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EXHIBIT 1
1,000,000 Shares
COLLAGENEX PHARMACEUTICALS, INC.
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
__________ ___, 1997
Alex. Xxxxx & Sons Incorporated
0 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Gentlemen:
CollaGenex Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to sell to Alex. Xxxxx & Sons Incorporated (the
"Underwriter") an aggregate of 1,000,000 shares of the Company's Common Stock,
$0.01 par value (the "Firm Shares"). A certain stockholder of the Company (the
"Selling Stockholder") also proposes to sell at the Underwriter's option an
aggregate of up to 150,000 additional shares of the Company's Common Stock (the
"Option Shares") as set forth below. The Company and the Selling Stockholder are
sometimes referred to herein collectively as the "Sellers".
The Underwriter has advised the Company and the Selling Stockholder (a)
that it is authorized to enter into this Agreement and (b) that it is willing to
purchase the Firm Shares, plus the Option Shares, if it elects to exercise the
over-allotment option in whole or in part. The Firm Shares and the Option Shares
(to the extent the aforementioned option is exercised) are herein collectively
called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDER.
(a) The Company represents and warrants to the
Underwriter as follows:
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(i) A registration statement on Form S-1 (File No.
333-____) with respect to the Shares has been carefully
prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the
Rules and Regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder and has been filed with the Commission. Copies of
such registration statement, including any amendments thereto,
the preliminary prospectuses (meeting the requirements of the
Rules and Regulations) contained therein and the exhibits,
financial statements and schedules, as finally amended and
revised, have heretofore been delivered by the Company to the
Underwriter. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule
462 (b) of the Act, herein referred to as the "Registration
Statement," which shall be deemed to include all information
omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under
the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement.
"Prospectus" means (i) the form of prospectus first filed with
the Commission pursuant to Rule 424(b) or (ii) the last
preliminary prospectus included in the Registration Statement
filed prior to the time it becomes effective or filed pursuant
to Rule 424(a) under the Act that is delivered by the Company
to the Underwriter for delivery to purchasers of the Shares,
together with the term sheet or abbreviated term sheet filed
with the Commission pursuant to Rule 424(b)(7) under the Act.
Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein
referred to as a "Preliminary Prospectus." Any reference
herein to the Registration Statement, any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein,
and, in the case of any reference herein to any Prospectus,
also shall be deemed to include any documents incorporated by
reference therein, and any supplements or amendments thereto,
filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the
termination of the offering of the Shares by the Underwriter.
(ii) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement. The
Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires
such qualification. The Company has no significant
subsidiaries.
(iii) The outstanding shares of Common Stock of the
Company, including all shares to be sold by the Selling
Stockholder, have been duly authorized and validly issued and
are fully paid and non-assessable; the portion of the Shares
to be issued and sold by the Company have been duly authorized
and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and no
preemptive rights of stockholders exist with respect to any of
the Shares or the issue and sale thereof. Except as described
in the Registration Statement, neither the filing of the
Registration Statement nor the offering or sale of the Shares
as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or
relating to the registration of any shares of Common Stock.
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(iv) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. All of
the Shares conform to the description thereof contained in the
Registration Statement. The form of certificates for the
Shares conforms to the corporate law of the jurisdiction of
the Company's incorporation.
(v) The Commission has not issued an order preventing
or suspending the use of any Prospectus relating to the
proposed offering of the Shares nor instituted proceedings for
that purpose. The Registration Statement contains, and the
Prospectus and any amendments or supplements thereto will
contain, all statements which are required to be stated
therein by, and will conform, to the requirements of the Act
and the Rules and Regulations. The Registration Statement and
any amendment thereto do not contain, and will not contain,
any untrue statement of a material fact and do not omit, and
will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Prospectus and any amendments and supplements
thereto do not contain, and will not contain, any untrue
statement of material fact; and do not omit, and will not
omit, to state any 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;
provided, however, that the Company makes no representations
or warranties as to information contained in or omitted from
the Registration Statement or the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity
with, written information furnished to the Company by or on
behalf of the Underwriter, specifically for use in the
preparation thereof.
(vi) The financial statements of the Company,
together with related notes as set forth in the Registration
Statement, present fairly the financial position and the
results of operations and cash flows of the Company, at the
indicated dates and for the indicated periods. Such financial
statements and related notes have been prepared in accordance
with generally accepted accounting principles, consistently
applied throughout the periods involved, except as disclosed
herein, and all adjustments necessary for a fair presentation
of results for such periods have been made. The summary
financial and statistical data included in the Registration
Statement presents fairly the information shown therein and
such data has been compiled on a basis consistent with the
financial statements presented therein and the books and
records of the Company. The pro forma financial statements and
other pro forma financial information included in the
Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro
forma financial statements, have been properly compiled on the
pro forma bases described therein, and, in the opinion of the
Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to
give effect to the transactions or circumstances referred to
therein.
(vii) KPMG Peat Marwick LLP, who have certified
certain of the financial statements filed with the Commission
as part of the Registration Statement, are independent public
accountants as required by the Act and the Rules and
Regulations.
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(viii) There is no action, suit, claim or proceeding
pending or, to the knowledge of the Company, threatened
against the Company before any court or administrative agency
or otherwise which if determined adversely to the Company
might result in any material adverse change in the earnings,
business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company
or prevent the consummation of the transactions contemplated
hereby, except as set forth in the Registration Statement.
(ix) The Company has good and marketable title to all
of the properties and assets reflected in the financial
statements hereinabove described (or as described in the
Registration Statement), subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in
such financial statements (or as described in the Registration
Statement) or which are not material in amount. The Company
occupies its leased properties under valid and binding leases
conforming in all material respects to the description thereof
set forth in the Registration Statement.
(x) The Company has filed all Federal, State, local
and foreign income tax returns which have been required to be
filed and have paid all taxes indicated by said returns and
all assessments received by them or any of them to the extent
that such taxes have become due. All tax liabilities have been
adequately provided for in the financial statements of the
Company.
(xi) Since the respective dates as of which
information is given in the Registration Statement, as it may
be amended or supplemented, there has not been any material
adverse change or any development involving a prospective
material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations,
condition (financial or otherwise), or prospects of the
Company, whether or not occurring in the ordinary course of
business, and there has not been any material transaction
entered into or any material transaction that is probable of
being entered into by the Company, other than transactions in
the ordinary course of business and changes and transactions
described in the Registration Statement, as it may be amended
or supplemented. The Company has no material contingent
obligations which are not disclosed in the Company's financial
statements which are included in the Registration Statement.
(xii) The Company is not, or with the giving of
notice or lapse of time or both, will not be, as of the date
hereof, in violation of or in default under its Amended and
Restated Certificate of Incorporation (the "Certificate of
Incorporation") or Amended and Restated By-Laws (the
"By-Laws") or under any agreement, lease, contract, indenture
or other instrument or obligation to which it is a party or by
which it, or any of its properties, is bound and which default
or violation could have a material adverse effect on the
condition, financial or otherwise of the Company or the
business, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company. The
execution and delivery of this Agreement and the consummation
of the transactions herein contemplated and the fulfillment of
the terms hereof will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other
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agreement or instrument to which the Company is a party, or of
the Certificate of Incorporation or By-Laws of the Company or
any order, rule or regulation applicable to the Company of any
court or of any regulatory body or administrative agency or
other governmental body having jurisdiction.
(xiii) Each approval, consent, order, authorization,
designation, declaration or filing 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 (except such additional steps as may be required
by the Commission, the National Association of Securities
Dealers, Inc. (the "NASD") or such additional steps as may be
necessary to qualify the Shares for public offering by the
Underwriter under state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(xiv) The Company holds all material licenses,
certificates and permits from governmental authorities which
are necessary to the conduct of its business.
(xv) The Company owns or licenses adequate rights to
use all patents, patent applications, patent rights,
inventions, trade secrets, know-how, trademarks, trademark
applications, service marks, service xxxx applications, trade
names, copyrights or other information, including but not
limited to, the patents and patent applications set forth on
Schedule I (collectively, "Intellectual Property") which the
Company believes are necessary to conduct its business as now
or as proposed to be conducted by it as described in the
Registration Statement in each case where the failure to own
or license such rights could have a material adverse effect on
the business, operations, condition (financial or otherwise)
or prospects of the Company; the Company has not received any
notice of, and has no knowledge of, any infringement of or
conflict with asserted rights of the Company by others with
respect to any Intellectual Property; the Company has not
received any notice of, and has no knowledge of, any
infringement of or conflict with asserted rights of others by
the Company or any of its products or processes or with
respect to any Intellectual Property which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect on the
condition (financial or otherwise), earnings, operations,
business or business prospects of the Company; to the
knowledge of the Company, none of the patents owned or
licensed by the Company are unenforceable or invalid. The
Company has duly and properly filed or caused to be filed with
the United States Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all
patent applications described or referred to in the
Prospectus, and believes it has complied with the PTO's duty
of candor and disclosure for each of the United States patent
applications set forth on Schedule I; the Company is unaware
of any facts which would preclude the grant of a patent from
each of the patent applications set forth on Schedule I; the
Company has no knowledge of any facts which would preclude it
from having clear title to its patent applications referenced
in the Prospectus, free of any liens, claims, pledges,
security interests or other encumbrances; and the Company has
not terminated or breached and is not in violation of any
agreement covering its Intellectual Property rights, including
but not limited to, that certain Amended and
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Restated Agreement dated January 13, 1992 by and between the
Company and the State University of New York at Stony Brook,
as amended (the "SUNY Agreement"). Except as described in the
Prospectus, the Company is not aware of the granting of any
patents to third parties or the filing of patent applications
by third parties or any other rights of third parties to any
of the Company's Intellectual Property or claiming any of the
Company's products or processes which could have a material
adverse effect on the business, operations, condition
(financial or otherwise) or prospects of the Company.
(xvi) The Company has filed with the U.S. Food and
Drug Administration (the "FDA"), and all applicable state and
local regulatory bodies for and received approval of all
registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations
necessary to conduct the Company's business as it is described
in the Registration Statement; the Company is in compliance
with all such registrations, applications, licenses, requests
for exemptions, permits and other regulatory authorizations,
and all applicable FDA, state and local rules, regulations,
guidelines and policies, including, but not limited to,
applicable FDA, state and local rules, regulations and
policies relating to good manufacturing practice ("GMP") and
good laboratory practice ("GLP"); the Company has no reason to
believe that any party granting any such registration,
application, license request for exemption, permit or other
authorization is considering limiting, suspending or revoking
the same and knows of no basis for any such limitation,
suspension or revocation.
(xvii) The human clinical trials, animal studies and
other preclinical tests conducted by or on behalf of the
Company or in which the Company has participated that are
described in the Registration Statement or the results of
which are referred to in the Registration Statement, and such
studies and tests conducted on behalf of the Company, were
and, if still pending, are being conducted in accordance with
experimental protocols, procedures and controls generally used
by qualified experts in the preclinical or clinical study of
new drugs; the descriptions of the results of such studies,
tests and trials contained in the Registration Statement are
accurate and complete in all material respects, and the
Company has no knowledge of any other trials, studies or
tests, the results of which reasonably call into question the
results described or referred to in the Registration
Statement; and, except as set forth in the Registration
Statement, the Company has not received any notices or
correspondence from the FDA or any other governmental agency
requiring the termination, suspension or modification of any
animal studies, preclinical tests or clinical trials conducted
by or on behalf of the Company or in which the Company has
participated that are described in the Registration Statement
or the results of which are referred to in the Registration
Statement.
(xviii) Neither the Company, nor to the Company's
knowledge, any of its affiliates, has taken or may take,
directly or indirectly, any action designed 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 shares of Common Stock to facilitate the sale
or resale of the Shares.
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(xix) The Company is not an "investment company"
within the meaning of such term under the Investment Company
Act of 1940, as amended, (the "1940 Act") and the rules and
regulations of the Commission thereunder.
(xx) The Company 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 authorization; (ii)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxi) The Company carries, or is covered by,
insurance in such amounts and covering such risks as is
adequate for the conduct of its business and the value of its
properties and as is customary for companies engaged in
similar industries.
(xxii) The Company is in compliance in all material
respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any
liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension
plan" for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(xxiii) The Company confirms as of the date hereof
that it is in compliance with all provisions of Section 1 of
Laws of Florida, Chapter 92-198, An Act Relating to Disclosure
of doing Business with Cuba, and the Company further agrees
that if it commences engaging in business with the government
of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become
effective with the Commission or with the Florida Department
of Banking and Finance (the "Department"), whichever date is
later, or if the information reported or incorporated by
reference in the Prospectus, if any, concerning the Company's
business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate,
in a form acceptable to the Department.
(b) The Selling Stockholder represents and warrants as
follows:
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(i) The Selling Stockholder now has and at the Option
Closing Date (as such date is hereinafter defined) will have
good and marketable title to the Option Shares to be sold by
the Selling Stockholder, free and clear of any liens,
encumbrances, equities and claims, and full right, power and
authority to effect the sale and delivery of such Option
Shares; and upon the delivery of, against payment for, such
Option Shares pursuant to this Agreement, the Underwriter will
acquire good and marketable title thereto, free and clear of
any liens, encumbrances, equities and claims.
(ii) The Selling Stockholder has full right, power
and authority to execute and deliver this Agreement, the Power
of Attorney, and the Custodian Agreement referred to below and
to perform its obligations under such Agreements. The
execution and delivery of this Agreement and the consummation
by the Selling Stockholder of the transactions herein
contemplated and the fulfillment by the Selling Stockholder of
the terms hereof will not require any consent, approval,
authorization, or other order of any court, regulatory body,
administrative agency or other governmental body (except as
may be required under the Act, state securities laws or Blue
Sky laws) and will not result in a breach of any of the terms
and provisions of, or constitute a default under,
organizational documents of the Selling Stockholder, if not an
individual, or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Selling Stockholder is a
party, or of any order, rule or regulation applicable to the
Selling Stockholder of any court or of any regulatory body or
administrative agency or other governmental body having
jurisdiction.
(iii) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to, or
which has constituted, or which might reasonably be expected
to cause or result in the stabilization or manipulation of the
price of the Common Stock of the Company and, other than as
permitted by the Act, the Selling Stockholder will not
distribute any prospectus or other offering material in
connection with the offering of the Shares.
(iv) Without having undertaken to determine
independently the accuracy or completeness of either the
representations and warranties of the Company contained herein
or the information contained in the Registration Statement,
the Selling Stockholder has no reason to believe that the
representations and warranties of the Company contained in
this Section 1 are not true and correct, is familiar with the
Registration Statement and has no knowledge of any material
fact, condition or information not disclosed in the
Registration Statement which has adversely affected or may
adversely affect the business of the company or any of the
Subsidiaries; and the sale of the Option Shares by the Selling
Stockholder pursuant hereto is not prompted by any information
concerning the Company or any of the Subsidiaries which is not
set forth in the Registration Statement. The information
pertaining to the Selling Stockholder under the caption
"Selling Stockholder" in the Prospectus is complete and
accurate in all material respects.
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2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties and
covenants herein contained, and subject to the conditions herein set
forth, the Sellers agree to sell to the Underwriter and the Underwriter
agrees to purchase the Shares at a price of $_____ per share. The
obligations of the Company and of the Selling Stockholder shall be
several and not joint.
(b) Certificates in negotiable form for the total number of
the Shares to be sold hereunder by the Selling Stockholder have been
placed in custody with _______________ as custodian (the "Custodian")
pursuant to the custodian agreement executed by the Selling Stockholder
for delivery of all Option Shares (the "Custodian Agreement") to be
sold hereunder by the Selling Stockholder. The Selling Stockholder
specifically agrees that the Option Shares represented by the
certificates held in custody for the Selling Stockholder under the
Custodian Agreement are subject to the interests of the Underwriter
hereunder, that the arrangements made by the Selling Stockholder for
such custody are to that extent irrevocable, and that the obligations
of the Selling Stockholder hereunder shall not be terminable by any act
or deed of the Selling Stockholder (or by any other person, firm or
corporation including the Company, the Custodian or the Underwriter) or
by operation of law (including the dissolution of the Selling
Stockholder) or by the occurrence of any other event or events, except
as set forth in the Custodian Agreement. If any such event should occur
prior to the delivery to the Underwriter of the Option Shares
hereunder, certificates for the Option Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement
as if such event has not occurred. The Custodian is authorized to
receive and acknowledge receipt of the proceeds of the sale of the
Shares held by it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be
made in same day funds by certified or bank cashier's check drawn to
the order of the Company or by wire transfer to the Company to an
account designated by the Company against delivery of certificates
therefor to the Underwriter for its account. Such payment and delivery
are to be made at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., New York time,
on the third business day after the date of this Agreement or at such
other time and date not later than five business days thereafter as the
Underwriter and the Company shall agree upon, such time and date being
herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for
trading and on which banks in New York are open for business and are
not permitted by law or executive order to be closed.) The certificates
for the Firm Shares will be delivered in such denominations and in such
registrations as the Underwriter request in writing not later than the
second full business day prior to the Closing Date, and will be made
available for inspection by the Underwriter at least one business day
prior to the Closing Date.
(d) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Selling Stockholder hereby grants an option to
the Underwriter to purchase the Option Shares at the price per share as
set forth in the first paragraph of this Section 2. The option granted
hereby may be exercised in whole or in part by giving written notice
(i) at any time before the Closing Date and (ii) only once
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thereafter within 30 days after the date of this Agreement, by the
Underwriter to the Company, the Attorney-in-Fact, and the Custodian
setting forth the number of Option Shares as to which the Underwriter
is exercising the option, the names and denominations in which the
Option Shares are to be registered and the time and date at which such
certificates are to be delivered. The time and date at which
certificates for Option Shares are to be delivered shall be determined
by the Underwriter but shall not be earlier than three nor later than
10 full business days after the exercise of such option, nor in any
event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of
the option is three or more days before the Closing Date, the notice of
exercise shall set the Closing Date as the Option Closing Date. The
option with respect to the Option Shares granted hereunder may be
exercised only to cover over-allotments in the sale of the Firm Shares
by the Underwriter. The Underwriter may cancel such option at any time
prior to its expiration by giving written notice of such cancellation
to the Company and the Attorney-in-Fact. To the extent, if any, that
the option is exercised, payment for the Option Shares shall be made on
the Option Closing Date (i) in same day funds by certified or bank
cashier's check drawn to the order of "_______________, as Custodian"
or (ii) to an account designated by the Custodian, for the Option
Shares to be sold by the Selling Stockholder against delivery of
certificates therefor at the offices of Xxxxxxx, Phleger & Xxxxxxxx
LLP, 1633 Broadway, 47th Floor, New York, New York.
(e) If on the Option Closing Date the Selling Stockholder
fails to sell the Option Shares which the Selling Stockholder has
agreed to sell on such date, the Company agrees that it will sell or
arrange for the sale of that number of shares of Common Stock to the
Underwriter which represent the Option Shares which the Selling
Stockholder has failed to so sell or such lesser number as may be
requested by the Underwriter.
3. OFFERING BY THE UNDERWRITER.
It is understood that the Underwriter is to make a public
offering of the Firm Shares as soon as the Underwriter deems it
advisable to do so. The Firm Shares are to be initially offered to the
public at the initial public offering price set forth in the
Prospectus. The Underwriter may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at
all, that any Option Shares are purchased pursuant to Section 2 hereof,
the Underwriter will offer them to the public on the foregoing terms.
4. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDER.
(a) The Company covenants and agrees with the Underwriter
that:
(i) The Company will (A) use its best efforts to
cause the Registration Statement to become effective and, if
the procedure in Rule 430A of the Rules and Regulations is
followed, to prepare and timely file with the Commission under
Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Underwriter containing information
previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules
and Regulations, and (B) not file any amendment to the
Registration Statement or supplement to the Prospectus of
which the Underwriter shall not previously have been advised
and
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furnished with a copy or to which the Underwriter shall have
reasonably objected in writing or which is not in compliance
with the Act and the Rules and Regulations.
(ii) The Company will advise the Underwriter promptly
(A) when the Registration Statement or any post-effective
amendment thereto shall have become effective, (B) of receipt
of any comments from the Commission, (C) of any request of the
Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional
information, and (D) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution
of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to
obtain as soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Underwriter
in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions as the Underwriter may
reasonably have designated in writing and will make such
applications, file such documents, and furnish such
information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified
or required to file such a consent. The Company will, from
time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such
qualifications in effect for so long a period as the
Underwriter may reasonably request for distribution of the
Shares.
(iv) The Company will deliver to, or upon the order
of, the Underwriter, from time to time, as many copies of any
Preliminary Prospectus as the Underwriter may reasonably
request. The Company will deliver to, or upon the order of,
the Underwriter during the period when delivery of a
Prospectus is required under the Act, as many copies of the
Prospectus in final form, or as thereafter amended or
supplemented, as the Underwriter may reasonably request. The
Company will deliver to the Underwriter at or before the
Closing Date, four signed copies of the Registration Statement
and all amendments thereto including all exhibits filed
therewith, and will deliver to the Underwriter such number of
copies of the Registration Statement (including such number of
copies of the exhibits filed therewith that may reasonably be
requested), and of all amendments thereto, as the Underwriter
may reasonably request.
(v) The Company will comply with the Act and the
Rules and Regulations, and the Securities Exchange Act of 1934
(the "Exchange Act"), and the rules and regulations of the
Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement
and the Prospectus. If during the period in which a prospectus
is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the
Underwriter, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the
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light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement the Prospectus to
comply with any law, the Company promptly will prepare and
file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the
law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but
in any event not later than 15 months after the effective date
of the Registration Statement, an earnings statement (which
need not be audited) in reasonable detail, covering a period
of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earning
statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 of the Rules and Regulations and will
advise the Underwriter in writing when such statement has been
so made available.
(vii) The Company will, for a period of five years
from the Closing Date, deliver to the Underwriter copies of
annual reports and copies of all other documents, reports and
information furnished by the Company to its stockholders or
filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant
to the Act or the Securities Exchange Act of 1934, as amended.
The Company will deliver to the Underwriter similar reports
with respect to significant subsidiaries, as that term is
defined in the Rules and Regulations, which are not
consolidated in the Company's financial statements.
(viii) Except for the issuance of shares of Common
Stock pursuant to the exercise of options granted under the
Company's stock option plans, no offering, sale, short sale or
other disposition of any shares of Common Stock of the Company
or other securities convertible into or exchangeable or
exercisable for shares of Common Stock or derivative of Common
Stock (or agreement for such) will be made for a period of 90
days after the date of this Agreement, directly or indirectly,
by the Company otherwise than hereunder or with the prior
written consent of Alex. Xxxxx & Sons Incorporated.
(ix) The Company will use its best efforts to list,
subject to notice of issuance, the Shares on the Nasdaq
National Market.
(x) The Company has caused each officer and director
and five percent (5%) stockholder of the Company and Xxxxxxx &
Xxxxxxx Development Corporation and InnoCal, L.P. to furnish
to the Underwriter on or prior to the date of this Agreement,
a letter or letters, in form and substance satisfactory to the
Underwriter, pursuant to which each such person shall agree
not to offer, sell, sell short or otherwise dispose of any
shares of Common Stock of the Company or other capital stock
of the Company, or any other securities convertible,
exchangeable or exercisable for Common Stock or derivative of
Common Stock owned by such person for a period of 90 days
after the date of this Agreement, directly or indirectly,
except
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with the prior written consent of Alex. Xxxxx & Sons
Incorporated ("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its
sale of the Shares as set forth in the Prospectus and shall
file such reports with the Commission with respect to the sale
of the Shares and the application of the proceeds therefrom as
may be required in accordance with Rule 463 under the Act.
(xii) The Company shall not invest, or otherwise use
the proceeds received by the Company from its sale of the
Shares in such a manner as would require the Company or any of
the Subsidiaries to register as an investment company under
the 1940 Act.
(xiii) The Company will maintain a transfer agent
and, if necessary under the jurisdiction of incorporation of
the Company, a registrar for the Common Stock.
(xiv) The Company will not take, directly or
indirectly, any action designed to cause or result in, or that
has constituted or might reasonably be expected to constitute,
the stabilization or manipulation of the price of any
securities of the Company.
(b) The Selling Stockholder covenants and agrees with the
Underwriter that:
(i) No offering, sale, short sale or other
disposition of any shares of Common Stock of the Company or
other capital stock of the Company or other securities
convertible into or exchangeable or exercisable for shares of
Common Stock or derivatives of Common Stock owned by the
Selling Stockholder (or agreement for such) or request the
registration for the offer or sale of any of the foregoing (or
as to which the Selling Stockholder has the right to direct
the disposition of) will be made for a period of ninety (90)
days after the date of this Agreement, directly or indirectly,
by the Selling Stockholder otherwise than hereunder or with
the prior written consent of Alex. Xxxxx & Sons Incorporated.
(ii) In order to document the Underwriter's
compliance with the reporting and withholding provisions of
the Tax Equity and Fiscal Responsibility Act of 1982 and the
Interest and Dividend Tax Compliance Act of 1983 with respect
to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to you prior to or at the
Closing Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu
thereof).
(iii) The Selling Stockholder will not take, directly
or indirectly, any action designed to cause or result in, or
that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of
any securities of the Company.
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5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to
the performance of the obligations of the Sellers under this Agreement,
including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements
of counsel for the Company and the Selling Stockholder; the cost of
printing and delivering to, or as requested by, the Underwriter copies
of the Registration Statement, Preliminary Prospectuses, the
Prospectus, this Agreement, the Additional Listing Application, the
Blue Sky Survey and any supplements or amendments thereto; the filing
fees of the Commission; the filing fees and expenses (including legal
fees and disbursements) incident to securing any required review by the
NASD of the terms of the sale of the Shares; the Listing Fee of the
Nasdaq National Market; and the expenses, including the fees and
disbursements of counsel for the Underwriter, incurred in connection
with the qualification of the Shares under State securities or Blue Sky
laws. The Selling Stockholder has agreed with the Company to reimburse
the Company for a portion of such expenses. To the extent, if at all,
that the Selling Stockholder engages special legal counsel to represent
it in connection with this offering, the fees and expenses of such
counsel shall be borne by the Selling Stockholder. Any transfer taxes
imposed on the sale of the Shares to the Underwriter will be paid by
the Seller pro rata. The Company agrees to pay all costs and expenses
of the Underwriter, including the fees and disbursements of counsel for
the Underwriter, incident to the offer and sale of directed shares of
the Common Stock by the Underwriter to employees and persons having
business relationships with the Company. The Sellers shall not,
however, be required to pay for any of the Underwriter's expenses
(other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall
not be consummated because the conditions in Section 6 hereof are not
satisfied, or because this Agreement is terminated by the Underwriter
pursuant to Section 10 hereof, or by reason of any failure, refusal or
inability on the part of the Company or the Selling Stockholder to
perform any undertaking or satisfy any condition of this Agreement or
to comply with any of the terms hereof on their part to be performed,
then the Company shall reimburse the Underwriter for reasonable
out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred in connection with investigating, marketing and
proposing to market the Shares or in contemplation of performing their
obligations hereunder; but the Company and the Selling Stockholder
shall not in any event be liable to the Underwriter for damages on
account of loss of anticipated profits from the sale of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITER.
The obligation of the Underwriter to purchase the Firm Shares
on the Closing Date and the Option Shares, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date or the
Option Closing Date, as the case may be, of the representations and
warranties of the Company and the Selling Stockholder contained herein,
and to the performance by the Company and the Selling Stockholder of
their covenants and obligations hereunder and to the following
additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 424 and Rule 430A of the Rules and Regulations shall
have been made, and any request of the Commission for additional
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information (to be included in the Registration Statement or otherwise)
shall have been disclosed to the Underwriter and complied with to their
reasonable satisfaction. No stop order suspending the effectiveness of
the Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been taken
or, to the knowledge of the Company, shall be contemplated by the
Commission and no injunction, restraining order, or order of any nature
by a Federal or state court of competent jurisdiction shall have been
issued as of the Closing Date which would prevent the issuance of the
Shares.
(b) The Underwriter shall have received on the Closing Date or
the Option Closing Date, as the case may be, the opinion of Xxxxxxxx
Ingersoll, counsel for the Company ("Company Counsel"), dated the
Closing Date or the Option Closing Date, as the case may be, addressed
to the Underwriter to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own or lease its properties and conduct its
business as described in the Registration Statement; the
Company is duly qualified to transact business in all
jurisdictions in which the conduct of its business requires
such qualification, or in which the failure to qualify would
have a materially adverse effect upon the business of the
Company. The Company has no significant subsidiaries.
(ii) The Company has authorized and outstanding
capital stock as set forth under the caption "Capitalization"
in the Prospectus; the authorized shares of the Company's
Common Stock have been duly authorized; the outstanding shares
of the Company's Common Stock, including the Shares to be sold
by the Selling Stockholder, have been duly authorized and
validly issued and are fully paid and non-assessable; all of
the Shares conform to the description thereof contained in the
Prospectus; the certificates for the Shares are in due and
proper form; and all dividends that were due and payable with
respect to the Company's mandatorily redeemable convertible
preferred stock on or prior to its conversion have been paid
or the obligation to pay such dividends has been extinguished.
(iii) The Firm Shares and the Option Shares, if any,
to be sold by the Company pursuant to this Agreement have been
duly authorized and will be validly issued, fully paid and
non-assessable when issued and paid for as contemplated by
this Agreement; and no preemptive rights of stockholders exist
with respect to any of the Shares or the issue or sale
thereof.
(iv) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or
rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as
described in the Prospectus, to the knowledge of such counsel,
no holder of any securities of the Company or any other person
has the right, contractual or otherwise,
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which has not been satisfied or effectively waived, to cause
the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Shares or the right
to have any Common Stock or other securities of the Company
included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require
registration under the Act of any shares of Common Stock or
other securities of the Company.
(v) The Registration Statement has become effective
under the Act and, to the knowledge of Company counsel, no
stop order proceedings with respect thereto have been
instituted or are pending or threatened under the Act.
(vi) The Registration Statement, the Prospectus and
each amendment or supplement thereto comply as to form in all
material respects with the requirements of the Act and the
applicable rules and regulations thereunder (except that such
counsel need express no opinion as to the financial statements
and other financial and statistical data included therein).
(vii) The statements under the captions "Other
Potential Applications" to the extent such statements pertain
to the Company's letter of intent with the National Cancer
Institute, and the Company's evaluation agreement with Xxxxx &
Nephew Research Limited, the Company's agreement with
Boeringer Mannheim Italia SpA and the Company's research
agreement with Instituto Gentili, "Manufacturing and
Suppliers" to the extent such statements pertain to the
Company's manufacturing agreement with Applied Analytical
Industries, Inc. and the Company's supply agreement with
Hovione International Limited, "Description of Capital Stock"
and "Shares Eligible for Future Sale" in the Prospectus,
insofar as such statements constitute a summary of documents
referred to therein or matters of law, fairly summarize in all
material respects the information called for with respect to
such documents and matters.
(viii) To the knowledge of Company counsel, no
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus are not so filed or described as
required, and such contracts and documents as are summarized
in the Registration Statement or the Prospectus are fairly
summarized in all material respects.
(ix) To the knowledge of Company counsel, no material
legal or governmental proceedings are pending or threatened
against the Company.
(x) The execution and delivery of this Agreement and
the consummation of the transactions herein contemplated do
not and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, the
Certificate of Incorporation or By-Laws of the Company, or any
agreement or instrument known to such counsel to which the
Company is a party or by which the Company may be bound.
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(xi) This Agreement has been duly authorized,
executed and delivered by the Company.
(xii) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body is necessary in
connection with the execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
(other than as may be required by the NASD or as required by
State securities and Blue Sky laws as to which such counsel
need express no opinion) except such as have been obtained or
made, specifying the same.
(xiii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by
this Agreement, and application of the net proceeds therefrom
as described in the Prospectus, required to register as an
investment company under the 1940 Act.
(xiv) This Agreement has been duly authorized,
executed and delivered on behalf of the Selling Stockholder.
(xv) The Selling Stockholder has full legal right,
power and authority, and any approval required by law (other
than as required by State securities and Blue Sky laws as to
which such counsel need express no opinion), to sell, assign,
transfer and deliver the portion of the Shares to be sold by
the Selling Stockholder.
(xvi) The Custodian Agreement and the Power of
Attorney executed and delivered by the Selling Stockholder is
valid and binding.
(xvii) The Underwriter (assuming that it is a bona
fide purchaser within the meaning of the Uniform Commercial
Code) has acquired good and marketable title to the Shares
being sold by the Selling Stockholder on the Option Closing
Date, free and clear of all liens, encumbrances, equities and
claims.
In rendering such opinion Company Counsel may rely as to
matters governed by the laws other than the laws of the State of New
Jersey, the General Corporation Law of the State of Delaware or Federal
laws on local counsel in such jurisdictions provided that in each case
Company Counsel shall state that they believe that they and the
Underwriter are justified in relying on such other counsel. In addition
to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration
Statement, at the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Act) and as of the Closing Date or the Option
Closing Date, as the case may be, 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, and
(ii) the Prospectus, or any supplement thereto, on the date it was
filed pursuant to the Rules and Regulations and as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they are made,
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not misleading (except that with respect to the Registration Statement
and the Prospectus, such counsel need express no view as to financial
statements and other financial and statistical data included therein).
With respect to such statement, Company Counsel may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.
(c) The Underwriter shall have received from Xxxxxxx, Xxxxxxx
& Xxxxxxxx LLP, counsel for the Underwriter ("Underwriter's Counsel"),
an opinion dated the Closing Date or the Option Closing Date, as the
case may be, substantially to the effect specified in subparagraphs
(iii), (vi), (x) and (xi) of Paragraph (b) of this Section 6, and that
the Company is a duly organized and validly existing corporation under
the laws of the State of Delaware. In rendering such opinion
Underwriter's Counsel may rely as to all matters governed other than by
the laws of the State of New York, the General Corporation Law of the
State of Delaware or Federal laws on the opinion of counsel referred to
in Paragraph (b) of this Section 6. In addition to the matters set
forth above, such opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads them
to believe that (i) the Registration Statement, or any amendment
thereto, as of the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to
Rule 430A under the Act) and as of the Closing Date or the Option
Closing Date, as the case may be, 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, and
(ii) the Prospectus, or any supplement thereto, on the date it was
filed pursuant to the Rules and Regulations and as of the Closing Date
or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact,
necessary in order to make the statements, in the light of the
circumstances under which they are made, not misleading (except that
such counsel need express no view as to financial statements, schedules
and statistical information therein). With respect to such statement,
Underwriter's Counsel may state that their belief is based upon the
procedures set forth therein, but is without independent check and
verification.
(d) The Underwriter shall have received at or prior to the
Closing Date from Underwriter's Counsel a memorandum or summary, in
form and substance satisfactory to the Underwriter, with respect to the
qualification for offering and sale by the Underwriter of the Shares
under the State securities or Blue Sky laws of such jurisdictions as
the Underwriter may reasonably have designated to the Company.
(e) The Underwriter shall have received, on each of the dates
hereof, the Closing Date and the Option Closing Date, as the case may
be, a letter dated the date hereof, the Closing Date or the Option
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriter, of KPMG Peat Marwick, LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that
in their opinion the financial statements examined by them and included
in the Registration Statement comply in form in all material respects
with the applicable accounting requirements of the Act and the related
published Rules and Regulations; and containing such other statements
and information as is ordinarily included in accountants' "comfort
letters" to Underwriter with respect to the financial
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statements and certain financial and statistical information contained
in the Registration Statement and Prospectus.
(f) The Underwriter shall have received on the Closing Date or
the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial
Officer of the Company to the effect that, as of the Closing Date or
the Option Closing Date, as the case may be, each of them severally
represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for such purpose have been taken or are, to his or
her knowledge, contemplated by the Commission;
(ii) The representations and warranties of the
Company contained in Section 1 hereof are true and correct as
of the Closing Date or the Option Closing Date, as the case
may be;
(iii) All filings required to have been made pursuant
to Rules 424 or 430A under the Act have been made;
(iv) He or she has carefully examined the
Registration Statement and the Prospectus and, in his or her
opinion, as of the effective date of the Registration
Statement, the statements contained in the Registration
Statement were true and correct, and such Registration
Statement, as of the effective date, and Prospectus, as of its
date, did not omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should
have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement
or amendment; and
(v) Since the respective dates as of which
information is given in the Registration Statement and
Prospectus, there has not been any material adverse change or
any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise,
of the Company or the earnings, business, management,
properties, assets, rights, operations, condition (financial
or otherwise) or prospects of the Company, whether or not
arising in the ordinary course of business.
(g) The Company and the Selling Stockholder shall have
furnished to the Underwriter such further certificates and documents
confirming the representations and warranties, covenants and conditions
contained herein and related matters as the Underwriter may reasonably
have requested.
(h) The Firm Shares and Option Shares, if any, shall have been
approved for designation upon notice of issuance on the Nasdaq National
Market.
(i) The Lockup Agreements described in Section 4 (j) shall be
in full force and effect.
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(j) As of the Closing Date, the Company shall have outstanding
no shares of capital stock other than Common Stock.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if
they are in all material respects satisfactory to the Underwriter and
to Underwriter's Counsel.
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this
Agreement to be fulfilled, the obligations of the Underwriter hereunder
may be terminated by the Underwriter by notifying the Company and the
Selling Stockholder of such termination in writing or by telegram at or
prior to the Closing Date or the Option Closing Date, as the case may
be.
In such event, the Company, the Selling Stockholder and the
Underwriter shall not be under any obligation to each other (except to
the extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion
of the Shares required to be delivered as and when specified in this
Agreement are subject to the conditions that at the Closing Date or the
Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
in effect or proceedings therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company and the Selling Stockholder, jointly and
severally, agree to indemnify and hold harmless the Underwriter and
each person, if any, who controls the Underwriter within the meaning of
the Act, against any losses, claims, damages or liabilities to which
the Underwriter or any such controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or (ii) 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 will reimburse the Underwriter
and each such controlling person upon demand promptly after receipt of
invoices for any legal or other expenses reasonably incurred by the
Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage or liability, action or
proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not the Underwriter
or controlling person is a party to any action or proceeding; provided,
however, that the Company and the Selling Stockholder 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 an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Underwriter specifically for use therein or in the preparation
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thereof. In no event, however, shall the liability of the Selling
Stockholder for indemnification under this Section 8(a) exceed the
proceeds received by the Selling Stockholder from the Underwriter in
the offering. This indemnity agreement will be in addition to any
liability which the Company or the Selling Stockholder may otherwise
have.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed
the Registration Statement, the Selling Stockholder, and each person,
if any, who controls the Company or the Selling Stockholder within the
meaning of the Act, against any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) to which the Company or
any such director, officer, Selling Stockholder or controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made; and will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, Selling Stockholder or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided,
however, that the Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Underwriter specifically for use therein or in the preparation thereof.
This indemnity agreement will be in addition to any liability which the
Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to this Section 8, such person
(the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing. No
indemnification provided for in Section 8(a) or (b) shall be available
to any party who shall fail to give notice as provided in this Section
8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially
prejudiced by the failure to give such notice, but the failure to give
such notice shall not relieve the indemnifying party or parties from
any liability which it or they may have to the indemnified party for
contribution or otherwise than on account of the provisions of Section
8(a) or (b). In case any such 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 therein 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 shall pay as incurred the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own
expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the reasonable fees
and expenses of the counsel retained by the indemnified party in the
event (i) the
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indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be, in the reasonable judgment of the
indemnifying party, inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have
failed to assume the defense and employ counsel acceptable to the
indemnified party within a reasonable period of time after notice of
commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified
parties. Such firm shall be designated in writing by the Underwriter in
the case of parties indemnified pursuant to Section 8(a) and by the
Company in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
In addition, the indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding of which indemnification may be sought hereunder (whether or
not any indemnified party is an actual or potential party to such
claim, action or proceeding) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising out of such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder
on the one hand and the Underwriter on the other from the offering of
the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the
Company and the Selling Stockholder on the one hand and the Underwriter
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company
and the Selling Stockholder on the one hand and the Underwriter on the
other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions
received by the Underwriter, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company and the Selling Stockholder on the one hand or the
Underwriter on the other and the parties'
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relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Stockholder and the Underwriter agree
that it would not be just and equitable if contributions pursuant to
this Section 8(d) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) the
Underwriter shall not be required to contribute any amount in excess of
the underwriting discounts and commissions applicable to the Shares
purchased by the Underwriter, (ii) 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, and (iii) the Selling Stockholder
shall not be required to contribute any amount in excess of the
proceeds received by the Selling Stockholder from the Underwriter in
the offering.
(e) In any action or proceeding relating to the Registration
Statement, any Preliminary Prospectus, the Prospectus or any supplement
or amendment thereto, each party against whom contribution may be
sought under this Section 8 hereby consents to the jurisdiction of any
court having jurisdiction over any other contributing party, agrees
that process issuing from such court may be served upon him or it by
any other contributing party and consents to the service of such
process and agrees that any other contributing party may join him or it
as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred upon forwarding invoices to the
indemnifying party. The indemnity and contribution agreements contained
in this Section 8 and the representations and warranties of the Company
set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of
the Underwriter or any person controlling the Underwriter, the Company,
its directors or officers or any persons controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to the Underwriter, or to
the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
9. NOTICES.
All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered, telecopied or
telegraphed and confirmed as follows: if to the Underwriter, to Alex.
Xxxxx & Sons Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
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21202-3220, Attention: Xx. Xxxxx X. Xxxxxx, with a copy to Alex. Xxxxx
& Sons Incorporated, 0 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000-0000.
Attention: General Counsel; if to the Company, to
CollaGenex Pharmaceuticals, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Ph.X.
Xxxxxxx & Xxxxxxx Development Corporation
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
10. TERMINATION.
This Agreement may be terminated by the Underwriter by notice
to the Sellers as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by the Underwriter for sale by notice to the
Underwriter, or (ii) 11:30 a.m. on the first business day following the
date of this Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company or the earnings, business, management,
properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company, whether or not arising in the
ordinary course of business, (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other
national or international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial
markets of the United States would, in the Underwriter's reasonable
judgment, make it impracticable to market the Shares or to enforce
contracts for the sale of the Shares, (iii) suspension of trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange,
(iv) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental
authority which in the Underwriter's opinion materially and adversely
affects or may materially and adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by
United States or New York State authorities, (vi) any downgrading in
the rating of the Company's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Exchange Act), (vii) the suspension of trading
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of the Company's Common Stock by the Commission on the Nasdaq National
Market or (viii) the taking of any action by any governmental body or
agency in respect of its monetary or fiscal affairs which in the
Underwriter's reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(c) as provided in Section 6 of this Agreement.
11. SUCCESSORS.
This Agreement has been and is made solely for the benefit of
the Underwriter, the Company and the Selling Stockholder and their
respective successors, executors, administrators, heirs and assigns,
and the officers, directors and controlling persons referred to herein,
and no other person will have any right or obligation hereunder. No
purchaser of any of the Shares from the Underwriter shall be deemed a
successor or assign merely because of such purchase.
12. INFORMATION PROVIDED BY THE UNDERWRITER.
The Company and the Underwriter acknowledge and agree that the
only information furnished or to be furnished by the Underwriter to the
Company for inclusion in any Prospectus or the Registration Statement
consists of the information set forth in the last paragraph on the
front cover page (insofar as such information relates to the
Underwriter), legends required by Item 502(d) of Regulation S-K under
the Act and the information under the caption "Underwriting" in the
Prospectus.
13. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of the Underwriter or controlling
person thereof, or by or on behalf of the Company or its directors or
officers and (c) delivery of and payment for the Shares under this
Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Maryland.
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If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Stockholder, the
Company and the Underwriter in accordance with its terms.
Very truly yours,
COLLAGENEX PHARMACEUTICALS, INC.
By:_____________________________________________
Xxxxx X. Xxxxxxxxx, Ph.D.
President and Chief Executive Officer
XXXXXXX & XXXXXXX DEVELOPMENT CORPORATION
By:_____________________________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
ALEX. XXXXX & SONS INCORPORATED
By: Alex. Xxxxx & Sons Incorporated
By:____________________________________
Authorized Officer
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SCHEDULE I
PATENTS/PATENT APPLICATIONS
27
