EXHIBIT 1.1
5,750,000 Shares
ILEX ONCOLOGY, INC.
Common Stock
UNDERWRITING AGREEMENT
Dated as of November 14, 2001
CIBC World Markets Corp.
UBS Warburg LLC
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
ILEX Oncology, Inc., a Delaware corporation (the "Company") proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as Representatives (the "Representatives"), an aggregate
of 5,000,000 shares (the "Firm Shares") of the Company's Common Stock, $0.01 par
value (the "Common Stock"). The respective amounts of the Firm Shares to be
purchased by each of the several Underwriters are set forth opposite their names
on Schedule I hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 750,000 shares (the
"Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at a price of $22.56 per share (the "Initial
Price"), the number of Firm Shares set forth opposite the
name of such Underwriter under the column "Number of Firm Shares to be
Purchased from the Company" on Schedule I to this Agreement, subject to
adjustment in accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option
to purchase, severally and not jointly, all or any part of the Option
Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted by
the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day immediately
prior to the Firm Shares Closing Date (as defined below), and in whole
or in part from time to time thereafter within 30 days after the date
of this Agreement, in each case upon written, facsimile or telegraphic
notice, or verbal or telephonic notice confirmed by written, facsimile
or telegraphic notice, by the Representatives to the Company no later
than 12:00 noon, New York City time, on the business day immediately
prior to the Firm Shares Closing Date or at least two business days
before the Option Shares Closing Date (as defined below), as the case
may be, setting forth the number of Option Shares to be purchased and
the time and date (if other than the Firm Shares Closing Date) of such
purchase.
2. Delivery and Payment. Payment of the purchase price for, and
delivery of certificate for, the Firm Shares shall be made at the offices of
CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 9:00 a.m., New York City time, on the third business day following the date
of this Agreement or at such time on such other date, not later than ten (10)
business days after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery and payment are
called the "Firm Shares Closing Date").
In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and delivery of
the certificates, for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on the date of delivery as specified in the notice from the
Representatives to the Company (each such time and date of delivery and payment
are being hereinafter referred to as an "Option Shares Closing Date"). The Firm
Shares Closing Date and the Option Shares Closing Date(s) are each called,
individually, a "Closing Date" and, together, the "Closing Dates."
Payment shall be made to the Company by wire transfer of immediately
available funds or by certified or official bank check or checks payable in New
York Clearing House (same day) funds drawn to the order of the Company against
delivery of the respective certificates to the Representatives for the
respective accounts of the Underwriters of certificates for the Shares to be
purchased by them.
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Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be delivered by or on behalf of the Company to the
Representatives through the facilities of the Depository Trust Company ("DTC")
for the account of such Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and packaging, at such
place as is designated by the Representatives, at least one the full business
day prior to the Firm Shares Closing Date (or the Option Shares Closing Date in
the case of Option Shares).
3. Registration Statement and Prospectus; Public Offering. The Company
has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission"), a Registration Statement (as hereinafter defined)
on Form S-3 (No. 333-72396), including the related Preliminary Prospectus (as
hereinafter defined) relating to the Shares, and such amendments thereof as may
have been required to the date of this Agreement. Copies of such Registration
Statement (including all amendments thereof) and of the Preliminary Prospectus
have heretofore been delivered by the Company to you. The term "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement or filed
with the Commission by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules. The term "Registration Statement" as used
in this Agreement means the initial registration statement (including, without
limitation, all exhibits, financial schedules and information deemed to be a
part of the Registration Statement through incorporation by reference or
otherwise), as amended at the time and on the date it becomes effective (the
"Effective Date") including the information (if any) deemed to be part thereof
at the time of effectiveness pursuant to Rule 430A of the Rules. If the Company
has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules (the "462(b) Registration Statement")
then any reference herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement. The term "Prospectus" as used in
this Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
upon, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed each Preliminary
Prospectus and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter as follows:
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(a) On the Effective Date, the Registration Statement
complied, and on the date of the Prospectus, the date any
post-effective amendment to the Registration Statement becomes
effective, the date any supplement or amendment to the Prospectus is
filed with the Commission and each Closing Date, the Registration
Statement and the Prospectus (and any amendment thereof or supplement
thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act, the Rules and the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and the rules and
regulations of the Commission thereunder. The Registration Statement
did not, as of the Effective Date, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and on the Effective Date and the other dates referred to above neither
the Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. When any Preliminary Prospectus was first filed with the
Commission (whether filed as part of the Registration Statement or any
amendment thereto or pursuant to Rule 424(a) of the Rules) and when any
amendment thereof or supplement thereto was first filed with the
Commission, such Preliminary Prospectus complied in all material
respects with the applicable provisions of the Securities Act and the
Rules and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If
applicable, each Preliminary Prospectus and the Prospectus delivered to
the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T. Notwithstanding the foregoing, none of the
representations and warranties in this paragraph 4(a) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon, and in conformity with, information
set forth herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished
in writing by the Representatives on behalf of the several Underwriters
for use in the Registration Statement or the Prospectus is the
statements contained under the caption "Underwriting" in the
Prospectus.
(b) The Registration Statement has been declared effective
under the Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or preventing
the use of the Prospectus has been issued and no proceedings for that
purpose have been instituted or are threatened under the Securities
Act. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) of the Rules has been or will be made in the
manner and within the time period required by Rule 424(b).
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(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they were filed
with the Commission complied in all material respects with the
requirements of the Exchange Act, as applicable, and, when read
together and with the other information in the Registration Statement
and the Prospectus, do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and any
further documents so filed at any time prior to the completion of this
offering and incorporated by reference in the Registration Statement
and the Prospectus, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Xxxxxx Xxxxxxxx LLP, which has examined the financial
statements of the Company, together with the related schedules and
notes thereto, as of and for each of the years ended December 31, 1996,
1997, 1998, 1999, 2000 and has performed review procedures on the
financial statements of the Company, together with the related
schedules and notes thereto, as of and for each of the nine month
periods ended September 30, 2000 and 2001 (collectively, the "Financial
Statements"), are independent accountants within the meaning of the
Securities Act and the Rules; the audited financial statements of the
Company, together with the related schedules and notes, and the
unaudited financial information, forming part of the Registration
Statement and Prospectus, fairly present the financial position and the
results of operations of the Company at the respective dates and for
the respective periods to which they apply; and all audited financial
statements of the Company, together with the related schedules and
notes thereto, and the unaudited financial information, filed with the
Commission as part of the Registration Statement, have been prepared in
accordance with U.S. generally accepted accounting principles ("GAAP")
consistently applied throughout the periods involved except as may be
otherwise stated therein. Except as and to the extent (a) reflected and
reserved against at September 30, 2001 in the Financial Statements, (b)
incurred in the ordinary course of business after September 30, 2001 or
(c) described in the Prospectus or in the documents incorporated by
reference in the Prospectus, the Company has no liability or
obligation, secured or unsecured, whether accrued, absolute,
contingent, unasserted or otherwise, which is material to the Company.
The selected and summary consolidated financial and statistical data
included or incorporated by reference in the Registration Statement
present the information shown therein and have been compiled on a basis
consistent with the audited financial statements presented therein. No
other financial statements, schedules or statistical data are required
to be include in the Registration Statement or the Prospectus.
(e) Each of the Company and its Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each
of the Company and each such
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subsidiary or other entity controlled directly or indirectly by the
Company (each, a "Subsidiary" and, collectively, the "Subsidiaries") is
duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business
conducted by it or location of the assets or properties owned, leased
or licensed by it requires such qualification, except for such
jurisdictions where the failure to so qualify could not have a material
adverse effect on the assets, properties, business, prospects, results
of operations or condition (financial or otherwise) of the Company (a
"Material Adverse Effect"); and, to the Company's knowledge, no
proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification. Each of the Company and its
Subsidiaries has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory
bodies or any other person or entity (collectively, "Permits"), to own,
lease and license its assets and properties and conduct its business as
presently conducted, all of which are valid and in full force and
effect, except for such instances where the lack of such Permits,
individually or in the aggregate, could not have a Material Adverse
Effect. Each of the Company and its Subsidiaries has fulfilled and
performed in all material respects all of its material obligations with
respect to such Permits and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof,
or has resulted in any other material impairment of the rights of the
Company thereunder.
(f) Each of the Company and its Subsidiaries owns, licenses or
otherwise possesses legally enforceable rights to use all patents,
patent rights, inventions, trade secrets, know-how, trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, and other similar rights and
proprietary knowledge (collectively, "Intangibles") necessary for the
conduct of its business as presently conducted. Neither the Company nor
any of its Subsidiaries has received any notice of, and to the
knowledge of the Company there has not occurred, any misappropriation
or infringement of asserted rights of others with respect to any
Intangibles.
(g) Each of the Company and its Subsidiaries has good and
insurable title in fee simple to all real property, and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects, except such as
do not materially affect the value of such property and do not
materially interfere with the use made or proposed to be made of such
property by the Company; and all assets held under lease by the Company
and its Subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company and its Subsidiaries. Except as described in
the Registration Statement and Prospectus, the Company and its
Subsidiaries own, lease or otherwise possess all such properties as are
necessary for its operations as now conducted and as proposed to
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be conducted. The description of the Company's properties contained or
incorporated by reference in the Prospectus is accurate in all material
respects.
(h) There is no pending or, to knowledge of the Company or its
Subsidiaries, threatened, action, suit, claim or proceeding against the
Company or its Subsidiaries, their directors, officers or properties,
assets or rights, before any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or
its Subsidiaries or over their respective directors, officers or
properties, assets or rights which (i) could reasonably be expected to
have a Material Adverse Effect, (ii) might prevent or delay the
consummation of the transactions contemplated hereby or (iii) is
required to be described in the Registration Statement or Prospectus
and is not so described.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
described therein, (i) the Company has not suffered a Material Adverse
Effect; (ii) neither the Company nor any of its Subsidiaries has
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental
action, order or decree which could reasonably be expected to have a
Material Adverse Effect; and (iii) since the date of the latest balance
sheet included or incorporated by reference in the Registration
Statement and the Prospectus, except as reflected therein, neither the
Company nor any of its Subsidiaries has (A) issued any securities or
incurred any liability or obligation, direct or contingent, for
borrowed money, except such liabilities or obligations incurred in the
ordinary course of business, (B) entered into any material transaction
not in the ordinary course of business or (C) declared or paid any
dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(j) There is no instrument, opinion, consent, schedule,
statement, contract or other agreement or document of a character
required to be described in the Registration Statement or Prospectus or
filed as an exhibit to the Registration Statement or incorporated by
reference therein (a "Material Agreement") which is not described or
filed as required by the Securities Act. Each description of a Material
Agreement in the Registration Statement and the Prospectus reflects the
terms of such agreement. Each Material Agreement in the Prospectus is
in full force and effect and is valid and enforceable by and against
the Company or the Subsidiary, as the case may be, in accordance with
its terms. Neither the Company nor any applicable Subsidiary, to the
Company's knowledge, any other party thereto is in default in the
observance or performance of any material term or obligation to be
performed by it under any Material Agreement, and no event has occurred
which with notice or lapse of time, or both, would constitute such a
default, in any instance where such default or event, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect. No default exists, and no event has occurred which with
notice or lapse of time, or both, would constitute a default, in the
due performance and observance of any term, covenant
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or condition, by the Company or any applicable Subsidiary, of any other
agreement or instrument to which the Company or the Subsidiary is a
party or by which the Company, any applicable Subsidiary or their
properties or business may be bound or affected which default or event,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(k) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of (i) its charter or by-laws or
(ii) of any franchise, license, permit, judgment, decree, order,
statute, rule or regulation, except, with respect to subsection (ii),
where the consequences of such violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due under,
or conflict with or result in the breach of any term or provision of,
or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or
any Subsidiary pursuant to the terms of, any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company or any
Subsidiary is a party or by which either the Company or any Subsidiary
or any of their properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company or any Subsidiary, or violate any provision
of the charter or by-laws of the Company or any Subsidiary, except for
such consents or waivers which have already been obtained and are in
full force and effect.
(m) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the
issued and outstanding shares of Common Stock have been duly and
validly issued and are fully paid and nonassessable. Since February 20,
1997, all outstanding shares of capital stock of the Company have been
issued in compliance in all material respects with all Federal and
state securities laws. There are no statutory preemptive or other
similar rights to subscribe for or to purchase or acquire any shares of
Common Stock of the Company or its Subsidiaries or any such rights
pursuant to its charter or by-laws or any agreement or instrument to or
by which the Company or any of its Subsidiaries is a party or bound.
The Shares, when issued and sold pursuant to this Agreement, will be
duly and validly issued, fully paid and nonassessable and none of them
will be issued in violation of any preemptive or other similar right.
Except as described in the Registration Statement and the Prospectus,
there is no outstanding option, warrant or other right calling for the
issuance of, and there is no commitment, plan or arrangement to issue,
any share of stock of the Company or its Subsidiaries or any security
convertible into, or exercisable or exchangeable for, such stock. The
Common Stock and the Shares conform in all material respects to all
statements in relation thereto
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contained or incorporated by reference in the Registration Statement
and the Prospectus. All outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued, and are fully
paid and nonassessable and are owned directly by the Company or by a
wholly-owned Subsidiary of the Company free and clear of any security
interests, liens, encumbrances, equities or claims.
(n) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder during the period ending 90 days after the date of this
Agreement. Schedule II sets forth a full and complete list of each
stockholder, director and executive officer of the Company who has
delivered to the Representatives his or her legally enforceable written
lock-up agreement in the form attached to this Agreement as Exhibit D
(the "Lock-Up Agreement"). Furthermore, each such holder of Common
Stock has also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of
the Common Stock held by such holder except in compliance with this
restriction.
(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares
by the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes and will
constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles and except as provisions regarding indemnification to
directors, officers and controlling persons of the Company for
liabilities under the Securities Act may be held to be unenforceable in
a final adjudication by a court of appropriate jurisdiction.
(p) Neither the Company nor any of its Subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company, is
any such dispute threatened. No collective bargaining agreement exists
with any employees of the Company or its Subsidiaries and, to the
knowledge of the Company, no such agreement is threatened or imminent.
Neither the Company nor its Subsidiaries is aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers or contractors which could reasonably be expected to have a
Material Adverse Effect.
(q) No transaction has occurred between or among the Company
and any of its officers or directors, shareholders or any affiliate or
affiliates of any such officer or director or shareholders that is
required to be described in the Registration Statement or the
Prospectus which is not described.
(r) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Registration Statement or the
Prospectus which is not so described.
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(s) Each of the Company and its Subsidiaries has filed all Tax
Returns (as defined below) required to be filed through the date
hereof, all of which returns are true and correct in all material
respects, or has otherwise received timely extensions thereof, and has
paid all Taxes (as defined below) shown on such returns and all
assessments received by it to the extent that the same have become due.
There are no tax audits or investigations pending, which, if adversely
determined, could have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company or any
of its Subsidiaries. For purposes of this Agreement, "Taxes" means all
taxes, charges, fees, levies or other similar assessments or
liabilities, including without limitation income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, payroll,
profits, license, lease, service, service use, severance, stamp,
occupation, windfall profits, customs, franchise and other taxes
imposed by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of
the United States or any such government, and any interest, fines,
penalties, assessments or additions to tax resulting from, attributable
to or incurred in connection with any tax or any contest or dispute
thereof. For purposes of this Agreement, "Tax Returns" means all
reports, returns, declarations, statements or other information
required to be supplied to a taxing authority in connection with Taxes.
(t) The Shares have been duly authorized for quotation on the
Nasdaq National Market System, subject only to official notice of
issuance.
(u) The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock
under the Exchange Act or the quotation of the Common Stock on the
Nasdaq National Market, nor has the Company received any notification
that the Commission or the Nasdaq National Market is contemplating
terminating such registration or quotation.
(v) The books, records and accounts of the Company and its
Subsidiaries reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the
Company and its Subsidiaries. The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP 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.
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(w) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they
are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
Subsidiaries or the Company's or its Subsidiaries' respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and each of its Subsidiaries are in compliance
with the terms of such policies and instruments in all material
respects; and neither the Company nor any Subsidiary of the Company has
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business at a cost not materially greater than the current cost.
Neither the Company nor any Subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed
by the Company (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made
and is in full force and effect.
(y) There are no affiliations with the NASD among the
Company's officers, directors or, to the knowledge of the Company, any
stockholder of the Company, except as set forth in the Registration
Statement or otherwise disclosed in writing or via e-mail to the
Representatives.
(z) (i) Each of the Company and its Subsidiaries is in
compliance in all material respects with all rules, laws and regulation
relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental
Laws"); (ii) neither the Company nor any of its Subsidiaries has
received any notice from any foreign, Federal, state or local
governmental authority or third party of an asserted claim under
Environmental Laws; (iii) each of the Company and its Subsidiaries has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business as presently
conducted and is in compliance in all material respects with all terms
and conditions of any such permit, license or approval; (iv) to the
Company's knowledge, no facts currently exist that will require the
Company or its Subsidiaries to make any material capital expenditures
to comply with Environmental Laws; and (v) no property which is or has
been owned, leased or occupied by the Company or its Subsidiaries has
been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) ("CER, CLA 1980") or
otherwise designated as a contaminated site under applicable state or
local law. Neither the Company nor any of its Subsidiaries has been
named as a "potentially responsible party" under the CER, CLA 1980.
11
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the
course of which the Company identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company
has reasonably concluded that such associated costs and liabilities
could not, singly or in the aggregate, be material to the Company and
its Subsidiaries, taken as a whole.
(bb) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "Investment Company Act") and
rules and regulations pertaining thereunder, and the Company has in the
past conducted, and intends in the future to conduct, its affairs in
such a manner as to ensure that it is not, and will not become an
"Investment Company" or a company "Controlled" by an "investment
company" within meaning of the Investment Company Act.
(cc) The Company, each of its Subsidiaries or any other person
associated with or acting on behalf of the Company or its Subsidiaries
including, without limitation, any director, officer, agent or employee
of the Company or its Subsidiaries has not, directly or indirectly,
while acting on behalf of the Company or its Subsidiaries: (i) used any
corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(dd) Except as described in the Prospectus or in the documents
incorporated by reference into the Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(ee) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Section 302 of the U.S. Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations
and published interpretations thereunder with respect to each "plan"
as defined in Section 3(3) of ERISA and such regulations and published
interpretations in which its employees are eligible to participate and
each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and
published interpretations. No "Reportable Event" (as defined in
12
ERISA) has occurred with respect to any "Pension Plan" (as defined in
ERISA) for which the Company could have any liability. The Company has
not incurred and will not incur any unpaid liability (i) to the Pension
Benefit Guaranty Corporation (other than for the payment of premiums in
the ordinary course), (ii) to any such plan under Title IV of ERISA, or
(iii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the "Code") and each "pension plan" for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which could cause
the loss of such qualification.
(ff) Each of the Company, its directors and officers has not
distributed and will not distribute prior to the later of (i) the Firm
Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectuses, the Prospectus, the Registration Statement
and other materials, if any, permitted by the Securities Act.
(gg) Except as otherwise fully and accurately described in the
Registration Statement or the Prospectus, there are no outstanding
loans, advances (except normal advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors of
the Company or any of the members of the families of any of them.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed a
representation and warranty by the Company, as to matters covered
thereby, to each Underwriter.
5. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to the
satisfaction of each of the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a) of this Agreement.
(b) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been or shall be in
effect and no order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise) shall have
been complied with to the satisfaction of the Commission and the
Representatives. If the Company has elected to rely upon Rule 430A,
Rule 430A information previously omitted from the effective
13
Registration Statement pursuant to Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) within
the prescribed time period and the Company shall have provided evidence
reasonably satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered pursuant
to Section 5(e) shall be true and correct when made and on and as of
each Closing Date as if made on such date.
(d) The Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement
required to be performed or satisfied by it at or before such Closing
Date.
(e) The Company shall have furnished to the Representatives
a certificate, dated such Delivery Date, of its Chief Executive Officer
and its Chief Financial Officer stating that:
(i) the representations, warranties and agreements of
the Company in this Agreement were true and correct when made
and are true and correct as of such Closing Date;
(ii) the Company has performed all covenants and
agreements and satisfied all conditions contained herein;
(iii) they have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or
otherwise required an amendment to the Registration Statement
or the Prospectus; and
(iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and, to their
knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act.
(f) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date, a signed letter from
Xxxxxx Xxxxxxxx LLP addressed to the Representatives and dated,
respectively, the date of this Agreement and each such Closing Date, in
form and substance reasonably satisfactory to the Representatives,
containing statements and information of the type customarily included
in accountants'
14
"comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus.
(g) The Representatives shall have received on each Closing
Date from Fulbright & Xxxxxxxx L.L.P., counsel for the Company, an
opinion, addressed to the Representatives and dated such Closing Date,
substantially in the form of Exhibit A.
(h) The Representatives shall have received on each Closing
Date from Mr. A. Jecmirek, Esq., intellectual property counsel for the
Company, an opinion, addressed to the Representatives and dated such
Closing Date, substantially in the form of Exhibit B.
(i) The Representatives shall have received on each Closing
Date from Xxxx Xxxxx, regulatory counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date,
substantially in the form of Exhibit C.
(j) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and their counsel, and the Underwriters shall have received from Xxxxx
Xxxxx a favorable opinion, addressed to the Representatives and dated
such Closing Date, with respect to the Shares, the Registration
Statement and the Prospectus, and such other related matters, as the
Representatives may reasonably request, and the Company shall have
furnished to Xxxxx Xxxxx such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(k) The Representatives shall have received true and complete
copies of the Lock-up Agreements executed by each entity or person
listed on Schedule II hereto.
(l) The Company shall have furnished or caused to be furnished
to the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
(m) Subsequent to the Effective Time there shall not have
occurred any of the following: (i) any domestic or international event
or act or occurrence that has materially disrupted, or, in the opinion
of the Representatives, will in the future materially disrupt, the
securities markets; (ii) any new outbreak or material escalation of
hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the
judgment of the Representatives, inadvisable to proceed with the
offering; (iii) a material adverse change in general financial,
political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to
make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Shares; (iv) trading in the Shares has been
suspended by the Commission or trading generally on the New York Stock
Exchange, Inc., on the American Stock Exchange, Inc. or the Nasdaq
National Market has been suspended or limited, or minimum or maximum
ranges for prices for securities have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges or by
15
order of the Commission, the National Association of Securities
Dealers, Inc., or any other governmental or regulatory authority; or
(v) a declaration of a banking moratorium by any state or Federal
authority.
(n) The Company shall not have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus: (i) any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the
Company or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company,
otherwise than as fully and accurately described in the Prospectus or
the Registration Statement or any documents incorporated by reference
into the Prospectus or the Registration Statement, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment
of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered on such Closing Date on the
terms and in the manner contemplated in the Prospectus.
(o) The Nasdaq National Market shall have approved the Shares
for listing, subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
6. Covenants of the Company.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall
prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the
Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the
Representatives in writing (A) when any amendment to the
Registration Statement shall have become effective, (B) of any
request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional
information, (C) of
16
the prevention or suspension of the use of any Preliminary
Prospectus or the Prospectus or of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening
of any proceeding for that purpose and (D) of the receipt by
the Company of any notification with respect to the suspension
of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the
Prospectus or any document incorporated by reference in the
Registration Statement unless the Company has furnished the
Representatives a copy for its review prior to filing and
shall not file any such proposed amendment or supplement to
which the Representatives reasonably object. The Company shall
use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(iii) If, at any time when a Prospectus relating to
the Shares is required to be delivered under the Securities
Act and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Securities Act or the Rules,
the Company shall promptly prepare and file with the
Commission, subject to the second sentence of paragraph (ii)
of this Section 6(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall
effect such compliance.
(iv) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of
the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Securities Act
or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
thereto and amendments thereof) and to each other Underwriter
a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery
of a Prospectus by an Underwriter or dealer may be required by
the Securities Act or the Rules, as many copies of any
Preliminary Prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may
reasonably request. If applicable, the copies of the
Registration Statement and Prospectus and each amendment and
supplement thereto furnished to the Underwriters will be
identical
17
to the electronically transmitted copies thereof filed with
the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale in connection with the offering
under the laws of such jurisdictions as the Representatives
may designate and shall maintain such qualifications in effect
so long as required for the distribution of the Shares;
provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation
as doing business in any jurisdiction.
(vii) The Company, during the period when the
Prospectus is required to be delivered under the Securities
Act, the Rules or the Exchange Act, will file all documents
required to be filed with the Commission pursuant to Sections
13, 14 or 15 of the Exchange Act within the time periods
required by the Exchange Act and the regulations promulgated
thereunder.
(viii) Without the prior written consent of CIBC
World Markets Corp., which may be withheld in their sole
discretion, for a period of 90 days after the date of this
Agreement, the Company and each of its individual directors,
executive officers and the entities listed on Schedule I
hereto shall not issue, sell or register with the Commission
(other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into,
exercisable for or exchangeable for equity securities of the
Company), except for the issuance of the Shares pursuant to
the Registration Statement and the issuance of shares pursuant
to the Company's existing stock option plans or stock purchase
plan as described in the Registration Statement and the
Prospectus.
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(x) Prior to the completion of the distribution of
the Shares by the Underwriters, the Company will issue no
press release or other communications, directly or indirectly,
and hold no press conference with respect to the Company, the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of any of them, or the offering
of the Shares, without prior notice to the Representatives.
(xi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby
are consummated or this Agreement
18
is terminated, all costs and expenses incident to the public offering
of the Shares and the performance of the obligations of the Company
under this Agreement including, without limitation, those relating to:
(i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each Preliminary
Prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus and any document incorporated
by reference therein, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
the various jurisdictions referred to in Section 6(a)(vi), including
the reasonable fees and disbursements of counsel for the Underwriters
in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters
of copies of each Preliminary Prospectus, the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonably requested for use in connection with the offering and sale
of the Shares by the Underwriters or by dealers to whom Shares may be
sold; (v) the filing fees of the NASD in connection with its review of
the terms of the public offering and reasonable fees and disbursements
of counsel for the Underwriters in connection with such review; (vi)
inclusion of the Shares for quotation on the Nasdaq National Market;
and (vii) all transfer taxes, if any, with respect to the sale and
delivery of the Shares by the Company to the Underwriters. Subject to
the provisions of Section 9, the Underwriters agree to pay, whether or
not the transactions contemplated hereby are consummated or this
Agreement is terminated, all costs and expenses incident to the
performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel
for the Underwriters.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including, without limitation, any
reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted), to which they, or any of them,
may become subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar
as such losses, claims, damages or liabilities arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement
thereto, or in any Blue Sky application or other information or other
documents executed by the Company filed in any state or other
jurisdiction to qualify any or all of the Shares under the securities
laws thereof (any such application, document or information being
hereinafter referred to as a "Blue Sky Application") or arise out of or
are based upon any omission or alleged omission to state therein a
material fact required to be stated therein
19
or necessary to make the statements therein not misleading; (ii) in
whole or in part upon any breach of the representations and warranties
set forth in Section 4 hereof; or (iii) in whole or in part upon any
failure of the Company to perform any of its obligations hereunder or
under law; provided, however, that such indemnity shall not inure to
the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement thereto,
or in any Blue Sky Application in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives
on behalf of any Underwriter specifically for use therein. This
indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company,
and each officer of the Company who signs the Registration Statement,
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus,
or any amendment thereof or supplement thereto, contained under the
caption "Underwriting" in the Prospectus; provided, however, that the
obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to
the net proceeds received by the Company from such Underwriter.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action,
suit or proceeding, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section
7, notify the indemnifying party in writing of the claim or the
commencement of such action, suit or proceeding; provided, however,
that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 7 except to the
extent it has been materially prejudiced by such failure and, provided
further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 7. If any such claim or action shall
be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party.
In case any such action, suit or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel
20
reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election
so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment of counsel by such indemnified party has been authorized
in writing by the indemnifying parties, (ii) the indemnified party
shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or in addition to
those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the
defense of such action within 21 days after receipt of notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any
action, suit, proceeding or claim effected without its written consent,
which consent shall not be unreasonably withheld or delayed.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if
21
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter (except as may be provided in the Master
Agreement Among Underwriters) be liable or responsible for any amount in excess
of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder; and (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 8, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter, and each person, if
any, who controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i) and (ii) in the immediately preceding sentence of this
Section 8. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 8. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. Termination. This obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of the Firm Shares if, prior to that time, any of the
conditions specified in Section 5 shall not have been fulfilled or if the
Underwriters shall decline to purchase the Shares for any reason permitted by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall be under no liability to any Underwriter, and no Underwriter shall
be under any liability to the Company, except that (y) if this Agreement is
terminated by the Representatives or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including, without limitation, the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
22
10. Substitution of Underwriters. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares
that all the Underwriters are obligated to purchase on such Closing
Date, then each of the nondefaulting Underwriters shall be obligated to
purchase such Shares on the terms herein set forth in proportion to
their respective obligations hereunder; provided, that in no event
shall the maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10
by more than one-ninth of such number of Shares without the written
consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date,
then the Company shall be entitled to one additional business day
within which it may, but is not obligated to, find one or more
substitute underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers,
23
directors or controlling persons referred to in Sections 7 and 8 hereof, and
shall survive delivery of and payment for the Shares. The provisions of Sections
6(b), 7, 8 and 9 shall survive the termination or cancellation of this
Agreement.
This Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone if subsequently confirmed in writing, (a) if to the
Representatives, c/o CIBC World Markets Corp., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 Attention: Xxxx Xxxxxxx Pitchett, with a copy to Xxxxx Xxxxx Xxxx
Xxxxxx Xxxxxxx and Xxxxx, P.C., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 Attention: Xxxxxx X. Xxxxxxxx III, Esq. and (b) if to the Company, to its
agent for service as such agent's address appears on the cover page of the
Registration Statement with a copy to Fulbright & Xxxxxxxx L.L.P., 000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxx 00000 Attention: Xxxxxxx X. Xxxxxx, Esq.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, applicable to agreements made and to be fully
performed therein.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
24
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ILEX ONCOLOGY, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
--------------------------------------
Title: President
-----------------------------------
Confirmed:
CIBC WORLD MARKETS CORP.
UBS WARBURG LLC
U.S. BANCORP XXXXX XXXXXXX INC.
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
By CIBC WORLD MARKETS CORP.
By: /s/ XXXX XXXXXXXXX
---------------------------------
Title: Managing Director
------------------------------
25
SCHEDULE I
Number of Firm Shares to
Name Be Purchased from the Company
---- -----------------------------
CIBC World Markets Corp. 2,182,700
UBS Warburg LLC 1,731,925
U.S. Bancorp Xxxxx Xxxxxxx Inc. 830,375
Arneson, Kercheville, Xxxxxxxxx & Associates, Inc. 85,000
Xxxxxxx Xxxxx & Associates, Inc. 85,000
Xxxxxxxx Inc. 85,000
-----------------------------
Total 5,000,000
26
SCHEDULE II
Xxxxxxx X. Love
Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxx
Ze'xx Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxx
Xxxxxx X. Xxxxxx, M.D.
Xxxxx X. Fisherman, M.D.
Ruskin X. Xxxxxx, M.D.
Xxxxxx X. Xxx Xxxx, M.D.
CTRC Research Foundation
27
EXHIBIT A
Ladies and Gentlemen:
We refer to the
Underwriting Agreement, dated as of November 14, 2001
(the "Agreement"), among you, as representatives of the several Underwriters
(the "Underwriters"), and ILEX Oncology, Inc., a Delaware corporation (the
"Company"), which provides for the purchase by the Underwriters of an aggregate
of up to 5,750,000 shares (including the over-allotment option) (the "Shares")
of common stock, $.01 par value, of the Company (the "Common Stock") from the
Company. This opinion is rendered by us, as special counsel to the Company,
pursuant to Section 5(g) of the Agreement. Capitalized terms used in this
opinion that are not otherwise defined have the respective meanings given them
in the Agreement.
In connection with this opinion, we have examined the Registration
Statement on Form S-3 (No. 333-72396) covering the registration of the Shares
under the Securities Act of 1933, as amended (the "Securities Act"), filed with
the Securities and Exchange Commission (the "Commission"), including Amendment
No. 1 thereto, when it became effective on November 14, 2001, the preliminary
prospectus dated November 2, 2001, included within Amendment No. 1 (the
"Preliminary Prospectus"), the prospectus dated November 15, 2001 filed with the
Commission pursuant to Rule 424(b) promulgated under the Securities Act (the
"Prospectus"), the Agreement, the Restated Certificate of Incorporation and
bylaws of the Company and such other documents, corporate records and questions
of law as we deem necessary for the purpose of rendering these
28
November 20, 2001
Page 2
opinions. We have also examined such certificates of public officials, corporate
officers of the Company and other persons as we have deemed relevant and
appropriate as a basis for the opinions expressed herein, and we have made no
effort to independently verify the facts set forth in such certificates.
In making the foregoing examinations and rendering the following
opinions, we have, with your approval, assumed the genuineness of all
signatures, the legal capacity of each person signatory to any of the documents
reviewed by us, the authenticity of all documents submitted to us as originals,
the conformity to the authentic original documents of all documents submitted to
us as certified, photostatic, facsimile or conformed copies, and the
authenticity of the originals of all such latter documents. In making the
foregoing examinations, we have assumed that all representations and warranties
made in the aforesaid documents were and are true, correct and complete as of
the date thereof and hereof.
In rendering the opinions expressed herein, we have assumed that each
of the documents examined by us (other than the Agreement) has been duly
authorized, executed and delivered by each of the parties thereto, that the
Agreement has been duly authorized, executed and delivered by or on behalf of
the parties thereto other than the Company, that each such party (other than the
Company with respect to the Agreement) has the requisite power and authority to
execute, deliver and perform such documents to which it is a party and that such
documents constitute the legal, valid and binding obligations of each party
thereto.
In rendering this opinion, we have made no independent investigation of
the facts referred to herein and have relied, for the purpose of rendering this
opinion, exclusively on the facts set forth in the Registration Statement
(including the Preliminary Prospectus and the Prospectus) and the Agreement,
which facts, we assume, have been and will continue to be true, accurate and
correct in all respects as of the date thereof and hereof.
Based upon the foregoing and upon examination of such questions of law
as we have considered necessary or appropriate for the purposes of this opinion,
and subject to the assumptions, exceptions, limitations and qualifications set
forth herein, it is our opinion that:
1. 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 or lease its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do business as a
foreign corporation in the State of Texas.
29
November 20, 2001
Page 3
2. Each of ILEX Products, Inc., ILEX Oncology Services, Inc., Convergence
Pharmaceuticals, Inc. and ILEX Acquisitions, Inc. (the "Subsidiaries")
has been duly organized 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 or lease its properties
and to conduct its business as described in the Registration Statement
and the Prospectus, and each of ILEX Oncology Services, Inc., ILEX
Products, Inc. and ILEX Acquisitions, Inc. is duly qualified to do
business as a foreign corporation in the State of Texas, ILEX Oncology
Services, Inc. is duly qualified to do business as a foreign
corporation in the State of Maryland and Convergence Pharmaceuticals,
Inc. is duly qualified to do business as a foreign corporation in the
Commonwealth of Massachusetts.
3. The Company has authorized and outstanding capital stock as set forth
in the Registration Statement and the Prospectus under the heading
"Capitalization" as of the date set forth therein. The capital stock of
the Company conforms as to legal matters in all material respects to
the description thereof contained in the Registration Statement and the
Prospectus. The outstanding shares of Common Stock (other than the
Shares) have been duly authorized and issued and are fully paid and
nonassessable and, to our knowledge, none of such securities were
issued in violation of any preemptive or other similar rights. The
Shares, when issued and delivered to and paid for by the Underwriters
pursuant to the Agreement, will be validly issued, outstanding, fully
paid and nonassessable and, to our knowledge, none of such securities
will have been issued in violation of any preemptive or other similar
rights. The certificates evidencing the Shares are in due and proper
legal form and have been duly authorized for issuance by the Company.
Except as described or incorporated by reference in the Registration
Statement, the Preliminary Prospectus or the Prospectus, to our
knowledge, there are no preemptive or other similar rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of
any securities of the Company pursuant to the Company's Certificate of
Incorporation, bylaws or other governing documents or any other
agreements or other instruments to which the Company is a party or by
which its properties or assets are bound and which is filed as an
exhibit to the documents incorporated by reference into the
Registration Statement. Except as described or incorporated by
reference in the Prospectus, to our knowledge, there is no outstanding
option, warrant or other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of capital stock of
the Company or any security convertible into, exercisable for, or
exchangeable for capital stock of the Company as of September 30, 2001.
The issued and outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company or a wholly owned
Subsidiary of the Company, free and clear of any perfected security
interest or, to our knowledge, any other security interests, liens,
encumbrances,
30
November 20, 2001
Page 4
equities or claims, other than those described or incorporated by
reference in the Registration Statement, the Preliminary Prospectus and
the Prospectus.
4. To our knowledge, there is no litigation or governmental proceeding or
investigation before any court or before or by any public body or
board, pending or threatened against, or involving the Company, which
is required to be disclosed in the Registration Statement and the
Prospectus or which, if determined adversely to the Company, could be
considered reasonably likely to result in a Material Adverse Effect.
5. The Registration Statement has become effective under the Securities
Act. Any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) promulgated under the Securities Act
has been made in the manner and within the time period required by Rule
424(b). To our knowledge, no stop order suspending the effectiveness of
the Registration Statement has been issued, no proceedings for that
purpose have been instituted or are pending or, to our knowledge,
threatened. The Registration Statement, the Preliminary Prospectus, the
Prospectus and each amendment or supplement thereto (other than the
financial statements and schedules and other financial and statistical
information contained therein, as to which we need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules promulgated
thereunder.
6. The Company has the requisite corporate power and authority to enter
into, deliver and to perform its obligations under the Agreement,
including, without limitation, the issuance and sale by the Company of
the Shares. The execution, delivery and performance of the Agreement by
the Company has been duly authorized by all necessary corporate action
by the Company.
7. The Company is not 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, and the rules and regulations
thereunder.
8. Other than as described in the Preliminary Prospectus, the Prospectus
and Registration Statement, neither the execution and delivery of the
Agreement by the Company nor the consummation by the Company of the
transactions contemplated by the Agreement, including, without
limitation, the issuance and sale by the Company of the Shares, will
give rise to a right to terminate or accelerate the due date of any
payment, or conflict with or result in the breach of any term or
provision of, or constitute a default under (or any event which with
notice or lapse of time, or both, would constitute a default under), or
require consent or waiver under, or result in the execution or
imposition of any lien, charge, claim, security
31
November 20, 2001
Page 5
interest or encumbrance upon any properties or assets of the Company or
any of the Subsidiaries pursuant to the terms of (a) any indenture,
mortgage, deed of trust, note, franchise, license or permit to which
the Company is a party or by which the Company or its properties or
assets are bound and in each case which is filed as an exhibit to the
documents incorporated by reference into the Registration Statement,
or, to our knowledge, any indenture, mortgage, deed of trust, note,
franchise, license or permit material to the Company; (b) any decree,
order, statute, rule or regulation known to us; or (c) any provision of
the charter or bylaws or other governing documents of the Company or
any of the Subsidiaries.
9. No consent, approval, authorization or order of any court or
governmental agency or regulatory body is required for the execution
and delivery of the Agreement by the Company or the consummation or the
transactions contemplated by the Agreement, except (a) such as have
been obtained under the Securities Act, (b) such as may be required
under the "Blue Sky" and state securities laws of any jurisdiction in
connection with the purchase and distribution of the Shares by the
Underwriters in the manner contemplated in the Agreement and in the
Prospectus (as to which we express no opinion), (c) such as may be
required for the clearance of the underwriting arrangements relating to
such offering with the NASD (as to which we express no opinion), and
(d) such other approvals as have been obtained.
10. To our knowledge, neither the Company or any Subsidiary is in breach
of, or in default under, any term or provision of any indenture,
mortgage, deed of trust, lease, note, loan or credit agreement or any
other agreement or instrument evidencing an obligation for borrowed
money, or any other agreement or instrument to which the Company or a
Subsidiary is a party or by which the Company, the Subsidiaries or any
of their respective properties may be bound or affected, in each case
filed as an exhibit to the documents incorporated by reference into the
Prospectus; and neither the Company or any Subsidiary is in violation
of any term or provision of its certificate of incorporation or bylaws.
11. The statements contained in Item 15 of the Registration Statement,
insofar as such statements constitute matters of law, summaries of
legal matters, the Company's charter or by-law provisions, documents or
legal proceedings, or legal conclusions, has been reviewed by us and,
to our knowledge, fairly present and summarize, in all material
respects, the matters referred to therein.
12. To our knowledge, the Company is eligible to use a registration
statement on Form S-3 to register the Shares.
32
November 20, 2001
Page 6
In addition to the legal opinions set forth above, we have been asked
to make certain other observations. In the course of the preparation of the
Registration Statement, the Preliminary Prospectus and the Prospectus, we have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
representatives of the Underwriters and counsel for the Underwriters at which
conferences the contents of the Registration Statement, the Preliminary
Prospectus and the Prospectus and related matters were discussed and at which we
inquired of the representatives of the Company as to the materiality of the
facts disclosed to us, and, although we are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except to the extent
required in paragraphs 3, 4, 8 and 11 above), and we have made no independent
check or verification thereof, and our judgment as to materiality is, to the
extent we deem proper, based in part upon the views of appropriate officers and
other representatives of the Company, no facts have come to our attention that
have led us to believe that the Registration Statement, as of the date it became
effective, contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading or that the Preliminary Prospectus or the Prospectus,
as amended or supplemented as of their respective dates, included or includes an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading (in each case, it being understood that we express no opinion with
respect to the financial statements and related notes and schedules thereto and
the other financial, statistical and accounting data included therein).
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. No opinion is herein expressed except as to the applicable Federal laws
of the United States, the laws of the State of
New York and the
Delaware General Corporation Law. With respect to laws, regulations and
the like referred to herein, in addition to all other limitations set
forth herein, such references are limited to laws, regulations and the
like of the State of
New York (exclusive of conflict of law
principles), the Delaware General Corporation Law and such applicable
Federal laws of the United States as each is in effect and force as of
the date of this opinion.
B. In rendering the opinions expressed in paragraphs 1 and 2 above
regarding existence, good standing and qualification to do business as
a foreign corporation, we have relied solely on certificates of, and
oral confirmation from, public officials and have conducted no further
investigation.
33
November 20, 2001
Page 7
C. In rendering the opinion expressed in paragraph 3 above regarding the
fully paid status of the Common Stock outstanding prior to the date
hereof, we have relied solely on the certificate of certain officers of
the Company that the Company has received payment in full of the
purchase price or other consideration specified by the Board of
Directors of the Company for all shares of capital stock of the Company
outstanding on or prior to the date hereof and have conducted no
further investigation.
D. In rendering the opinion expressed in paragraph 4 above, no opinion is
therein expressed or intended to be expressed regarding the outcome or
possible outcome of any litigation, governmental proceeding or
investigation referred to in paragraph 4, and no such opinion shall or
should be inferred therefrom.
E. In rendering the opinion expressed in paragraph 5 above regarding the
effectiveness of the Registration Statement and the absence of any stop
order suspending such effectiveness or any proceeding for that purpose,
we have relied solely upon a telephone call with the Commission on the
date hereof.
F. Our opinion expressed in paragraph 9 above is based upon a review of
those laws, statutes, rules and regulations that, in our experience,
are applicable to the transactions contemplated by the Agreement.
G. With respect to references herein to "known to us," "to our knowledge"
or words or phrases of similar import (whether or not modified by any
additional phrases), such references mean the actual, current knowledge
that those attorneys of this Firm who have participated in the review
of the Registration Statement (including the exhibits thereto), the
Preliminary Prospectus and the Prospectus have obtained from: (a) their
review of documents in connection with rendering these opinions, and
the due diligence performed in connection therewith, which review and
due diligence were limited to reviewing the Agreement, the Preliminary
Prospectus, the Prospectus, the exhibits to the Registration Statement
or the documents incorporated by reference into the Registration
Statement, and other documents provided to us by the Company in
connection with our due diligence investigation, the minute books of
the Company, and a certificate of Xxxxxxx X. Xxxxxxxxx, Xxxxxxx X.
Love, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx, President, Chief
Executive Officer, Chief Financial Officer and Secretary, respectively,
of the Company, and which due diligence did not include any examination
of courts, boards, other tribunals or public records with respect to
any litigation, investigation or proceedings, or judgments, orders or
decrees, in any event applicable to the Company, the Subsidiaries or
any of their respective properties; (b) participation in the review of
the Registration Statement, the Preliminary Prospectus and the
Prospectus, including discussions with representatives of the Company
concerning the
34
November 20, 2001
Page 8
contents thereof; and (c) with respect to factual matters,
representations and warranties of the Company set forth in the
Agreement or otherwise made to us.
This opinion letter is provided to you at the request of the Company
and solely to you as the Underwriters in connection with the Agreement. This
opinion letter may not be relied upon by anyone else or for any other purpose,
nor may it be quoted from or referred to or copies delivered to any person other
than the Underwriters, without our prior written consent.
Very truly yours,
35
EXHIBIT B
Ladies and Gentlemen:
I act as in-house Intellectual Property Counsel for
Ilex Oncology Inc., a
Delaware corporation (referred to below as the "Company") in connection with the
issuance and sale by the Company of up to 5,000,000 shares of company common
stock, par value $0.01 per share ("Common Stock") in the planned secondary
offering.
In connection with this Opinion, I have been asked to review the statements
relating to Intellectual Property in the Form S-3 Registration Statement filed
with the Securities and Exchange Commission on (the "Registration Statement") on
November 2, 2001. I have made this review and provide my opinion with respect to
the above-identified sections of the Registration Statement. I have not been
asked to review or comment on any other sections of the Registration Statement
and my opinion is limited to Intellectual Property matters, as noted above.
The opinions and beliefs expressed in this letter represent my considered
judgment and are based upon compilations of applicable laws generally available
to the public and effective as of the date hereof. I am qualified to practice
law only in the State of Texas and before the United States Patent and Trademark
Office, and I do not purport to be an expert on any law other than the laws of
such jurisdiction and the Federal laws of the United States.
As used in this letter, the phrase "to my knowledge" when used as a
qualification with respect to the existence or absence of any matter, means
that, during my representation of the Company and having no independent
investigation with respect thereto, no information has come to my attention
which has given me actual knowledge of the existence of facts contrary to the
stated existence or absence of the matter.
Based on my review of the above-identified sections of the Registration
Statement and subject to and limited by the foregoing and the exceptions and
limitations set forth below, I offer the following opinions and conclusions:
(i) I have conducted searches or am otherwise familiar with a) the
Company's and its subsidiaries' licensed and optioned proposed
products as described in the Registration Statement (the
"Licensed Properties") and b) all patents and pending patents
applications, trademarks, and copyrights owned or co-owned by
the Company and/or its subsidiaries (the "Owned Properties")
and to my knowledge: (1) all Owned Properties have been
validly assigned in the United States Patent and Trademark
Office (the "PTO") to the owner of such Owned Properties and
the Company or its Subsidiaries, as the case may be, has
complied with the PTO's duty of Candor and disclosure for each
of the Owned Properties; (2) all patents and patent
applications within Licensed Properties disclose patentable
subject matter and have been filed in a timely manner, and
there is no prior art under Section 35 U.S.C. 102 that
anticipates the claims to Licensed Properties and (3) with
respect to both Owned Properties and Licensed Properties, no
patent application has been finally abandoned and all patents
have been lawfully issued.
36
(ii) To my knowledge, except as disclosed in the: (a) there are no
third parties who have patent rights that would prevent the
Company or its Subsidiaries from using or selling the Licensed
Properties as described in the: (b) there are currently no
sales of any products that would constitute an infringement by
third parties of the Owned Properties or the patents and
patent applications licensed or optioned by the Company or its
Subsidiaries as they pertain to the Licensed Properties; (c)
the Company has received no notice nor is there any pending or
threatened action, suit or proceeding in which it is claimed
that the current or planned activities of the Company or its
Subsidiaries as described in the Registration Statement
infringe or otherwise violate any patent, trademark or
copyright of another or otherwise involve the misappropriation
of another's trade secrets; (d) there is no pending or
threatened action, suit, proceeding or claim by another
challenging the Company's or its Subsidiaries' rights in or to
any of the Owned Properties or the Licensed Properties; (e)
there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity of the Owned
Properties or patents or patent applications as they cover the
Licensed Properties or the scope of any such Owned Properties
or patents or patent applications as they cover the Licensed
Properties, or, except as indicated in the License Agreements
between the Company and its Licensors, asserting any ownership
interest or lien with respect to such Owned Properties or the
patents or patent applications as they cover the Licensed
Properties.
(iii) The statements in the Registration Statement in so far as they
constitute summaries of intellectual property rights
associated with Owned Properties or Licensed Properties as
well as the impact of other third party held patents on the
business of the Company or its Subsidiaries are accurate in
all material respects.
(iv) There are no agreements with third parties relating to the
acquisition, licensing and/or transfer of intellectual
property rights within Owned Properties or Licensed
Properties, which have or are anticipated to have a material
impact on the Company's existing or future business, including
license agreements, joint venture agreements, marketing and/or
distribution agreements or other collaboration agreements that
are not currently in effect or that will be expiring soon, nor
further, has there been any notice of termination or other act
indicating a desire to terminate any of the aforesaid
agreements.
This letter is limited to the matters set forth herein, and no matter may be
inferred or implied beyond the matters expressly stated in this letter. No
inference as to my independent review of any information set forth in the
Registration Statement should be drawn form the fact of my representation of the
Company. I assume no obligation to advise you, subsequent to the delivery of
this letter, of any matters that could result in a change in the opinions or
beliefs set forth herein. This letter has been prepared solely for your use in
connection with the Purchase of the Shares under the Registration Statement, and
may not be used for any other purpose, or be relied upon by any other person or
entity. It should not be quoted in whole or in part or otherwise be referred to,
nor be files with nor furnished to any governmental agency or other person or
entity, without the prior written consent of the undersigned.
Very truly yours,
Xx X. Xxxxxxxx
Vice President, Licensing and Intellectual Property Counsel
37
EXHIBIT C
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 5(i) of the
Underwriting Agreement dated November 20, 2001 (the "
Underwriting Agreement")
between you and ILEX Oncology, Inc. (the "Company") relating to a public
offering and sale of 5,000,000 shares (which amount does not include 750,000
shares being offered and sold upon the over-allotment option) of the Company's
common stock, par value $0.01 per share (the "Common Stock"). As used herein,
the terms "Registration Statement" and "Prospectus" have the meanings assigned
to them in the
Underwriting Agreement.
Xxxx Xxxxx LLP (the "Firm") has acted as special health care regulatory
counsel to the Company in connection with certain regulatory matters related to
the United States Food and Drug Administration ("FDA"). In connection with this
letter and in our capacity as special FDA regulatory counsel to the Company, we
have reviewed the Risk Factors sections of the Registration Statement and
Prospectus entitled: (1) Risks Related to Operations -- "Because we have limited
manufacturing capabilities, we are dependent on third-party manufacturers to
manufacture products for us. We may be required to incur significant costs and
devote significant efforts to establish our own manufacturing facilities and
capabilities;" (2) Risks Related to Drug Development -- "We may be unsuccessful
in our efforts to expand the number and scope of authorized uses of Campath,
which would hamper sales growth and make it more difficult for us to attain
profitability;" (3) Risks Related to Drug Development -- "If we are not able to
demonstrate the safety and efficacy of our product candidates in clinical trials
or if our clinical trials are delayed, we will not be able to obtain regulatory
approval, or regulatory approval will be delayed, to market these drugs;" (4)
Risks Related to Drug Development -- "All of our product candidates are subject
to the risks of failure inherent in drug development;" (5) Risks Related to Drug
Development -- "Delays in patient enrollment for clinical trials could increase
costs and delay regulatory approvals;" (6) Risks Related to Drug Development --
"If we fail to comply with extensive regulations enforced by the FDA and its
foreign counterparts, the commercialization of our product candidates will be
prevented or delayed" (the "Referenced Sections"). As used herein, the term
"Approval" shall mean a health care license, permit, approval, consent, notice,
certification, authorization and related matters contained in the Referenced
Sections. We have not considered, and this opinion does not address, any
Approval other than those discussed in the Referenced Sections.
The opinions and beliefs expressed in this letter represent our
considered judgment and are based upon compilations of applicable laws generally
available to the public and effective as of the date hereof. The attorneys in
this Firm who prepared this opinion are qualified to practice law only in the
District of Columbia, and do not purport to be experts on any law other than the
laws of such jurisdiction and the Federal laws of the United States.
Based upon, subject to, and limited by the foregoing and the exceptions
and limitations set forth below, we are of the opinion that:
(i) the issuance, sale and delivery of the Common Stock pursuant
to the
Underwriting Agreement do not require any Approval of
any health care agency
38
or body of any state in which the Company, or any of its
subsidiaries, operate or under any Federal food and drug,
Medicare or state Medicaid laws and regulations; and
(ii) the statements in the Referenced Sections insofar as they
purport to constitute summaries of health care laws,
regulations, guidance, policies and interpretations accurately
in all material respects present the matters purported to be
described therein.
In addition, we are not aware of any lawsuit or regulatory proceeding,
pending or threatened, brought by or before the FDA, or related federal
authorities, in which the Company or any of its subsidiaries is or would be the
defendant or respondent, except as described in the Prospectus.
In addition, without taking any action to verify independently the
accuracy, completeness or fairness of any statements contained in the Referenced
Sections, and without assuming responsibility for the accuracy, completeness or
fairness of any such statements, based on the description of the business of the
Company and its subsidiaries contained in the Registration Statement, we do not
believe that the Referenced Sections contained in the Registration Statement, at
the time the Registration Statement became effective, or at the Closing Date, as
the case may be, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
This letter is limited to the matters set forth herein, and no matter
may be inferred or is implied beyond the matters expressly stated in this
letter. Except as otherwise set forth herein, no inference as to our independent
review of any information set forth in the Registration Statement should be
drawn from the fact of our representation of the Company. We assume no
obligation to advise you, subsequent to the delivery of this letter, of any
matters that could result in a change in the opinions or beliefs set forth
herein. This letter has been prepared solely for your use in connection with the
offer and sale by the Company of the Common Shares to the Underwriters pursuant
to the
Underwriting Agreement on the date hereof, and may not be used for any
other purpose, or be relied upon by any other person or entity without our prior
written consent.
Very truly yours,
Xxxx Xxxxx LLP
39
EXHIBIT D
FORM OF LOCKUP AGREEMENT
40
LOCKUP AGREEMENT
October 29, 2001
CIBC World Markets Corp.
UBS Warburg LLC
U.S. Bancorp Xxxxx Xxxxxxx
As Representative of the Several Underwriters
c/o CIBC World Markets Corp.
CIBC World Markets Tower
World Financial Center
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Public Offering of Common Stock of ILEX Oncology, Inc.
Gentlemen:
The undersigned, a holder of common stock ("Common Stock") or rights to
acquire Common Stock, of ILEX Oncology, Inc. (the "Company") understands that
the Company intends to file a Registration Statement on Form S-3 (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") on or about October 29, 2001 for the registration of approximately
5,750,000 shares of Common Stock (including 750,000 shares subject to an
over-allotment option on the part of the Underwriters) (the "Offering"). The
undersigned further understands that you are contemplating entering into an
Underwriting Agreement with the Company in connection with the Offering.
In order to induce the Company, you and the other Underwriters to enter
into the
Underwriting Agreement and to proceed with the Offering, the
undersigned agrees, for the benefit of the Company, you and the other
Underwriters, that should the Offering be effected the undersigned will not,
without your prior written consent, directly or indirectly, make any offer,
sale, assignment, transfer, encumbrance, contract to sell, grant of an option to
purchase or other disposition of any Common Stock beneficially owned (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by
the undersigned on the date hereof or hereafter acquired for a period of ninety
(90) days subsequent to the date of the
Underwriting Agreement, other than
Common Stock transferred as a gift or gifts (provided that any donee thereof
agrees in writing to be bound by the terms hereof).
41
The undersigned, whether or not participating in the Offering, confirms
that he, she or it understands that the Underwriters and the Company will rely
upon the representations set forth in this agreement in proceeding with the
Offering. This agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns. The
undersigned agrees and consents to the entry of stop transfer instructions with
the Company's transfer agent against the transfer of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with this agreement.
Very truly yours,
Dated: , 2001
------------------ -----------------------------------------
Signature
-----------------------------------------
Printed Name and Title (if applicable)
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