Exhibit 1.1
Isis Pharmaceuticals, Inc.
5,000,000 Shares
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
________ __, 2001
UNDERWRITING AGREEMENT
________ __, 2001
UBS Warburg LLC
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxxx & Company, Inc.
Fortis Securities Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Isis Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters named in Schedule A
annexed hereto (the "Underwriters") an aggregate of 5,000,000 shares of Common
Stock, $0.001 par value per share (the "Common Stock"), of the Company (the
"Firm Shares"). In addition, solely for the purpose of covering over-allotments,
the Company proposes to grant to the Underwriters the option to purchase from
the Company up to an additional 750,000 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the Shares. The Shares are described in the Prospectus
which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-71176)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act, and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the Registration Statement, and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after
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the date hereof (or such earlier time as may be required under the Act) or, if
no such filing is required, the form of final prospectus included in the
Registration Statement at the time it became effective, is herein called the
Prospectus. Any reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Form S-3, and any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the filing of any document under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act") after the effective date of the
Registration Statement, or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the
representations and warranties and subject to the terms and conditions herein
set forth, the Company agrees to sell to the respective Underwriters and each of
the Underwriters, severally and not jointly, agrees to purchase from the Company
the respective number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A annexed hereto in each case at a purchase price of
$____ per Share. The Company is advised by you that the Underwriters intend (i)
to make a public offering of their respective portions of the Firm Shares as
soon after the effective date of the Registration Statement as in your judgment
is advisable and (ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
for the Firm Shares. This option may be exercised by you on behalf of the
several Underwriters at any time and from time to time on or before the 30th day
following the date hereof by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the additional time of
purchase); PROVIDED, HOWEVER, that the additional time of purchase shall not be
earlier than the time of purchase (as defined
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below) nor earlier than the second business day(1) after the date on which the
option shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares.
2. PAYMENT AND DELIVERY. Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds wire transfer,
against delivery of the certificates for the Firm Shares to you through the
facilities of the Depository Trust Company (DTC) for the respective accounts of
the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time, on _________ __, 2001 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are actually made
is hereinafter sometimes called the time of purchase. Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Firm
Shares shall be made to you at the time of purchase in such names and in such
denominations as you shall specify.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to each of the Underwriters that:
(a) The Company has not received nor has notice of any
notice or order of the Commission preventing or suspending the use of
any Preliminary Prospectus, nor has the Company received any notice of
the Commission's instituting proceedings for that purpose, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act; and when the
Registration Statement becomes effective, the Registration Statement
and the Prospectus will conform in all material respects with the
provisions of the Act, and the Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein
--------
(1) As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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not misleading, and the Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the Company makes no representation or warranty
with respect to any statement contained in the Registration Statement
or the Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf of
any Underwriter through you to the Company for use in the Registration
Statement or the Prospectus; and neither the Company nor any of its
affiliates has distributed any offering material in connection with the
offer or sale of the Shares other than the Registration Statement, the
Preliminary Prospectus, the Prospectus or any other materials, if any,
permitted by the Act;
(b) as of the date of this Agreement, the Company's
capitalization is in all material respects as set forth under the
heading entitled "Actual" in the section of the Registration Statement
and the Prospectus entitled "Capitalization" and, as of the time of
purchase, the Company's capitalization shall be in all material
respects as set forth under the heading entitled "As Adjusted" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization" (subject to the issuance of shares of Common Stock
upon the exercise of stock options disclosed as outstanding and issued
under the plans described in the Registration Statement and the
Prospectus and subject to the issuance of shares of Common Stock
pursuant to agreements described in the Registration Statement and the
Prospectus); all of the issued and outstanding shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable, have been issued in compliance with all
federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar
right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus;
(d) the Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to so
qualify would not reasonably be expected to have a material adverse
effect on the business, operations, prospects, properties, condition
(financial or otherwise) or results of operation of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material
Adverse Effect"). The Company has no subsidiaries (as defined in the
Act) other than as listed in Schedule B annexed hereto (the
"Subsidiaries") and except for such other inactive subsidiaries that do
not possess,
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individually or in the aggregate, any assets, liabilities or rights
that are material to the Company and the Subsidiaries taken as a whole;
the Company owns such interest in the Subsidiaries as is set forth in
the Registration Statement and the Prospectus; except for the
Subsidiaries or as described in the Registration Statement and the
Prospectus, the Company does not own, directly or indirectly, any
long-term debt or any material equity interest in any firm,
corporation, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation and of
the bylaws of the Company and all amendments thereto have been made
available to you; each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with the requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement
and the Prospectus; each of the Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction where the ownership or leasing of the properties or the
conduct of its business requires such qualification, except where the
failure to so qualify would not reasonably be expected to have a
Material Adverse Effect; all of the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, have been issued in
compliance with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal
or similar right;
(e) neither the Company nor any of the Subsidiaries is in
breach or violation of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in the Company's
or any Subsidiary's breach or violation of, or constitute the Company's
or any Subsidiary's default under) (each such breach, violation,
default or event of the Company or any of the Subsidiaries, a "Default
Event"), (i) its charter, by-laws or other organizational documents,
(ii) any obligation, agreement, covenant or condition contained in any
license, permit, indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or any of their
properties is bound or affected, (iii) any federal, state, local or
foreign law, regulation or rule or (iv) any decree, judgment or order
applicable to the Company, any of the Subsidiaries or any of their
respective properties, other than, in the case of clauses (ii) and
(iii), such Default Events as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and the execution, delivery and performance of this Agreement,
including the issuance and sale of the Shares and the consummation of
the other transactions contemplated hereby, does not constitute and
will not result in a Default Event under (w) any provisions of the
charter, by-laws or other organizational documents of the Company or
any of the Subsidiaries, (x)
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under any provision of any license, permit, indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument
to which the Company or any of the Subsidiaries or by which any of them
or their respective properties may be bound or affected, (y) under any
federal, state, local or foreign law, regulation or rule or (z) under
any decree, judgment or order applicable to the Company, any of the
Subsidiaries or any of their respective properties, except, in the case
of clauses (x) and (y), for such Default Events as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(f) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company;
(g) the capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus;
(h) the Shares have been duly and validly authorized by
the Company and, when issued and delivered by the Company against
payment therefor as provided herein, will be validly issued, fully paid
and non-assessable;
(i) no approval, authorization, consent or order of or
filing with any national, state, local or other governmental or
regulatory commission, board, body, authority or agency is required to
be obtained or made by the Company or any of the Subsidiaries in
connection with the issuance and sale of the Shares or the consummation
by the Company of the other transactions contemplated hereby other than
registration of the offer and sale of the Shares under the Act, which
has been or will be effected, and any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters;
(j) except as set forth in the Registration Statement and
the Prospectus (i) no person has the right, contractual or otherwise,
to cause the Company to issue or sell to it any shares of Common Stock
or shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, and (iii) no person has the right to act as
an underwriter, or as a financial advisor to the Company, in connection
with the offer and sale of the Shares, in the case of each of the
foregoing clauses (i), (ii) and (iii), whether as a result of the
filing or effectiveness of the Registration Statement or the sale of
the Shares as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Company to register under
the Act any shares of Common Stock or shares of any other capital stock
or
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other equity interests of the Company, or to include any such shares
or interests in the Registration Statement or the offering contemplated
thereby whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated
thereby or otherwise, except as disclosed in the Registration Statement
and Prospectus and except for such rights as have been complied with or
waived;
(k) Ernst & Young LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is filed with
the Commission as part of the Registration Statement and the
Prospectus, are independent public accountants as required by the Act;
(l) the Company and each of the Subsidiaries has all
necessary licenses, permits, authorizations, consents and approvals and
has made all necessary filings required under any federal, state, local
or foreign law, regulation or rule (collectively, "Permits"), and has
obtained all authorizations, consents and approvals from other persons
(collectively, "Approvals") that are necessary in order to conduct its
business as described in the Registration Statement and the Prospectus,
other than such Permits and Approvals the failure of which to obtain
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; to its knowledge neither the Company
nor any of the Subsidiaries is in violation of, or any default under,
any such Permit or Approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to
the Company or any of the Subsidiaries the effect of which would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(m) all legal or governmental proceedings, contracts,
leases or documents of a character required to be described in the
Registration Statement or the Prospectus or any document incorporated
by reference therein or to be filed as an exhibit to the Registration
Statement or any document incorporated by reference therein have been
so described or filed as required;
(n) except as disclosed in the Registration Statement and
the Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or threatened to which the Company, its directors
or officers, any of the Subsidiaries or, to the Company's knowledge,
any of the Subsidiaries' directors or officers is a party or of which
any of their respective properties is subject at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which, if
adversely decided, would reasonably be expected to result in a
judgment, decree or order having a Material Adverse Effect or prevent
consummation of the transactions contemplated hereby;
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(o) the financial statements, together with the related
schedules and notes, included in the Registration Statement and the
Prospectus present fairly in all material respects the consolidated
financial position of the Company and the Subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows of
the Company and the Subsidiaries for the periods specified and have
been prepared in compliance in all material respects with the
requirements of the Act and in conformity with generally accepted
accounting principles applied on a consistent basis during the periods
involved; the other financial and statistical data set forth under
"Summary Consolidated Financial Data," "Capitalization," and "Selected
Consolidated Financial Data" in the Registration Statement and the
Prospectus are accurately presented in all material respects and
prepared on a basis consistent with such financial statements and books
and records of the Company; and there are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement and the Prospectus that are not included as
required;
(p) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been (i) any material adverse change, or any development
which could reasonably be expected to result in a material adverse
change in the business, operations, properties, condition (financial or
otherwise), or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction of the Company or
the Subsidiaries which is material to the Company and the Subsidiaries
taken as a whole, (iii) any obligation, direct or contingent, which is
material to the Company and the Subsidiaries taken as a whole, incurred
by the Company or any of the Subsidiaries, or (iv) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company; neither the Company nor any of the Subsidiaries has any
material contingent obligation which is not disclosed in the
Registration Statement and the Prospectus;
(q) the Company has obtained for the benefit of the
Underwriters the agreement (a "LOCK-UP AGREEMENT"), in the form set
forth as EXHIBIT C hereto, of each of its executive officers and
directors; the Company will not release or purport to release any of
its officers or directors from any Lock-Up Agreement without the prior
written consent of UBS Warburg;
(r) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(s) any statistical and market related data included in
the Prospectus are based on or derived from sources that the Company
believes to be reliable and
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accurate, and the Company has obtained the written consent to the use
of such data from such sources to the extent required;
(t) neither the Company nor any of the Subsidiaries nor,
to the Company's knowledge, any of their respective affiliates has
taken, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares;
(u) the Company and each of the Subsidiaries maintain
insurance of the types and in amounts reasonably adequate for their
respective businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and other risks
customarily insured against, all of which insurance is in full force
and effect;
(v) neither the Company nor any of the Subsidiaries has
sustained since the date of the latest financial statements included in
the Prospectus any losses or interferences with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Registration Statement and the Prospectus or other than any losses or
interferences which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(w) the Company and each of the Subsidiaries have good
title to all personal property owned by them as described in the
Registration Statement and the Prospectus, which to the Company's
knowledge is free and clear of all liens, encumbrances and defects
except such as (i) are described in the Registration Statement and the
Prospectus, (ii) were incurred in the ordinary course of business and
not required to be described in the Registration Statement and the
Prospectus or (iii) would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; except as
described in the Registration Statement and the Prospectus, any real
property and buildings held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and presently
proposed to be made of such property and buildings by the Company or
any of the Subsidiaries, as the case may be;
(x) neither the Company nor, to the Company's knowledge,
any of the Subsidiaries has violated any foreign, federal, state or
local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable
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federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act or the rules and regulations
promulgated thereunder, which would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect;
(y) the Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(z) except as would not individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, all tax
returns required to be filed by the Company and each of the
Subsidiaries have been filed, other than those filings being contested
in good faith, and all taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company or any of
the Subsidiaries have been paid, other than those being contested in
good faith and for which adequate reserves have been provided;
(aa) all documents incorporated by reference by the
Registration Statement, the Preliminary Prospectus or the Prospectus
complied in all material respects, at the time the Registration
Statement was filed with the Commission, with the requirements of the
Exchange Act;
(bb) other than as set forth in the Registration Statement
and the Prospectus, or as would not individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the Company
and the Subsidiaries own, possess, license or have other rights to use,
all patents, trademarks, servicemarks, trade names, copyrights, trade
secrets, information, proprietary rights and processes ("Intellectual
Property") necessary for their business as described in the
Registration Statement and the Prospectus, without any known conflict
with or infringement of the interests of others. Except as described in
the Registration Statement and the Prospectus, the Company is not aware
of any options, licenses or agreements of any kind relating to the
Intellectual Property of the Company or the Subsidiaries that are
outstanding and which are required to be described in the Registration
Statement and the Prospectus, and, except as described in the
Registration Statement and the Prospectus, neither the Company nor
either of the Subsidiaries is a party to or bound by any options,
licenses or
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agreements with respect to the Intellectual Property of any other
person or entity which are required to be described in the Registration
Statement and the Prospectus; none of the technology employed by the
Company and the Subsidiaries has been obtained or is used or proposed
to be used by the Company or the Subsidiaries in violation of any
contractual obligation binding on the Company or the Subsidiaries or
any of their respective directors or executive officers or, to the
Company's knowledge, any employees of the Company or the Subsidiaries,
other than any violation which would not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect; except
as described in the Registration Statement and the Prospectus, to the
Company's knowledge neither the Company nor either of the Subsidiaries
has violated, infringed or conflicted with, or, by conducting its
business as described in the Registration Statement and the Prospectus
and commercializing the products under development described therein,
would violate, infringe or conflict with any of the Intellectual
Property of any other person or entity other than any such violation,
infringement or conflict which would not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect; and
(cc) The clinical, pre-clinical and other studies and
tests conducted by or on behalf of or sponsored by the Company or any
Subsidiary or in which the Company, any Subsidiary or its products or
product candidates have participated that are described in the
Prospectus or the results of which are referred to in the Prospectus
were and, if still pending, are being conducted in accordance with
standard medical and scientific research procedures; except to the
extent disclosed in the Registration Statement and the Prospectus, the
Company and each Subsidiary has operated and currently is in compliance
in all material respects with all applicable rules, regulations and
policies of the U.S. Food and Drug Administration and comparable drug
regulatory agencies outside of the United States (collectively, the
"REGULATORY AUTHORITIES"); and except to the extent disclosed in the
Registration Statement and the Prospectus, the Company has not received
any notices or other correspondence from the Regulatory Authorities or
any other governmental agency requiring the termination or suspension
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.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby
agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; PROVIDED that the Company
shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except
service of process with respect to the
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offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(b) to make available to the Underwriters in New York
City, as soon as practicable after the Registration Statement becomes
effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments
or supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare promptly upon request such amendment or amendments
to the Registration Statement and such prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the
Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act (which the Company agrees to file in a timely manner under such
Rules);
(d) to advise you promptly, confirming such advice in
writing (if requested by you), of any request by the Commission for
amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to make every reasonable effort to obtain
the lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment or supplement to
which you shall object in writing;
(e) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(f) to furnish, upon request, to you and, upon request,
to each of the other Underwriters for a period of five years from the
date of this Agreement (i) copies of any reports or other
communications which the Company shall send to its stockholders or
shall from time to time publish or publicly disseminate, (ii) copies of
all annual,
12
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms, as may be designated by the
Commission, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other public information as you may
reasonably request regarding the Company or any of the Subsidiaries, in
each case as soon as reasonably practicable after such reports,
communications, documents or information become available;
(g) to advise the Underwriters promptly of the happening
of any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Act which would require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement
of material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading, and, during such time, to prepare and
furnish, at the Company's expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change and to furnish you a copy of such proposed
amendment or supplement before filing any such amendment or supplement
with the Commission;
(h) to make generally available to its security holders,
and to deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) of the Act) and ending not later
than 15 months thereafter;
(i) to furnish to you five conformed copies of the
Registration Statement, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto) and sufficient
additional conformed copies (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(j) to furnish to you as early as reasonably practicable
prior to the time of purchase and the additional time of purchase, as
the case may be, but not later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(f) hereof;
(k) to apply the net proceeds from the sale of the Shares
in the manner set forth under the caption "Use of proceeds" in the
Prospectus;
13
(l) to pay all costs, expenses, fees and taxes in
connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including
costs of mailing and shipment), (ii) the registration, issue, sale and
delivery of the Shares, (iii) the printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Powers of
Attorney and any closing documents (including compilations thereof) and
the reproduction and/or printing and furnishing of copies of each
thereof to the Underwriters and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Shares for offering and sale under state laws and the determination
of their eligibility for investment under state law as aforesaid
(including associated filing fees and the reasonable legal fees and
disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) any listing of the
Shares on any securities exchange or qualification of the Shares for
quotation on the Nasdaq National Market and any registration thereof
under the Exchange Act, (vi) review of the public offering of the
Shares by NASD Regulation, Inc. (including associated filing fees and
the reasonable legal fees and disbursements of counsel for the
Underwriters), (vii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing
of the offer and sale of the Shares to prospective investors and the
Representatives' sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show and (viii) the
performance of the other obligations of the Company hereunder.
(m) for so long as the delivery of the Prospectus is
required in connection with the offer or sale of the Shares, to furnish
to you, before filing with the Commission, a copy of any document
proposed to be filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act;
(n) not to sell, offer or agree to sell, contract to
sell, hypothecate, pledge, grant any option to sell or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or file
or cause to be declared effective a registration statement under the
Act relating to the offer and sale of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common
Stock or other rights to purchase Common Stock or any
14
other securities of the Company that are substantially similar to
Common Stock, for a period of ninety (90) days after the date hereof
(the "LOCK-UP PERIOD"), without the prior written consent of UBS
Warburg except for (i) the registration of the Shares and the sales to
the Underwriters pursuant to this Agreement, (ii) issuances of Common
Stock upon the exercise of options or warrants or upon the conversion
of convertible securities disclosed as outstanding in the Registration
Statement and the Prospectus, (iii) the issuance of stock options not
exercisable during the Lock-up Period pursuant to stock option plans
described in the Registration Statement and the Prospectus and (iv) the
issuance of securities which may be required pursuant to the Company's
or the Subsidiaries' currently outstanding agreements which are
described in the Registration Statement and the Prospectus, including
without limitation the issuance of Common Stock to Hybridon, Inc. and
the registration thereof under the Act.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the
Shares are not delivered for any reason other than the termination of this
Agreement pursuant to the last paragraph of Section 8 hereof or the default by
one or more of the Underwriters in its or their respective obligations
hereunder, the Company agrees, in addition to paying the amounts described in
Section 4(l) hereof, to reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of their
counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (unless previously waived) and at the additional time of purchase, as
the case may be), the performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a) You shall have received, at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of
Xxxxxx Godward LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and
is validly existing as a corporation and in good standing
under the laws of the State of Delaware, with full corporate
power and authority to own, lease and operate its properties
and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
15
(ii) the Company is duly qualified to do business
as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is necessary, except
where the failure to so qualify would not reasonably be
expected to have a Material Adverse Effect;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company;
(iv) the Firm Shares have been duly authorized
and, when issued (in the case of the Firm Shares) and
delivered to and paid for by the Underwriters in accordance
with and for the consideration set forth herein, will be duly
and validly issued and will be fully paid and non-assessable;
(v) the Company has authorized and outstanding
(as of the dates indicated) shares of capital stock as set
forth in the Registration Statement and the Prospectus under
the caption "Capitalization"; the outstanding shares of
capital stock of the Company (A) have been duly authorized and
validly issued and are fully paid and non-assessable and (B)
are free of preemptive rights, resale rights, rights of first
refusal and similar rights under the Delaware General
Corporation Law (the "DGCL") or the charter or bylaws or other
organizational documents of the Company or any contract,
commitment or instrument filed as an exhibit to the
Registration Statement; the Firm Shares when issued will be
free of preemptive or similar rights under the DGCL or any
contract, commitment or instrument filed as an exhibit to the
Registration Statement; and the certificates for the Shares
are in due and proper form and conform to the requirements of
the DGCL and the Nasdaq National Market;
(vi) the common stock of the Company, including
the Shares, conforms in all material respects to the
description thereof contained in the Registration Statement
and Prospectus (as incorporated by reference therein from the
Company's Registration Statement on Form 8-A filed with the
Commission on April 12, 1991 and from the Company's
Certificate of Amendment of Restated Certificate of
Incorporation filed with the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 2001, as amended);
(vii) the Registration Statement and the
Prospectus (except as to the financial statements and
schedules and other financial and statistical data contained
therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act;
16
(viii) the Registration Statement has become
effective under the Act, and to such counsel's knowledge no
stop order with respect to the effectiveness thereof has been
issued and no stop order proceedings with respect thereto have
been instituted or are overtly threatened under the Act; and
any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424 under the Act has been made in
the manner and within the time period required by such Rule
424;
(ix) no approval, authorization, consent or order
of or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required in connection with the execution and delivery of this
Agreement and the issuance and sale of the Shares and
consummation of the other transactions contemplated hereby
other than those that have been obtained under the Act, the
Exchange Act and the rules of the Nasdaq National Market,
other than any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or any
necessary approval of the Corporate Financing Department of
NASD Regulation, Inc., as to which such qualification and
approval such counsel need express no opinion;
(x) the execution, delivery and performance of
this Agreement by the Company, including the consummation of
the transactions contemplated hereby and by the Registration
Statement, do not constitute, and will not result in, a
Default Event pursuant to (A) any provision of the charter or
bylaws or other organizational documents of the Company, (B)
any provision of any license, permit, franchise,
authorization, indenture, mortgage, deed of trust, note, bank
loan, credit agreement, other evidence of indebtedness, lease,
contract, agreement or instrument filed as an exhibit to the
Registration Statement, (C) any federal, state, local or
foreign law, regulation or rule applicable to the Company or
(D) any decree, judgment or order known by such counsel to be
applicable to the Company or any of the Subsidiaries other
than, in the case of clause (B) such Default Events as would
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(xi) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Prospectus which have not been so filed, summarized or
described;
(xii) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending
or overtly threatened to which the Company or any of the
Subsidiaries is subject or of which any of their
17
respective properties is subject, whether at law, in equity
or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body,
authority or agency, which are required to be described in
the Prospectus but are not so described;
(xiii) the Company is not and, after giving effect
to the offer and sale of the Shares, will not be an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act;
(xiv) those statements in the Registration
Statement and the Prospectus under the captions "Risk
Factors--If registration rights that we have previously
granted are exercised, then our stock price may be
negatively affected." and "Risk Factors--Provisions in our
certificate of incorporation, other agreements and Delaware
law may prevent stockholders from receiving a premium for
their shares." and in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000 under the
caption "Recent Sales of Unregistered Securities" that are
descriptions of contracts, agreements or other legal
documents or of legal proceedings, or refer to statements of
law or legal conclusions, are accurate in all material
respects and present fairly the information required to be
shown; and
(xv) except as described in the Registration
Statement and the Prospectus (including those rights held by
Hybridon, Inc. pursuant to the agreements described in the
Registration Statement and the Prospectus), no person has the
right, pursuant to the terms of any contract, agreement or
other instrument filed as an exhibit to the Registration
Statement to have any securities issued by the Company and
owned by them registered pursuant to the Act, included in the
Registration Statement or sold in the offering contemplated
thereby, whether as a result of the filing or effectiveness of
the Registration Statement or the transactions contemplated by
this Agreement or otherwise, except for such rights as have
been complied with or waived;
In addition, such counsel shall state that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
Prospectus were discussed. Although such counsel has not
independently verified and is not passing upon and does not assume
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus
(except as and to the extent stated in subparagraphs (vi) (vii) and
(xiv) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or any
18
supplement thereto at the date of such Prospectus or such
supplement, and at all times up to and including the time of
purchase or additional time of purchase, as the case may be,
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial
statements and schedules and other financial or statistical data
included in the Registration Statement or Prospectus).
(b) You shall have received at the time of purchase
and at the additional time of purchase, as the case may be, the
opinion of Xxxxxxxx Xxxxxxxx LLP, patent counsel to the Company,
dated the time of purchase or the additional time of purchase, as
the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to Xxxxx Xxxxxxxxxx
LLP, counsel for the Underwriters, stating that:
(i) based on information brought to our
attention by the Company with respect to the Company's
investigation of the published literature and patent
references relating to the inventions claimed in its patent
applications in our care (the "relevant applications"), we
have disclosed all pertinent art references to the United
States Patent and Trademark Office in such applications. To
the best of our knowledge, all information submitted to the
United States Patent and Trademark Office in the relevant
applications and in connection with the prosecution of the
relevant applications was accurate. Neither we nor, to the
best of our knowledge, the Company has made any
misrepresentation or concealed any material fact from the
Patent and Trademark Office in any of the relevant
applications, or in connection with the prosecution of such
applications. Xxxxxxxx Xxxxxxxx LLP has not independently
conducted any investigation of the published literature and
patent references relating to the inventions claimed in the
Company patent applications;
(ii) the statements in the Prospectus under the
heading "Risk factors-- Intellectual property litigation could
be expensive and prevent us from pursuing our programs" and in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 under the caption "Patents and Proprietary
Rights" constitute an accurate summary of the matters referred
to therein and fairly present the information called for with
respect to such matters; and
(iii) other than as disclosed in the Prospectus,
to the best of our knowledge, the Company's products and
products under development do not, and would not upon
commercialization, infringe or conflict with asserted rights
19
of any third party with respect to any material patents,
trademarks, licenses, copyrights and proprietary or other
confidential information employed by the Company in connection
with its business.
With respect to subparagraph (i) of paragraph (b) above, Xxxxxxxx
Xxxxxxxx LLP may state that they have not independently conducted any
investigation of the published literature and patent references relating to
the inventions claimed in the Company's patent applications.
(c) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, the opinion of
Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may require.
(d) You shall have received from Ernst & Young LLP
letters dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by UBS Warburg.
(e) No amendment or supplement to the Registration
Statement or Prospectus, or document which upon filing with the
Commission would be incorporated by reference therein, shall at any
time have been filed to which you have objected or shall object in
writing.
(f) The Registration Statement shall have become
effective, or if Rule 430A under the Act is used, the Prospectus shall
have been filed with the Commission pursuant to Rule 424(b) under the
Act, at or before 5:00 P.M., New York City time, on the date of this
Agreement, unless a later time (but not later than 5:00 P.M., New York
City time, on the second full business day after the date of this
Agreement) shall be agreed to by the Company and you in writing or by
telephone, confirmed in writing; PROVIDED, HOWEVER, that the Company
and you and any group of Underwriters, including you, who have agreed
hereunder to purchase in the aggregate at least 50% of the Firm Shares
may from time to time agree on a later date.
(g) Prior to the time of purchase or the additional time
of purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of
a material fact or
20
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii)
the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
(h) Between the time of execution of this Agreement and
the time of purchase or the additional time of purchase, as the case
may be, (i) no material and adverse change or any development involving
a prospective material and adverse change (other than as specifically
described in the Registration Statement and Prospectus), in the
business, properties, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole, shall
occur or become known and (ii) no transaction which is material and
adverse to the Company shall have been entered into by the Company or
any of the Subsidiaries.
(i) The Company will, at the time of purchase or
additional time of purchase, as the case may be, deliver to you a
certificate signed by one of the Company's executive officers to the
effect that the representations and warranties of the Company as set
forth in this Agreement are true and correct as of each such date, that
the Company has performed such of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be, and the
conditions set forth in paragraphs (g) and (h) of this Section 6 have
been met.
(j) You shall have received the letters referred to in
Section 3(q).
(k) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statement and the Prospectus as of the
time of purchase and the additional time of purchase, as the case may
be, as you may reasonably request.
(l) The Shares shall have been approved for listing for
quotation on the Nasdaq National Market, subject only to notice of
issuance at or prior to the time of purchase or the additional time of
purchase, as the case may be.
(m) Between the time of execution of this Agreement and
the time of purchase or additional time of purchase, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
or announcement have been given or made of (i) any intended or
potential downgrading or (ii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of
21
or guaranteed by the Company or any Subsidiary by any "nationally
recognized statistical rating organization", as that term is defined in
rule 436(g)(2) under the Act.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This
Agreement shall become effective (i) if Rule 430A under the Act is not used,
when you shall have received notification of the effectiveness of the
Registration Statement, or (ii) if Rule 430A under the Act is used, when the
parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, (i) if, since the time of execution
of this Agreement or the respective dates as of which information is given in
the Registration Statement and Prospectus, there has been any material adverse
change, financial or otherwise (other than as specifically described in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and the Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, (ii) there shall have occurred any
downgrading, or any notice shall have been given of (x) any intended or
potential downgrading or (y) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or guaranteed
by the Company or any Subsidiary by any "nationally recognized statistical
rating organization", as that term is defined in Rule 436(g)(2) under the Act or
(iii) if, at any time prior to the time of purchase or, with respect to the
purchase of any Additional Shares, the additional time of purchase, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or limitations
or minimum prices shall have been established on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, or if a banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on the financial markets of
the United States as, in your judgment or in the judgment of such group of
Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram from such terminating
Underwriter.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or
22
liability under this Agreement (except to the extent provided in Sections
4(1), 5 and 9 hereof), and the Underwriters shall be under no obligation or
liability to the Company under this Agreement (except to the extent provided
in Section 9 hereof) or to one another hereunder.
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to
Sections 6 and 7, if any Underwriter shall default in its obligation to
purchase and pay for the Firm Shares to be purchased by it hereunder
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 7 hereof) and if the number of Firm
Shares which all Underwriters so defaulting shall have agreed but failed to
purchase and pay for does not exceed 10% of the total number of Firm Shares,
the non-defaulting Underwriters shall purchase and pay for (in addition to
the aggregate number of Firm Shares they are obligated to purchase pursuant
to Section 1 hereof) the number of Firm Shares agreed to be purchased by all
such defaulting Underwriters, as hereinafter provided. Such Shares shall be
purchased and paid for by such non-defaulting Underwriter or Underwriters in
such amount or amounts as you may designate with the consent of each
Underwriter so designated or, in the event no such designation is made, such
Shares shall be purchased and paid for by all non-defaulting Underwriters pro
rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total
number of Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the
purchase of all the Shares which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall terminate without further
act or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any
23
liability on the part of any non-defaulting Underwriter to the Company.
Nothing in this paragraph, and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and any person
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter through you to the Company expressly
for use with reference to such Underwriter in such Registration Statement or
such Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading, or (ii) any untrue statement or alleged
untrue statement made by the Company in Section 3 of this Agreement or the
failure by the Company to perform when and as required any agreement or covenant
contained herein or (iii) any untrue statement or alleged untrue statement of
any material fact contained in any audio or visual materials provided by the
Company or based upon written information furnished by or on behalf of the
Company including, without limitation, slides, videos, films, tape recordings,
used in connection with the marketing of the Shares, PROVIDED, HOWEVER, that the
indemnity agreement contained in clause (i) of this subsection (a) with respect
to any Preliminary Prospectus or amended Preliminary Prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such loss,
damage, expense, liability or claim purchased the Shares which is the subject
thereof if the Prospectus corrected any such alleged untrue statement or
omission and if such Underwriter failed to send or give a copy of the Prospectus
to such person at or prior to the written confirmation of the sale of such
Shares
24
to such person, unless the failure is the result of noncompliance by the
Company with Section 4(b) hereof.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such Underwriter or such person shall promptly notify the Company in writing of
the institution of such Proceeding and the Company shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; PROVIDED, HOWEVER,
that the omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to any Underwriter or any such person
or otherwise, except to the extent the Company is materially prejudiced thereby.
Such Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without the written consent of the
Company, but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without the Company's written consent if (i) such settlement
is entered into more than 60 business days after receipt by the indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party,
25
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers, and any person
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which the Company or any such
person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in and in conformity with information furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use with
reference to such Underwriter in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; PROVIDED, HOWEVER, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise,
except to the extent such Underwriter is materially prejudiced thereby. The
Company or such person shall have the right to employ their or its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Company or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being
26
understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel)
in any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees
to indemnify and hold harmless the Company and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the
27
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating, preparing to defend or defending
any Proceeding.
(d) The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 9, in no case shall any
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of any
damage which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained
in this Section 9 and the covenants, warranties and representations of the
Company contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, its
partners, directors or officers or any person (including each partner, officer
or director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors or officers or any person who controls any of the
foregoing within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company and each Underwriter agree
promptly to notify each other of the commencement of any Proceeding against it
and against any of the officers or directors of the Company in connection with
the issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 10171-
28
0026, Attention: Syndicate Department; and if to the Company, shall be
sufficient in all respects if delivered or sent to the Company at the offices
of the Company at 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000, Attention: B.
Xxxxx Xxxxxxxx, Esq., Executive Vice President and Chief Financial Officer.
11. INFORMATION FURNISHED BY THE UNDERWRITERS. The
statements set forth in the last paragraph on the cover page of the Prospectus
and the statements set forth in the fifth, seventh, eighth, ninth and tenth
paragraphs under the caption "Underwriting" in the Prospectus constitute the
only information furnished by or on behalf of the Underwriters as such
information is referred to in Sections 3 and 9 hereof.
12. GOVERNING LAW; CONSTRUCTION. This Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement ("Claim"), directly or indirectly,
shall be governed by, and construed in accordance with, the laws of the State of
New York. The Section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
13. SUBMISSION TO JURISDICTION. Except as set forth
below, no Claim may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and County of New
York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such
matters, and you and the Company consent to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
an Underwriter or any indemnified party. Each Underwriter and the Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment not subject to appeal in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding
thereupon, and may be enforced in any other courts in the jurisdiction to which
the Company is or may be subject, by suit upon such judgment.
14. PARTIES AT INTEREST. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Company
and, to the extent provided in Section 9 hereof, the controlling persons,
directors and officers referred to in such section, and their respective
successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
29
15. COUNTERPARTS. This Agreement may be signed by the
parties in one or more counterparts which together shall constitute one and the
same agreement among the parties.
16. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the Underwriters and the Company and their successors and assigns
and any successor or assign of any substantial portion of the Company's and any
of the Underwriters' respective businesses and/or assets.
17. MISCELLANEOUS. UBS Warburg LLC, an indirect, wholly
owned subsidiary of UBS AG, is not a bank and is separate from any affiliated
bank, including any U.S. branch or agency of UBS Warburg LLC. Because UBS
Warburg LLC is a separately incorporated entity, it is solely responsible for
its own contractual obligations and commitments, including obligations with
respect to sales and purchases of securities. Securities sold, offered or
recommended by UBS Warburg LLC are not deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are
not otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
30
If the foregoing correctly sets forth the understanding among
the Company, and the Underwriters, please so indicate in the space provided
below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company and the several Underwriters.
Very truly yours,
ISIS PHARMACEUTICALS, INC.
By:
-----------------------------------
Name:
Title:
Accepted and agreed to as of the date first above written:
UBS WARBURG LLC
XXXXXXXXX XXXXXXXX, INC.
XXXXXXX & COMPANY, INC.
FORTIS SECURITIES INC.
On their behalf and on behalf of each of the several underwriters named in
Schedule A hereto.
By: UBS WARBURG LLC
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
31
SCHEDULE A
UNDERWRITER NUMBER OF FIRM SHARES
----------- ---------------------
UBS Warburg LLC.........................................
Xxxxxxxxx Xxxxxxxx, Inc.................................
Xxxxxxx & Company, Inc..................................
Fortis Securities Inc...................................
--------------------------------
Total 5,000,000
--------------------------------
1
SCHEDULE B
NAME JURISDICTION OF INCORPORATION
---- -----------------------------
ORASENSE LTD. BERMUDA
HEPASENSE LTD. BERMUDA
1
EXHIBIT C
ISIS PHARMACEUTICALS, INC.
Common Stock
($.001 Par Value)
__________ , 2001
UBS Warburg LLC
Xxxxxxxxx Xxxxxxxx, Inc.
Xxxxxxx & Company, Inc.
Fortis Securities Inc.
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed
Underwriting Agreement (the "
Underwriting
Agreement") to be entered into by and among Isis Pharmaceuticals, Inc. (the
"Company"), you and the other Underwriters named therein, as representatives of
the several Underwriters, with respect to a public offering (the "Offering") of
5,000,000 shares of Common Stock of the Company, $.001 par value per share (the
"Common Stock").
In order to induce you to enter into the
Underwriting
Agreement, the undersigned agrees that for a period of 90 days after the date
of the final prospectus relating to the Offering the undersigned will not,
without the prior written consent of UBS Warburg LLC, (i) sell, offer to
sell, contract to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common
1
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, whether any such transaction is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause
(i) or (ii). The foregoing sentence shall not apply to (a) the sale of any
Common Stock to the Underwriters pursuant to the
Underwriting Agreement, (b)
bona fide gifts, provided the recipient or recipients thereof agree in
writing to be bound by the terms of this Lock-Up Letter Agreement, or (c)
dispositions to any trust for the direct or indirect benefit of the
undersigned and/or the immediate family of the undersigned, provided that
such trust agrees in writing to be bound by the terms of this Lock-Up Letter
Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus relating to the Offering, the undersigned will not, without the prior
written consent of UBS Warburg LLC, make any demand for, or exercise any right
with respect to, the registration of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock.
If (i) the registration statement filed with the Securities
and Exchange Commission with respect to the Offering is withdrawn or (ii) for
any reason the
Underwriting Agreement shall be terminated prior to the time of
purchase (as defined in the
Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
------------------------------
Name:
2
