EXHIBIT 1.1
7,000,000 Shares
TANOX, INC.
Common Stock
UNDERWRITING AGREEMENT
April 6, 2000
CIBC World Markets Corp.
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxx Xxxxxx Read LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
KBC Securities Inc.
c/o CIBC World Markets Corp.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the
Several Underwriters named on
Schedule I attached hereto
Ladies and Gentlemen:
Tanox, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters"),
for whom you are acting as Representatives (the "Representatives"), an aggregate
of 7,000,000 shares (the "Firm Shares") of the Company's Common Stock, $.01 par
value (the "Common Stock"). The respective amounts of the Firm Shares to be
purchased by each of the several Underwriters are set forth opposite their names
on Schedule I hereto. In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional 1,050,000 shares (the
"Option Shares") of Common Stock from it for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at a price of $[o] per share (the "Initial Price"), the number of
Firm Shares set forth opposite the name of such Underwriter under the column
"Number of Firm Shares" on Schedule I to this Agreement, subject to adjustment
in accordance with Section 10 hereof.
(b) The Company grants to the several Underwriters an option
to purchase, severally and not jointly, all or any part of the Option Shares at
the Initial Price. The number of Option Shares to be purchased by each
Underwriter shall be the same percentage (adjusted by the Representatives to
eliminate fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date (as defined below), and from time to time thereafter within
30 days after the date of this Agreement, in each case upon written, facsimile
or telegraphic notice, or verbal or telephonic notice confirmed by written,
facsimile or telegraphic notice, by the Representatives to the Company no later
than 12:00 noon, New York City time, on the business day before the Firm Shares
Closing Date or at least two business days before the Option Shares Closing Date
(as defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Shares
to the Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (same day) funds drawn to the order of the
Company for the shares purchased from the Company, against delivery of the
certificates therefor to the Representatives, shall take place at the offices of
CIBC World Markets Corp., Xxx Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
at 10:00 a.m., New York City time, on the third business day following the date
of this Agreement, or at such time on such other date, not later than 10
business days after the date of this Agreement, as shall
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be agreed upon by the Company and the Representatives (such time and date of
delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is
exercised in whole or in part on one or more occasions, delivery by the Company
of the Option Shares to the Representatives for the respective accounts of the
Underwriters and payment of the purchase price thereof in immediately available
funds by wire transfer or by certified or official bank check or checks payable
in New York Clearing House (same day) funds to the Company shall take place at
the offices of CIBC World Markets Corp. specified above at the time and on the
date (which may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in Section 1(b)
(such time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and the Option Shares Closing Date
are called, individually, a "Closing Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a Registration Statement (as hereinafter
defined) on Form S-1 (No. 333-96025), including a preliminary prospectus
relating to the Shares, and such amendments thereof as may have been required to
the date of this Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Preliminary Prospectus (as hereinafter
defined) have heretofore been delivered by the Company to the Representatives.
The term "Preliminary Prospectus" means any preliminary prospectus (as described
in Rule 430 of the Rules) included at any time as a part of the Registration
Statement or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules. The term "Registration
Statement" as used in this Agreement means the initial registration statement
(including all exhibits, financial schedules and information deemed to be a part
of the Registration Statement through incorporation by reference or otherwise),
as
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amended at the time and on the date it becomes effective (the "Effective Date")
including the information (if any) deemed to be part thereof at the time of
effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an
abbreviated registration statement to register additional Shares pursuant to
Rule 462(b) under the Rules (the "462(b) Registration Statement") then any
reference herein to the Registration Statement shall also be deemed to include
such 462(b) Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
on, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a
public offering of the Shares, as set forth in and pursuant to the Prospectus,
as soon after the Effective Date and the date of this Agreement as the
Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement
complied, and on the date of the Prospectus, the date any post-effective
amendment to the Registration Statement becomes effective, the date any
supplement or amendment to the Prospectus is filed with the Commission and each
Closing Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) will comply, in all material respects, with the
applicable provisions of the Securities Act and the Rules and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Commission thereunder. The Registration Statement did not and
will not, as of the Effective Date, and as of the other dates referred to above,
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. The Prospectus (and any amendment thereof or
supplement thereto) will not, at the date of the Prospectus, at the date of any
such amendments or supplements thereto or at any Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circum stances under which they were made, not misleading. When any
related Preliminary Prospectus was first filed with the Commission (whether
filed as part of the Registration Statement or any amendment
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thereto or pursuant to Rule 424(a) of the Rules) and when any amendment thereof
or supplement thereto was first filed with the Commission, such Preliminary
Prospectus, as amended or supplemented, complied in all material respects with
the applicable provisions of the Securities Act and the Rules and did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If applicable, each Preliminary Prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
If Rule 434 is used, the Company will comply with the require ments of Rule 434
and the Prospectus shall not be "materially different," as such term is used in
Rule 434, from the Prospectus included in the Registration Statement at the time
it became effective. Notwithstanding the foregoing, none of the representations
and warranties in this paragraph 4(a) shall apply to statements in, or omissions
from, the Registration Statement, any Preliminary Prospectus or the Prospectus
relating to any Underwriter made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the Representatives on
behalf of the several Underwriters expressly for use in the Registration
Statement, any Preliminary Prospectus or the Prospectus. With respect to the
preceding sentence, the Company acknowledges that the only information furnished
in writing by the Representatives on behalf of the several Underwriters
expressly for use in the Registration Statement, any Preliminary Prospectus or
the Prospectus is the paragraph with respect to stabilization on the inside
front cover page of the Prospectus and any Preliminary Prospectus and the
statements contained under the caption "Underwriting" in the Prospectus or any
Preliminary Prospectus. The Company has not distributed any offering materials
in connection with the offering or sale of the Shares other than the
Registration Statement, the Preliminary Prospectus or the Prospectus or any
other materials, if any, permitted by the Securities Act or the Rules.
(b) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the effectiveness of
the Registration Statement or suspending or preventing the use of the Prospectus
has been issued and no proceedings for that purpose have been instituted or are
threatened under the Securities Act. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) of the Rules has been or will be
made in the manner and within the time period required by such Rule 424(b).
(c) The financial statements of the Company (including all
notes and schedules thereto) included in the Registration Statement and
Prospectus present fairly the financial position, the results of operations, the
statements of cash
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flows and the statements of stockholders' equity and the other information
purported to be shown therein of the Company at the respective dates and for the
respective periods to which they apply; and such financial statements and
related schedules and notes have been prepared in conformity with United States
generally accepted accounting principles, consistently applied throughout the
periods involved, and all adjustments necessary for a fair presentation of the
results for such periods have been made. The summary and selected financial data
included in the Prospectus present fairly the information shown therein as at
the respective dates and for the respective periods specified and the summary
and selected financial data have been presented on a basis consistent with the
consolidated financial statements so set forth in the Prospectus and other
financial information.
(d) Xxxxxx Xxxxxxxx LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as required by the
Securities Act and the Rules.
(e) The Company and each of its Subsidiaries (as hereinafter
defined) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, formation or
organization. Except as described in the Prospectus, the Company has no
subsidiary or subsidiaries and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other business
organization. The Company and each such Subsidiary or other entity controlled
directly or indirectly by the Company (collectively, "Subsidiaries") is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it requires
such qualification, except for such jurisdictions where the failure to so
qualify would not have a material adverse effect on the assets or properties,
business, prospects, results of operations or financial condition of the Company
and its Subsidiaries, taken as a whole (a "Material Adverse Effect"). Except as
described in the Prospectus, the Company does not own, lease or license any
asset or property or conduct any business outside the United States of America.
The Company and each of its Subsidiaries has all requisite corporate power and
authority, and all necessary authorizations, approvals, consents, orders,
licenses, certificates and permits of and from all governmental or regulatory
bodies or any other person or entity
(collectively, the "Permits"), to own, lease and license its assets and
properties and conduct its business, all of which are valid and in full force
and effect, as described in the Registration Statement and the Prospectus,
except where the lack of such Permits, individually or in the aggregate, would
not have a Material Adverse Effect. The Company and each of its Subsidiaries has
fulfilled and performed in all material respects
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all of its material obligations with respect to such Permits and no event has
occurred that allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the Company thereunder. Except as may be required under the Securities Act
and state and foreign Blue Sky laws, no other Permits are required to enter
into, deliver and perform this Agreement and to issue and sell the Shares.
(f) The Company and its Subsidiaries own or are licensed to
use all patents, patent applications, inventions, trademarks, trade names,
applications for registration of trademarks, service marks, service xxxx
applications, copyrights, know-how, manufacturing processes, formulae, trade
secrets, licenses and rights in any thereof and any other intangible property
and assets (herein called the "Proprietary Rights") which are material to the
businesses of the Company and its Subsidiaries as now conducted and as proposed
to be conducted, in each case as described in the Prospectus. The description of
the Proprietary Rights in the Prospectus is correct in all material respects and
fairly and correctly describes the Company's and its Subsidiaries' rights with
respect thereto. Except for matters specifically described in the Prospectus
under the caption "Business - Pending Legal Proceedings," (i) the Company does
not have any knowledge of, and the Company has not given or received any notice
of, any pending conflicts with or infringement of the rights of others with
respect to any Proprietary Rights or with respect to any license of Proprietary
Rights; (ii) no action, suit, arbitration, or legal, administrative or other
proceeding, or investigation is pending, or, to the best knowledge of the
Company, threatened, which involves any Proprietary Rights; (iii) neither the
Company nor any Subsidiary is subject to any judgment, order, writ, injunction
or decree of any court or any Federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any arbitrator, or has entered into or is a party to any
contract which restricts or impairs the use of any such Proprietary Rights in a
manner which would have a Material Adverse Effect on the use of any of the
Proprietary Rights; (iv) to the best knowledge of the Company, no Proprietary
Rights used by the Company or any of its Subsidiaries, and no services or
products sold by the Company or any of its Subsidiaries, conflict with or
infringe upon any Proprietary Rights available to any third party; (v) neither
the Company nor any Subsidiary has received written notice of any pending
conflict with or infringement upon such third party proprietary rights; (vi)
neither the Company nor any Subsidiary has entered into any consent, indemnifica
tion, forbearance to xxx or settlement agreement with respect to Proprietary
Rights other than in the ordinary course of business; (vii) no claims have been
asserted by any person with respect to the validity of the Company's or any of
its Subsidiaries' ownership or right to use the Proprietary Rights and, to the
best knowledge of the Company, there is no reasonable basis for any such claim
to be successful; (viii) the Company and its
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Subsidiaries have complied, in all material respects, with their respective
contractual obligations relating to the protection of the Proprietary Rights
used pursuant to licenses; and (ix) to the best knowledge of the Company, no
person is infringing on or violating the Proprietary Rights owned or used by the
Company or any of its Subsidiaries. The Proprietary Rights are valid and
enforceable and no registration relating thereto has lapsed, expired or been
abandoned or canceled or is the subject of cancellation or other adversarial
proceedings, and all applications therefor are pending and are in good standing.
(g) The Company and its Subsidiaries own no real property and
have good and marketable title to all personal property described in the
Prospectus as being owned by it. Any real property and buildings described in
the Prospectus as being held under lease by the Company and each of its
Subsidiaries is held by it under valid, existing and enforceable leases, free
and clear of all liens, encumbrances, claims, security interests and defects,
except such as are described in the Registration Statement and the Prospectus or
would not have a Material Adverse Effect.
(h) Except for matters specifically described in the
Prospectus under the caption "Business - Pending Legal Proceedings," there are
no actions, suits or governmental proceedings to which the Company or its
Subsidiaries is subject or which is pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries, which,
individually or in the aggregate, might have a Material Adverse Effect, affect
the consummation of this Agreement or which are required to be disclosed in the
Registration Statement and the Prospectus that are not so disclosed.
(i) Subsequent to the respective dates as of which informa
tion is given in the Registration Statement and the Prospectus, except as
described therein, (a) there has not been any material adverse change or any
development involving a prospective material adverse change in or affecting the
assets or properties, business, results of operations or financial condition of
the Company; (b) neither the Company nor any of its Subsidiaries has sustained
any loss or interference with its assets, businesses or properties (whether
owned or leased) from fire, explosion, earthquake, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree which would have a
Material Adverse Effect; and (c) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus, except as reflected
therein, neither the Company nor any of its Subsidiaries has (i) issued any
securities or incurred any liability or obligation, direct or contingent, for
borrowed money, except such liabilities or obligations incurred in the ordinary
course of business, (ii) entered into any transaction
8
not in the ordinary course of business or (iii) declared or paid any dividend or
made any distribution on any shares of its stock or redeemed, purchased or
otherwise acquired or agreed to redeem, purchase or otherwise acquire any shares
of its stock. Neither the Company nor any of its Subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement.
(j) There is no document, contract or other agreement of a
character required to be described in the Registration Statement or Prospectus
or to be filed as an exhibit to the Registration Statement which is not
described or filed as required by the Securities Act or Rules. Each description
of a contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all respects the material terms of the
underlying document, contract or agreement. Each agreement described in the
Registration Statement and Prospectus or listed in the Exhibits to the
Registration Statement is in full force and effect and is valid and enforceable
by and against the Company or any of its Subsidiaries, as the case may be, in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles. Except for matters specifically described in the
Prospectus under the caption "Business - Pending Legal Proceedings," neither the
Company nor any of its Subsidiaries, if a Subsidiary is a party, nor to the
Company's knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or both
would constitute such a default, in any such case which default or event,
individually or in the aggregate, would have a Material Adverse Effect. Except
for matters specifically described in the Prospectus under the caption "Business
- Pending Legal Proceedings," no default exists, and no event has occurred which
with notice or lapse of time or both would constitute a default, in the due
performance and observance of any term, covenant or condition, by the Company or
any of its Subsidiaries, if a Subsidiary is a party thereto, of any other
agreement or instrument to which the Company or the Subsidiary is a party or by
which the Company, the Subsidiary or their properties or business may be bound
or affected which default or event, individually or in the aggregate, would have
a Material Adverse Effect.
(k) Neither the Company nor any of its Subsidiaries is in
violation of any term or provision of its charter or by-laws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in the
aggregate, would have a Material Adverse Effect.
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(l) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company or its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which it either the Company or any of its Subsidiaries or any of
their properties or businesses is bound, or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation applicable to the Company
or any of its Subsidiaries or violate any provision of the charter or by-laws of
the Company or any of its Subsidiaries, except for such consents or waivers
which have already been obtained and are in full force and effect.
(m) The Company has authorized, issued and outstanding capital
stock as set forth under the caption "Capitalization" in the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and have
been duly authorized for issuance by the Company. All of the issued and
outstanding shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable. There are no statutory preemptive or other similar
rights to subscribe for or to purchase or acquire any shares of Common Stock of
the Company or its Subsidiaries or any such rights pursuant to its charter or
by-laws or any agreement or instrument to or by which the Company or any of its
Subsidiaries is a party or bound. The Shares, when issued and sold pursuant to
this Agreement, will be duly and validly issued, fully paid and nonassessable
and none of them will be issued in violation of any preemptive or other similar
right. Except as disclosed in the Registration Statement and the Prospectus,
there is no outstanding option, warrant or other right calling for the issuance
of, and there is no commitment, plan or arrangement to issue, any share of stock
of the Company or its Subsidiaries or any security convertible into, or
exercisable or exchangeable for, such stock. The Common Stock and the Shares
conform in all material respects to all statements in relation thereto contained
in the Registration Statement and the Prospectus. All outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued,
and are fully paid and nonassessable and are owned directly by the Company or by
another wholly-owned subsidiary of the Company free and clear of any security
interests, liens, encumbrances, equities or claims, other than those described
in the Prospectus.
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(n) Other than Novartis AG or Novartis Pharma AG, no holder of
any security of the Company has the right to have any security owned by such
holder included in the Registration Statement or to demand registration of any
security owned by such holder during the period ending 180 days after the date
of this Agreement, which rights have not been waived. Each stockholder (except
for certain stockholders that own individually less than 5% and in the aggregate
less than 1% of the Company's Common Stock and the stockholders listed on
Schedule II hereto, and only with respect to the certain transactions or shares
of Common Stock set forth on Schedule II), director and executive officer of the
Company has executed and delivered to the Representatives an enforceable written
lock-up agreement in the form attached to this Agreement ("Lock-Up Agreement").
(o) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes and will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(p) Neither the Company nor any of its Subsidiaries is
involved in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect. The
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or contractors which would have a
Material Adverse Effect. The Company is not aware of any threatened or pending
litigation between the Company or its Subsidiaries and any of its executive
officers which, if adversely determined, could have a Material Adverse Effect
and has no reason to believe that such officers will not remain in the
employment of the Company.
(q) No transaction has occurred between or among the Company
and any of its officers or directors or five percent shareholders or any
affiliate or affiliates of any such officer or director or five percent
shareholders that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(r) Neither the Company nor, to its knowledge, any of its
officers, directors or affiliates, has taken, or will take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has
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constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of any of the Shares.
(s) The Company and its Subsidiaries have filed all Federal,
state, local and foreign tax returns which are required to be filed through the
date hereof, which returns are true and correct in all material respects, or
have received extensions thereof, and have paid all taxes shown on such returns
and all assessments received by it to the extent that the same are material and
have become due. There are no tax audits or investigations pending, which if
adversely determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company or any of its
Subsidiaries.
(t) The Common Stock is registered pursuant to Section 12(g)
of the Exchange Act. The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market System. A registration statement has been filed on Form 8-A
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which registration statement complies in all material respects
with the Exchange Act. The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the
Exchange Act or quotation the Common Stock on the Nasdaq National Market, nor
has the Company received any notification that the Commission of the Nasdaq
National Market is contemplating terminating such registration or quotation.
(u) The books, records and accounts of the Company and its
Subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its Subsidiaries. The Company and each of its
Subsidiaries maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(v) The Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts
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as are customary in the businesses in which they are engaged or propose to
engage after giving effect to the transactions described in the Prospectus,
including but not limited to, insurance covering clinical trial liability,
product liability and real or personal property owned or leased against theft,
damage, destruction, act of vandalism and all other risks customarily insured
against; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its Subsidiaries or the Company's or its Subsidiaries'
respective businesses, assets, employees, officers and directors are in full
force and effect; the Company and each of its Subsidiaries are in compliance
with the terms of such policies and instruments in all material respects; and
neither the Company nor any Subsidiary of the Company has 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. Neither the Company nor any Subsidiary has been denied any
insurance coverage which it has sought or for which it has applied.
(w) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(x) There are no affiliations with the NASD among the
Company's officers, directors or, to the best of the knowledge of the Company,
any five percent or greater stockholder of the Company, except as set forth in
the Registration Statement or otherwise disclosed in writing to the
Representatives.
(y) (i) Each of the Company and its Subsidiaries is in
compliance in all material respects with all rules, laws, ordinances, codes,
policies, rules of common law and regulations and any judicial or administrative
interpretation thereof relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment ("Environmental
Law") which are applicable to its business; (ii) neither the Company nor its
Subsidiaries has received any notice from any governmental authority or third
party of an asserted claim under Environmental Laws; (iii) each of the Company
and its Subsidiaries has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business and
is in compliance with all terms and conditions of any such permit, license or
13
approval; (iv) to the Company's knowledge, no facts currently exist that will
require the Company or its Subsidiaries to make future material capital
expenditures to comply with Environmental Laws; and (v) no property which is or
has been owned, leased or occupied by the Company or its Subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42 U.S.C. Section
9601, et. seq.) ("CERCLA") or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company nor any of its Subsidiaries
has been named as a "potentially responsible party" under the CERCLA.
(z) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its Subsidiaries, in the course of
which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a Material Adverse Effect.
(aa) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds thereof as
described in the Prospectus, will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(bb) Neither the Company nor its Subsidiaries nor any other
person associated with or acting on behalf of the Company or its Subsidiaries
including, without limitation, any director, officer, agent or employee of the
Company or its Subsidiaries has, directly or indirectly, while acting on behalf
of the Company or its Subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(cc) The Company has reviewed its operations and that of its
Subsidiaries to evaluate the extent to which the business or operations of the
Company or any of its Subsidiaries will be affected by the Year 2000 Problem
(that is, any significant risk that computer hardware or software applications
used by the Company
14
and its Subsidiaries will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000); as a result of such
review, (i) the Company has no reason to believe, and does not believe, that (A)
there are any issues related to the Company's preparedness to address the Year
2000 Problem that are of a character required to be described or referred to in
the Registration Statement or Prospectus which have not been accurately
described in the Registration Statement or Prospectus and (B) the Year 2000
Problem will have a Material Adverse Effect, or result in any material loss or
interference with the business or operations of the Company and its
Subsidiaries, taken as a whole; and (ii) the Company reasonably believes, after
due inquiry, that the suppliers, vendors, customers or other material third
parties used or served by the Company and such Subsidiaries are addressing or
will address the Year 2000 Problem in a timely manner, except to the extent that
a failure to address the Year 2000 Problem by a supplier, vendor, customer or
material third party would not have a Material Adverse Effect.
(dd) The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific 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)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountabil ity for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(ee) Except as described in the Prospectus, to the best of the
Company's knowledge, there are no rulemaking or similar proceedings before the
United States Food and Drug Administration or comparable Federal, state, local
or foreign government bodies which involve or affect the Company or any
Subsidiary, which, if the subject of an action unfavorable to the Company or any
Subsidiary, could result in a Material Adverse Effect.
(ff) Except for matters specifically described in the
Prospectus under the caption "Business - Pending Legal Proceedings," the Company
has not received any communication (whether written or oral) relating to the
termination or threatened termination or modification or threatened modification
of any material, consulting, licensing, marketing, research and development,
cooperative or any similar agreement, including, without limitation, the
collaborative research and license agreements listed under the sections of the
Prospectus entitled, "Business -
15
Collaboration and Licensing Agreements," " - Other Collaborations and License
Agreements" and "- Patents and Proprietary Rights."
(gg) All offers and sales of capital stock of the Company
prior to the date hereof were at all relevant times duly registered or exempt
from the registration requirements of the Securities Act and were duly
registered or subject to an available exemption from the registration
requirements of the applicable state securities or Blue Sky laws.
(hh) To the Company's knowledge, if any full-time employee
identified in the Prospectus has entered into any non-competition,
non-disclosure, confidentiality or other similar agreement with any party other
than the Company or any Subsidiary, such employee is neither in violation
thereof nor is expected to be in violation thereof as a result of the business
conducted or expected to be conducted by the Company or Subsidiary as described
in the Prospectus or such person's performance of his obligations to the Company
or any Subsidiary; and neither the Company nor any Subsidiary has received
written notice that any consultant or scientific advisor of the Company or any
Subsidiary is in violation of any non-competition, non-disclosure,
confidentiality or similar agreement.
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives and the Prospectus
shall have been timely filed with the Commission in accordance with Section 6(a)
of this Agreement.
(b) No order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus shall have been or shall be in effect
and no order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information on the
part of the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
the Commission and the Representatives. If the Company has elected to rely upon
Rule 430A, Rule 430A information previously omitted from the effective
Registration Statement pursuant to Rule 430A shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within
16
the prescribed time period and the Company shall have provided evidence
satisfactory to the Underwriters of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A. If the Company has
elected to rely upon Rule 434, a term sheet shall have been transmitted to the
Commission for filing pursuant to Rule 424(b) within the prescribed time period.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered pursuant to
Section 5(d) shall be true and correct when made and on and as of each Closing
Date as if made on such date. The Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required
to be performed or satisfied by them at or before such Closing Date.
(d) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive or chief operating officer and the chief financial
officer or chief accounting officer of the Company to the effect that (i) the
signers of such certificate have carefully examined the Registration Statement,
the Prospectus and this Agreement and that the representations and warranties of
the Company in this Agreement are true and correct on and as of such Closing
Date with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date, and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge, no
proceedings for that purpose have been instituted or are pending under the
Securities Act.
(e) The Representatives shall have received, at the time this
Agreement is executed and on each Closing Date a signed letter from Xxxxxx
Xxxxxxxx LLP addressed to the Representatives and dated, respectively, the date
of this Agreement and each such Closing Date, in form and substance reasonably
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Securities Act and the Rules, that the
response to Item 10 of the Registration Statement is correct insofar as it
relates to them and stating in effect that:
(i) In their opinion the audited financial statements
and financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus and reported
17
on by them comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Rules.
(ii) On the basis of a reading of the amounts included
in the Registration Statement and the Prospectus under the headings
"Summary Consolidated Financial Information" and "Selected Consolidated
Financial Data," carrying out certain procedures (but not an examination
in accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments
set forth in such letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company as to transactions and events subsequent
to the date of the latest audited financial statements, except as
disclosed in the Registration Statement and the Prospectus, nothing came
to their attention which caused them to believe that:
(A) the amounts in "Summary Consolidated Financial
Information," and "Selected Consolidated Financial Data" included in
the Registra tion Statement and the Prospectus do not agree with the
corresponding amounts in the audited financial state ments from
which such amounts were derived; or
(B) with respect to the Com pany, there were, at a
specified date not more than three business days prior to the date
of the letter, any increases in the current liabilities and
long-term liabilities of the Company or any decreases in net assets
or in working capital or the stockholders' equity in the Company, as
compared with the amounts shown on the Company's audited balance
sheet for the fiscal year ended 1999 included in the Registration
Statement.
(iii) They have performed certain other procedures as
may be permitted under Generally Acceptable Auditing Standards as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general
18
accounting records of the Company) set forth in the Registration Statement
and the Prospectus and reasonably specified by the Represen tatives agrees
with the accounting records of the Company.
(iv) Based upon the procedures set forth in clauses (ii)
and (iii) above and a reading of the amounts included in the Registration
Statement under the headings "Summary Consolidated Financial Information"
and "Selected Consolidated Financial Data" included in the Registration
Statement and Prospectus and a reading of the financial statements from
which certain of such data were derived, nothing has come to their
attention that gives them reason to believe that the "Summary Consolidated
Financial Information" and "Selected Consolidated Financial Data" included
in the Registration Statement and Prospectus do not comply as to the form
in all material respects with the applicable accounting requirements of
the Securities Act and the Rules or that the information set forth therein
is not fairly stated in relation to the financial statements included in
the Registration Statement or Prospectus from which certain of such data
were derived are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial state ments included in the Registration Statement and
Prospectus.
References to the Registration Statement and the Prospectus in this
paragraph (f) are to such documents as amended and supplemented at the
date of the letter.
(f) The Representatives shall have received on each Closing
Date from Chamberlain, Hrdlicka, White, Xxxxxxxx & Xxxxxx, counsel for the
Company, an opinion, addressed to the Representatives and dated such Closing
Date, in form and substance satisfactory to counsel for the Underwriters, and
stating in effect that:
(i) Each of the Company and its Subsidiaries has been
duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation or formation or
organization. Except as described in the Prospectus, the Company has no
subsidiary and does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business organization.
Each of the Company and its Subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdic tion in which the
character or location of its assets or properties (owned, leased
19
or licensed) or the nature of its businesses makes such qualifica tion
necessary, except for such jurisdictions where the failure to so qualify,
individually or in the aggregate, would not have a Material Adverse
Effect.
(ii) Each of the Company and its Subsidiaries has all
requisite corporate power and authority to own, lease and license its
assets and properties and conduct its business as now being conducted and
as described in the Registration Statement and the Prospectus and with
respect to the Company to enter into, deliver and perform this Agreement
and to issue and sell the Shares other than those required under the state
and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital
stock as set forth in the Registration Statement and the Prospec tus under
the caption "Capitalization"; the certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for issuance by
the Company; all of the outstanding shares of Common Stock of the Company
have been duly and validly authorized and issued and are fully paid and
nonassessable and none of them was issued in violation of any preemptive
or other similar right. The Shares when issued and sold pursuant to this
Agreement will be duly and validly issued, outstanding, fully paid and
nonassessable and none of them will have been issued in violation of any
preemptive or other similar right. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and the
Prospectus, there are no preemptive or other rights to subscribe for or to
purchase or any restriction upon the voting or transfer of any securities
of the Company pursuant to the Company's charter or by-laws or other
governing documents or any agreements or other instruments to which the
Company is a party or by which it is bound. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right calling
for the issuance of, and no commitment, plan or arrangement to issue, any
share of stock of the Company or any security convertible into,
exercisable for, or exchange able for stock of the Company. The Common
Stock and the Shares conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus. The
issued and outstand ing shares of capital stock of each of the Company's
Subsidiaries have been duly authorized and validly issued, are fully paid
20
and nonassessable and are owned by the Company or by another wholly owned
subsidiary of the Company, free and clear of any perfected security
interest or, to the knowledge of such counsel, any other security
interests, liens, encumbrances, equities or claims, other than those
contained in the Registration Statement and the Prospectus.
(iv) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares.
This Agreement has been duly and validly authorized, executed and
delivered by the Company and this Agreement constitutes the legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(v) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
issuance and sale by the Company of the Shares will give rise to a right
to terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or any event which with notice or lapse of time, or
both, would constitute a default) under, or require consent or waiver
under, or result in the execution or imposition of any lien, charge,
claim, security interest or encumbrance upon any properties or assets of
the Company or its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, note or other agreement or instru ment of which
such counsel is aware and to which the Company or any of its Subsidiaries
is a party or by which either the Company or any of its Subsidiaries or
any of their properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation of which such
counsel is aware or violate any provision of the charter or by-laws of the
Company or any of its Subsidiaries.
(vi) To the best of such counsel's knowledge, except for
matters specifically described in the Prospectus under the caption
"Business - Pending Legal Proceedings," no default exists, and
21
no event has occurred which with notice or lapse of time, or both, would
constitute a default, in the due performance and observance of any term,
covenant or condition by the Company of any indenture, mortgage, deed of
trust, note or any other agreement or instrument to which the Company is a
party or by which it or any of its assets or properties or businesses may
be bound or affected, where the consequences of such default, individually
or in the aggregate, would have a Material Adverse Effect.
(vii) To the best of such counsel's knowledge, except
for matters specifically described in the Prospectus under the caption
"Business - Pending Legal Proceedings," the Company and its Subsidiaries
are not in violation of any term or provision of their respective charters
or by-laws (or similar organization or formation document) or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(viii) No consent, approval, authorization or order of
any court or governmental agency or regulatory body is required for the
execution, delivery or performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby or thereby, except
such as have been obtained under the Securities Act and such as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several Underwriters.
(ix) To the best of such counsel's knowledge, except for
matters specifically described in the Prospectus under the caption
"Business - Pending Legal Proceedings," there is no litigation or
governmental or other proceeding or investigation, before any court or
before or by any public body or board pending or threatened against, or
involving the assets, properties or businesses of, the Company which would
have a Material Adverse Effect.
(x) The statements in the Prospectus under the captions
"Business - Collaborations and Licensing Agreements," "- Other
Collaborations and License Agreements," "- Government Regulations" and "-
Pending Legal Proceedings," "Description of Capital Stock," "Management,"
"Certain Transactions," and "Shares
22
Eligible for Future Sale," insofar as such statements constitute a summary
of documents referred to therein or matters of law, are fair summaries in
all material respects and accurately present the information called for
with respect to such documents and matters. Accurate copies of all
contracts and other documents required to be filed as exhibits to, or
described in, the Registration Statement have been so filed with the
Commission or are fairly described in the Registration Statement, as the
case may be.
(xi) The Registration Statement, all Prelimi nary
Prospectuses and the Prospectus and each amendment or supple ment thereto
(except for the financial statements and schedules and other financial and
statistical data included therein, as to which such counsel expresses no
opinion) comply as to form in all material respects with the requirements
of the Securities Act and the Rules.
(xii) The Registration Statement is effective under the
Securities Act, and, to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
threatened, pending or contemplated. Any required filing of the Prospectus
and any supplement thereto pursuant to Rule 424(b) under the Securities
Act has been made in the manner and within the time period required by
such Rule 424(b).
(xiii)The capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock."
(xiv) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(xv) All offers and sales of capital stock of the
Company prior to the date hereof were at all relevant times duly
registered or exempt from the registration requirements of the Securities
Act and were duly registered or subject to an available exemption from the
registration requirements of the applicable state securities or Blue Sky
laws.
23
(xvi) Other than Novartis AG, no holder of any security
of the Company has the right to have any security owned by such holder
included in the Registration Statement or to demand registration of any
security owned by such holder during the period ending 180 days after the
date of this Agreement, which rights have not been waived.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus as they related to the matters
set forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof and the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such counsel shall further state
that the Shares have been approved for quotation on the Nasdaq National Market.
Such opinion shall be limited to the General Corporation Law of the
State of Delaware, the laws of the State of Texas and the federal laws of the
United States of America. In rendering such opinion, counsel for the Company may
rely (i) as to matters of fact upon the representations of officers of the
Company contained in any certificate delivered to such counsel and certificates
of public officials, which certificates shall be attached to or delivered with
such opinion and (ii) as to matters governed by the jurisdiction or laws of
states other than Texas or Delaware or the federal laws of the United States of
America, on local counsel in such jurisdiction.
24
(g) The Representatives shall have received on each Closing
Date from Chamberlain, Hrdlicka, White, Xxxxxxxx & Xxxxxx, patent counsel for
the Company, an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
(i) To the best of such counsel's knowledge, the
information in the Prospectus under "Risk Factors - We depend on our
patents and proprietary rights. The validity, enforceability and
commercial value of these rights are highly uncertain," "Business -
Collaboration and Licensing Agreements," "Business - Other Collabora tions
and License Agreements," and "Business - Patents and Proprietary Rights,"
to the extent that it constitutes matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, has been reviewed
by such counsel and is correct in all material respects and fairly and
correctly presents the information called for with respect thereto.
(ii) To the best of such counsel's knowledge, other than
as specifically described in the Prospectus under the caption "Business -
Pending Legal Proceedings," there are no pending or threatened legal or
governmental proceedings, nor allegations on the part of any person of
infringement, relating to patent rights, trade secrets, trademarks,
service marks, copyrights or other proprietary information or know-how of
the Company and its Subsidiaries the unfavorable outcome of which could
reasonably be expected to have a Material Adverse Effect on the Company.
(iii) To the best of such counsel's knowledge, the
Certificate of Patent issued by the United States Patent and Trade xxxx
Office ("PTO") for each of the patents listed on Schedule "A" to such
opinion (the "Patents") reflect that the Company is the owner of the
Patents, and the Company holds an assignment for each of the applica tions
listed on Schedule "B" to such opinion (the "Applications"), which has
been filed with the PTO, and no other assignments concerning the Patents
or the Applications are reflected in the records of the PTO, except for
those Patents and Applications co-assigned to the Company and Novartis
Pharma, AG. To the best of such counsel's knowledge, there are no asserted
claims of any persons relating to the ownership of any of the Patents or
Applications, and there are no liens that have been filed against any of
the Patents.
25
(iv) To the best of such counsel's knowledge, the
Company is listed in the records of the appropriate foreign offices as the
holder of record of the foreign patents listed on Schedule "C" to such
opinion (the "Foreign Patents") and each of the applications listed on
Schedule "D" to such opinion (the "Foreign Applications"), except for
those Foreign Patents and Foreign Applications co-assigned to the Company
and Novartis Pharma, AG. Such counsel knows of no claims of third parties
to any ownership interest or lien with respect to the Foreign Patents or
Foreign Applications.
(v) To the best of such counsel's knowledge and assuming
that the controlling laws are identical to the laws of the State of Texas,
the licenses of the Company and its Subsidiaries to patents and
applications attached hereto as Schedule "E," whether United States or
foreign, are duly executed, validly binding and enforceable in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or by general
equitable principles, and except to the extent that such unenforceability
would not be reasonably expected to have a Material Adverse Effect on the
Company, and, to such counsel's knowledge, neither the Company nor any
Subsidiary is in default (declared or undeclared) of any material
provision of such licenses that could reasonably be expected to have a
Material Adverse Effect on the Company.
(vi) To the best of such counsel's knowledge, the
Company and its Subsidiaries take security measures reasonably adequate to
assert trade secret protection in its non-patented technology, except to
the extent that such failure would not reasonably be expected to have a
Material Adverse Effect on the Company.
(vii) The form of agreement executed by the Company's
and its Subsidiaries' employees, consultants and other advisors respecting
trade secrets, confidentiality or other intellectual rights is valid,
binding and enforceable in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
26
enforcement of creditors' rights generally or by general equitable
principles.
(viii)Nothing has come to such counsel's attention that
leads such counsel to believe that any of the Company and its
Subsidiaries' trademark applications filed with the PTO will not eventuate
in registered trademarks, or that any trademark registrations issued in
respect of any such applications will not be valid or will not afford the
Company or its Subsidiaries reasonable trademark protection relative to
the subject matter thereof.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus as they related to the matters
set forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof and the date of such opinion contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(h) The Representatives shall have received on each Closing
Date from Xxxxxxxx, Xxxxx & Xxxxxxxxx, LLP, special patent counsel for the
Company, an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
(i) To the best of such counsel's knowledge, the Patents
and Foreign Patents are valid and enforceable, and there are
27
no material defects of form in the preparation or filing of any of the
Applications or Foreign Applications. To the best of such counsel's
knowledge, the Applications and Foreign Applications are being diligently
prosecuted. Such counsel has no knowledge of any reason why any patent to
be issued as a result of any Application or Foreign Application would not
be valid and enforceable or would not afford the Company useful patent
protection with respect thereto.
(ii) Such counsel has no actual knowledge that either
the Company or any of its Subsidiaries is infringing or otherwise
violating any patents, trade secrets, trademarks, service marks, copy
rights or other proprietary information or know-how of any person or that
any person is infringing or otherwise violating any of the Com pany's or
its Subsidiaries' patents, trade secrets, trademarks, service marks,
copyrights or other proprietary information or know-how of the Company or
its Subsidiaries in a way in which could materially affect the use thereof
by the Company or its Subsidiaries.
(iii) To the best of such counsel's knowledge, the
Company and its Subsidiaries own or possess sufficient licenses or other
rights to use the technology covered by patents or trade secrets, and to
use the trademarks, service marks or other proprietary informa tion or
know-how necessary to conduct the business now being or proposed to be
conducted by the Company and its Subsidiaries as described in the
Prospectus.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus as they related to the matters
set forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express not belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated
28
therein or necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except with respect to the financial
statements, notes and schedules thereto and other financial data, as to which
such counsel need make no statement) on the date thereof and the date of such
opinion contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) The Representatives shall have received on each Closing
Date from Xxxx Xxxxxxx, Esq., Vice President of Intellectual Property for the
Company, an opinion, addressed to the Representatives and dated such Closing
Date, and stating in effect that:
(i) To the best of such counsel's knowledge, neither the
Company nor any of its Subsidiaries is infringing or otherwise violating
any patents, trade secrets, trademarks, service marks, copyrights or other
proprietary information or know-how of any persons and, to such counsel's
knowledge, no person is infringing or otherwise violating any of the
Company's or its Subsidiaries' patents, trade secrets, trademarks, service
marks, copyrights or other proprietary information or know-how.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives and representatives of the
independent public accountants of the Company, at which conferences the contents
of the Registration Statement and the Prospectus as they related to the matters
set forth in the foregoing opinion were discussed. While such counsel has not
undertaken to independently verify and does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel with respect to the matters set forth in the foregoing opinion
which lead such counsel to believe that the Registration Statement at the time
it became effective (except with respect to the financial statements and notes
and schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof and the date of such opinion contained any
29
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(j) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives, and their counsel and
the Underwriters shall have received from Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois) a favorable opinion, addressed to the Representatives and dated such
Closing Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) such documents as they may reasonably request
for the purpose of enabling them to pass upon such matters.
(k) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person described in Section 4(n).
(l) The Company shall have furnished or caused to be furnished
to the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
6. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of this
Agreement, and any amendments thereto, to become effective as promptly as
possible. The Company shall prepare the Prospectus in a form approved by
the Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act.
(ii) The Company shall promptly advise the
Representatives in writing (i) when the Registration Statement and any
amendment thereto shall have become effective, (ii) of the receipt of any
comments from the Commission or of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for
30
any additional information, (iii) of the prevention or suspension of the
use of any Preliminary Prospectus or the Prospectus or of the issuance by
the Commission of any stop order suspending the effective ness of the
Registration Statement or the suspension of qualification of the Shares
for offering or sale in any jurisdiction or the institution or threatening
of any proceeding for that purpose, and (iv) of the receipt by the Company
of any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company shall give notice to the
Representatives of its intent to file any amendment of the Registration
Statement or supplement to the Prospectus and the Company shall not file
any such amendment or supplement unless the Company has furnished the
Representatives a copy for its review prior to filing and shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to prevent the
issuance of any such stop order or order suspending the qualification or
exemption of the Shares under any state securities or Blue Sky laws and,
if issued, to obtain as soon as possible the withdrawal thereof.
(iii) The Company shall promptly advise the
Representatives in writing if, at any time when a prospectus relating to
the Shares is required to be delivered under the Securities Act and the
Rules or the Exchange Act, any change, event, or occurrence which could
result in such a change, in the Company's condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company or the happening of any event occurs as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or the
Rules, the Company promptly shall prepare and file with the Commission,
subject to the second sentence of paragraph (ii) of this Section 6(a), an
amendment or supplement which shall correct such statement or omission or
an amendment which shall effect such compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as
31
practicable, but not later than 45 days after the end of the 12-month
period beginning at the end of the fiscal quarter of the Company during
which the Effective Date occurs (or 90 days if such 12-month period
coincides with the Company's fiscal year), an earnings statement (which
need not be audited) of the Company, covering such 12-month period, which
shall satisfy the provisions of Section 11(a) of the Securities Act or
Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, as many signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) as the Representatives may reasonably request and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Securities
Act or the Rules, as many copies of any Preliminary Prospectus and the
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request. If applicable, the copies of the
Registration Statement and Prospectus and each amendment and supplement
thereto furnished to the Under writers will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(vi) During the period of five years hereafter, the
Company will furnish the Representatives (i) as soon as available, a copy
of each report of the Company mailed to stockholders or filed with the
Commission, and (ii) from time to time such other information concerning
the Company as the Representatives may reasonably request.
(vii) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the Shares for
offer and sale in connection with the offering under the laws of such
jurisdictions as the Representatives may designate and shall maintain such
qualifications in effect so long as required for the distribution of the
Shares; provided, however, that the Company shall not be required in
connection therewith, as a condition thereof, to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
32
(viii) The Company, during the period when the
Prospectus is required to be delivered under the Securities Act and the
Rules or the Exchange Act, will file all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the regulations
promulgated thereunder.
(ix) Except as set forth on Schedule II hereto, without
the prior written consent of CIBC World Markets Corp., for a period of 180
days after the date of the Prospectus, the Company and each of its
individual directors and executive officers shall not issue, sell or
register with the Commission (other than on Form S-8 or on any successor
form), or otherwise dispose of, directly or indirectly, any equity
securities of the Company (or any securities convertible into, exercisable
for or exchangeable for equity securities of the Company), except for the
issuance of the Shares pursuant to the Registration Statement and the
issuance of shares pursuant to the Company's existing stock option plans
as described in the Registration Statement and the Prospectus. In the
event that during this period, (i) any shares are issued pursuant to the
Company's existing stock option plans that are exercis able during such
180 day period or (ii) any registration is effected on Form S-8 or on any
successor form relating to shares that are exercisable during such 180
period, the Company shall obtain the written agreement of such grantee or
purchaser or holder of such registered securities that, for a period of
180 days after the date of the Prospectus, such person will not, without
the prior written consent of CIBC World Markets Corp., offer for sale,
sell, distribute, grant any option for the sale of, or otherwise dispose
of, directly or indirectly, or exercise any registration rights with
respect to, any shares of Common Stock (or any securities convertible
into, exercisable for, or exchangeable for any shares of Common Stock)
owned by such person.
(x) On or before completion of this offering, the
Company shall make all filings required under applicable securities laws
and by the Nasdaq National Market (including any required registration
under the Exchange Act).
(xi) The Company has furnished or will furnish to the
Representatives the Lock-up Agreements, in form and substance
33
satisfactory to the Representatives, signed by each of its current
officers and directors and each of its stockholders (except for certain
stockholders that own individually less than 1% and in the aggregate less
than 5% of the Company's Common Stock) designated by the Representatives.
(xii) For a period of 180 days from the date hereof, the
Company will not waive, modify or amend or otherwise release Novartis AG
from its obligations under the sale restrictions contained in Section 5 of
the Stock Purchase Agreement, dated as of May 11, 1990, by and between the
Company and Novartis AG, without the prior written consent of CIBC World
Markets Corp.
(xiii) The Company will supply the Underwrit ers with
copies of all correspondence to and from, and all documents issued to and
by, the Commission in connection with the registration of the Shares under
the Securities Act.
(xiv) Prior to the Closing Date, the Company shall
furnish to the Underwriters, as soon as they have been prepared, copies of
any unaudited interim consolidated financial statements of the Company and
its subsidiaries, for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(xv) Prior to the Closing Date, the Company will issue
no press release or other communications directly or indirectly and hold
no press conference with respect to the Company or any of its
Subsidiaries, the condition, financial or otherwise, or the earnings,
business affairs or business prospects of any of them, or the offering of
the Shares without the prior written consent of the Representatives unless
in the judgment of the Company and its counsel, and after notification to
the Representatives, such press release or communication is required by
law.
(xvi) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of Proceeds" in
the Prospectus.
34
(xvii) The Company has not taken, nor will it take,
directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipula tion of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(xviii) The Company will use its best efforts to
maintain the quotation of the Common Stock (including the Shares) on the
Nasdaq National Market and will file with the Nasdaq National Market all
documents and notices required by the Nasdaq National Market of companies
that have shares that are traded in the over-the- counter market and
quotations for which are reported by the Nasdaq National Market.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each Preliminary Prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(a)(vi), if any, including the reasonable fees and disbursements of counsel for
the Underwriters in connection with such registration and qualification and the
preparation, printing, distribution and shipment of preliminary and
supplementary Blue Sky memoranda; (iv) the furnishing (including costs of
shipping and mailing) to the Representatives and to the Underwriters of copies
of each Preliminary Prospectus, the Prospectus and all amendments or supplements
to the Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with the
offering and sale of the Shares by the Underwriters or by dealers to whom Shares
may be sold; (v) the filing fees of the NASD in connection with its review of
the terms of the public offering and reasonable fees and disbursements of
counsel for the Underwriters in connection with such review; (vi) inclusion of
the Shares for quotation on the Nasdaq National Market; and (vii) all transfer
taxes, if any, with respect to the sale and delivery of the Shares by the
Company to the Underwriters. Subject to the provisions of Section 9, the
Underwriters agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and
35
expenses incident to the performance of the obligations of the Underwriters
under this Agreement not payable by the Company pursuant to the preceding
sentence, including, without limitation, the fees and disbursements of counsel
for the Underwrit ers.
7. INDEMNIFICATION.
(a) The Company, agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal or state law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission to state therein or material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; (iii) any
untrue statement or alleged untrue statement of a material fact contained in any
Blue Sky application or other information or other documents executed by the
Company filed in any state or other jurisdiction to qualify any or all of the
Shares under the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application"); (iv) in
whole or in part, any breach of the representations and warranties set forth in
Section 4 hereof; or (v) in whole or in part upon any failure of the Company to
perform any of its obligations hereunder or under law; provided, however, that
such indemnity shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) on account of any losses, claims, damages or
liabilities arising from the sale of the Shares to any person by such
Underwriter if such untrue statement or omission or alleged untrue statement or
omission was made in such Preliminary Prospectus, the Registration Statement or
the Prospectus, or such amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Company by the
Representa tives on behalf of any Underwriter expressly for use therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
36
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each director of the Company, and each officer of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or are based upon any
untrue statement or omission or alleged untrue statement or omission which was
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment thereof or supplement thereto, contained in (i) the
concession and reallowance figures appearing under the caption "Underwriting"
and (ii) the stabilization information contained under the caption
"Underwriting" in the Prospectus and any Preliminary Prospectus; provided,
however, that the obligation of each Underwriter to indemnify the Company
(including any controlling person, director or officer thereof) shall be limited
to the net proceeds received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served. No indemnification
provided for in Section 7(a) or 7(b) shall be available to any party who shall
fail to give notice as provided in this Section 7(c) if the party to whom notice
was not given was unaware of the proceeding to which such notice would have
related and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or proceeding
shall not relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section. In case any such
action, suit or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnify ing party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of
37
counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party) or (iii) the
indemnifying parties shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent, which consent shall not be unreasonably withheld or delayed.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
38
it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder; and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) in the
immediately preceding sentence of this Section 8. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriter's
obligations to contribute pursuant to this Section 8 are several in proportion
to their respective underwriting commitments and not joint.
9. TERMINATION. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in the
opinion of the Representa tives will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make
39
it, in the judgment of the Representatives, inadvisable to proceed with the
offering; (iii) if there shall be such a material adverse change in general
financial, political or economic conditions or the effect of international
conditions on the financial markets in the United States is such as to make it,
in the judgment of the Representa tives, inadvisable or impracticable to market
the Shares; (iv) if trading in the Shares has been suspended by the Commission
or trading generally on the New York Stock Exchange, Inc., on the American Stock
Exchange, Inc. or the Nasdaq National Market has been suspended or limited, or
minimum or maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities have been required, by said exchanges
or by order of the Commission, the NASD, or any other governmen tal or
regulatory authority; or (v) if a banking moratorium has been declared by any
state or Federal authority; or (vi) if, in the judgment of the Representatives,
there has occurred a Material Adverse Effect, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
the Company shall not be under any liability to any Underwriter, and no
Underwriter shall be under any liability to the Company, except that (y) if this
Agreement is terminated by the Representatives or the Underwriters because of
any failure, refusal or inability on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in contempla
tion of performing their obligations hereunder and (z) no Underwriter who shall
have failed or refused to purchase the Shares agreed to be purchased by it under
this Agreement, without some reason sufficient hereunder to justify cancellation
or termination of its obligations under this Agreement, shall be relieved of
liability to the Company or to the other Underwriters for damages occasioned by
its failure or refusal.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set
40
forth in this Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to one additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall
have the right to postpone the applicable Closing Date for a period of not more
than five business days in order that necessary changes and arrangements
(including any necessary amendments or supplements to the Registration Statement
or Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the
41
Underwriters set forth in or made pursuant to this Agreement shall remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Sections 7 and 8 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 6(b), 7, 8 and 9 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling any of
the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the Representatives, c/o CIBC World Markets Corp., Xxx Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: [Xxxx Xxxxxx], with a copy
to Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), 000 Xxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Chamberlain, Hrdlicka, White,
Xxxxxxxx & Xxxxxx, 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000,
Attention: Xxxxxxx X. XxXxxxxx, Xx.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
TANOX, INC.
By:___________________________
Title:________________________
Confirmed:
CIBC WORLD MARKETS CORP.
_________________________________
Acting severally on behalf of itself
and as representative of the several
Underwriters named in Schedule I annexed
hereto.
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By: CIBC WORLD MARKETS CORP.
By: __________________________
Title: _______________________
By: XXXXXXXXX XXXXXXXX INC.
By: __________________________
Title: _______________________
By: WARBURG DILLON READ LLC.
By: __________________________
Title: _______________________
By: XXXXX, XXXXXXXX & XXXX, INC.
By: __________________________
Title: _______________________
By: KBC SECURITIES INC.
By: __________________________
Title: _______________________
44
SCHEDULE I
NUMBER OF
FIRM SHARES TO
NAME BE PURCHASED
CIBC World Markets Corp.
Xxxxxxxxx Xxxxxxxx Inc.
Xxxxxxx Xxxxxx Read LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
KBC Securities Inc.
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SCHEDULE II
Stockholders with Modified Lock-ups
[ADD LANGUAGE EXPLAINING SPECIFIC SHARES OR TRANSACTIONS EXCLUDED FROM LOCK-UP
IN EACH CASE]
Xxxxx Xxxxxxxx
Biovest C.V.A.
Xxxx Xxxxxxxxxxxx
Credimo N.V.
Xxxx xx Xxxx
Exinde West N.V.
HBK-Spaarbank N.V.
KBC Pensioenfunds V.Z.W.
KBC Equity Fund N.V. - Biotech
KBC Equity Fund N.V. - New Shares
KBC Equity Fund N.V. - Pharma
Koceram N.V.
Mercator & Noordstar N.V.
Tosalu N.V.
TrustCapital Technology N.V.
Quest for Growth N.V.
46
