Exhibit 1.1
3,750,000 Shares
Valera Pharmaceuticals, Inc.
Common Stock
($0.001 Par Value)
UNDERWRITING AGREEMENT
_________ __, 2006
UNDERWRITING AGREEMENT
_________ __, 2006
UBS Securities LLC
Banc of America Securities LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Valera Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters"), for whom you are acting as representatives
(the "Representatives"), an aggregate of 3,750,000 shares (the "Firm Shares")
of the class of Common Stock, $0.001 par value (the "Common Stock"), of the
Company. In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the
Company up to an additional 562,500 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the "Shares." The Shares are described in the
Prospectus which is referred to below.
The Company hereby acknowledges that, in connection with the
proposed offering of the Shares, it has requested UBS Financial Services Inc.
("UBS-FinSvc") to administer a directed share program (the "Directed Share
Program") under which up to 215,625 Firm Shares, or 5% of the Firm Shares to
be purchased by the Underwriters (the "Reserved Shares"), shall be reserved for
sale by UBS-FinSvc at the initial public offering price to the Company's
officers, directors, employees and consultants and other persons having a
relationship with the Company as designated by the Company (the "Directed Share
Participants"), as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD"), and all other applicable laws, rules and regulations. The number of
Shares available for sale to the general public will be reduced to the extent
that Directed Share Participants purchase Reserved Shares. The Underwriters may
offer any Reserved Shares not purchased by Directed Share Participants to the
general public on the same basis as the other Shares being issued and sold
hereunder. The Company has supplied UBS-FinSvc with the names, addresses and
telephone numbers of the individuals or other entities which the Company has
designated to be participants in the Directed Share Program. It is understood
that any number of those designated to participate in the Directed Share Program
may decline to do so.
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The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "Act"), with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-1 (File No. 333-123288) under the Act including a prospectus, relating
to the Shares.
Except where the context otherwise requires, "Registration
Statement," as used herein, means the registration statement, as amended at the
time of such registration statement's effectiveness for purposes of Section 11
of the Act, as such section applies to the respective Underwriters (the
"Effective Time"), including (i) all documents filed as a part thereof, (ii) any
information contained in a prospectus filed with the Commission pursuant to Rule
424(b) under the Act and deemed, pursuant to Rule 430A or Rule 430C under the
Act, to be part of the registration statement at the Effective Time, and (iii)
any registration statement filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act.
The Company has furnished to you, for use by the Underwriters and by
dealers in connection with the offering of the Shares, copies of one or more
preliminary prospectuses relating to the Shares. Except where the context
otherwise requires, "Preliminary Prospectus," as used herein, means each such
preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, "Prospectus," as used
herein, means the prospectus filed by the Company with the Commission pursuant
to Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act), or, if no such
filing is required, the final prospectus included in the Registration Statement
at the time it became effective under the Act, in each case in the form
furnished by the Company to you for use by the Underwriters and by dealers in
connection with the offering of the Shares.
"Permitted Free Writing Prospectuses," as used herein, means the
documents listed on Schedule B attached hereto and each "road show" (as defined
in Rule 433 under the Act), if any, related to the offering of the Shares
contemplated hereby that is a "written communication" (as defined in Rule 405
under the Act) (each such road show, a "Road Show").
"Disclosure Package," as used herein, means any Preliminary
Prospectus together with any combination of one or more of the Permitted Free
Writing Prospectuses, if any.
As used in this Agreement, "business day" shall mean a day on which
the New York Stock Exchange (the "NYSE") is open for trading. The terms
"herein," "hereof," "hereto," "hereinafter" and similar terms, as used in this
Agreement, shall in each case refer to this Agreement as a whole and not to any
particular section, paragraph, sentence or other subdivision of this Agreement.
The term "or," as used herein, is not exclusive.
The Company has prepared and filed, in accordance with Section 12 of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"), a registration statement (as
amended, the "Exchange Act Registration Statement") on Form 8-A (File No. -)
under the Exchange Act to register, under Section 12(g) of the Exchange Act, the
class of securities consisting of the Common Stock.
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The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A
attached hereto, subject to adjustment in accordance with Section 8 hereof, in
each case at a purchase price of $______ per Share. The Company is advised by
you that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the effective date of the
Registration Statement as in your judgment is advisable and (ii) initially to
offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters
the option (the "Over-Allotment Option") to purchase, and upon the basis of the
representations and warranties and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not
jointly, from the Company, ratably in accordance with the number of Firm Shares
to be purchased by each of them, all or a portion of the Additional Shares as
may be necessary to cover over-allotments made in connection with the offering
of the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Company for the Firm Shares. The Over-Allotment Option may
be exercised by the Representatives on behalf of the several Underwriters at any
time and from time to time on or before the thirtieth day following the date of
the Prospectus, by written notice to the Company. Such notice shall set forth
the aggregate number of Additional Shares as to which the Over-Allotment Option
is being exercised and the date and time when the Additional Shares are to be
delivered (any such date and time being herein referred to as an "additional
time of purchase"); provided, however, that no additional time of purchase shall
be earlier than the "time of purchase" (as defined below) nor earlier than the
second business day after the date on which the Over-Allotment Option shall have
been exercised nor later than the tenth business day after the date on which the
Over-Allotment Option shall have been exercised. The number of Additional Shares
to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares),
subject to adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Company by Federal Funds wire transfer, against delivery of
the certificates for the Firm Shares to you through the facilities of The
Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on _______________, 2006 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
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Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New York, NY, at 9:00 A.M.,
New York City time, on the date of the closing of the purchase of the Firm
Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) the Registration Statement has heretofore become effective under
the Act or, with respect to any registration statement to be filed to
register the offer and sale of Shares pursuant to Rule 462(b) under the
Act, will be filed with the Commission and become effective under the Act
no later than 10:00 P.M., New York City time, on the date of determination
of the public offering price for the Shares; no stop order of the
Commission preventing or suspending the use of any Preliminary Prospectus
or Permitted Free Writing Prospectus or the effectiveness of the
Registration Statement has been issued, and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; the Exchange Act Registration Statement
has become effective as provided in Section 12 of the Exchange Act;
(b) the Registration Statement complied when it became effective,
complies as of the date hereof and, as amended or supplemented, at the
time of purchase, each additional time of purchase, if any, and at all
times during which a prospectus is required by the Act to be delivered
(whether physically or through compliance with Rule 172 under the Act or
any similar rule) in connection with any sale of Shares, will comply, in
all material respects, with the requirements of the Act; the Registration
Statement did not, as of the Effective Time, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; each
Preliminary Prospectus complied, at the time it was filed with the
Commission, and complies as of the date hereof, in all material respects
with the requirements of the Act; at no time during the period that begins
on the earlier of the date of such Preliminary Prospectus and the date
such Preliminary Prospectus was filed with the Commission and ends at the
time of purchase did or will any Preliminary Prospectus, as then amended
or supplemented, include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, and at no time during such period did or will any Preliminary
Prospectus, as then amended or supplemented, together with any combination
of one or more of the then issued Permitted Free Writing Prospectuses, if
any, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; the
Prospectus will comply, as of its date, the date that it is filed with the
Commission, the time of purchase, each additional time of purchase, if
any,
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and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under
the Act or any similar rule) in connection with any sale of Shares, in all
material respects, with the requirements of the Act (including, without
limitation, Section 10(a) of the Act); at no time during the period that
begins on the earlier of the date of the Prospectus and the date the
Prospectus is filed with the Commission and ends at the later of the time
of purchase, the latest additional time of purchase, if any, and the end
of the period during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under
the Act or any similar rule) in connection with any sale of Shares did or
will the Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; at no time during the period
that begins on the date of such Permitted Free Writing Prospectus and ends
at the time of purchase did or will any Permitted Free Writing Prospectus
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty with respect
to any statement contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus in
reliance upon and in conformity with information concerning an Underwriter
and furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use in the Registration Statement, such
Preliminary Prospectus, the Prospectus or such Permitted Free Writing
Prospectus;
(c) prior to the execution of this Agreement, the Company has not,
directly or indirectly, offered or sold any Shares by means of any
"prospectus" (within the meaning of the Act) or used any "prospectus"
(within the meaning of the Act) in connection with the offer or sale of
the Shares, in each case other than the Preliminary Prospectuses and the
Permitted Free Writing Prospectuses, if any; the Company has not, directly
or indirectly, prepared, used or referred to any Permitted Free Writing
Prospectus except in compliance with Rules 164 and 433 under the Act;
assuming that such Permitted Free Writing Prospectus is accompanied or
preceded by the most recent Preliminary Prospectus that contains a price
range or the Prospectus, as the case may be, and that such Permitted Free
Writing Prospectus is so sent or given after the Registration Statement
was filed with the Commission (and after such Permitted Free Writing
Prospectus was, if required pursuant to Rule 433(d) under the Act, filed
with the Commission), the sending or giving, by any Underwriter, of any
Permitted Free Writing Prospectus will satisfy the provisions of Rule 164
or Rule 433 (without reliance on subsections (b), (c) and (d) of Rule
164); each of the Preliminary Prospectuses dated ?, 2006 and ?, 2006,
respectively, is a prospectus that, other than by reason of Rule 433 or
Rule 431 under the Act, satisfies the requirements of Section 10 of the
Act, including a price range where required by rule; neither the Company
nor the Underwriters are disqualified, by reason of subsection (f) or (g)
of Rule 164 under the Act, from using, in connection with the offer and
sale of the Shares, "free writing prospectuses" (as defined in Rule 405
under the Act) pursuant to Rules 164 and 433 under the Act; the Company is
not an "ineligible issuer" (as defined in Rule 405 under the Act) as of
the eligibility determination date for purposes of Rules 164 and 433 under
the Act with respect to the offering of the Shares contemplated by the
Registration
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Statement; the parties hereto agree and understand that the content of any
and all "road shows" (as defined in Rule 433 under the Act) related to the
offering of the Shares contemplated hereby is solely the property of the
Company; the Company has caused there to be made available at least one
version of a "bona fide electronic road show" (as defined in Rule 433
under the Act) in a manner that, pursuant to Rule 433(d)(8)(ii) under the
Act, causes the Company not to be required, pursuant to Rule 433(d) under
the Act, to file, with the Commission, any Road Show;
(d) as of the date of this Agreement, the Company has an authorized
and outstanding capitalization as set forth in the sections of the
Registration Statement, the Preliminary Prospectuses and the Prospectus
entitled "Capitalization" and "Description of Capital Stock" (and any
similar sections or information, if any, contained in any Permitted Free
Writing Prospectus), and, as of the time of purchase and any additional
time of purchase, as the case may be, the Company shall have an authorized
and outstanding capitalization as set forth in the sections of the
Registration Statement and the Prospectus entitled "Capitalization" and
"Description of Capital Stock" (and any similar sections or information,
if any, contained in any Permitted Free Writing Prospectus), (subject, in
each case, to the issuance of shares of Common Stock upon exercise of
stock options and warrants disclosed as outstanding in the Registration
Statement (excluding the exhibits thereto), each Preliminary Prospectus
and the Prospectus and grant of options under existing stock option plans
described in the Registration Statement (excluding the exhibits thereto),
each Preliminary Prospectus and the Prospectus); all of the issued and
outstanding shares of capital stock of the Company, including the Common
Stock, have been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right; prior to the time
of purchase, all outstanding shares of Series A 6% Cumulative Convertible
Preferred Stock, $0.001 par value per share, Series B 10% Cumulative
Convertible Preferred Stock, $0.001 par value per share and Series C 6%
Cumulative Convertible Preferred Stock, $0.001 par value per share, of the
Company shall convert into shares of Common Stock in the manner described
in the Registration Statement (excluding the exhibits thereto), each
Preliminary Prospectus and the Prospectus; prior to the date hereof, the
Company has duly effected and completed a 1-for-6 reverse stock split of
the Common Stock in the manner described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the
Prospectus; and the [Second] Amended and Restated Certificate of
Incorporation of the Company and the Amended and Restated Bylaws of the
Company, each in the form filed as an exhibit to the Registration
Statement, have been heretofore duly authorized and approved in accordance
with the Delaware General Corporation Law and shall become effective and
in full force and effect at or before the time of purchase; the Shares are
duly listed, and admitted and authorized for trading, subject to official
notice of issuance and evidence of satisfactory distribution, on the
Nasdaq National Market (the "Nasdaq");
(e) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted
Free
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Writing Prospectuses, if any, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(f) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial condition,
results of operations or prospects of the Company and the Subsidiaries (as
defined below) taken as a whole (a "Material Adverse Effect");
(g) the Company has no subsidiaries (as defined under the Act) other
than Valera Pharmaceuticals Ireland Limited (the "Subsidiaries"); the
Company owns all of the issued and outstanding capital stock of each of
the Subsidiaries; other than the capital stock of the Subsidiaries, the
Company does not own, directly or indirectly, any shares of stock or any
other equity interests or long-term debt securities of any corporation,
firm, partnership, joint venture, association or other entity; complete
and correct copies of the charters and the bylaws of the Company and each
Subsidiary and all amendments thereto have been delivered to you, and,
except as set forth in the exhibits to the Registration Statement, no
changes therein will be made on or after the date hereof through and
including the time of purchase or, if later, any additional time of
purchase; each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any; each
Subsidiary is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified and in good standing;
(h) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
(i) the capital stock of the Company, including the Shares, conforms
in all material respects to each description, if any, thereof contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus or
any Permitted Free Writing Prospectus; and the certificates for the Shares
are in due and proper form and the holders of the Shares will not be
subject to personal liability solely by reason of being such holders;
(j) this Agreement has been duly authorized, executed and delivered
by the Company;
(k) neither the Company nor any of the Subsidiaries is (A) in
violation of its charter or by-laws, or (B) in breach or violation of or
in default under (nor has any event oc-
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curred which with notice, lapse of time or both would result in any breach
or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (i) any indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company is a
party or by which it or any of its properties may be bound or affected,
(ii) any federal, state, local or foreign law, regulation or rule, or
(iii) any decree, judgment or order applicable to it or any of its
properties, except, in the case of clause (B)(i), for such breaches,
violations or defaults that would not result in a Material Adverse Effect;
(l) the execution, delivery and performance of this Agreement, the
issuance and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which
with notice, lapse of time or both, would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any
Subsidiary pursuant to) (A) the charter or by-laws of the Company or any
Subsidiary, or (B) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or any of its properties may be bound
or affected, or (C) any federal, state, local or foreign law, regulation
or rule or (D) any decree, judgment or order applicable to the Company or
any Subsidiary, except, in the case of clause (B), for such breaches,
violations or defaults that would not result in a Material Adverse Effect;
(m) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or approval of the
stockholders of the Company, is required in connection with the issuance
and sale of the Shares or the consummation by the Company of the
transactions contemplated hereby, other than (i) registration of the
Shares under the Act, which has been effected (or, with respect to any
registration statement to be filed hereunder pursuant to Rule 462(b) under
the Act, will be effected in accordance herewith), (ii) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters or
(iii) under the Conduct Rules of the NASD;
(n) except as described in the Registration Statement (excluding the
exhibits thereto), each Preliminary Prospectus and the Prospectus, (i) no
person has the right, contractual or otherwise, to cause the Company to
issue or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, (ii) no person has
any preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock of or other equity interests in the Company, and (iii) no
person has the right to act as an underwriter or as a financial advisor to
the Company in connection with the offer and sale of the Shares, in the
case of each of the
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foregoing clauses (i), (ii) and (iii), whether as a result of the filing
or effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise; no person has the right, contractual
or otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock of or other equity
interests in the Company, or to include any such shares or interests in
the Registration Statement or the offering contemplated thereby, whether
as a result of the filing or effectiveness of the Registration Statement
or the sale of the Shares as contemplated thereby or otherwise;
(o) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary licenses,
authorizations, consents and approvals from other persons, in order to
conduct its business; neither the Company nor any of the Subsidiaries is
in violation of, or in default under, or has received notice of any
proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, including without limitation, all such
certificates, authorizations and permits required by the United States
Food and Drug Administration (the "FDA") or any other federal, state,
local or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous substances or materials, except where such
violation, default, revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect;
(p) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(q) there are no actions, suits, claims, investigations or
proceedings pending or, to the Company's knowledge, threatened or
contemplated to which the Company or any of the Subsidiaries or any of its
directors or officers is or would be a party or of which any of its
properties is or would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, except any such action, suit, claim,
investigation or proceeding which, if resolved adversely to the Company or
any Subsidiary, would not, individually or in the aggregate, have a
Material Adverse Effect or prevent or interfere with consummation of the
transactions contemplated hereby;
(r) Ernst & Young LLP, whose report on the financial statements of
the Company and the Subsidiaries is included in the Registration
Statement, the Preliminary Prospectuses and the Prospectus, is an
independent registered public accounting firm as required by the Act and
by the rules of the Public Company Accounting Oversight Board;
(s) the audited financial statements included in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Permitted
Free Writing Prospectus, together with the related notes and schedules,
present fairly the financial position of the Company and the Subsidiaries
as of the dates indicated and the results of operations, cash flows and
changes
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in stockholders' equity of the Company and the Subsidiaries for the
periods specified and have been prepared in compliance with the
requirements of the Act and the Exchange Act and in conformity with U.S.
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus are accurately and
fairly presented and prepared on a basis consistent with the financial
statements and books and records of the Company and the Subsidiaries;
there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statement, any Preliminary
Prospectus or the Prospectus that are not included as required; the
Company and the Subsidiaries taken as a whole do not have any material
liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not described in the Registration
Statement (excluding the exhibits thereto), each Preliminary Prospectus
and the Prospectus;
(t) subsequent to the respective dates as of which information is
given in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, in each
case excluding any amendments or supplements to the foregoing made after
the execution of this Agreement, there has not been (i) any material
adverse change, or any development involving a prospective material
adverse change, in the business, properties, management, financial
condition or results of operations of the Company and the Subsidiaries
taken as a whole, (ii) any transaction which is material to the Company
and the Subsidiaries taken as a whole, (iii) any obligation or liability,
direct or contingent (including any off-balance sheet obligations),
incurred by the Company or any Subsidiary, which is material to the
Company and the Subsidiaries taken as a whole, (iv) any change in the
capital stock or outstanding indebtedness of the Company or any
Subsidiaries or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company or any Subsidiary;
(u) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A
hereto, of each of its directors and officers (within the meaning of Rule
16a-1(f) under the Exchange Act), and each holder of shares of Common
Stock or any security convertible into or exercisable or exchangeable for
Common Stock, or any warrant or other right to acquire shares of Common
Stock or any such security;
(v) neither the Company nor any Subsidiary is and at no time during
which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares will either of them
be, and, after giving effect to the offering and sale of the Shares,
neither of them will be an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(w) the Company and each of the Subsidiaries have good and
marketable title to all property (real and personal) described in the
Registration Statement, any Preliminary Pro-
12
spectus, the Prospectus or any Permitted Free Writing Prospectus as being
owned by any of them, free and clear of all liens, claims, security
interests or other encumbrances; all the property described in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as being held under lease by the Company
or a Subsidiary is held thereby under valid, subsisting and enforceable
leases;
(x) the Company and the Subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, service names, copyrights, trade secrets and other proprietary
information described in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus as
being owned or licensed by it or which are necessary for the conduct of
its business as currently conducted or as proposed to be conducted
(including the commercialization of products or services described in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as under development) (collectively,
"Intellectual Property") except where the failure to own, license or have
such rights would not, individually or in the aggregate, have a Material
Adverse Effect; and (i) there are no third parties who have or, to the
Company's knowledge, will be able to establish rights to any Intellectual
Property, except for, and to the extent of, the ownership rights of the
owners of the Intellectual Property which the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the
Prospectus disclose is licensed to the Company, (ii) to the Company's
knowledge, there is no infringement by third parties of any Intellectual
Property, (iii) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the
Company's rights in or to any Intellectual Property, and the Company is
unaware of any facts which could form a reasonable basis for any such
action, suit, proceeding or claim, (iv) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the validity, enforceability or scope of any
Intellectual Property, and the Company is unaware of any facts which could
form a reasonable basis for any such action, suit, proceeding or claim,
(v) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes or
otherwise violates, or would, upon the commercialization of any product or
service described in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus as
under development, infringe or violate, any patent, trademark, tradename,
service name, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any facts which could form a
reasonable basis for any such action, suit, proceeding or claim, (vi) the
Company and the Subsidiaries have complied with the terms of each
agreement pursuant to which Intellectual Property has been licensed to the
Company or any Subsidiary, and all such agreements are in full force and
effect; (vii) to the Company's knowledge there is no patent or patent
application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property or that challenges the
validity, enforceability or scope of any of the Intellectual Property,
(viii) the Company has duly and properly filed or caused to be filed with
the United States Patent and Trademark Office (the "PTO") and applicable
foreign and international patent authorities all patent applications owned
by the Company (the "Applications") (ix) the Company has complied with the
PTO's duty of candor and disclosure for the Applications and has made no
material misrepresentation in the Appli-
13
cations, including the disclosure of all prior art that may render any of
the Applications unpatentable, (x) the Company is not aware of any facts
material to a determination of patentability regarding the Applications
not called to the attention of the PTO or similar foreign authority, (xi)
the Company is not aware of any facts not called to the attention of the
PTO or similar foreign authority which would preclude the grant of a
patent for the Applications, and (xii) the Company is unaware of any facts
which would preclude it from having clear title to the Applications;
(y) neither the Company nor any of the Subsidiaries is engaged in
any unfair labor practice; except for matters which would not,
individually or in the aggregate, have a Material Adverse Effect, (i)
there is (A) no unfair labor practice complaint pending or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under collective bargaining
agreements is pending or, to the Company's knowledge, threatened, (B) no
strike, labor dispute, slowdown or stoppage pending or, to the Company's
knowledge, threatened against the Company or any of the Subsidiaries and
(C) no union representation dispute currently existing concerning the
employees of the Company or any of the Subsidiaries, and (ii) to the
Company's knowledge, (A) no union organizing activities are currently
taking place concerning the employees of the Company or any of the
Subsidiaries and (B) there has been no violation of any federal, state,
local or foreign law relating to discrimination in the hiring, promotion
or pay of employees, any applicable wage or hour laws or any provision of
the Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder concerning the employees of the
Company or any of the Subsidiaries;
(z) the Company and the Subsidiaries and their respective
properties, assets and operations are in compliance with, and hold all
permits, authorizations and approvals required under, Environmental Laws
(as defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually or
in the aggregate, have a Material Adverse Effect; there are no past,
present or, to the Company's knowledge, reasonably anticipated future
events, conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise to any
material costs or liabilities to the Company or any Subsidiary under, or
to interfere with or prevent compliance by the Company or any Subsidiary
with, Environmental Laws; except as would not, individually or in the
aggregate, have a Material Adverse Effect, neither the Company nor any of
the Subsidiaries (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any
pending or, to its knowledge, threatened action, suit or proceeding, (iv)
is bound by any judgment, decree or order, and (v) has entered into any
agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release
or cleanup at any location of any Hazardous Materials (as defined below)
(as used herein, "Environmental Law" means any federal, state, local or
foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other binding
requirement, or common law, relating to health, safety or the protection,
cleanup or restoration of the environment or natural resources, including
those relating to the distribution, processing, generation, treatment,
storage, disposal,
14
transportation, other handling or release or threatened release of
Hazardous Materials, and "Hazardous Materials" means any material
(including, without limitation, pollutants, contaminants, hazardous or
toxic substances or wastes) that is regulated by or may give rise to
liability under any Environmental Law);
(aa) in the ordinary course of its business, the Company and each of
the Subsidiaries conduct periodic reviews of the effect of the
Environmental Laws on their respective businesses, operations and
properties, in the course of which they identify and evaluate associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for cleanup, closure of properties or
compliance with the Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties);
(bb) all tax returns required to be filed by the Company or any of
the Subsidiaries have been filed, and all taxes and other assessments of a
similar nature (whether imposed directly or through withholding) including
any interest, additions to tax or penalties applicable thereto due or
claimed to be due from it have been paid, other than those being contested
in good faith and for which adequate reserves have been provided;
(cc) the Company and each of the Subsidiaries maintain insurance
covering their respective properties, operations, personnel and businesses
as the Company reasonably deems adequate; such insurance insures against
such losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and the Subsidiaries
and their respective businesses; all such insurance is fully in force on
the date hereof and will be fully in force at the time of purchase and any
additional time of purchase; neither the Company nor any Subsidiary has
reason to believe that it will not be able to renew any such insurance as
and when such insurance expires;
(dd) neither the Company nor any of the Subsidiaries has sustained
since the date of the last audited financial statements included in the
Registration Statement, the Preliminary Prospectuses and the Prospectus
any loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree;
(ee) neither the Company nor any of the Subsidiaries has sent or
received any communication regarding termination of, or intent not to
renew, any of the contracts or agreements referred to or described in any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been
threatened by the Company or any Subsidiary or, to the Company's
knowledge, any other party to any such contract or agreement;
(ff) the Company and each of the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are re-
15
corded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(gg) the Company has established and maintains and evaluates
disclosure controls and procedures (as such term is defined in Rule 13a-15
and 15d-15 under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to
the Company, including its consolidated Subsidiaries, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, and such disclosure controls and procedures
are effective to perform the functions for which they were established;
the Company's independent auditors and the Audit Committee of the Board of
Directors have been advised of: (i) all significant deficiencies, if any,
in the design or operation of internal controls which could adversely
affect the Company's ability to record, process, summarize, and report
financial data; and (ii) all fraud, if any, whether or not material, that
involves management or other employees who have a role in the Company's
internal controls; all material weaknesses, if any, in internal controls
have been identified for the Company's auditors; since the date of the
most recent evaluation of such disclosure controls and procedures and
internal controls, there have been no significant changes in internal
controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses;
(hh) the Company and the Subsidiaries have provided you true,
correct, and complete copies of all documentation pertaining to any
extension of credit in the form of a personal loan made, directly or
indirectly, by the Company to any director or executive officer of the
Company, or to any family member or affiliate of any director or executive
officer of the Company; and since March 14, 2005, the Company and the
Subsidiaries have not, directly or indirectly, including through any
subsidiary: (i) extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the Company;
or (ii) made any material modification, including any renewal thereof, to
any term of any personal loan to any director or executive officer of the
Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on March 14, 2005;
(ii) all statistical or market-related data included in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and the Company has
obtained the written consent to the use of such data from such sources to
the extent required;
(jj) neither the Company nor any of the Subsidiaries nor, to the
Company's knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary
or received or retained any funds in violation of
16
any law, rule or regulation (including, without limitation, the Foreign
Corrupt Practices Act of 1977), which payment, receipt or retention of
funds is of a character required to be disclosed in the Registration
Statement, any Preliminary Prospectus, or the Prospectus;
(kk) no Subsidiary is currently prohibited, directly or indirectly,
from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to the Company or
any other Subsidiary of the Company, except as described in the
Registration Statement (excluding the exhibits thereto), each Preliminary
Prospectus and the Prospectus;
(ll) neither the Company nor any of the Subsidiaries nor any of
their directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed, or which has constituted or
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
(mm) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or securityholders or any beneficial owner of the
Company's unregistered equity securities that were acquired at any time on
or after the 180th day immediately preceding the date the Registration
Statement was initially filed with the Commission, except as disclosed in
the Registration Statement (excluding the exhibits thereto), the
Preliminary Prospectuses and the Prospectus;
(nn) the Registration Statement, each Preliminary Prospectus, the
Prospectus and each Permitted Free Writing Prospectus comply, and any
further amendments or supplements thereto will comply, with any applicable
laws or regulations of any foreign jurisdiction in which any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus is
distributed in connection with the Directed Share Program; and no
approval, authorization, consent or order of or filing with any
governmental or regulatory commission, board, body, authority or agency,
other than those heretofore obtained, is required in connection with the
offering of the Reserved Shares in any jurisdiction where the Reserved
Shares are being offered;
(oo) the Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with
the intent to influence unlawfully (i) a customer or supplier of the
Company or any of the Subsidiaries to alter the customer's or supplier's
level or type of business with the Company or any of the Subsidiaries, or
(ii) a trade journalist or publication to write or publish favorable
information about the Company or any of the Subsidiaries or any of its
products or services;
(pp) the tests and pre-clinical and clinical studies conducted by or
on behalf of the Company that are described in the Registration Statement,
any Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus were and, if still pending, are being, conducted in all
material respects in accordance with experimental protocols, procedures
and
17
controls filed with the appropriate regulatory authorities for each such
test or trial, as the case may be; the descriptions of the tests and
preclinical and clinical studies conducted by or on behalf of the Company
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus are accurate in all
material respects; neither the Company nor any Subsidiaries has received
any written notice or correspondence from the FDA or any foreign, state or
local governmental body exercising comparable authority or any
Institutional Review Board or comparable authority requiring the
termination, suspension, material modification or clinical hold of any
tests or preclinical or clinical studies conducted by or on behalf of the
Company or any Subsidiary, which termination, suspension, material
modification or clinical hold would reasonably be expected to have a
Material Adverse Effect; and neither the Company nor any Subsidiary has
received any written notices or correspondence from others concerning the
termination, suspension, material modification or clinical hold of any
tests or preclinical or clinical studies conducted by others on any active
ingredient contained in the existing products of the Company or the
products described in any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as being under development, which
termination, suspension, material modification or clinical hold would
reasonably be expected to have a Material Adverse Effect;
(qq) all of the manufacturing facilities and operations of the
Company and the Subsidiaries and its suppliers' of products sold in the
United States are in compliance with applicable FDA regulations, including
current Good Manufacturing Practices, and meet sanitation standards set by
the Federal Food, Drug and Cosmetic Act of 1938, as amended, and all
manufacturing facilities and operations of the Company and the
Subsidiaries and, to the Company's knowledge, its suppliers of products
sold outside the United States are in compliance with applicable foreign
regulatory requirements and standards, except to the extent that the
failure to be in compliance with such regulations and standards would not
have a Material Adverse Effect;
(rr) the FDA has not, and no applicable foreign regulatory agency
has, commenced, or, to the knowledge of the Company and the Subsidiaries,
threatened to initiate, any action to withdraw its approval of any product
of the Company or any Subsidiary, except as disclosed in the Registration
Statement, the Preliminary Prospectuses and the Prospectus;
(ss) except pursuant to this Agreement, neither the Company nor any
of the Subsidiaries has incurred any liability for any finder's or
broker's fee or agent's commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby or by the Registration Statement; and
(tt) except as disclosed in the Registration Statement, the
Preliminary Prospectuses and the Prospectus, the Company and the
Subsidiaries have not sold or issued any securities during the six-month
period preceding the date of the Prospectus, including but not limited to
any sales pursuant to Rule 144A or Regulation D or S under the Securities
Act and the rules and regulations promulgated thereunder, other than
Common Stock issued pursuant to employee benefit plans, qualified stock
option plans or the employee compensation plans or
18
pursuant to outstanding options, rights or warrants as described in the
Registration Statement, the Preliminary Prospectuses and the Prospectus.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Underwriters or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed to be
a representation and warranty by the Company as to matters covered thereby, to
each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may designate and to maintain such qualifications in effect so long as you
may request for the distribution of the Shares; provided, however, that
the Company shall not be required to qualify as a foreign corporation or
to consent to the service of process under the laws of any such
jurisdiction (except service of process with respect to the offering and
sale of the Shares); and to promptly advise you of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon
as practicable after this Agreement becomes effective, and thereafter from
time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company
shall have made any amendments or supplements thereto after the effective
date of the Registration Statement) as the Underwriters may request for
the purposes contemplated by the Act; in case any Underwriter is required
to deliver (whether physically or through compliance with Rule 172 under
the Act or any similar rule) a prospectus after the nine-month period
referred to in Section 10(a)(3) of the Act in connection with the sale of
the Shares, the Company will prepare, at its expense, promptly upon
request such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for a post-effective amendment to the Registration Statement, or
a Registration Statement under Rule 462(b) under the Act, to be filed with
the Commission and become effective before the Shares may be sold, the
Company will endeavor to cause such post-effective amendment or such
Registration Statement to be filed and to become effective as soon as
possible, and the Company will advise you promptly and, if requested by
you, will confirm such advice in writing, (i) when such post-effective
amendment or such Registration Statement has become effective, and (ii) if
Rule 430A under the Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Act (which the Company agrees
to file in a timely manner in accordance with such Rules);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Ex-
19
change Act Registration Statement, any Preliminary Prospectus, the
Prospectus or any Permitted Free Writing Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission should
enter a stop order suspending the effectiveness of the Registration
Statement, to use its best efforts to obtain the lifting or removal of
such order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement or the Exchange Act
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus and to provide you and Underwriters'
counsel copies of any such documents for review and comment a reasonable
amount of time prior to any proposed filing and to file no such amendment
or supplement to which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and
documents and any preliminary or definitive proxy or information statement
required to be filed by the Company with the Commission in order to comply
with the Exchange Act for so long as a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of the
Shares; and to provide you, for your review and comment, with a copy of
such reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such period
a reasonable amount of time prior to any proposed filing, and to file no
such report, statement or document to which you shall have objected in
writing; and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to, and in accordance with, Rule 462(b) under the Act and to pay
the applicable fees in accordance with the Act;
(g) to advise the Underwriters promptly of the happening of any
event within the period during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares,
which event could require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading, and, during such time, subject to Section 4(d)
hereof, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to such Prospectus as
may be necessary to reflect any such change;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act) as soon as is reasonably
practicable after the termination of such twelve-month period but in any
case not later than , 2006;
20
(i) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flow of the Company
and the Subsidiaries for such fiscal year, accompanied by a copy of the
certificate or report thereon of a nationally recognized independent
registered certified public accounting firm);
(j) to furnish to you four copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto) and sufficient copies of the foregoing
(other than exhibits) for distribution of a copy to each of the other
Underwriters;
(k) to furnish to you promptly and, upon request, to each of the
other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its stockholders or shall
from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms
10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other information as you may reasonably
request regarding the Company or any Subsidiary provided, however that the
Company shall not be required to furnish any materials pursuant to this
clause (k) if such materials are otherwise filed and publicly accessible
on the Commission's Electronic Data Gathering, Analysis and Retrieval
system;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly financial statements, if any, of the Company
and the Subsidiaries which have been read by the Company's independent
registered public accounting firm, as stated in their letter to be
furnished pursuant to Section 6(b) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus and
to file such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required by
Rule 463 under the Act;
(n) to pay all costs, expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, each Permitted Free Writing
Prospectus and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration, issue,
sale and delivery of the Shares including any stock or transfer taxes and
stamp or similar duties payable upon the sale, issuance or delivery of the
Shares to the Underwriters, (iii) the producing, word processing and/or
printing of this Agreement, any Agreement Among Underwriters, any dealer
agreements, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and furnishing
of copies of each thereof to the Underwriters and
21
(except closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility for
investment under state or foreign law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) any listing of the Shares on any securities exchange or qualification
of the Shares for quotation on NASDAQ and any registration thereof under
the Exchange Act, (vi) any filing for review of the public offering of the
Shares by the NASD, including the legal fees and filing fees and other
disbursements of counsel to the Underwriters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii)
the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offering and
sale of the Shares to prospective investors and the Underwriters' sales
forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the Company
and any such consultants, and the cost of any aircraft chartered in
connection with the road show, (ix) the costs and expenses of qualifying
the Shares for inclusion in the book-entry settlement system of the DTC,
(x) the preparation and filing of the Exchange Act Registration Statement,
including any amendments thereto, (xi) the offer and sale of the Reserved
Shares, including all costs and expenses of UBS-FinSvc and the
Underwriters, including the fees and disbursement of counsel for the
Underwriters, and (xii) the performance of the Company's other obligations
hereunder;
(o) to comply with Rule 433(g) under the Act;
(p) beginning on the date hereof and ending on, and including, the
date that is 180 days after the date hereof (the "Lock-Up Period"),
without the prior written consent of UBS, not to (i) sell, offer to sell,
contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, with respect to, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
(ii) file or cause to become effective a registration statement under the
Act relating to the offer and sale of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock,
(iii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase
Common Stock or any such securities, whether any such transaction is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise or (iv) publicly announce an intention to effect any transaction
specified in clause (i), (ii) or (iii), except, in each case, for (A) the
registration of the offer and sale of the Shares as contemplated by
22
this Agreement, (B) issuances of Common Stock upon the exercise of options
or warrants disclosed as outstanding in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the
Prospectus, and (C) the issuance of employee stock options not exercisable
during the Lock-Up Period pursuant to stock option plans described in the
Registration Statement (excluding the exhibits thereto), each Preliminary
Prospectus and the Prospectus; provided, however, that if (a) during the
period that begins on the date that is fifteen (15) calendar days plus
three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings
release or material news or a material event relating to the Company
occurs; or (b) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results during the sixteen (16)
day period beginning on the last day of the Lock-Up Period, then the
restrictions imposed by this Section 4(p) shall continue to apply until
the expiration of the date that is fifteen (15) calendar days plus three
(3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
(q) not, at any time at or after the execution of this Agreement, to
offer or sell any Shares by means of any "prospectus" (within the meaning
of the Act), or use any "prospectus" (within the meaning of the Act) in
connection with the offer or sale of the Shares, in each case other than
the Prospectus;
(r) the Company will not, and will cause its Subsidiaries not to,
take, directly or indirectly, any action designed, or which will
constitute, or has constituted, or might reasonably be expected to cause
or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
(s) to use its best efforts to cause the Common Stock to be listed
for quotation on the NASDAQ and to maintain such listing;
(t) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock; and
(u) to cause each Directed Share Participant to execute a Lock-Up
Agreement and otherwise to cause the Reserved Shares to be restricted from
sale, transfer, assignment, pledge or hypothecation for such period and to
such extent as may be required by the NASD and its rules, and to direct
the transfer agent to place stop transfer restrictions upon such Reserved
Shares during the Lock-Up Period or any such longer period of time as may
be required by the NASD and its rules; and to comply with all applicable
securities and other applicable laws, rules and regulations in each
jurisdiction in which the Reserved Shares are offered in connection with
the Directed Share Program.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Company
shall, in addition to paying the amounts described in Section 4(n) hereof,
xxxx-
23
xxxxx the Underwriters for all of their reasonably incurred out-of-pocket
expenses, including the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx
Xxxxxxxx LLP, counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with executed copies for each of the other Underwriters and in
form and substance satisfactory to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel for the Underwriters.
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxxx
Xxxxxxxx LLP, intellectual property counsel for the Company, addressed to
the Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the other
Underwriters and in form and substance satisfactory to Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters.
(c) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of Xxxxx,
Xxxxxx & XxXxxxxx, P.C., FDA regulatory counsel for the Company, addressed
to the Underwriters, and dated the time of purchase or the additional time
of purchase, as the case may be, with executed copies for each of the
other Underwriters and in form and substance satisfactory to Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters.
(d) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the
Underwriters (with executed copies for each of the Underwriters) in the
forms approved by UBS, which letters shall cover, without limitation, the
various financial disclosures, if any, contained in the Permitted Free
Writing Prospectuses, if any.
(e) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Underwriters,
dated the time of purchase or the additional time of purchase, as the case
may be in form and substance satisfactory to UBS.
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you shall have
objected in writing.
24
(g) The Registration Statement, the Exchange Act Registration
Statement and any registration statement required to be filed, prior to
the sale of the Shares, under the Act pursuant to Rule 462(b) shall have
been filed and shall have become effective under the Act or the Exchange
Act, as the case may be. If Rule 430A under the Act is used, the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) under the Act at or before 5:30 P.M., New York City time, on the
second full business day after the date of this Agreement (or such earlier
time as may be required under the Act).
(h) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; (iii) none of the Preliminary Prospectuses or the
Prospectus and no amendment or supplement thereto shall include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; (iv) no Disclosure Package, and
no amendment or supplement thereto, shall include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective
material adverse change in the business, properties, management, financial
condition or results of operations of the Company taken as a whole shall
occur or become known.
(j) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer, dated the time of
purchase or the additional time of purchase, as the case may be, in the
form attached as Exhibit B hereto.
(k) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and Chief Financial Officer, dated the time of purchase
or the additional time of purchase, as the case may be, in the form
attached as Exhibit C hereto as to the accuracy of certain numbers
contained in the Prospectus.
(l) You shall have received each of the signed Lock-Up Agreements
referred to in Section 3(u) hereof.
25
(m) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably
request.
(n) The Shares shall have been approved for quotation on NASDAQ,
subject only to notice of issuance and evidence of satisfactory
distribution at or prior to the time of purchase or the additional time of
purchase, as the case may be.
(o) The NASD shall not have raised any objection with respect to the
fairness or reasonableness of the underwriting, or other arrangements of
the transactions, contemplated hereby.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have executed
and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of the Representatives if (x)
since the time of execution of this Agreement or the earlier respective dates as
of which information is given in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, there has been any material adverse change or any development involving a
prospective material adverse change in the business, properties, management,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, which would, in the sole judgment of the Representatives, make
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any, or (y) since the time of execution
of this Agreement, there shall have occurred: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq; (ii) a suspension or material
limitation in trading in the Company's securities on the NASDAQ; (iii) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the United
States or a declaration by the United States of a national emergency or war; or
(v) any other calamity or crisis or any change in financial, political or
economic conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the sole judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Preliminary Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, or (z) since the
time of execution of this Agreement, there shall have occurred any downgrading,
or any notice or announcement shall have been given or made of (i) any intended
or potential downgrading or (ii) any watch, review or possible change that does
not indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Company or any Subsidiary
26
by any "nationally recognized statistical rating organization," as that term is
defined in Rule 436(g)(2) under the Act.
If the Representatives elect to terminate this Agreement as provided
in this Section 7, the Company and each other Underwriter shall be notified
promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters (including the
Underwriters, if any, substituted in the manner set forth below) shall take up
and pay for (in addition to the aggregate number of Firm Shares they are
obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set forth opposite
the names of such non-defaulting Underwriters in Schedule A hereto.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
27
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any Underwriter and without
any liability on the part of any non-defaulting Underwriter to the Company.
Nothing in this paragraph, and no action taken hereunder, shall relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
any such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a material
fact contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, the Registration
Statement or arises out of or is based upon any omission or alleged
omission to state a material fact in the Registration Statement in
connection with such information, which material fact was not contained in
such information and which material fact was required to be stated in such
Registration Statement or was necessary to make such information not
misleading, (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and any amendments or supplements to the
foregoing), in any Permitted Free Writing Prospectus, in any "issuer
information" (as defined in Rule 433 under the Act) of the Company or in
any Prospectus together with any combination of one or more of the
Permitted Free Writing Prospectuses, if any, or arises out of or is based
upon any omission or alleged omission to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except, with respect to such
Prospectus or Permitted Free Writing Prospectus, insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
28
contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, such Prospectus or
Permitted Free Writing Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in such Prospectus
or Permitted Free Writing Prospectus in connection with such information,
which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such
information, in the light of the circumstances under which they were made,
not misleading or (iii) the Directed Share Program, except, with respect
to this clause (iii), insofar as such loss, damage, expense, liability or
claim is finally judicially determined to have resulted from the gross
negligence or willful misconduct of the Underwriters in conducting the
Directed Share Program.
Without limitation of and in addition to its obligations under the
other paragraphs of this Section 9, the Company agrees to indemnify, defend and
hold harmless UBS-FinSvc and its partners, directors and officers, and any
person who controls UBS-FinSvc within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, UBS-FinSvc or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim (1) arises out of or is based upon (a) any of the matters
referred to in clauses (i) through (iii) of the first paragraph of this Section
9(a), or (b) any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or on behalf or with the consent of the
Company for distribution to Directed Share Participants in connection with the
Directed Share Program or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (2) is or was caused by the failure of any
Directed Share Participant to pay for and accept delivery of Reserved Shares
that the Directed Share Participant has agreed to purchase; or (3) otherwise
arises out of or is based upon the Directed Share Program, provided, however,
that the Company shall not be responsible under this clause (3) for any loss,
damage, expense, liability or claim that is finally judicially determined to
have resulted from the gross negligence or willful misconduct of UBS-FinSvc in
conducting the Directed Share Program. Section 9(c) shall apply equally to any
Proceeding (as defined below) brought against UBS-FinSvc or any such person in
respect of which indemnity may be sought against the Company pursuant to the
immediately preceding sentence, except that the Company shall be liable for the
expenses of one separate counsel (in addition to any local counsel) for
UBS-FinSvc and any such person, separate and in addition to counsel for the
persons who may seek indemnification pursuant to the first paragraph of this
Section 9(a), in any such Proceeding.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company or any such person may incur under the
Act, the Exchange Act, the common law or oth-
29
erwise, insofar as such loss, damage, expense, liability or claim arises
out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use
in, the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company), or arises
out of or is based upon any omission or alleged omission to state a
material fact in such Registration Statement in connection with such
information, which material fact was not contained in such information and
which material fact was required to be stated in such Registration
Statement or was necessary to make such information not misleading or (ii)
any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, a Prospectus or a
Permitted Free Writing Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in such Prospectus
or Permitted Free Writing Prospectus in connection with such information,
which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such
information, in the light of the circumstances under which they were made,
not misleading.
(c) If any action, suit or proceeding (each, a "Proceeding") is
brought against a person (an "indemnified party") in respect of which
indemnity may be sought against the Company or an Underwriter (as
applicable, the "indemnifying party") pursuant to subsection (a) or (b),
respectively, of this Section 9, such indemnified party shall promptly
notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such indemnifying party shall not
relieve such indemnifying party from any liability which such indemnifying
party may have to any indemnified party or otherwise, except to the extent
that such failure results in the forfeiture by the indemnifying party of
substantial rights or defenses. The indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall
have been authorized in writing by the indemnifying party in connection
with the defense of such Proceeding or the indemnifying party shall not
have, within a reasonable period of time in light of the circumstances,
employed counsel to defend such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in
conflict with those available to such indemnifying party (in which case
such indemnifying party shall not have the right to direct the defense of
such Proceeding on behalf of the indemnified party or parties, but the
indemnifying party may employ counsel and participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense
of the indemnifying
30
party), in any of which events such fees and expenses shall be borne by
such indemnifying party and paid as incurred (it being understood,
however, that, except as provided in the second paragraph of Section 9(a),
such indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding).
The indemnifying party shall not be liable for any settlement of any
Proceeding effected without its written consent but, if settled with its
written consent, such indemnifying party agrees to indemnify and hold
harmless the indemnified party or parties from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second sentence of this Section
9(c), then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i)
such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified party
in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault or culpability or a
failure to act by or on behalf of such indemnified party.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an indemnified party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims,
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company on the one hand and of the Underwriters on the other
shall be
31
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(e) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection
(d) above. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by such
Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or
by or on behalf of the Company, its directors or officers or any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale
of the Shares, or in connection with the Registration Statement, any
Preliminary Prospectus, the Prospectus or any Permitted Free Writing
Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page of the Prospectus and the statements set
forth in the [_____ and _____] paragraphs under the caption "Underwriting" in
the Prospectus, only insofar as such statements relate to the amount of selling
concession and reallowance or to over-allotment and stabilization activities
that may be undertaken by the Underwriters, constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 9 hereof.
32
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 0 Xxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, Chief Executive
Officer.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against any Underwriter or any
indemnified party. Each Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Company and may be enforced in any other
courts to the jurisdiction of which the Company is or may be subject, by suit
upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, partners, directors
and officers referred to in such Section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
15. No Fiduciary Relationship. The Company hereby acknowledges that the
Underwriters are acting solely as an underwriter in connection with the purchase
and sale of the Company's securities. The Company further acknowledges that the
Underwriters are acting pursuant to a contractual relationship created solely by
this Agreement entered into on an arm's length basis, and in no event do the
parties intend that the Underwriters act or be responsible as a fiduciary to the
Company, its management, stockholders, creditors or any other person in
connection with any activity that the Underwriters may undertake or have
undertaken in furtherance of the purchase and sale of the Company's securities,
either before or after the date hereof. The Underwriters hereby expressly
disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company hereby
33
confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including, but not limited to, any opinions or views with respect
to the price or market for the Company's securities, do not constitute advice or
recommendations to the Company. The Company hereby waives and releases, to the
fullest extent permitted by law, any claims that the Company may have against
the Underwriters with respect to any breach or alleged breach of any fiduciary
or similar duty to the Company in connection with the transactions contemplated
by this Agreement or any matters leading up to such transactions.
16. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
17. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
18. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this agreement and your acceptance shall
constitute a binding agreement between the Company and the Underwriters,
severally.
Very truly yours,
VALERA PHARMACEUTICALS, INC.
By:
-------------------------------
Name:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
BANC OF AMERICA SECURITIES LLC
By: UBS SECURITIES LLC
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS Securities LLC
Banc of America Securities LLC
First Albany Capital
Fortis Securities LLC
-----------
Total..............
===========
SCHEDULE B
PERMITTED FREE WRITING PROSPECTUSES
EXHIBIT A
Form of Lock-Up
Valera Pharmaceuticals, Inc.
Common Stock
($0.001 Par Value)
_________ __, 2005
UBS Securities LLC
Banc of America Securities LLC
As Representatives of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Valera Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and you, as Representative of the several
Underwriters named therein, with respect to the initial public offering (the
"Offering") of shares of the Company's class of common stock, par value $.001
per share (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that, for a period of 180 days from the date of the
Underwriting Agreement (the "Lock-Up Period"), the undersigned will not, without
the prior written consent of UBS Securities LLC ("UBS") and Banc of America
Securities, LLC ("Banc of America"), (i) sell, offer to sell, contract or agree
to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, or file (or participate in
the filing of) a registration statement with the Securities and Exchange
Commission (the "Commission") in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder with
respect to, the Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters
-2-
of any Common Stock pursuant to the Offering and the Underwriting Agreement, (b)
bona fide gifts, provided the recipient thereof agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement or (c)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Letter
Agreement.
If:
(1) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the 180-day restricted period
and ends on the last day of the 180-day restricted period, the Company issues a
earnings release or material news or a material event relating to the Company
occurs; or
(2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period,
the restrictions imposed by this letter shall continue to apply
until the expiration of the date that is 15 calendar days plus 3 business days
after the date on which the issuance of the earnings release or the material
news or material event occurs.
The undersigned hereby acknowledges that the Company has agreed in
the Underwriting Agreement to provide written notice of any event that would
result in an extension of the Lock-Up Period pursuant to the previous paragraph
to the undersigned (in accordance with Section 4(o) of the Underwriting
Agreement) and agrees that any such notice properly delivered will be deemed to
have given to, and received by, the undersigned.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 180 days after the date of the Underwriting
Agreement, the undersigned will not, without the prior written consent of UBS
and Banc of America, make any demand for, or exercise any right with respect to,
the registration of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
If (i) the Company notifies you in writing that it does not intend
to proceed with the Offering, (ii) the registration statement filed with the
Commission with respect to the Offering is withdrawn or (iii) for any reason the
Underwriting Agreement shall be terminated prior to the time of purchase (as
defined in the Underwriting Agreement), this Lock-Up Letter Agreement shall be
terminated and the undersigned shall be released from its obligations hereunder.
Yours very truly,
--------------------------------
Name:
-3-
EXHIBIT B
Form of Officers' Certificate Pursuant to Section 6(j)
Reference is hereby made to the Underwriting Agreement (the "Underwriting
Agreement"), dated________, 2006 by and among Valera Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and the Underwriters named therein
(collectively, the "Underwriters"), in connection with the public offering of
3,750,000 shares of the Company's common stock, $0.001 par value per share.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Underwriting Agreement.
The undersigned hereby certify that they are, respectively, the duly
elected, qualified and acting (i) Chief Executive Officer and (ii) Chief
Financial Officer, and pursuant to Section 6(j) of the Underwriting Agreement,
in such capacity, each of them do hereby certify on behalf of the Company, as
follows:
1. I have carefully reviewed the Registration Statement, the Prospectus and
the Underwriting Agreement.
2. The representations and warranties of the Company as set forth in the
Underwriting Agreement are true and correct as of the [time of purchase]
[additional time of purchase].
3. The Company has performed all of its obligations under the Underwriting
Agreement as are to be performed at or before the [time of
purchase][additional time of purchase].
4. The conditions set forth in paragraphs (h) and (i) of Section 6 of the
Underwriting Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
[SIGNATURE PAGE FOLLOWS]
-4-
IN WITNESS WHEREOF, we have signed our names this ___ day of , 2006.
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
By:
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
EXHIBIT C
Form of Officers' Certificate Pursuant to Section 6(k)
Reference is hereby made to the Underwriting Agreement (the "Underwriting
Agreement"), dated________, 2006 by and among Valera Pharmaceuticals, Inc., a
Delaware corporation (the "Company"), and the Underwriters named therein
(collectively, the "Underwriters"), in connection with the public offering of
3,750,000 shares of the Company's common stock, $0.001 par value per share.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Underwriting Agreement.
The undersigned hereby certify that they are, respectively, the duly
elected, qualified and acting (i) Chief Executive Officer and (ii) Chief
Financial Officer, and pursuant to Section 6(k) of the Underwriting Agreement,
in such capacity, each of them do hereby certify on behalf of the Company, as
follows:
1. The Company has prepared each of the numbers (the "Financial Numbers")
that are circled and ticked with the symbol X in the pages of the
Prospectus attached hereto as Exhibit A and, as of the date hereof, each
of the Financial Numbers matches or is accurately derived from the
appropriate internal accounting and/or financial records of the Company.
2. Each of the numbers and statements that are circled and ticked with the
symbol Y in the pages of the Prospectus attached hereto as Exhibit A is
accurately derived from, or is consistent with, appropriate internal
records or management estimates of the Company or is based on publicly
available information or other third-party information the Company
believes to be reliable.
[SIGNATURE PAGE FOLLOWS]
-2-
IN WITNESS WHEREOF, we have signed our names this ___ day of , 2006.
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
By:
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
