Exhibit 1.1
PREDIX PHARMACEUTICALS HOLDINGS, INC.
[___] Shares
Common Stock
($0.01 par value per Share)
UNDERWRITING AGREEMENT
____________, 2005
UNDERWRITING AGREEMENT
___________, 2005
UBS Securities LLC
Deutsche Bank Securities Inc.
CIBC World Markets Corp.
ThinkEquity Partners LLC
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Predix Pharmaceuticals Holdings, 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,
an aggregate of [# of firm shares] shares (the "Firm Shares") of common stock,
$0.01 par value per share (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 [# of additional shares] 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 Deutsche Bank Securities Inc. (the "DSP
Administrator") to administer a directed share program (the "Directed Share
Program") under which up to [# of reserved shares] Firm Shares, or 5% of the
Firm Shares to be purchased by the Underwriters (the "Reserved Shares"), shall
be reserved for sale by DSP Administrator 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 DSP Administrator 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 so designated to participate
in the Directed Share Program may decline to do so.
The Company has prepared and filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (File No. 333-127159) under
the Act, including a prospectus, relating to
the Shares. The Company has furnished to you, for use by the Underwriters and by
dealers, copies of one or more preliminary prospectuses (each such preliminary
prospectus being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it became or becomes effective, including all documents filed as
a part thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act and
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act and also including any registration
statement filed pursuant to Rule 462(b) under the Act, is herein called the
"Registration Statement," and the prospectus in the form filed by the Company
with the Commission pursuant to Rule 424(b) under the Act on or before the
second business day after the date hereof (or such earlier time as may be
required under the Act), or, if no such filing is required, the form of final
prospectus included in the Registration Statement at the time it became
effective, is herein called the "Prospectus." 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 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"), with the Commission a
registration statement (as may be amended prior to the time of execution of this
Agreement, 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.
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 9 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 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. This option may be exercised by UBS Securities LLC ("UBS") on
behalf of the several
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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
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 option shall
have been exercised nor later than the tenth business day after the date on
which the option shall have been exercised. The number of Additional Shares to
be sold to each Underwriter shall be the number which bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as you may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 9 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 __________, 2005 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
9 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 not later than one full business day
prior to the time of purchase.
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 not later than one full business day prior to
the additional time of purchase.
Deliveries of the documents described in Section 7 hereof with respect to
the purchase of the Shares shall be made at the offices of Xxxxxxxx & Xxxxxxxx
LLP at 1290 Avenue of the Americas, New York, New York, 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, as of the date
hereof:
(a) the Registration Statement has heretofore become, and is,
effective under the Act; no stop order of the Commission preventing or
suspending the use of any Preliminary 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; each Preliminary Prospectus complied, at
the time of filing thereof, and complies in all material respects with the
requirements of the Act, and each Preliminary Prospectus distributed in
connection with the offering of the Shares did not, as of its date, contain
an untrue statement of a material fact or omit to
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state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; the Registration Statement complied when it became
effective, complies and, as amended or supplemented as applicable, at the
time of purchase, will comply, in all material respects, with the
requirements of the Act, and the Prospectus will comply, as of its date
and, as amended and supplemented, at the time of purchase and any
additional times of purchase and any time at which any sales with respect
to which the Prospectus is delivered, in all material respects, with the
requirements of the Act; any statutes, regulations, contracts, related
party transactions or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement have been and will be so described or filed as
required; the conditions to the use of Form S-1 with respect to the
Registration Statement in connection with the offering and sale of the
Shares as contemplated by the Underwriting Agreement have been satisfied;
the Registration Statement did not when it became effective, does not and,
as amended or supplemented as applicable, at the time of purchase and any
additional time of purchase, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus will not, as of its date and, as amended or supplemented as
applicable, at the time of purchase and any additional time of purchase and
any time at which any sales with respect to which the Prospectus is
delivered, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no warranty
or representation with respect to any statement contained in the
Registration Statement or the 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 or the Prospectus; the Exchange Act
Registration Statement has become effective as provided in Section 12 of
the Exchange Act; and the Company has not, prior to the execution of this
Agreement, distributed any "prospectus" (within the meaning of the Act) or
offering material in connection with the offering or sale of the Shares
other than the Registration Statement and then most recent Preliminary
Prospectus and will not, at any time on or after the execution of this
Agreement, distribute any "prospectus" (within the meaning of the Act) or
offering material in connection with the offering or sale of the Shares
other than the Registration Statement and then most recent Preliminary
Prospectus and Prospectus;
(b) as of the respective dates set forth therein, the Company has 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"; all of the issued and outstanding shares of
capital stock, including the Common Stock, of the Company 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; and no further approval or authority of
the stockholders or the Board of Directors of the Company are required for
the issuance and sale of the Shares; prior to the time of purchase, all
outstanding shares of Series AB convertible preferred stock, $0.01 par
value per share and Series C convertible preferred stock, $0.01 par value
per share, of
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the Company shall convert into the number of shares of Common Stock, and
shall convert in the manner, set forth in the Registration Statement and
the Prospectus; prior to the date hereof, the Company has duly effected and
completed a [x] for [x] reverse stock split of the Common Stock in the
manner set forth in the Registration Statement and the Prospectus; the
Restated Certificate of Incorporation of the Company and the 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 on 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");
(c) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to 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 Subsidiary (as
hereinafter defined) taken as a whole (a "Material Adverse Effect")";
(e) the Company has no subsidiaries (as defined under the Act) other
than Predix Pharmaceuticals Ltd. (the "Subsidiary"); the Company owns all
of the issued and outstanding capital stock of the Subsidiary; other than
the capital stock of the Subsidiary, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt
securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity; complete and
correct copies of the charters and the bylaws of the Company and the
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 or on or before
the time of purchase or, if later, any additional time of purchase; the
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 and the Prospectus; the 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 would not, individually or
in the aggregate, have a Material Adverse Effect; the Subsidiary is in
compliance in all respects with the laws, orders, rules, regulations and
directives issued or administered by such jurisdictions, except where the
failure to be in compliance would not, individually or in the aggregate,
have a Material Adverse Effect; all of the outstanding shares of capital
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stock of the Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance with all
applicable securities laws, have been issued in compliance with all
applicable federal and state securities laws, were not issued in violation
of any preemptive right, resale right, right of first refusal or similar
right and are owned by the Company subject to no security interest, other
encumbrance or adverse claims; and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership interests
in the Subsidiary are outstanding; and other than the Subsidiary, the
Company has no "significant subsidiary," as that term is defined in Rule
1-02(w) of Regulation S-X under the Act;
(f) 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; the Shares, when issued and delivered against payment
therefor as provided herein, will be free of any restriction upon the
voting or transfer thereof pursuant to the Company's charter or bylaws or
other governing documents or any agreement or other instrument to which the
Company or the Subsidiary is a party or, to the Company's knowledge, by
which any of them or any of their respective properties may be bound or
affected;
(g) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; the certificates for the Shares
are in due and proper form; and the holders of the Shares will not be
subject to personal liability for the obligations of the Company by reason
of being such holders;
(h) this Agreement has been duly authorized, executed and delivered by
the Company;
(i) neither the Company nor the Subsidiary is in breach or violation
of or in default under (nor has any event occurred which with notice, lapse
of time or both would result in 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) (A) its respective
charter or bylaws, 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
the Subsidiary is a party or by which either of them or any of their
respective properties may be bound or affected, or (C) any federal, state,
local or foreign law, regulation or rule, or (D) any rule or regulation of
any self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, the rules and regulations of the
Nasdaq, or (E) any decree, judgment or order applicable to the Company or
the Subsidiary or any of their respective properties; except, with respect
to clauses (B), (C), (D) and (E), where such events would not, individually
or in the aggregate, have a Material Adverse Effect; and 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
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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 or 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 the Subsidiary pursuant to) (I) the charter or bylaws of the
Company or the Subsidiary, or (II) any material indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness,
or any material license, lease, contract or other agreement or instrument
to which the Company or the Subsidiary is a party or by which either of
them or any of their respective properties may be bound or affected, or
(III) any federal, state, local or foreign law, regulation or rule, or (IV)
any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
rules and regulations of the Nasdaq), or (V) any decree, judgment or order
applicable to the Company or the Subsidiary or any of their respective
properties;
(j) 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 of or with any self-regulatory
organization or other non-governmental regulatory authority (including,
without limitation, the Nasdaq, 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 registration of the Shares under the Act, which has been
effected, 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 under the rules and regulations of the National Association
of Securities Dealers, Inc. (the "NASD") and any necessary approvals of the
stockholders of the Company, which have been obtained;
(k) except as expressly set forth in the Registration Statement and
the Prospectus or otherwise waived or terminated in writing before the date
hereof, (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 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; except as
expressly set forth in the Registration Statement and the Prospectus or
otherwise waived or terminated in writing before the date hereof, 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;
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(l) each of the Company and the Subsidiary 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 respective business;
except where the absence of such license, authorization, consent, approval
or filing would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor the Subsidiary 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 the Subsidiary,
except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions (including, without limitation, transactions
related to, and the existence of, "variable interest entities" within the
meaning of Financial Accounting Standards Board Interpretation No. 46),
contracts, licenses, agreements, properties, 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;
(n) there are no actions, suits, claims, investigations or proceedings
pending or, to the Company's knowledge, threatened or contemplated to which
the Company or the Subsidiary or any of their respective directors or
officers (in such person's capacity as a director or officer) is or would
be a party or of which any of their respective 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, or before or by any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
rules and regulations of the Nasdaq), except any such action, suit, claim,
investigation or proceeding which would not result in a judgment, decree or
order having, individually or in the aggregate, a Material Adverse Effect
or preventing consummation of the transactions contemplated hereby;
(o) Ernst & Young LLP, whose report on the consolidated financial
statements of the Company and the Subsidiary is included in the
Registration Statement 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;
(p) the consolidated financial statements of the Company included in
the Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the consolidated financial position of
the Company and the Subsidiary as of the dates indicated and the
consolidated results of operations and cash flows of the Company and the
Subsidiary for the periods specified and have been prepared in compliance
with the requirements of the Act and Exchange Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved except as stated therein; all pro forma
financial data included in the Registration Statement and the Prospectus
accurately give effect to the transactions or circumstances
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described therein; the other financial and statistical data set forth in
the Registration Statement or the Prospectus are accurately and fairly
presented and prepared on a basis consistent with the financial statements
and books and records of the Company; there are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement and the Prospectus (including, without limitation,
as required by Rules 3-12 or 3-05 or Article 11 of Regulation S-X under the
Act) that are not included as required; the Company and the Subsidiary do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the
Registration Statement and the Prospectus; except as disclosed in the
Registration Statement and the Prospectus, neither the Company nor the
Subsidiary is, together with its "related parties," the "primary
beneficiary" of any "variable interest entity" (as such terms are used in
Financial Accounting Standards Board Interpretation No. 46); and all
disclosures contained in the Registration Statement or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent
applicable; and the consolidated financial statements of Predix
Pharmaceuticals Ltd. included in the Registration Statement and the
Prospectus, together with the related notes and schedules, present fairly
the consolidated financial position of Predix Pharmaceuticals Ltd. and its
subsidiary as of the dates indicated and the consolidated results of
operations and cash flows of Predix Pharmaceuticals Ltd. and its subsidiary
for the periods specified and have been prepared in compliance with the
requirements of the Act and Exchange Act and in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved except as stated therein;
(q) since the respective dates as of which information is given in the
Registration Statement and the Prospectus and as of the date hereof, 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 Subsidiary taken as a whole, (ii) any transaction which is material to
the Company and the Subsidiary taken as a whole, (iii) any obligation,
direct or contingent (including any off-balance sheet obligations),
incurred by the Company or the Subsidiary, which is material to the Company
and the Subsidiary taken as a whole, (iv) any change in the capital stock
or outstanding indebtedness of the Company or the Subsidiary, except for
the exercise of options, warrants or securities convertible into capital
stock of the Company outstanding on the date hereof or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or the Subsidiary;
(r) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), of (i) each of its directors and
"officers" (within the meaning of Rule 16a-1(f) under the Act); (ii)
holders of substantially all of the outstanding shares of Common Stock
(treating, for purposes of this Section 3(r), each holder of any security
convertible into or exercisable or exchangeable for shares of Common Stock
or any warrant or other right to acquire shares of Common Stock or any such
security as a holder of the shares of Common Stock underlying such
security, warrant or right, and treating as outstanding, for purposes of
this Section 3(r), each share
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of Common Stock underlying any such security, warrant or right) and (iii)
each Directed Share Participant who has not otherwise executed a Lock-Up
Agreement pursuant to this Section 3(r) and who, together with his or her
affiliates, purchases Reserved Shares with an aggregate purchase price in
excess of $100,000;
(s) neither the Company nor the Subsidiary is 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");
(t) neither the Company nor the Subsidiary is and, after giving effect
to the offering and sale of the Shares, neither will be a "holding company"
or a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company," as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended (the "Public
Utility Holding Company Act");
(u) the Company, and the Subsidiary, do not own any real property; the
Company and the Subsidiary, have good and marketable title to all personal
property described in the Registration Statement or in the Prospectus as
being owned by each of them, free and clear of all liens, claims, security
interests or other encumbrances, except as would not, individually or in
the aggregate, have a Material Adverse Effect; all the property described
in the Registration Statement or the Prospectus as being held under lease
by the Company or the Subsidiary is held thereby under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made of such property;
(v) the Company and the Subsidiary 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 or the Prospectus as
being owned or licensed by them or which are necessary for the conduct of
their respective businesses as currently conducted or as proposed to be
conducted (relating to the commercialization of products or services
described in the Registration Statement or Prospectus as under clinical
development), except where the failure to own, license or have such rights
would not, individually or in the aggregate, have a Material Adverse Effect
(collectively, "Intellectual Property"); (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 and 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 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 threatened action, suit, proceeding or
claim by others that the Company or the Subsidiary infringes or otherwise
violates, or would, upon the commercialization of any product or service
described in the Registration Statement or Prospectus as under
-10-
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; (v) the Company and the
Subsidiary have complied with the terms of any agreement pursuant to which
Intellectual Property has been licensed to the Company or the Subsidiary,
and all such agreements are in full force and effect; (vi) to the Company's
knowledge, the sale of any product, or, upon the commercialization thereof,
any product candidate or service described in the Registration Statement or
Prospectus as under development by the Company or the Subsidiary would not
be held to infringe any claims in any patents of third parties; (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; (viii) to the Company's knowledge, based on
conducting customary prior art searches, there is no prior art that may
render any product candidate described in the Registration Statement or
Prospectus owned by the Company or any Subsidiary of the Intellectual
Property unpatentable that has not been disclosed to the U.S. Patent and
Trademark Office to their satisfaction; and (ix) the product candidates
described in the Registration Statement or the Prospectus as under
development by the Company or any Subsidiary fall within the scope of the
claims of one or more patents owned by, or exclusively licensed to, the
Company or any Subsidiary;
(w) neither the Company nor the Subsidiary 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 the Subsidiary before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, (B) no strike,
labor dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company or the Subsidiary and (C) no union
representation dispute currently existing concerning the employees of the
Company or the Subsidiary, and (ii) to the Company's knowledge, (A) no
union organizing activities are currently taking place concerning the
employees of the Company or the Subsidiary 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 the Subsidiary;
(x) the Company and the Subsidiary and their properties, assets and
operations each is in compliance with, and holds, 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 after due inquiry, reasonably anticipated future
events, conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to have a Material
Adverse Effect, or to interfere with or prevent compliance by the Company
or the Subsidiary with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect, neither
the
-11-
Company nor the Subsidiary (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 or (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, 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);
(y) in the ordinary course of its business, the Company, and the
Subsidiary, conducts a periodic review of the effect of the Environmental
Laws on its business, operations and properties, in the course of which it
identifies and evaluates 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);
(z) all tax returns required to be filed by the Company or the
Subsidiary have been timely filed, except for the 2004 federal tax return,
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 such entities
have been timely paid, other than those being contested in good faith and
for which adequate reserves have been provided;
(aa) each of the Company, and the Subsidiary, maintains insurance
covering its 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 Subsidiary and
their businesses; all such insurance is fully in force on the date hereof
and the Company has no reason to believe that such insurance will not be
fully in force at the time of purchase and any additional time of purchase;
neither the Company nor the Subsidiary has reason to believe that it will
not be able to renew any such insurance as and when such insurance expires;
(bb) neither the Company nor the Subsidiary has sustained since the
date of the last audited financial statements included in the Registration
Statement and the Prospectus any loss or interference with its respective
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;
-12-
(cc) neither the Company nor the Subsidiary has sent or received any
communication regarding termination of, or intent not to renew, any of the
contracts or agreements filed as an exhibit to, the Registration Statement
and no such termination or non-renewal has been threatened by the Company
or the Subsidiary or, to the Company's knowledge, any other party to any
such contract or agreement;
(dd) each of the Company, and the Subsidiary, maintains 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 recorded 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;
(ee) the Company has established "disclosure controls and procedures"
(as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act)
and "internal control over financial reporting" (as such term is defined in
Rule 13a-15 and 15d-15 under the Exchange Act); and the Company and the
Subsidiary each are in compliance in all material respects with all
applicable effective provisions of the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act") and the rules and regulations of the Commission and
the Nasdaq promulgated thereunder with which the Company and the Subsidiary
are currently required to comply;
(ff) no transaction has occurred between or among the Company or the
Subsidiary, on the one hand, and their respective affiliates, officers or
directors or any family member of affiliate of any officer or director on
the other hand, that is required to be described in the Registration
Statement or the Prospectus and is not so described therein;
(gg) each "forward-looking statement" (within the meaning of Section
27A of the Act or Section 21E of the Exchange Act) contained in the
Registration Statement or the Prospectus has been made with a reasonable
basis and has been disclosed in good faith;
(hh) all statistical or market-related data included in the
Registration Statement or the 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;
(ii) neither the Company nor the Subsidiary nor, to the Company's
knowledge, any employee or agent of the Company or the Subsidiary has made
any payment of funds of the Company or the Subsidiary or received or
retained any funds in violation of 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 or the Prospectus;
-13-
(jj) other than conditions, limitations and restrictions relating to
distributions under the Israeli Companies Law, 1999, applicable to
companies incorporated in Israel and except as described in the Prospectus,
the Subsidiary is not 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;
(kk) the preclinical tests and clinical trials that are described in,
or the results of which are referred to in, the Registration Statement or
the Prospectus, were and, if still pending, are being conducted in all
material respects in accordance with protocols filed with the appropriate
regulatory authorities for each such test or trial, as the case may be, and
with standard clinical and scientific research procedures; the description
of the results of such tests and trials contained in the Registration
Statement or the Prospectus, are accurate and complete in all material
respects and fairly present the data derived from such tests and trials,
and the Company and the Subsidiary have no knowledge of any other studies
or tests the results of which are inconsistent with, or otherwise call into
question, the results described or referred to in the Registration
Statement or the Prospectus; except as previously disclosed to the
Underwriters, neither the Company nor the Subsidiary has received any
notices or other correspondence from the United States Food and Drug
Administration (the "FDA") or from any other U.S. or foreign government
agency requiring the termination, suspension or modification of any
clinical trials that are described or referred to in the Registration
Statement or the Prospectus; and the Company and the Subsidiary have each
operated and currently are in compliance in all material respects with all
applicable rules, regulations and policies of the FDA;
(ll) immediately after the issuance and sale of the Shares as
contemplated hereby, no shares of preferred stock of the Company shall be
issued or outstanding; and the issuance and sale of the Shares as
contemplated hereby will not cause any holder of any shares of capital
stock, securities convertible into or exchangeable or exercisable for
capital stock or options, warrants or other rights to purchase capital
stock or any other securities of the Company to have any right to acquire
any shares of preferred stock of the Company;
(mm) the Shares have been approved for listing on the Nasdaq National
Market, subject only to official notice of issuance;
(nn) except pursuant to this Agreement, neither the Company nor the
Subsidiary 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 Prospectus;
(oo) neither the Company nor the Subsidiary nor any of their
respective 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, under
the Exchange Act or otherwise, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares;
-14-
(pp) to the Company's knowledge after due inquiry, there are no
affiliations or associations between (i) any member of the NASD and (ii)
the Company or any of the Company's officers, directors or 5% or greater
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 set forth in the Registration
Statement and the Prospectus or as disclosed to you in writing before the
date hereof;
(qq) the Registration Statement, the Prospectus and any Preliminary
Prospectus comply, in all material and respects, and any further amendments
or supplements thereto will comply in all material respects, with any
applicable laws or regulations of any foreign jurisdiction in which the
Prospectus or any Preliminary 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; and
(rr) 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 the Subsidiary or any of their respective products or
services.
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 the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; in case any Underwriter
is required to deliver a prospectus after the nine-month period referred to
in Section 10(a)(3) of the Act in connection with the sale of the Shares,
the Company will
-15-
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 the Registration Statement or any post-effective amendment
thereto to be declared effective before the Shares may be sold, the Company
will use its best efforts to cause the Registration Statement or such
post-effective amendment 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 the Registration Statement and any such
post-effective amendment thereto 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, the Prospectus or the Exchange Act Registration Statement 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, the Prospectus or the Exchange Act Registration
Statement 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 reasonably 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 subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or 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 reasonably object 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 pay the
applicable fees in accordance with the Act;
(g) to advise the Underwriters promptly of the happening of any event
within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which 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
-16-
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and,
during such time, 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;
(i) to furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a consolidated balance
sheet and statements of income, stockholders' equity and cash flow of the
Company and the Subsidiary for such fiscal year, accompanied by a copy of
the certificate or report thereon of nationally recognized independent
certified public accountants duly registered with the PCOAB);
(j) to furnish to you five copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto) and sufficient conformed copies of the
foregoing (other than exhibits) for distribution of a conformed 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, transition
and current reports filed with the Commission on Forms 10-K, 10-Q or 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
the Subsidiary;
(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 consolidated financial statements, if any, of
the Company and the Subsidiary which have been read by the Company's
independent certified public accountants, as stated in their letter to be
furnished pursuant to Section 7(d) 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 (except as otherwise
set forth in
-17-
this Agreement) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus and any
amendments or supplements thereto, and the printing and furnishing of
copies of each thereof to the Underwriters and to dealers (including costs
of mailing and shipment), (ii) the registration, issue, sale and delivery
of the Shares 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 (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 the
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 relating to NASD matters, (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 with the
Company's consent 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, (x) the costs and expenses of qualifying the Shares for
inclusion in the book-entry settlement system of the DTC, (xi) the
preparation and filing of the Exchange Act Registration Statement,
including any amendments thereto", (xii) the offer and sale of the Reserved
Shares, including all costs and expenses of DSP Administrator and the
Underwriters including the fees and disbursement of counsel for the
Underwriters and (xiii) the performance of the Company's other obligations
hereunder;
(o) for a period of 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
-18-
Common Stock or any other securities of the Company that are substantially
similar to Common Stock, (ii) file or cause to be declared effective a
registration statement under the Act relating to the offer and sale of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or warrants or other rights to purchase
Common Stock or any other securities of the Company that are substantially
similar to Common Stock (other than a Registration Statement on Form S-8
(or any successor form) relating to the Company's equity compensation plans
existing on the date hereof or as may become effective on or before the
additional time of purchase), (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 Shares and the sales
to the Underwriters pursuant to this Agreement, (B) issuances of Common
Stock upon the exercise of options or warrants disclosed as outstanding in
the Registration Statement and the Prospectus, (C) the issuance of employee
stock options not exercisable during the Lock-Up Period or restricted stock
that does not vest during the Lock-Up Period or shares of Common Stock
pursuant to any employee stock purchase plans described in the Registration
Statement and the Prospectus, and (D) the issuance of any shares of 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 in connection with any strategic
partnership, joint venture or collaboration to which the Company is a
party; provided that, prior to the issuance of any such securities, the
Company shall cause the recipients of such securities to execute and
deliver to you Lock-Up Agreements; provided, however, that if (a) during
the period that begins on the date that is fifteen calendar days plus three
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 day period beginning on
the last day of the Lock-Up Period, then the restrictions imposed by this
Section 4(o) shall continue to apply until the expiration of the date that
is fifteen calendar days plus three business days after the date on which
the issuance of the earnings release or the material news or material event
occurs;
(p) prior to the time of purchase or any additional time of purchase,
as the case may be, to issue no press release or other communication
directly or indirectly and hold no press conferences with respect to the
Company or any Subsidiary, the financial condition, results of operations,
business, properties, assets, or liabilities of the Company or the
Subsidiary, or the offering of the Shares, without your prior consent;
(q) not, at any time on or after the execution of this Agreement, to
distribute any "prospectus" (within the meaning of the Act) or offering
material in connection with the offering or sale of the Shares other than
the Registration Statement and the then most recent Prospectus;
(r) the Company will not, and will cause its Subsidiary not to, take,
directly or indirectly, any action designed, or which has constituted or
might reasonably be expected to cause or result in, under the Exchange Act
or otherwise, the stabilization or
-19-
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 who has not otherwise
executed a Lock-Up Agreement pursuant to Section 3(r) and who, together
with his or her affiliates, purchases Reserved Shares with an aggregate
purchase price in excess of $100,000 to execute a Lock-Up Agreement and
otherwise to cause the Reserved Shares to be restricted from sale,
transfer, assignment, pledge or hypothecation 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. 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 Underwriting 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
has 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 Underwriting Agreement
or any matters leading up to such transactions, and the Company hereby 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 Underwriting
Agreement or any matters leading up to such transactions.
6. 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 9 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
-20-
4(n) hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
7. 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 Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 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
Xxxxxxxx & Xxxxxxxx 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 Gross,
Kleinhendler, Hodak, Halevy, Xxxxxxxxx & Co., Israeli counsel for the
Subsidiary, 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 Xxxxxxxx & Xxxxxxxx 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 Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., special counsel for the
Company with respect to patents and proprietary rights, 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 Xxxxxxxx &
Xxxxxxxx, 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 previously approved by UBS.
(e) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion of
Xxxxxxxx & Xxxxxxxx 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 reasonably satisfactory to UBS.
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus shall have been filed to which you object in
writing.
(g) The Registration Statement and the Exchange Act Registration
Statement shall become effective not later than 5:30 P.M., New York City
time, on the date of this Agreement and, 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
-21-
York City time, on the second full business day after the date of this
Agreement and any registration statement pursuant to Rule 462(b) under the
Act required in connection with the offering and sale of the Shares shall
have been filed and become effective no later than 10:00 P.M., New York
City time, on the date of this Agreement.
(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; and (iii) the Prospectus and all amendments or
supplements 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, 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, (A) 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 and the Subsidiary taken
as a whole shall occur or become known and (B) no transaction which is
material and adverse to the Company has been entered into by the Company
or the Subsidiary.
(j) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, a certificate of its Vice
President, Clinical and Regulatory Affairs, with respect to regulatory
matters, dated the time of purchase or the additional time of purchase, as
the case may be.
(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
President and Chief Executive Officer and its Chief Financial Officer,
dated the time of purchase or the additional time of purchase, as the case
may be.
(l) You shall have received each of the signed Lock-Up Agreements
referred to in Section 3(r) hereof, and each such Lock-Up Agreement shall
be in full force and effect at the time of purchase and the additional
time of purchase, as the case may be.
(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 or the 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 the Nasdaq,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
(o) The NASD shall not have raised any objection with respect to the
fairness
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or reasonableness of the underwriting, or other arrangements of the
transactions, contemplated hereby.
8. 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 UBS, or of any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, 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 and the Prospectus, 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 UBS's
judgment or in the judgment of such group of Underwriters, 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 and
the Prospectus, 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 NYSE, the American Stock Exchange or 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 UBS's
judgment or in the judgment of such group of Underwriters 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 and
the Prospectus.
If UBS or any group of Underwriters elects to terminate this Agreement as
provided in this Section 8, 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), 6 and 10 hereof), and the Underwriters shall be under
no obligation or liability to the Company under this Agreement (except to the
extent provided in Section 10 hereof) or to one another hereunder.
9. Increase in Underwriters' Commitments. Subject to Sections 7 and 8
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 7 hereof
-23-
or a reason sufficient to justify the termination of this Agreement under the
provisions of Section 8 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 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.
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 9 with like effect as if
such substituted Underwriter had originally been named in Schedule A hereto.
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 non-defaulting 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.
10. 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
-24-
Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or in the Registration Statement as amended
by any post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 10 being deemed to
include any Preliminary Prospectus, the Prospectus and the Prospectus as
amended or supplemented by the Company), or arises out of or is based upon
any omission or alleged omission to state a material fact required to be
stated in either such Registration Statement or such Prospectus or
necessary to make the statements made therein not misleading, except
insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning
such Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use in, such Registration
Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with
such information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading, or
(ii) the Directed Share Program, provided that the Company shall not be
responsible under this clause (ii) for any loss, damage, expense,
liability or claim that is finally judicially determined to have resulted
from the gross negligence or willful misconduct of the Underwriters in
conducting the Directed Share Program provided, however, that the
indemnity agreement contained in this Section 10(a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure
to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) from whom the person asserting any such
loss, damage, expense, liability or claim purchased the Shares which are
the subject thereof if, and only to the extent that, a court of competent
jurisdiction finds, in a final, non-appealable judgment binding upon the
parties hereto, that (A) the sale to such person was an initial resale by
such Underwriter directly to such person, (B) the Prospectus corrected,
and the Company has satisfied and sustained the burden of proof that the
Prospectus corrected, any such alleged untrue statement or omission, (C)
such Underwriter failed to send or give a copy of the Prospectus to such
person at or prior to the written confirmation of the sale of such Shares
to such person, (D) the Company furnished to such Underwriter, in
compliance with Section 4(b) hereof, sufficient copies of the Prospectus
in a timely manner as to reasonably permit such Underwriter to send or
give a copy of the Prospectus to such person at or prior to the written
confirmation of such sale, (E) such Prospectus was required by law to be
delivered to such person at or prior to the written confirmation of such
sale, and (F) such loss, damage, expense, liability or claim resulted from
such failure to send or give a copy of the Prospectus to such person at or
prior to the written confirmation of the sale of such Shares to such
person.
If any action, suit or proceeding (each, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity
may be sought against the Company pursuant to the foregoing paragraph,
such Underwriter or such person shall promptly notify the Company in
writing of the institution of such Proceeding and the Company shall assume
the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees
and
-25-
expenses; provided, however, that the omission to so notify the Company
shall not relieve the Company from any liability which the Company may
have to any Underwriter or any such person or otherwise. Such Underwriter
or such person shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or of such person unless the employment of
such counsel shall have been authorized in writing by the Company in
connection with the defense of such Proceeding or the Company shall not
have, within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or such
indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in which
case the Company shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be
liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings
in the same jurisdiction representing the indemnified parties who are
parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without its written consent but, if
settled with the written consent of the Company, the Company agrees to
indemnify and hold harmless any Underwriter and any such person from and
against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second sentence of this paragraph, then the indemnifying party agrees that
it shall be liable for any settlement of any Proceeding effected without
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.
The Company agrees to indemnify, defend and hold harmless DSP
Administrator and its partners, directors and officers, and any person who
controls DSP Administrator 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, DSP Administrator 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) and (ii) of the
first paragraph of this Section 10(a), or (b) any untrue
-26-
statement or alleged untrue statement of a material fact contained in any
material prepared by 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 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 DSP Administrator in conducting the Directed Share
Program. The second paragraph of this Section 10(a) shall apply equally to
any Proceeding brought against DSP Administrator or any such person in
respect of which indemnity may be sought against the Company pursuant to
the foregoing sentence, except that the Company shall be liable for the
expenses of one separate counsel (in addition to any local counsel) for
DSP Administrator and any such person, separate and in addition to counsel
for the Underwriters, 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 otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in, and in conformity with information 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 in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with
such information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such person in
respect of which indemnity may be sought against any Underwriter pursuant
to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding
and such Underwriter shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however,
that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the
Company or any such person or otherwise. The Company or such person shall
have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or
such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense
of such
-27-
Proceeding or such Underwriter shall not have, within a reasonable period
of time in light of the circumstances, employed counsel to defend such
Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to or in conflict with those available to
such Underwriter (in which case such Underwriter shall not have the right
to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and participate
in the defense thereof but the fees and expenses of such counsel shall be
at the expense of such Underwriter), in any of which events such fees and
expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement of any
such Proceeding effected without the written consent of such Underwriter
but, if settled with the written consent of such Underwriter, such
Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, then the indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected
without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of
such settlement, and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter
of such Proceeding.
(c) If the indemnification provided for in this Section 10 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 10 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
-28-
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
determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in subsection
(c) above. Notwithstanding the provisions of this Section 10, 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 10 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 10 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 or the
Prospectus.
11. Information Furnished by the Underwriters. The statements set forth in
(i) the last paragraph on the cover page of the Prospectus and (ii) under the
caption "Underwriting-Commissions and discounts", only insofar as such
statements relate to the amount of selling concession and reallowance and
discretionary sales and (iii) under the caption "Underwriting-
-29-
Price stabilization and short position," constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 10 hereof.
12. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram or facsimile
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department (facsimile: ------- 212-821-) 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 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxxxx Xxxxxxxx, M.D., Ph.D., President and Chief Executive Officer (facsimile:
781-372-3267).
13. 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.
14. 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) waive 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.
15. 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 10 hereof the controlling persons, partners,
directors, 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.
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.
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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.
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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,
PREDIX PHARMACEUTICALS HOLDINGS, 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
DEUTSCHE BANK SECURITIES INC.
CIBC WORLD MARKETS CORP.
THINKEQUITY PARTNERS LLC
By: UBS SECURITIES LLC
By:
------------------------------------------------------
Name:
Title:
By:
------------------------------------------------------
Name:
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
UBS SECURITIES LLC................................................. [____]
DEUTSCHE BANK SECURITIES INC....................................... [____]
CIBC WORLD MARKETS CORP............................................ [____]
THINKEQUITY PARTNERS LLC........................................... [____]
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Total........................................................ [____]
=============
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