Exhibit 1.1
Advanced Life Sciences Holdings, Inc.
Shares *
Common Stock
($0.01 par value)
Form of Underwriting Agreement
New York, New York
, 2005
X.X. Xxxxxxxxx, Towbin, LLC
ThinkEquity Partners LLC
As Representatives of the several Underwriters,
c/o X.X. Xxxxxxxxx, Towbin, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Ladies and Gentlemen:
Advanced Life Sciences Holdings, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, shares of Common Stock, $0.01 par value ("Common
Stock"), of the Company, (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to additional shares of
Common Stock (the "Option Securities"; the Option Securities, together with the
Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires.
The terms which follow, when used in this Agreement, shall have the
meanings indicated.
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* Plus an option to purchase from the Company up to additional shares to
cover over-allotments.
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"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a), including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended or any Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462(b)" refer to such rules under
the Act.
"Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the registration statement referred to in Section 1(a)
hereof.
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1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333- ) on Form S-1, including a
related preliminary prospectus, for the registration under the Act of
the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, including a related preliminary
prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission either (i) prior to the
Effective Date of such registration statement, a further amendment to
such registration statement (including the form of final prospectus)
or (ii) after the Effective Date of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b). In the case
of clause (ii), the Company has included in such registration
statement, as amended at the Effective Date, all information (other
than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or
such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date and on any date on
which Option Securities are purchased, if such date is not the Closing
Date (a "settlement date"), the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the rules thereunder; on the Effective
Date and at the Execution Time, the Registration Statement did not or
will 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; and, on the
Effective Date, the Prospectus, if not filed pursuant to Rule 424(b),
will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any settlement date, the Prospectus (together
with any supplement thereto) will not, include any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to the information
contained in or omitted from the Registration Statement, or the
Prospectus
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(or any supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the following information in the Prospectus furnished on
behalf of each Underwriter: (i) the second paragraph below the pricing
table on the front cover; and (ii) under the caption "Underwriting,"
(a) the fifth paragraph, (b) the paragraph under the section entitled
"Public Offering Price and Dealer Concessions," (c) the paragraph
under the section entitled "Stabilization and Other Transactions" and
(d) the sentence under the section entitled "Electronic Prospectuses."
(c) Each of the Company and Advanced Life Sciences, Inc., an
Illinois corporation (the "Subsidiary"), has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized with
full corporate power and authority to own its properties and conduct
its business as described in the prospectus, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification, except
where such failures to so qualify would not individually or in the
aggregate have a Material Adverse Effect (as defined herein).
(d) All the outstanding shares of capital stock of the Subsidiary
have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiary
are owned directly by the Company free and clear of any perfected
security interest and any other security interests, claims, liens or
encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable;
the Securities being sold hereunder have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities 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 certificates for the Securities are in valid and sufficient form;
the holders of outstanding shares of capital stock of the Company are
not entitled to preemptive rights, except for such rights of Xxxxxx
Laboratories that terminate upon the completion of the offering of the
Common Stock pursuant to the Prospectus, or other rights to subscribe
for the Securities; and, except as set forth in the Prospectus, no
options, warrants or other
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rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for,
shares of capital stock of or ownership interests in the Company are
outstanding.
(f) There is no contract or other document of a character
required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed
as required.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, registration, filing
with or order or qualification of any court or governmental agency or
body is required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(j) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, default under or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
the Subsidiary pursuant to (i) the charter or by-laws of the Company
or the Subsidiary or (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or the Subsidiary is a party or bound or to which its or their
property is subject, except, with respect to this subparagraph (ii),
where such conflicts, breaches, violations, defaults or impositions of
any such lien, charge or encumbrance would not individually or in the
aggregate have a Material Adverse Effect, or (iii) any statute, law,
rule, regulation, judgment, order or decree applicable to the Company
or the Subsidiary of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or the Subsidiary or any of the
Company's or the Subsidiary's properties.
(k) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement
except for such rights of Xxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxxx Gift
Trust,
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Xxxxxxxx X. Xxxxx Discretionary Trust, Xxxxxx X. Xxxxxx Gift Trust,
Xxxxxx X. Fee, The Xxxxxx Xxxxxx Xx. Annuity Trust, Xxxxx Family Trust
(the "Angel Investors") and Xxxxxx Laboratories as have been
effectively waived.
(l) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and the
rules and regulations thereunder and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Financial Data" in the Prospectus and Registration Statement
fairly present, on the basis stated in the Prospectus and the
Registration Statement, the information included therein. The
assumptions used in preparing any pro forma financial statements
included in the Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts. Any pro forma financial statements
included in the Prospectus and the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of Regulation S-X under the Act and the pro forma
adjustments have been properly applied to the historical amounts in
the compilation of those statements.
(m) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or the Subsidiary or the Company's or the Subsidiary's
property is pending or, to the Company's knowledge, threatened that
(i) could reasonably be expected (individually or together with other
such actions, suits or proceedings) to have a material adverse effect
on the performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) could reasonably be expected
(individually or together with other such actions, suits or
proceedings) to have a material adverse effect on the condition
(financial or otherwise), results of operations, business or
properties of the Company and the Subsidiary, taken as a whole
("Material Adverse Effect"), except as set forth in or contemplated in
the Prospectus (except, in the case of this clause (ii), for those
that have been disclosed in the Prospectus).
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(n) Each of the Company and the Subsidiary owns or leases all
such properties as are necessary to the conduct of its operations as
presently conducted; neither the Company nor the Subsidiary is in
violation of any law, rule or regulation of any Federal, state or
local governmental or regulatory authority applicable to it nor is in
non-compliance with any term or condition of, nor has failed to obtain
and maintain in effect, any license, certificate, permit or other
governmental authorization required for the ownership or lease of its
property or the conduct of its business, which violation,
non-compliance or failure would individually or in the aggregate have
a Material Adverse Effect, except as set forth in or contemplated in
the Prospectus; and the Company has not received notice of any
proceedings relating to the revocation or material modification of any
such license, certificate, permit or other authorization.
(o) Neither the Company nor the Subsidiary is in violation or
default of (i) any provision of its charter or bylaws or (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, except where such violation or default under
clause (ii) above, either individually or in the aggregate, would not
have a Material Adverse Effect.
(p) Deloitte & Touche LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(q) There are no transfer taxes or other similar fees or charges
under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the
Company or sale by the Company of the Securities.
(r) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which failures to so file would not
individually or in the aggregate have a Material Adverse Effect),
except as set forth in or contemplated in the Prospectus, and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessments, fines or penalties
that are currently being contested in good faith or as would not
individually or in the aggregate have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus.
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(s) No labor dispute with the employees of the Company or any of
its subsidiaries exists or is, to the Company's knowledge, threatened
or imminent, that could result in a Material Adverse Effect, except as
set forth in or contemplated in the Prospectus.
(t) The Company and the Subsidiary are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in
which they are engaged; neither the Company nor the Subsidiary has
been refused any material insurance coverage sought or applied for;
and neither the Company nor the Subsidiary has any 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, except as set
forth in or contemplated in the Prospectus.
(u) The Subsidiary is not currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any
other distribution on its capital stock, from repaying to the Company
any loans or advances to it from the Company or from transferring any
of its property or assets to the Company, except as described in or
contemplated by the Prospectus.
(v) The Company and the Subsidiary are (i) in compliance with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability under any Environmental Law, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus. Except as
set forth in the Prospectus, neither the Company nor the Subsidiary
has been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.
(w) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii)
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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.
(x) The Subsidiary is the only subsidiary of the Company and is a
significant subsidiary as defined by Rule 1-02 of Regulation S-X.
(y) The Company and the Subsidiary own, possess, license or have
other rights to use, on reasonable terms, all material patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the
Prospectus to be conducted. Except as set forth in the Prospectus
under the caption "Business--Intellectual Property," (a) there are no
rights of third parties to any such Intellectual Property; (b) to the
Company's knowledge, there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or,
to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's or the Subsidiary's rights
in or to any such Intellectual Property, and the Company is unaware of
any facts that would form a reasonable basis for any such claim; (d)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope
of any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (e)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others that the Company or the Subsidiary
infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of others, and the Company is
unaware of any other fact which would form a reasonable basis for any
such claim; (f) there is no U.S. patent or published U.S. patent
application that contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by or
licensed to the Company or the Subsidiary or that interferes with the
issued or pending claims of any such Intellectual Property; and (g)
there is no prior art of which the Company is aware that may render
any U.S. patent held by the Company or the Subsidiary invalid or any
U.S. patent application held by the Company or the Subsidiary
unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office. Each of the Company and the Subsidiary owns the
Intellectual Property or has the rights to the Intellectual Property
that is necessary to conduct its business as described in the
Prospectus.
(z) The clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company or the
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Subsidiary or in which the Company, the Subsidiary or its product
candidates have participated ("Company Studies") that are described in
the Prospectus or the results of which are referred to in the
Prospectus were and, if still pending, are being conducted in all
material respects in accordance with standard medical and scientific
research procedures; the descriptions in the Prospectus of the results
of such studies and tests are accurate in all material respects,
fairly present the data derived from such studies and tests, and the
Company has no knowledge of any other studies or tests the results of
which are materially inconsistent with or otherwise materially call
into question the results described or referred to in the Prospectus;
the Company and the Subsidiary have operated and currently are in
compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration and
comparable drug regulatory agencies outside of the United States
(collectively, the "Regulatory Authorities"); and, except to the
extent disclosed in the Registration Statement and the Prospectus,
neither the Company nor the Subsidiary has received any written notice
or other correspondence from any Regulatory Authority or any other
governmental agency requiring the termination, suspension or material
modification of any Company Studies that are described in the
Prospectus or the results of which are referred to in the Prospectus.
(aa) The Company is in compliance with all the applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002, and the rules and
regulations promulgated in connection therewith (the "Xxxxxxxx-Xxxxx
Act"), that are currently in effect and require compliance by the
Company on or before the date hereof.
(bb) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is aware of or has
taken any action, directly or indirectly, that would result in a
violation by such Persons of the Foreign Corrupt Practice Act of 1977,
as amended and the rules and regulations thereunder ("FCPA"),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of
the giving of anything of value to any "foreign official" as such term
is defined in the FCPA or any foreign political party or official
thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, any of its subsidiaries
and, to the knowledge of the Company, its affiliates have conducted
their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are
reasonably expected to continue to ensure, continued compliance
therewith.
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(cc) All the outstanding shares of capital stock of Sarawak
MediChem Pharmaceuticals, Inc. held by the Subsidiary have been duly
and validly authorized and issued and are fully paid and
nonassessable; and, except as otherwise set forth in the Prospectus,
all such shares are owned by the Subsidiary directly free and clear of
any perfected security interest and any other security interests,
claims, liens or encumbrances. The financial statements of Sarawak
MediChem Pharmaceuticals, Inc. are not consolidated into the financial
statements of the Company; none of the liabilities of Sarawak MediChem
Pharmaceuticals, Inc. are liabilities of the Subsidiary or the
Company; and neither the Company nor the Subsidiary has guaranteed any
of the liabilities of Sarawak MediChem Pharmaceuticals, Inc.
(dd) The Company and the Subsidiary are eligible, and since the
first receipt of thereof, have been eligible, to receive Small
Business Innovative Research ("SBIR") grants from the National
Institutes of Health ("NIH"); and there exists no current rule,
policy, guideline, regulation or, to the Company's knowledge,
proposal, under which the Company and/or the Subsidiary would be
required to refund to the NIH any such SBIR grant that has been
awarded to the Company and/or the Subsidiary.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of
$ per share, the amount of the Underwritten Securities set forth
opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally
and not jointly, up to shares of Option Securities at the same
purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any
time on or before the 30th day after the date of the Prospectus upon
written notice by the Representatives to the Company setting forth the
number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the
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settlement date. Delivery of certificates for the shares of Option
Securities, and payment therefor, shall be made as provided in Section
3 hereof. The number of shares of the Option Securities to be
purchased by each Underwriter shall be the same percentage of the
total number of shares of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on , 2005,
or such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives on the
date specified by the Representatives (which shall be within three Business Days
after exercise of said option), for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same day funds to an account specified by
the Company. Delivery of the Option Securities shall be made through facilities
of the Depository Trust Company unless the Representatives shall otherwise
instruct.
If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
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4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the
Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Prospectus is otherwise required under
Rule 424(b), the Company will cause the Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly
advise the Representatives (i) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (ii)
when the Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Registration Statement shall have been filed with the
Commission, (iii) when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement shall have
been filed or become effective, (iv) of any request by the Commission
or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the
Prospectus or for any additional information, (v) 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 (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification
of the Securities for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company will use
its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain as soon
as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then 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 the Registration Statement or supplement
the Prospectus to comply with the
14
Act or the rules thereunder, the Company promptly will (i) notify the
Representatives of any such event, (ii) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement that will correct such statement
or omission or effect such compliance and (iii) supply any
supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as reasonably practicable, the Company will make
generally available to its security holders and to the Representatives
in the form of a periodic report filed pursuant to the Exchange Act an
earnings statement or statements of the Company and the Subsidiary
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the qualification
of the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not so qualified or to
take any action that would subject it to service of process in such
jurisdiction.
(f) The Company will not, for the period specified below (the
"Lock-Up Period"), without the prior written consent of X.X.
Xxxxxxxxx, Towbin, LLC, offer, sell or contract to sell, pledge, or
otherwise dispose of directly or indirectly, or file with the
Securities and Exchange Commission a registration statement under the
Securities Act of 1933 relating to, any other shares of Common Stock
or any securities convertible into, or exercisable, or exchangeable
for, shares of Common Stock, or publicly announce an intention to
effect any such transaction, provided, however, that the Company may
issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time and described in the
Prospectus and the Company may issue Common Stock issuable upon the
conversion of securities or the exercise of warrants outstanding at
the Execution Time. The initial Lock-Up Period will commence on the
date hereof and will continue up until and include the date 180 days
after the date hereof or such earlier date that X.X. Xxxxxxxxx,
00
Towbin, LLC consents to in writing; provided, however, that if (1)
during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or material news or a material event
relating to the Company occurs or (2) prior to the expiration of the
initial Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in each case the Lock-Up Period will
be extended until the expiration of the 18-day period beginning on the
date of release of the earnings results or the occurrence of the
material news or material event, as applicable, unless X.X. Xxxxxxxxx,
Towbin, LLC waives, in writing, such extension. The Company will
provide X.X. Xxxxxxxxx, Towbin, LLC with notice of any announcement
described in clause (2) of the preceding sentence that gives rise to
an extension of the Lock-up Period.
(g) The Company will comply in all material respects with all
applicable securities and other applicable laws, rules and
regulations, including, without limitation, the Xxxxxxxx-Xxxxx Act,
and to use its best efforts to cause the Company's directors and
officers, in their capacities as such, to comply with such laws, rules
and regulations, including, without limitation, the provisions of the
Xxxxxxxx-Xxxxx Act.
(h) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(i) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or
supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Registration Statement,
each Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp
or transfer taxes in connection with the original issuance and sale of
the Securities; (iv) the registration of the Securities under the
Exchange Act and the listing of the Securities on the Nasdaq National
Market; (v) any registration or qualification of the Securities for
offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Underwriters relating to such registration and
qualification in an amount not to exceed $2,000); (vi) any filings
required to be made with the National Association of
16
Securities Dealers, Inc. (including all filing fees and the reasonable
fees and expenses of counsel for the Underwriters relating to such
filings, such expenses of counsel not to exceed $10,000); (vii) the
transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective
purchasers of the Securities; (viii) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (ix) all other costs
and expenses incident to the performance by the Company of its
obligations hereunder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time on the date of determination
of the public offering price, if such determination occurred at or
prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on
the Business Day following the day on which the public offering price
was determined, if such determination occurred after 3:00 PM New York
City time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have requested and caused Winston & Xxxxxx
LLP to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Company and the "Subsidiary is validly existing
as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus; and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify would not have a
Material Adverse Effect;
17
(ii) all the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Subsidiary
are owned by the Company directly free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are duly
listed, and admitted and authorized for trading, subject to official
notice of issuance on the Nasdaq National Market; the certificates for
the Securities are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not entitled to
statutory or, to the knowledge of such counsel, contractual preemptive
or other rights to subscribe for the Securities as a result of the
offering of Securities pursuant to the Prospectus; and except as set
forth in the Prospectus, to the knowledge of such counsel, no options,
warrants or other rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in the
Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or the Subsidiary or the Company's or Subsidiary's property of a
character required to be disclosed in the Registration Statement which
is not adequately disclosed in the Prospectus, and, to the knowledge of
such counsel after reasonable investigation, there is no contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit
thereto, which is not described or filed as required; and the statements
included in the Prospectus under the heading "Material U.S. Federal
Income Tax Consequences to Non-U.S. Holders",["Business --
Collaborations,"] "Description of Capital Stock" and "Shares Eligible
for Future Sale" insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and
fair summaries of such legal matters, agreements, documents or
proceedings;
(v) the Registration Statement has become effective under the
Act; any required filing of the Prospectus, and any supplement thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the knowledge of such counsel, no
stop
18
order suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been instituted or
threatened and the Registration Statement and the Prospectus (in each
case, other than the financial statements and other financial
information (or statistical data derived therefrom) contained therein as
to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with or
order or qualification of any court or governmental agency or body is
required in connection with the transactions contemplated herein, except
such as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction or with the National
Association of Securities Dealers, Inc. in connection with the purchase
and distribution of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Prospectus;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, default under, or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or the
Subsidiary pursuant to, (i) the charter or by-laws of the Company or the
Subsidiary or (ii) to the knowledge of such counsel, the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition or covenant or
instrument to which the Company or the Subsidiary is a party or bound or
to which the Company's or Subsidiary's property is subject, or (iii) to
the knowledge of such counsel, any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or the Subsidiary of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
the Subsidiary or any of the Company's or Subsidiary's properties, which
violation or default would, in the case of clauses (ii) and (iii) above,
either individually or in the aggregate with all other violations and
defaults referred to in this paragraph (ix) (if any), have a Material
Adverse Effect, except as set forth in or contemplated in the
Prospectus;
(x) to the knowledge of such counsel, no holders of securities
of the Company have rights to the registration of such securities under
the
19
Registration Statement except for such rights of Xxxxxx Laboratories and
the Angel Investors as have been effectively waived; and
(xi) Nothing has come to such counsel's attention, after its
reasonable investigation, that causes such counsel to believe that on
the Effective Date or the date the Registration Statement was last
deemed amended the Registration Statement contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus as of its date and on the Closing
Date contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (in each case, other than the financial
statements, supporting schedules, footnotes to financial statements and
other financial and statistical information contained or incorporated by
reference therein, as to which such counsel need express no opinion);
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Illinois, the General Corporation Law of the State of Delaware or the federal
laws of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters and (B) as
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to the
Prospectus in this paragraph (b) shall also include any supplements thereto at
the Closing Date.
(c) The Representatives shall have received from Ropes & Xxxx
LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(d) The Representatives shall have received from XxXxxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx, intellectual property counsel for the
Company, such opinion or opinions, dated the Closing Date and
addressed to the Representatives, in the form set forth in Exhibit B.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate
20
have carefully examined the Registration Statement, the Prospectus,
any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no Material Adverse Effect,
except as set forth or contemplated in the Prospectus.
(f) The Company shall have requested and caused Deloitte &
Touche, LLP to have furnished to the Representatives, at the Execution
Time and at the Closing Date, letters, dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent public accountants within the meaning of the Act and the
applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited interim
financial information of the Company for the three-month period ended
March 31, 2005, and as at March 31, 2005, in accordance with Statement
on Auditing Standards No. 100 and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included 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 Act and the
related published rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and the Subsidiary;
their limited review, in accordance with standards established under
Statement on Auditing Standards No. 100, of the unaudited interim
financial information for the three-month period ended March 31, 2005,
and as at March 31, 2005, carrying out certain specified 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, directors and audit,
compensation and the nominating and corporate governance committees of
the Company and the Subsidiary; and inquiries of certain officials of
the Company who have responsibility for
21
financial and accounting matters of the Company and the Subsidiary as to
transactions and events subsequent to December 31, 2004, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included in the
Registration Statement and the Prospectus do not comply as to form in
all material respects with applicable accounting requirements of the Act
and with the related rules and regulations adopted by the Commission
with respect to registration statements on Form S-1; and said unaudited
financial statements 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 the Prospectus;
(2) there were any changes, at a specified date not more than
five days prior to the date of the letter, in the [long-term debt of the
Company and the Subsidiary or capital stock of the Company] or decreases
in the stockholders' equity of the Company as compared with the amounts
shown on the March 31, 2005, consolidated balance sheet included in the
Registration Statement and the Prospectus, or for the period from April
1, 2005 to such specified date there were any decreases, as compared
with the corresponding period in the preceding year in [total revenues
or income before income taxes or increases in total or per share amounts
of net loss, loss from operations or net interest expense of the Company
and the Subsidiary], except in all instances for changes, decreases or
increases set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives;
(3) the information included in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301 (Selected Financial
Data) and Item 402 (Executive Compensation) is not in conformity with
the applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified procedures 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 and the Subsidiary) set forth
in the Registration Statement and the Prospectus, including the
information set forth under the captions "Summary Financial Data" and
"Selected Financial Data" in the Prospectus, agrees with the accounting
records of the Company and the Subsidiary, excluding any questions of
legal interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
22
(g) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement and the
Prospectus, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of
this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and the
Subsidiary, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole judgment of
the Representatives, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement and the
Prospectus.
(h) Prior to the Closing Date, the Company shall have furnished
to the Representatives a letter addressed to the Representatives
substantially in the form of Exhibit A hereto from each officer,
director and current employee of the Company, and from each other
shareholder and option holder who beneficially own greater than 1% of
the common stock of the Company.
(i) The Securities shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory
evidence of such action shall have been provided to the
Representatives.
(j) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Winston & Xxxxxx LLP, counsel for the Company, at 00
X. Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000xx the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other
23
than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through X.X. Xxxxxxxxx, Towbin, LLC on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act
or other Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that (i) the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion
therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the following information in
the Prospectus furnished on behalf of each Underwriter: (i) the second
paragraph below the pricing table on the front cover; and (ii) under
the caption "Underwriting," (a) the fifth paragraph, (b) the paragraph
under the section entitled "Public Offering Price and Dealer
Concessions," (c) the paragraph under the section entitled
"Stabilization and Other Transactions" and (d) the sentence under the
section entitled "Electronic Prospectuses."
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, and each person
who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the
24
Company to each Underwriter, but only with reference to written
information relating to such Underwriter furnished to the Company by
or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except
as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such
action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
25
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of
the Underwriters may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the
Securities; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not
only such relative benefits 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 that resulted in such Losses as well
as any other relevant equitable considerations. Benefits received by
the Company shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on
the cover page of the Prospectus. Relative fault shall be determined
by reference to, among other things, whether any untrue or any alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by
the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro
rata allocation or any other method of allocation that does not take
account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this
Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the
26
meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as
the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities that the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on either of
such Exchange or National Market, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred outbreak or escalation of hostilities, a declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus.
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. 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 will remain in full force and effect, regardless of any
investigation made by or
27
on behalf of any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed and confirmed to them, care of X.X. Xxxxxxxxx, Towbin,
LLC, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000; or, if sent to the Company,
will be mailed, delivered or telefaxed and confirmed to it at 0000 Xxxxx Xxxx,
Xxxxxxxxx, XX 00000, attention of Xxxxxxx X. Xxxxxx.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
28
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
Advanced Life Sciences Holdings,
Inc.
By:
-------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
X.X. Xxxxxxxxx, Towbin, LLC
By:
------------------------
[Xxxxxxxxx Xxxxxxxxx]
[Managing Director]
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
NUMBER OF SHARES
UNDERWRITERS TO BE PURCHASED
------------ ----------------
X.X. Xxxxxxxxx, Towbin, LLC . . . . . . .
ThinkEquity Partners LLC . . . . . . .
[ ] . . . . . . .
----------------------------
Total............................
============================
[Draft--4/4/05]
EXHIBIT A
[Letterhead of officer, director or shareholder of Company]
ADVANCED LIFE SCIENCES HOLDINGS, INC.
INITIAL PUBLIC OFFERING OF COMMON STOCK
February __, 2005
X.X. Xxxxxxxxx, Towbin, LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the Underwriting
Agreement (the "Underwriting Agreement") to be entered into by
Advanced Life
Sciences Holdings, Inc., a Delaware corporation (the "Company"), and you as
Underwriter, relating to the initial public offering of shares of Common Stock,
$0.01 par value (the "Common Stock"), of the Company (the "Offering").
In order to induce you to enter into the Underwriting Agreement, the
undersigned will not, without the prior written consent of X.X. Xxxxxxxxx,
Towbin, LLC ("Unterberg"), offer, sell, contract to sell, pledge or otherwise
dispose of, file (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by actual
disposition as effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of Common Stock of the Company or any securities convertible into or
exercisable or exchangeable for such Common Stock, in each case that are
currently or hereafter owned either of record or beneficially (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce an intention to effect any such transaction,
during the period specified in the following two paragraphs (the "Lock-Up
Period"), other than (i) transfers pursuant to a court order, decree or
settlement, (ii) transfers of shares of Common Stock or other securities
approved by Unterberg, (iii) pledges of Common Stock or other securities to a
bank or other financial institution, (iv) transfers of Common Stock or other
securities to members of the immediate family of the undersigned or to a
corporation, partnership, limited liability company or other entity wholly-owned
by the undersigned or members of
31
the immediate family of the undersigned, (v) transfers to charitable
organizations, (vi) transfers to any trust for the direct or indirect benefit of
the undersigned or the immediate family of the undersigned, and (vii) the
exercise of options and transfers of shares of Common Stock to the Company used
to pay taxes applicable to the exercise of options in accordance with the
Company's stock option arrangements; provided that in the case of any transfer
pursuant to clause (iii), (iv), (v) or (vi), the transferee agrees to be bound
by the restrictions set forth herein and in the case of exercises of options
pursuant to clause (vii) the holder agrees to be bound by the restrictions set
forth herein with respect to the shares issued upon such exercise. For purposes
of this lock-up agreement, "immediate family" shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin.
The initial Lock-Up Period will commence on the later of (x) the date of
this Lock-Up Agreement or (y) the date of the initial filing with the Securities
and Exchange Commission of the Registration Statement on Form S-1 for the
Offering and continue and include the date 180 days after the public offering
date set forth on the final prospectus used to sell the Securities (the "Public
Offering Date") pursuant to the Underwriting Agreement, to which you are or
expect to become a party; provided, however, that if (1) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or material
news or a material event relating to the Company occurs or (2) prior to the
expiration of the initial Lock-Up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the initial Lock-Up Period, then in each case the Lock-Up Period will be
extended until the expiration of the 18-day period beginning on the date of
release of the earnings results or the occurrence of the material news or
material event, as applicable, unless Unterberg waives, in writing, such
extension.
The undersigned hereby acknowledges and agrees that written notice of any
extension of the Lock-Up Period pursuant to the previous paragraph will be
delivered by Unterberg to the Company (in accordance with Section 12 of the
Underwriting Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the restrictions of this Lock-Up Agreement during the
period from the date of this Lock-Up Agreement to an including the 34th day
following the expiration of the initial Lock-Up Period, it will give notice
thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the
Lock-Up Period (as may have been extended pursuant to the previous paragraph)
has expired.
32
If for any reason the Underwriting Agreement shall be terminated prior to
the Closing Date (as defined in the Underwriting Agreement), the agreement set
forth above shall likewise be terminated and the undersigned shall have no
further obligations hereunder.
Yours very truly,
-----------------------------------
[SIGNATURE OF STOCKHOLDER]
Print name:
-----------------------
Title:
----------------------------
Address:
--------------------------
00
XXXXXXX X
XXXXXXX XX XXXXXXXXX XXXXXXX XXXXXXX & XXXXXXXX
[IP Opinion Form To Be Provided]
