3,130,435 Shares
CELL THERAPEUTICS, INC.
Common Stock
UNDERWRITING AGREEMENT
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September 20, 2000
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Cell Therapeutics, Inc., a Washington corporation (the "Company"),
proposes, subject to the terms and conditions contained herein, to sell to you
(the "Underwriters"), an aggregate of 3,130,435 shares (the "Firm Shares") of
the Company's Common Stock, no par value (the "Common Stock"). The respective
amounts of the Firm Shares to be purchased by each of you are set forth opposite
your names on Schedule I hereto. In addition, the Company proposes to grant to
you an option to purchase up to an additional 469,565 shares (the "Option
Shares") of Common Stock from it for the purpose of covering over-allotments in
connection with the sale of the Firm Shares. The Firm Shares and the Option
Shares are together called the "Shares."
1. Sale and Purchase of the Shares.
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On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a price of $35.72 per share (the "Initial Price"), the number
of Firm Shares set forth opposite the name of such Underwriter under the
column "Number of Firm Shares to be Purchased from the Company" on Schedule
I to this Agreement, subject to adjustment in accordance with Section 11
hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares
at the Initial Price. The number of Option Shares to be purchased by
each Underwriter shall be the same
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percentage (adjusted by the Underwriters to eliminate fractions) of the
total number of Option Shares to be purchased by the Underwriters as such
Underwriter is purchasing of the Firm Shares. Such option may be exercised
only to cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time thereafter
within 30 days after the date of this Agreement, in each case upon written,
facsimile or telegraphic notice, or verbal or telephonic notice confirmed
by written, facsimile or telegraphic notice, by the Underwriters to the
Company no later than 12:00 noon, New York City time, on the business day
before the Firm Shares Closing Date or at least two business days before
the Option Shares Closing Date (as defined below), as the case may be,
setting forth the number of Option Shares to be purchased and the time and
date (if other than the Firm Shares Closing Date) of such purchase.
2. Delivery and Payment. Delivery by the Company of the Firm Shares
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to the Underwriters, and payment of the purchase price by certified or official
bank check or checks payable in New York Clearing House (same day) funds drawn
to the order of the Company for the shares purchased from the Company, against
delivery of the respective certificates therefor to the Underwriters, shall take
place at the offices of CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement, or at such time on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Company and the Underwriters (such time and date of
delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised
in whole or in part on one or more occasions, delivery by the Company of the
Option Shares to the Underwriters and payment of the purchase price thereof in
immediately available funds by wire transfer or by certified or official bank
check or checks payable in New York Clearing House (same day) funds to the
Company shall take place at the offices of CIBC World Markets Corp. specified
above at the time and on the date (which may be the same date as, but in no
event shall be earlier than, the Firm Shares Closing Date) specified in the
notice referred to in Section 1(b) (such time and date of delivery and payment
are called the "Option Shares Closing Date"). The Firm Shares Closing Date and
the Option Shares Closing Date are called, individually, a "Closing Date" and,
together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Underwriters shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Underwriters for checking and
packaging, at such place as is designated by the Underwriters, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
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3. Registration Statement and Prospectus; Public Offering. The
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Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-41300), which Registration Statement, as amended
at the time it became effective or at the time of the most recent post effective
amendment thereto and including all documents incorporated or deemed to be
incorporated by reference therein shall hereinafter be referred to as the
"Registration Statement". The term "Registration Statement" as used in this
Agreement shall also include any registration statement relating to the Shares
that is filed pursuant to Rule 462(b) under the Securities Act. A prospectus
supplement to the prospectus included in the Registration Statement (the "Base
Prospectus") is to be used in connection with the offering and sale of the
Shares. The Base Prospectus as supplemented by the prospectus supplement in the
form first filed pursuant to Rule 424(b) of the Securities Act, following the
execution of this Agreement, including all documents incorporated or deemed to
be incorporated by reference therein, is hereinafter referred to as the
"Prospectus."
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Underwriters deem
advisable. The Company hereby confirms that the Underwriters and dealers have
been authorized to distribute or cause to be distributed the Registration
Statement and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and
on the date of the Prospectus, the date any post-effective amendment to the
Registration Statement becomes effective, the date any supplement or
amendment to the Prospectus is filed with the Commission and each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with
the applicable provisions of the Securities Act and the Rules and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective Date, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and on the Effective Date and the other dates referred to above
neither the Registration Statement nor the Prospectus, nor any amendment
thereof or supplement thereto, will contain any untrue statement of a
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. When any related preliminary prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or any
amendment thereto or pursuant to Rule 424(a) of the Rules) and when any
amendment thereof or supplement thereto was first filed with the
Commission, such preliminary
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prospectus as amended or supplemented complied in all material respects
with the applicable provisions of the Securities Act and the Rules and did
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading. Notwithstanding the foregoing, none
of the representations and warranties in this paragraph 4(a) shall apply to
statements in, or omissions from, the Registration Statement or the
Prospectus made in reliance upon, and in conformity with, information
herein or otherwise furnished in writing by the Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished in
writing by the Underwriters for use in the Registration Statement or the
Prospectus is the paragraph with respect to stabilization on the inside
front cover page of the Prospectus and the statements contained under the
caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424(b) of the
Rules has been or will be made in the manner and within the time period
required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) The financial statements of the Company (including all notes and
schedules thereto) included or incorporated by reference in the
Registration Statement and Prospectus present fairly the financial
position, the results of operations, the statements of cash flows and the
statements of stockholders' equity and the other information purported to
be shown therein of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements and
related schedules and notes have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of the
results for such periods have been made. The summary and selected financial
data included in the Prospectus present fairly the information shown
therein as at the respective dates and for the respective periods specified
and the summary and selected financial data have been presented on a basis
consistent with the consolidated financial statements so set forth in the
Prospectus and other financial information.
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(e) To the best of the Company's knowledge, Ernst & Young LLP, whose
reports are filed with the Commission as a part of the Registration
Statement, are and, during the periods covered by their reports, were
independent public accountants as required by the Securities Act and the
Rules.
(f) The Company and each of its Subsidiaries (as hereinafter defined)
is a corporation duly organized, validly existing and in good standing
under the laws of the State of the jurisdiction of its incorporation. The
Company and each such subsidiary or other entity controlled directly or
indirectly by the Company (collectively, "Subsidiaries") is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on the
assets or properties, business, results of operations or financial
condition of the Company (a "Material Adverse Effect"). The Company does
not own, lease or license any asset or property or conduct any business
outside the United States of America. The Company and each of its
Subsidiaries has all requisite corporate power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies
or any other person or entity (collectively, the "Permits"), to own, lease
and license its assets and properties and conduct its business, all of
which are valid and in full force and effect, as described in the
Registration Statement and the Prospectus, except where the lack of such
Permits, individually or in the aggregate, would not have a Material
Adverse Effect. The Company and each of its Subsidiaries has fulfilled and
performed in all material respects all of its material obligations with
respect to such Permits and no event has occurred that allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the Company
thereunder. Except as may be required under the Securities Act and state
and foreign Blue Sky laws, no other Permits are required to enter into,
deliver and perform this Agreement and to issue and sell the Shares.
(g) The Company and each of its Subsidiaries owns or possesses
adequate and enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how and other similar rights and
proprietary knowledge (collectively, "Intangibles") described in the
Prospectus as being owned by it necessary for the conduct of its business.
Neither the Company nor any of its Subsidiaries has received any written
notice of, and is not aware of, any infringement of or conflict with
asserted rights of others with respect to any Intangibles.
(h) The Company and each of its Subsidiaries has good and marketable
title in fee simple to all items of real property and good and marketable
title to all personal property described in the Prospectus as being owned
by it. Any real property and
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buildings described in the Prospectus as being held under lease by the
Company and each of its Subsidiaries are held by it under valid, existing
and enforceable leases, free and clear of all liens, encumbrances, claims,
security interests and defects, except such as are described in the
Registration Statement and the Prospectus or would not have a Material
Adverse Effect.
(i) There are no litigation or governmental proceedings to which the
Company or its Subsidiaries is subject or which are pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries, which, individually or in the aggregate, might have a
Material Adverse Effect, affect the consummation of this Agreement or which
is required to be disclosed in the Registration Statement and the
Prospectus that is not so disclosed.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (a) there has not been any material adverse change with regard to
the assets or properties, business, results of operations or financial
condition of the Company; (b) Neither the Company nor its Subsidiaries has
sustained any loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental action,
order or decree which would have a Material Adverse Effect; and (c) since
the date of the latest balance sheet included in the Registration Statement
and the Prospectus, except as reflected therein, neither the Company nor
its Subsidiaries has (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business,
(ii) entered into any transaction not in the ordinary course of business or
(iii) declared or paid any dividend or made any distribution on any shares
of its stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its stock.
(k) There is no document, contract or other agreement of a character
required to be described in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which is not described
or filed as required by the Securities Act or Rules. Each description of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all respects the terms of the underlying
document, contract or agreement. Each agreement described in the
Registration Statement and Prospectus or listed in the Exhibits to the
Registration Statement or incorporated by reference is in full force and
effect and is valid and enforceable by and against the Company or the
Subsidiary, as the case may be, in accordance with its terms. Neither the
Company nor any of its Subsidiaries, if any Subsidiary is a party, nor to
the Company's knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or
both would constitute such a default, in any such case which default or
event, individually or in the aggregate, would have a Material
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Adverse Effect. No default exists, and no event has occurred which with
notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the
Company or the Subsidiary, if the Subsidiary is a party thereto, of any
other agreement or instrument to which the Company or the Subsidiary is a
party or by which it or its the Company, the Subsidiary or their properties
or business may be bound or affected which default or event, individually
or in the aggregate, would have a Material Adverse Effect.
(l) Neither The Company nor any of its Subsidiaries is in violation
of any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation, individually or in the aggregate,
would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and sale by the Company
of the Shares will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets
of the Company or its Subsidiary pursuant to the terms of, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or its Subsidiary is a party or by which it either the Company or
its Subsidiary or any of its their properties or businesses is bound, or
any franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or its Subsidiary or violate any
provision of the charter or by-laws of the Company or its Subsidiary,
except for such consents or waivers which have already been obtained and
are in full force and effect.
(n) The Company has authorized and outstanding capital stock as set
forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding shares of Common Stock have been duly and validly issued
and are fully paid and nonassessable. There are no statutory preemptive or
other similar rights to subscribe for or to purchase or acquire any shares
of Common Stock of the Company or its Subsidiaries or any such rights
pursuant to its Certificate of Incorporation or by-laws or any agreement or
instrument to or by which the Company or any of its Subsidiaries is a party
or bound. The Shares, when issued and sold pursuant to this Agreement, will
be duly and validly issued, fully paid and nonassessable and none of them
will be issued in violation of any preemptive or other similar right.
Except as disclosed in the Registration Statement and the Prospectus, there
is no outstanding option, warrant or other right calling for the issuance
of, and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or its Subsidiaries or any security convertible into,
or exercisable or exchangeable for, such stock. The Common
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Stock and the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement and the
Prospectus. All outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another wholly-
owned subsidiary of the Company free and clear of any security interests,
liens, encumbrances, equities or claims, other than those described in the
Prospectus.
(o) Certain five percent (or greater) stockholders, directors and
executive officers of the Company, listed on Schedule II, have delivered to
the Underwriters an enforceable written lock-up agreement in the form
attached to this Agreement ("Lock-Up Agreement").
(p) All necessary corporate action has been duly and validly taken by
the Company and the Parent to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares by
the Company. This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes and will constitute the legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
(q) Neither the Company nor any of its Subsidiaries is involved in
any labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The Company
is not aware of any existing or imminent labor disturbance by the employees
of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company or its Subsidiaries and any of its
executive officers which, if adversely determined, could have a Material
Adverse Effect and has no reason to believe that such officers will not
remain in the employment of the Company.
(r) No transaction has occurred between or among the Company and any
of its officers or directors or five percent shareholders or any affiliate
or affiliates of any such officer or director or five percent shareholders
that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of the Shares.
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(t) The Company and its Subsidiaries has filed all Federal, state,
local and foreign tax returns which are required to be filed through the
date hereof, or has received extensions thereof, and has paid all taxes
shown on such returns and all assessments received by it to the extent that
the same are material and have become due. There are no tax audits or
investigations pending, which if adversely determined would have a Material
Adverse Effect; nor are there any material proposed additional tax
assessments against the Company and any of its Subsidiaries.
(u) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System, subject to official Notice of Issuance.
(v) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of
its Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(w) The Company and its Subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which it is they are
engaged or propose to engage after giving effect to the transactions
described in the Prospectus; all policies of insurance and fidelity or
surety bonds insuring the Company or any of its subsidiaries or the
Company's or its subsidiaries' respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and each
of its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and neither the Company nor any
Subsidiary of the Company has reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect. Neither the Company nor any Subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(x) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the
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National Association of Securities Dealers, Inc. (the "NASD" or may be
necessary to qualify the Shares for public offering by the Underwriters
under the state securities or Blue Sky laws) has been obtained or made and
is in full force and effect.
(y) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any
five percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Underwriters.
(z) Each of the Company and its Subsidiaries is in compliance in all
material respects with all rules, laws and regulations relating to the use,
treatment, storage and disposal of toxic substances and protection of
health or the environment ("Environmental Law") which are applicable to its
business; (ii) neither the Company nor any of its Subsidiaries has received
any written notice from any governmental authority or third party of an
asserted claim under Environmental Laws; (iii) each of the Company and its
Subsidiaries has received all permits, licenses and other approvals
required of it under applicable Environmental Laws to conduct its business
and is in compliance with all terms and conditions of any such permit,
license or approval; (iv) to the Company's knowledge, no facts currently
exist that will require the Company or its Subsidiaries to make future
material capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, leased or occupied by the Company or
its Subsidiaries has been designated as a Superfund site pursuant to the
Comprehensive Environmental Response, Compensation of Liability Act of
1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise designated
as a contaminated site under applicable state or local law. Neither the
Company nor any of its Subsidiaries has been named as a "potentially
responsible party" under the CERCLA 1980.
(aa) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of which the
Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably concluded
that such associated costs and liabilities would not, singly or in the
aggregate, have a Material Adverse Effect.
(bb) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
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(cc) None of the Company, any of its Subsidiaries or to the Company's
knowledge, any other person associated with or acting on behalf of the
Company or its Subsidiaries including, without limitation, any director,
officer, agent or employee of the Company or its Subsidiaries has, directly
or indirectly, while acting on behalf of the Company or its Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from
corporate funds, (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended, or (iv) made any other unlawful payment.
(dd) The Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general
or specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(ee) The Company and each of its Subsidiaries is in compliance in all
material respects with all rules, laws and regulations relating to the
development, testing, manufacturing, sale and distribution of
pharmaceuticals and other products regulated by the United States Food and
Drug Administration, or similar state or foreign governmental agencies.
5. Conditions of the Underwriters' Obligations. The obligations of
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the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the Underwriters and the Prospectus shall
have been timely filed with the Commission in accordance with Section
6(a) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with
to the satisfaction of the Commission and the Underwriters.
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(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of each Closing Date as
if made on such date. The Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement
required to be performed or satisfied by them at or before such Closing
Date.
(d) The Underwriters shall have received on each Closing Date a
certificate, addressed to the Underwriters and dated such Closing Date,
of the chief executive or chief operating officer and the chief financial
officer or chief accounting officer of the Company to the effect that (i)
the signers of such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the representations
and warranties of the Company in this Agreement are true and correct on
and as of such Closing Date with the same effect as if made on such
Closing Date and the Company has performed all covenants and agreements
and satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date, and (ii)
no stop order suspending the effectiveness of the Registration Statement
has been issued and to the best of their knowledge, no proceedings for
that purpose have been instituted or are pending under the Securities
Act.
(e) The Underwriters shall have received, at the time this Agreement
is executed and on each Closing Date a signed letter from Ernst & Young
LLP addressed to the Underwriters and dated, respectively, the date of
this Agreement and each such Closing Date, in form and substance
reasonably satisfactory to the Underwriters, confirming that they are
independent accountants within the meaning of the Securities Act and the
Rules, that the response to Item 10 of the Registration Statement is
correct insofar as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included by
reference in the Registration Statement and the Prospectus carrying
out certain procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company as to transactions and events
subsequent to the date of the latest audited financial statements,
except as disclosed in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe that:
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(A) the amounts included by reference in the Registration
Statement and the Prospectus do not agree with the corresponding
amounts in the audited and unaudited financial statements from
which such amounts were derived; or
(iii) they have performed certain other procedures as may be
permitted under Generally Acceptable Auditing Standards as a result of
which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
Statement and the Prospectus and reasonably specified by the
Underwriters agrees with the accounting records of the Company; and
(iv) based upon the procedures set forth in clauses (ii) and
(iii) above and a reading of the amounts included by reference in the
Registration Statement included in the Registration Statement and
Prospectus and a reading of the financial statements from which
certain of such data were derived, nothing has come to their attention
that gives them reason to believe that the amounts included by
reference in the Registration Statement and Prospectus do not comply
as to the form in all material respects with the applicable accounting
requirements of the Securities Act and the Rules or that the
information set forth therein is not fairly stated in relation to the
financial statements included in the Registration Statement or
Prospectus from which certain of such data were derived are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited financial
statements included in the Registration Statement and Prospectus.
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented
at the date of the letter.
(f) The Underwriters shall have received on each Closing Date from
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for
the Company, an opinion, addressed to the Underwriters and dated such
Closing Date, and stating in effect that:
(i) Each of the Company and its Subsidiaries has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Washington. To the best of such
counsel's knowledge, the Company has no subsidiary and does not
control, directly or indirectly, any corporation, partnership, joint
venture, association or other business organization.
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(ii) Each of the Company and its Subsidiaries has all requisite
corporate power and authority to own, lease and license its assets
and properties and conduct its business as now being conducted and
as described in the Registration Statement and the Prospectus and
with respect to the Company to enter into, deliver and perform this
Agreement and to issue and sell the Shares other than those required
under the state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital stock as
set forth in the Company's Registration Statement on Form 10
incorporated by reference in the Registration Statement and the
Prospectus; the certificates evidencing the Shares are in due and
proper legal form and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock of the Company
have been duly and validly authorized and issued and are fully paid
and nonassessable and none of them was issued in violation of any
preemptive or other similar right. The Shares when issued and sold
pursuant to this Agreement, will be duly and validly issued,
outstanding, fully paid and nonassessable and none of them will have
been issued in violation of any preemptive or other similar right. To
the best of such counsel's knowledge, except as disclosed in the
Registration Statement, Prospectus and the documents incorporated by
reference therein, there are no preemptive or other rights to
subscribe for or to purchase or any restriction upon the voting or
transfer of any securities of the Company pursuant to the Company's
Certificate of Incorporation or by-laws or other governing documents
or any agreements or other instruments to which the Company is a party
or by which it is bound. To the best of such counsel's knowledge,
except as disclosed in the Registration Statement, the Prospectus and
the documents incorporated by reference therein, there is no
outstanding option, warrant or other right calling for the issuance
of, and no commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into, exercisable
for, or exchangeable for stock of the Company. The Common Stock, the
Shares and the Warrants conform in all material respects to the
descriptions thereof contained in the Registration Statement, the
Prospectus and the documents incorporated by reference therein. The
issued and outstanding shares of capital stock of each of the
Company's Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and are owned by the Company or by
another wholly-owned subsidiary of the Company, free and clear of any
perfected security interest or, to the knowledge of such counsel, any
other security interests, liens, encumbrances, equities or claims,
other than those contained in the Registration Statement, the
Prospectus and the documents incorporated by reference therein.
(iv) Each of the Lock-Up Agreements executed by the Company's
stockholders, directors and officers has been duly and validly
delivered by such persons and constitutes the legal, valid and binding
obligation of each such person
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enforceable against each such person in accordance with its terms,
except as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(v) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and this Agreement constitutes the legal,
valid and binding obligation of the Company enforceable against the
Company in accordance with their respective terms except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
(vi) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or any event which with notice
or lapse of time, or both, would constitute a default) under, or
require consent or waiver under, or result in the execution or
imposition of any lien, charge, claim, security interest or
encumbrance upon any properties or assets of the Company or the
Subsidiary pursuant to the terms of any indenture, mortgage, deed
trust, note or other agreement or instrument of which such counsel is
aware and to which the Company or the Subsidiary is a party or by
which it either the Company or the Subsidiary or any of its properties
or businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation of which such counsel is
aware or violate any provision of the charter or by-laws of the
Company or the Subsidiary.
(vii) To the best of such counsel's knowledge, no default
exists, and no event has occurred which with notice or lapse of time,
or both, would constitute a default, in the due performance and
observance of any term, covenant or condition by the Company of any
indenture, mortgage, deed of trust, note or any other agreement or
instrument to which the Company is a party or by which it or any of
its assets or properties or businesses may be bound or affected, where
the consequences of such default, individually or in the aggregate,
would have a Material Adverse Effect.
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(viii) To the best of such counsel's knowledge, the Company and
its Subsidiaries are not is not in violation of any term or provision
of its charter or by-laws or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation, where the consequences of
such violation, individually or in the aggregate, would have a
Material Adverse Effect.
(ix) No consent, approval, authorization or order of any court
or governmental agency or regulatory body is required for the
execution, delivery or performance of this Agreement by the Company or
the consummation of the transactions contemplated hereby or thereby,
except such as have been obtained under the Securities Act and such as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the several
Underwriters.
(x) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company which would have a Material Adverse Effect.
(xi) The statements incorporated by reference in the
Registration Statement and the Prospectus under the captions
"Description of Registrant's Securities to be Registered, " "Liquidity
and Capital Resources," and "Acquisition or Disposition of Assets,"
insofar as such statements constitute a summary of documents referred
to therein or matters of law, are fair summaries in all material
respects and accurately present the information called for with
respect to such documents and matters. Accurate copies of all
contracts and other documents required to be filed as exhibits to, or
described in, the Registration Statement have been so filed with the
Commission or are fairly described in the Registration Statement, as
the case may be.
(xii) The Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto (except
for the financial statements and schedules and other financial and
statistical data included therein, as to which such counsel expresses
no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Rules.
(xiii) The Registration Statement is effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are threatened, pending or
contemplated. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) under the Securities Act has been made
in the manner and within the time period required by such Rule 424(b).
-16-
(xiv) The Shares have been approved for listing on the Nasdaq
National Market System.
(xv) The capital stock of the Company conforms in all material
respects to the description thereof incorporated by reference in the
Prospectus under the caption "Description of Registrant's Securities
to be Registered."
(xvi) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Underwriters as to matters which are governed by laws other than the laws of the
State of New York, the General Corporation Law of the State of Washington and
the Federal laws of the United States; provided that such counsel shall state
that in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Underwriters and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other Underwriters of the Company,
Underwriters of the Underwriters and Underwriters of the independent certified
public accountants of the Company, at which conferences the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts have come to
the attention of such counsel which lead such counsel to believe that the
Registration Statement at the time it became effective (except with respect to
the financial statements and notes and schedules thereto and other financial
data, as to which such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus as amended or supplemented (except with respect to the
financial statements, notes and schedules thereto and other financial data, as
to which such counsel need make no statement) on the date thereof contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Underwriters shall have received on each Closing Date from Xxxxx
& Lardner, special patent counsel for the Company, an opinion, addressed to the
Underwriters and dated such Closing Date, and in a form acceptable to the
Underwriters in their sole discretion.
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(h) The Underwriters shall have received on each Closing Date from Buc &
Xxxxxxxxx, special regulatory counsel for the Company, an opinion, addressed to
the Underwriters and dated such Closing Date, and in a form acceptable to the
Underwriters in their sole discretion.
(i) All proceedings taken in connection with the sale of the Firm Shares
and the Option Shares as herein contemplated shall be reasonably satisfactory in
form and substance to the Underwriters, and their counsel and the Underwriters
shall have received from XxXxxxxxx, Will & Xxxxx a favorable opinion, addressed
to the Underwriters and dated such Closing Date, with respect to the Shares, the
Registration Statement and the Prospectus, and such other related matters, as
the Underwriters may reasonably request, and the Company shall have furnished to
XxXxxxxxx, Will & Xxxxx such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(j) The Underwriters shall have received copies of the Lock-up Agreements
executed by each entity or person described in Section 4(O).
(k) The Company shall have furnished or caused to be furnished to the
Underwriters such further certificates or documents as the Underwriters shall
have reasonably requested.
6. Covenants of the Company.
------------------------
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of
this Agreement, and any amendments thereto, to become effective as
promptly as possible. The Company shall prepare the Prospectus in a
form approved by the Underwriters and file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the Commission's
close of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the Underwriters in
writing (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (iii) of the prevention or suspension of the
use of any preliminary prospectus or the Prospectus or of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not
file any amendment of the Registration
-18-
Statement or supplement to the Prospectus unless the Company has
furnished the Underwriters a copy for its review prior to filing and
shall not file any such proposed amendment or supplement to which the
Underwriters reasonably object. The Company shall use its best efforts
to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules,
any event occurs as a result of which the Prospectus as then amended
or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (ii) of this Section 6(a), an amendment
or supplement which shall correct such statement or omission or an
amendment which shall effect such compliance.
(iv) The Company shall make generally available to its security
holders and to the Underwriters as soon as practicable, an earnings
statement (which need not be audited) of the Company, covering such
12-month period, which shall satisfy the provisions of Section 11(a)
of the Securities Act or Rule 158 thereunder.
(v) The Company shall furnish to the Underwriters and counsel
for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and all amendments thereof and,
so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Securities Act or the Rules, as many copies of any
preliminary prospectus and the Prospectus and any amendments thereof
and supplements thereto as the Underwriters may reasonably request.
(vi) The Company shall cooperate with the Underwriters and
their counsel in endeavoring to qualify the Shares for offer and sale
in connection with the offering under the laws of such jurisdictions
as the Underwriters may designate and shall maintain such
qualifications in effect so long as required for the distribution of
the Shares; provided, however, that the Company shall not be required
in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing
business in any jurisdiction.
-19-
(vii) Without the prior written consent of CIBC World Markets
Corp., for a period of 90 days after the date of this Agreement, the
Company and those directors and executive officers identified on
Schedule ___ shall not issue, sell or register with the Commission
(other than on Form S-8 or on any successor form), or otherwise
dispose of, directly or indirectly, any equity securities of the
Company (or any securities convertible into, exercisable for or
exchangeable for equity securities of the Company), except for the
issuance of the Shares pursuant to the Registration Statement and the
issuance of shares pursuant to the Company's existing stock option
plan or bonus plan.
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and
by the Nasdaq National Market (including any required registration
under the Exchange Act).
(ix) The Company will apply the net proceeds from the offering
of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing and distribution of the
Registration Statement including all exhibits thereto, each preliminary
prospectus, the Prospectus, all amendments and supplements to the
Registration Statement and the Prospectus, and the printing, filing and
distribution of this Agreement; (ii) the preparation and delivery of
certificates for the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue
Sky laws of the various jurisdictions referred to in Section 6(a)(vi),
including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to be so
furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold; (v) the filing fees of the NASD in connection with its
review of the terms of the public offering and reasonable fees and
disbursements of counsel for the Underwriters in connection with such
review; (vi) inclusion of the Shares for quotation on the Nasdaq National
Market System; and (vii) all transfer taxes, if any, with respect to the
sale and delivery of the Shares by the Company to the Underwriters. Subject
to the provisions of Section 9, the Underwriters agree to pay, whether or
not the transactions contemplated hereby are consummated or this Agreement
is terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this
-20-
Agreement not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel for
the Underwriters.
7. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and liabilities,
joint or several (including any reasonable investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted), to which they, or
any of them, may become subject under the Securities Act, the Exchange Act
or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment thereof or supplement thereto,
or in any Blue Sky application or other information or other documents
executed by the Company filed in any state or other jurisdiction to qualify
any or all of the Shares under the securities laws thereof (any such
application, document or information being hereinafter referred to as a
"Blue Sky Application") or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) in
whole or in part upon any breach of the representations and warranties set
forth in Section 4 hereof, or (iii) in whole or in part upon any failure of
the Company to perform any of its obligations hereunder or under law;
provided, however, that such indemnity shall not inure to the benefit of
any Underwriter (or any person controlling such Underwriter) on account of
any losses, claims, damages or liabilities arising from the sale of the
Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement thereto, or in any Blue Sky Application in
reliance upon and in conformity with information furnished in writing to
the Company by the Underwriters specifically for use therein or resulting
from the failure by the Underwriters to provide an amended Registration
Statement or Prospectus to prospective purchasers of the Shares, which
amended Registration Statement or Prospectus shall have been provided to
the Underwriter by the Company. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, each director of the Company, and each officer of
the Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only insofar
as such losses, claims, damages or liabilities arise out of or
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are based upon any untrue statement or omission or alleged untrue statement
or omission which was made in any preliminary prospectus, the Registration
Statement or the Prospectus, or any amendment thereof or supplement
thereto, to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon an in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein. This indemnity will be in
addition to any liability which such Underwriter may otherwise have.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 7(a) or 7(b) shall be available to
any party who shall fail to give notice as provided in this Section 7(c) if
the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice but the omission so to notify such indemnifying party of
any such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise
than under this Section. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of
counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which
are different from or in addition to those available to the indemnifying
party (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume
the defense of such action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying parties. An
indemnifying party shall not be liable for any settlement of any action,
suit, proceeding or claim effected without its written consent, which
consent shall not be unreasonably withheld or delayed.
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8. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason
is held to be unavailable to or insufficient to hold harmless an
indemnified party under Section 7(a) or 7(b), then each indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses reasonably incurred
in connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claims asserted, but after deducting any contribution
received by any person entitled hereunder to contribution from any person
who may be liable for contribution) to which the indemnified party may be
subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Shares or, if such allocation is not
permitted by applicable law or indemnification is not available as a result
of the indemnifying party not having received notice as provided in Section
7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before
deducting expenses) received by the Company, as set forth in the table on
the cover page of the Prospectus, bear to (y) the underwriting discounts
received by the Underwriters, as set forth in the table on the cover page
of the Prospectus. The relative fault of the Company or the Underwriters
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact related to information
supplied by the Company or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section 8, (i) in
no case shall any Underwriter (except as may be provided in the Agreement
Among Underwriters) be liable or responsible for any amount in excess of
the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder; (ii) the Company shall be liable and responsible for
any amount in excess of such underwriting discount; provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, each officer of
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the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) in the immediately
preceding sentence of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this
Section, notify such party or parties from whom contribution may be sought,
but the omission so to notify such party or parties from whom contribution
may be sought shall not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have hereunder or
otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriter's obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. Termination. This Agreement may be terminated with respect to
-----------
the Shares to be purchased on a Closing Date by the Underwriters by notifying
the Company at any time
(a) in the absolute discretion of the Underwriters at or before any
Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Underwriters will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Underwriters, inadvisable to proceed with the offering;
(iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to make
it, in the judgment of the Underwriters, inadvisable or impracticable to
market the Shares; (iv) if trading in the Shares has been suspended by the
Commission or trading generally on the New York Stock Exchange, Inc., on
the American Stock Exchange, Inc. or the Nasdaq National Market System has
been suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or Federal authority; or (vi) if, in the
judgment of the Underwriters, there has occurred a Material Adverse Effect,
or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required
by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if this Agreement
is terminated by the Underwriters or the Underwriters because of any failure,
refusal or inability on the part of the Company to comply with
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the terms or to fulfill any of the conditions of this Agreement, the Company
will reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contemplation
of performing their obligations hereunder and (z) no Underwriter who shall have
failed or refused to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify cancellation or
termination of its obligations under this Agreement, shall be relieved of
liability to the Company, or to the other Underwriters for damages occasioned by
its failure or refusal.
10. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 9 and 10 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 6(b), 7, 8
and 9 shall survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and their respective successors and assigns, and, to
the extent expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Underwriters, c/o CIBC World Markets Corp., Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx Xxxxxxxx, with a
copy to XxXxxxxxx, Will & Xxxxx, 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the
[THIS SPACE INTENTIONALLY LEFT BLANK]
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[THIS PAGE INTENTIONALLY LEFT BLANK]
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Registration Statement with a copy to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, Xxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxxx.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
CELL THERAPEUTICS, INC.
By __________________________________
Title:
Confirmed:
CIBC WORLD MARKETS CORP.
U.S. BANCORP XXXXX XXXXXXX
By CIBC WORLD MARKETS CORP.
By___________________________________
Title:
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SCHEDULE I
Number of
Firm Shares to
Name Be Purchased
---- --------------
CIBC World Markets Corp. 1,878,261
U.S. Bancorp Xxxxx Xxxxxxx 1,252,174
----------------
Total 3,130,435
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SCHEDULE II
Essex Woodlands Health Ventures Fund IV, L.P.
Xxxxx Xxxxxx
Xxx Xxxx
Xxxx Xxxxxx
Xxxxx Xxxxxx
Xxxxx Xxxxx
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