the Company nor any subsidiary is, nor as of the Closing
Date will be, an "investment company" as defined in the Investment Company Act
of 1940, as amended.
(dd) None of the Directed Shares (as defined below) distributed in
connection with the Directed Share Program (as defined below) will be offered or
sold outside the United States.
(ee) 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.
(ff) 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 reliable and accurate.
(gg) The clinical, pre-clinical and other studies and tests conducted
by or on behalf of or sponsored by the Company or any of its subsidiaries 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
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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 (in the case of each study and test
performed by outside third parties, with reference to the information regarding
such studies and tests provided to the Company by such third parties), 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 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.
(hh) Neither the Company nor any of its 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, and no such termination has been threatened by the Company or any of
its subsidiaries or any other party to any such contract or agreement.
(ii) 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 of the Stock.
(jj) The Company has not offered, or caused the Underwriters to offer,
shares of the Stock to any person pursuant to the Directed Share Program (as
defined below) with the specific intent to influence unlawfully (i) a customer
or supplier of the Company or any of its subsidiaries to alter the customer's or
supplier's level or type of business with the Company or any of its subsidiaries
or (ii) a trade journalist or publication to write or publish favorable
information about the Company or any of the subsidiaries or any of their respect
products or services.
(kk) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act),
which (i) are designed to ensure that material information relating to the
Company and its subsidiaries is made known to the Company's principal executive
officer and its principal financial officer by others within those entities;
(ii) have been evaluated for effectiveness; and (iii) are effective in all
material respects to perform the functions for which they were established.
(ll) Based on the evaluation of its disclosure controls and procedures,
the Company is not aware of (i) any significant deficiency in the design or
operation of internal controls which could adversely affect the Company's
ability to record, process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company's internal controls.
(mm) Since the date of the most recent evaluation of such disclosure
controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
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(nn) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable assurance
that (A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit preparation
of its financial statements in conformity with United States generally accepted
accounting principles and to maintain accountability for its assets, (C) access
to its assets is permitted only in accordance with management's authorization
and (D) the reported accountability for its assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(oo) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(pp) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any applicable provision of the U.S. Sarbanes Oxley Act of 2002 and
the rules and regulations promulgated in connection therewith.
(qq) There are no pro forma or as adjusted financial statements which
are required to be included or incorporated by reference in the Registration
Statement and the Prospectus in accordance with Regulation S-X which have not
been so included.
(rr) No forward-looking statement (within the meaning of Section 27A of
the Securities and Exchange Act and Section 21E of the Exchange Act) contained
in the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
SECTION 2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell [ ] shares of the Firm
Stock to the several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of shares of the Firm Stock set forth
opposite that Underwriter's name in Schedule 1 hereto. Each Underwriter shall be
obligated to purchase from the Company that number of shares of the Firm Stock
which represents the same proportion of the number of shares of the Firm Stock
to be sold by the Company as the number of shares of the Firm Stock set forth
opposite the name of such Underwriter in Schedule 1 represents of the total
number of shares of the Firm Stock to be purchased by all of the Underwriters
pursuant to this Agreement. The respective purchase obligations of the
Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representative may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to [ ] shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representative so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ] per
share.
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The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters. Upon authorization by the
Representative of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
It is understood that approximately [ ] shares of the Firm Stock
("DIRECTED SHARES") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business relationships with the Company
("DIRECTED SHARE PARTICIPANTS") upon the terms and conditions set forth in the
Prospectus (the "DIRECTED SHARE PROGRAM") and in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD"),
and that any allocation of such Directed Shares among such persons will be made
in accordance with timely directions received by Xxxxxx Brothers Inc. from the
Company. Under no circumstances will Xxxxxx Brothers Inc. or any Underwriter be
liable to the Company or to any Directed Share Participant for any action taken
or omitted to be taken in good faith in connection with such Directed Share
Program. To the extent that any Directed Shares are not affirmatively
reconfirmed for purchase by any Directed Share Participant on or immediately
after the date of this Agreement, such Directed Shares may be offered to the
public as part of the public offering contemplated hereby.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxxxx Chance US LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representative and
the Company. This date and time are sometimes referred to as the "FIRST DELIVERY
DATE." On the First Delivery Date, the Company shall deliver or cause to be
delivered certificates representing the Firm Stock to the Representative for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representative shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company shall make the certificates representing the Firm Stock available
for inspection by the Representative in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representative. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representative, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY
DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by
9
agreement between the Representative and the Company) at 10:00 A.M., New York
City time, on such Second Delivery Date. On such Second Delivery Date, the
Company shall deliver or cause to be delivered the certificates representing the
Option Stock to the Representative for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Option Stock shall be registered in such names and in such denominations as the
Representative shall request in the aforesaid written notice. For the purpose of
expediting the checking and packaging of the certificates for the Option Stock,
the Company shall make the certificates representing the Option Stock available
for inspection by the Representative in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
SECTION 5. Further Agreements of the Company. The Company covenants and agrees:
(a) To prepare the Prospectus in a form approved by the Representative
and to file such Pros-pectus 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; to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the Representative,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representative with copies thereof; to advise the Representative, promptly after
it receives notice thereof, of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representative and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representative and, upon their request, to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as the Representative may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
10
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representative and counsel for the Underwriters and obtain the consent of
the Representative to the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the Representative
an earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representative copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Stock for offering and sale
under the securities laws of such jurisdictions as the Representative may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), (ii) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, or (iii) file or cause to be
filed a registration statement on Form S-8 or other similar form with respect to
any shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company, in each
case without the prior written consent of Xxxxxx Brothers Inc. on behalf of the
Underwriters; and to cause each stockholder and optionholder listed on Schedule
2 hereto, each officer and director of the Company and each Directed Share
Participant to furnish to the Representative, prior to the First Delivery Date,
a letter or letters, substantially in the form of Exhibit A hereto, pursuant to
which each such person shall agree not to, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (ii) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (i)
11
or (ii) above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc. on behalf
of the Underwriters;
(j) To apply for the inclusion of the Stock on the Nasdaq National
Market System, and to use its best efforts to effect that quotation, subject
only to official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as set forth
in the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended and the rules and regulations of
the Commission thereunder;
(m) In connection with the Directed Share Program, to ensure that the
Directed Shares will be restricted to the extent required by the NASD or the
rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, and Xxxxxx Brothers Inc. will
notify the Company as to which Directed Share Participants will need to be so
restricted. At the request of Xxxxxx Brothers Inc., the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time; and
(n) To comply with all applicable securities and other applicable laws,
rules and regulations in each foreign jurisdiction in which the Directed Shares
are offered in connection with the Directed Share Program.
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement, any
supplemental agreement among the Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the stock; (e) the
filing fees incident to securing the review by the NASD of the terms of sale of
the Stock; (f) any applicable listing or other fees; (g) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum and a Canadian "wrapper" (including related fees and expenses of
counsel to the Underwriters); (h) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, incident
to the Directed Share Program described in Section 3; (i) the costs and expenses
of the Company relating to investor presentations on any "road show" undertaken
in connection with the marketing of the offering of the Stock, 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 with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show and (j) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement; provided that, except as
provided in this Section 6 and in Sections 8 and 11, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of their counsel,
any transfer taxes on the Stock which they may sell and the expenses of
advertising any offering of the Stock made by the Underwriters.
12
SECTION 7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) Xxxxxx & Xxxxxxx LLP shall have furnished to the Representative their
written opinion, as counsel to the Company, addressed to the Underwriters and
dated such Delivery Date, in form and substance reasonably satisfactory to the
Representative, to the effect that:
(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly qualified to
do business and are in good standing as foreign corporations in each
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification and have all
power and authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged, to execute and deliver this
Agreement and to issue, sell and deliver the Stock as contemplated in this
Agreement;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus. All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, were issued in compliance with
federal and state securities laws, are fully paid and non-assessable and conform
to the description thereof contained in the Prospectus. 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 with federal and state securities laws, and
conform to the description thereof contained in the Prospectus. All of the
issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(iii) The shares of the Stock being delivered on such Delivery Date
to the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor will be duly and validly issued,
fully paid and non-assessable;
(iv) Except as described in the Prospectus, there are no preemptive
or other rights to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument known to such counsel;
13
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, might
have a Material Adverse Effect; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date specified therein
and no stop order suspending the effectiveness of the Registration Statement has
been issued and, to the knowledge of such counsel, no proceeding for that
purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date (except for the financial statements and related schedules therein, as to
which such counsel need express no belief) comply as to form in all material
respects with the requirements of the Securities Act and the Rules and
Regulations;
(viii) The statements contained in the Prospectus under the captions
"Risk Factors", "Business", "Related Party Transactions", and "Description of
Capital Stock", insofar as they describe federal and state statutes, rules and
regulations, constitute a fair summary thereof and the opinion of such counsel
filed as Exhibit 5.01 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them;
(ix) To the best of such counsel's knowledge, there are no contracts
or other documents which are required to be described in the Prospectus or filed
as exhibits to the Registration Statement by the Securities Act or by the Rules
and Regulations which have not been described or filed as exhibits to the
Registration Statement;
(x) This Agreement has been duly authorized, executed and delivered
by the Company;
(xi) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company pursuant to this Agreement and the execution,
delivery and compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such actions result
in any violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; and, except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, except for such consents, approvals,
authorizations, orders, filings or registrations as have been obtained or made;
14
(xii) Except as described in the Prospectus, to the best of such
counsel's knowledge, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act; and
(xiii) Neither the Company nor any subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the Commonwealth of Massachusetts and the General Corporation Law of
the State of Delaware. Such opinion shall also be to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statement and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead them to believe that the
Registration Statement (except for the financial statements and related
schedules therein, as to which such counsel need express no belief) as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (except as
stated above) contains any untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause
(viii) above).
(d) Sterne, Kessler, Xxxxxxxxx & Fox P.L.L.C. shall have furnished to the
Representative their written opinion, as patent counsel to the Company,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representative, to the effect that:
(i) such counsel (A) represents the Company in certain matters
relating to Intellectual P, (B) is generally familiar with the technology for
which patents have been sought by or licensed to the Company for use in its
business and the manner of such use, and (C) has read the Intellectual Property
portions of the Registration Statement and Prospectus;
(ii) to such counsel's knowledge, the statements in the Registration
Statement and the Prospectus regarding Intellectual Property are true, correct
and complete statements or summaries;
(iii) such counsel has reviewed the Company's patents and patent
applications filed in the U.S. and foreign counterparts thereto, and the patents
issued in the U.S. licensed to the Company (collectively, the "Patents"), which
Patents are described in the Intellectual Property portions of the Registration
Statement and Prospectus;
(iv) to such counsel's knowledge, except as described in the
Prospectus, (A) according to the records of such counsel, and subject to the
following sentence, the Company (either directly or through the subsidiary) has
valid license rights to the Patents, or is listed in the records of the
appropriate Patent Office(s) as the owner of record of, the Patents that the
Company represents that it owns. For inventions that are the subject of Patents
the Company represents that it owns, the Company has obtained an assignment of
all right, title and interest from all named inventors, or has the legal right
to obtain such assignment and is in the process of doing so, or has obtained all
right, title and interest from
15
predecessor companies; (B) during the course of such counsel's work for the
Company, such counsel has not become aware of any infringement or other
violation by third parties of any Patent; (C) during the course of such
counsel's work for the Company, such counsel has not become aware that the
Company is infringing or otherwise violating any patents of others; nor has such
counsel become aware of any patent rights of third parties which would be
infringed or could reasonably be expected to materially affect the ability of
the Company to conduct business upon commercialization of the Company's products
described as under development in the Registration Statement and the Prospectus;
(D) such counsel is not aware of any pending or threatened action, suit,
proceeding or claim by governmental authorities or others that the Company
infringes or otherwise violates any patents of others, and such counsel is
unaware of any facts which would form a reasonable basis for any such claim; (E)
such counsel is not aware of any pending or threatened action, suit, proceeding
or claim by governmental authorities or others challenging the rights of the
Company in or to, or challenging the scope of, any Patent of the Company
referred to in the Prospectus, and such counsel is unaware of any facts which
would form a reasonable basis for any such claim; and (F) such counsel has
become aware of prior art references that may affect the scope of one claim of
one of the Company's Patents. It is such counsel's opinion that the remaining
claims are valid and enforceable, and sufficiently broad so that coverage of the
applicable Company technology is unaffected. In addition, such counsel has
become aware of a prior art reference that, if the Company were to bring an
infringement action under one of its Patents issued in France, may be used as a
defense to one or more claims of such Patent;
(v) In such counsel's opinion, the U.S. patent applications of the
Company and the subsidiary presently on file disclose patentable subject matter,
and such counsel is not aware of any inventorship challenges, any interference
which has been declared or provoked, or any other material fact with respect to
the patent applications of the Company presently on file that (A) would preclude
the issuance of patents with respect to such applications, or (B) would lead
such counsel to conclude that such patents, when issued, would not be valid and
enforceable in accordance with applicable regulations, except as follows. Such
counsel is aware of a pending U.S. patent application assigned to a third party
that has claims that overlap with one or more claims of one of the Company's
pending U.S. patent applications directed to a new method of use which is in
preclinical development. The third party application has been brought to the
attention of the U.S. Patent & Trademark Office. It is such counsel's opinion
that the Company would prevail in any inventorship challenge or interference
based upon the third party application;
(vi) such counsel has no reason to believe that the statements in
the Registration Statement and the Prospectus referring to Intellectual Property
matters, insofar as such statements constitute summaries of legal matters,
contracts, agreements, documents or proceedings referred to therein, or to
statements of law or legal conclusions, contain any untrue statement of a
material fact or omit to state any material fact known to such counsel necessary
to make such statement not misleading; and
(vii) nothing has come to such counsel's attention that causes such
counsel 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 known
to such counsel 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 known to such counsel required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
16
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the Commonwealth of Massachusetts and the General Corporation Law of
the State of Delaware. Such opinion shall also be to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statement and (y) based on the foregoing, no facts have come
to the attention of such counsel which lead them to believe that the
Intellectual Property portions of the Registration Statement (except for the
financial statements and related schedules therein, as to which such counsel
need express no belief) as of the Effective Date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus (except as stated above) contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement
may be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(e) The Representative shall have received from Xxxxxxxx Chance US LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representative may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the Representative shall
have received from Deloitte & Touche LLP a letter or letters, in form and
substance satisfactory to the Representative, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter or letters of Deloitte & Touche LLP
referred to in the preceding paragraph and delivered to the Representative
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Company shall have furnished to the Representative a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
17
(h) The Company shall have furnished to the Representative a certificate,
dated such Delivery Date, of its Chairman of the Board, its President or a Vice
President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of such Delivery Date; the Company has
complied with all its agreements contained herein; and the conditions set forth
in Sections 7(a) and 9(i) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B) since the
Effective Date no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement or the Prospectus which
has not been so set forth.
(i) Neither the Company nor any of its subsidiaries shall have sustained
(i) since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date, there shall not
have been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there shall
not have occurred any of the following: (i) trading in securities generally on
the New York Stock Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such), including, without
limitation, as a result of terrorist activities after the date hereof, or any
other calamity or crisis as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the public offering or delivery of
the Stock being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) The Nasdaq National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(l) No Underwriter shall have discovered and disclosed to the Company on
or prior to such Delivery 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 Xxxxxxxx Chance US LLP,
18
counsel for 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 not misleading.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
directors, officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (B) in any materials or information provided to investors by, or with
the approval of, the Company in connection with the marketing of the offering of
the Stock, including any roadshow or investor presentations made to investors by
the Company (whether in person or electronically) (the "MARKETING MATERIALS"),
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such director, officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter, director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representative by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 10(e). The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to any Underwriter or to any director,
officer, employee or controlling person of that Underwriter.
The Company agrees to indemnify and hold harmless Xxxxxx Brothers Inc.
(including its officers and employees) and each person, if any, who controls
Xxxxxx Brothers Inc. within the meaning of the Securities Act ("XXXXXX BROTHERS
ENTITIES"), from and against any loss, claim, damage or liability or any action
in respect thereof to which any of the Xxxxxx Brothers Entities may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
material
19
prepared by or with the approval of the Company for distribution to Directed
Share Participants in connection with the Directed Share Program or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) arises
out of, or is based upon, the failure of the Directed Share Participant to pay
for and accept delivery of Directed Shares that the Directed Share Participant
agreed to purchase or (iii) is otherwise related to the Directed Share Program,
other than losses, finally judicially determined to have resulted directly from
the bad faith or gross negligence of Xxxxxx Brothers Inc. The Company shall
reimburse the Xxxxxx Brothers Entities promptly upon demand for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, each of its officers who have signed the Registration
Statement, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is 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 in any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representative by or on behalf of that
Underwriter specifically for inclusion therein, which information is limited to
the information set forth in Section 8(e), and shall reimburse the Company and
any such director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Underwriter may otherwise have to the Company or any such director,
officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representative shall have the right to employ counsel to represent jointly
the Representative and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representative, it is advisable for the Representative and
20
those Underwriters, directors, officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and expenses
of such separate counsel shall be paid by the Company. Notwithstanding anything
contained herein to the contrary, if indemnity may be sought pursuant to Section
8(a) hereof in respect of such claim or action, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the fees and expenses of not more than one separate firm (in addition
to any local counsel) for the Xxxxxx Brothers Entities for the defense of any
loss, claim, damage, liability or action arising out of the Directed Share
Program. No indemnifying party shall (i) without the prior written consent of
the indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be 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 Stock
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 the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Stock purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the shares of the Stock under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative 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 contributions
pursuant to this Section 8(d) were to be 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 into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or
21
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges that
the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
SECTION 9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 2. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representative who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representative do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the part
of any non-defaulting Underwriter or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 6 and 11. As used in this Agreement, the term "UNDERWRITER" includes,
for all purposes of this Agreement unless the context requires otherwise, any
party not listed in Schedule 1 hereto who, pursuant to this Section 9, purchases
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representative or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representative by notice given to and received by the Company
prior to delivery of and payment for the Firm Stock if, prior to that time, any
of the events described in Sections 7(i) or 7(j), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
22
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company shall fail
to tender the Stock for delivery to the Underwriters by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company is not fulfilled,
the Company will reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Stock, and upon demand the Company shall pay the full amount thereof to the
Representative. If this Agreement is terminated pursuant to Section 9 by reason
of the default of one or more Underwriters, the Company shall not be obligated
to reimburse any defaulting Underwriter on account of those expenses.
SECTION 12. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
X.X. 00000, Attention: Syndicate Registration Department, Fax (000) 000-0000,
with a copy, in the case of any notice pursuant to Section 8(c), to the Director
of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) If to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxxx Xxxx, Fax: (000) 000-0000; provided,
however, that any notice to an Underwriter pursuant to Section 10(d) shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its acceptance telex to the Representative, which
address will be supplied to any other party hereto by the Representative upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Underwriters by Xxxxxx Brothers Inc. on behalf of the Representative;
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (a) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (b) the indemnity
agreement of the Underwriters contained in Section 8(b) of this Agreement shall
be deemed to be for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 13, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
SECTION 15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or
23
executive order to close and (b) "SUBSIDIARY" has the meaning set forth in Rule
405 of the Rules and Regulations.
SECTION 16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
SECTION 17. Consent to Jurisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("RELATED PROCEEDINGS") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "SPECIFIED COURTS"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. [Each party not located in
the United States hereby irrevocably appoints CT Corporation System, which
currently maintains a New York City office at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service of process
or other legal summons for purposes of any such action or proceeding that may be
instituted in any state or federal court in the City and State of New York.]
SECTION 18. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
24
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
Aderis Pharmaceuticals, Inc.
By:
----------------------------------------
Name:
Title:
Accepted:
Xxxxxx Brothers Inc.
For itself and as Representative
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By:
---------------------------------
Authorized Representative
25
EXHIBIT A
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
As Representative of the several
Underwriters named in Schedule 1
to the Underwriting Agreement,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.001 per share (the "Common Stock"), of
Aderis Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and that
the Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock (other
than the Shares) owned by the undersigned on the date of execution of this
Lock-Up Letter Agreement or on the date of the completion of the Offering, or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, for a period of 180 days after the date of the
final Prospectus relating to the Offering.
The foregoing sentence shall not apply to bona fide gifts, sales or other
dispositions of shares of any class of the Company's capital stock, in each case
that are made exclusively between and among the undersigned and members of the
undersigned's family, or affiliates of the undersigned, provided that it shall
be a condition to any such transfer that (i) the transferee/donee agrees to be
bound by the terms of the Lock-Up Letter Agreement (including, without
limitation, the restrictions set forth in the preceding sentence) to the same
extent as if the transferee/donee were a party hereto, (ii) no filing by any
party (donor, donee, transferor or transferee) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), shall be required or shall be
voluntarily made in connection with such transfer or distribution, (iii) each
party (donor, donee, transferor or transferee) shall not be required by law
(including without limitation the disclosure requirements of the Securities Act
of 1933, as amended, and the Exchange Act) to make, and shall agree to not
voluntarily make, any public announcement of the transfer or disposition, and
(iv) the undersigned notifies Xxxxxx Brothers' Equity Capital Markets at least
two business days prior to the proposed transfer or disposition.
26
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, (i) if the Company notifies you that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is
withdrawn, (iii) if the Underwriting Agreement does not become effective, or
(iv) if the Underwriting Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Shares, the undersigned will be released from the undersigned's
obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
Dated: ___________________________ By: ______________________________
Name:
Title:
27
