EXHIBIT 1.1
ENCYSIVE PHARMACEUTICALS INC.
COMMON STOCK
UNDERWRITING AGREEMENT
September 8, 2004
WACHOVIA CAPITAL MARKETS, LLC
000 Xxxxx Xxxxxxx Xxxxxx, XX0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Sirs:
1. INTRODUCTORY. Encysive Pharmaceuticals Inc., a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to
Wachovia Capital Markets, LLC ("Wachovia" or the "Underwriter"), an aggregate of
4,000,000 shares of common stock, $.005 par value (the "Common Stock"), of the
Company. The aggregate of 4,000,000 shares so proposed to be sold is hereinafter
referred to as the "Firm Stock". The Company also proposes to sell to the
Underwriter, upon the terms and conditions set forth in Section 3 hereof, up to
an additional 600,000 shares of Common Stock (the "Optional Stock"). The Firm
Stock and the Optional Stock are hereinafter collectively referred to as the
"Stock".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act") and the rules
and regulations of the Commission (the "Rules and Regulations")
thereunder. A registration statement on Form S-3 (File No. 333-116193)
(including all pre-effective amendments thereto, the "Initial
Registration Statement") in respect of the Stock has been filed with
the Securities and Exchange Commission (the "Commission") pursuant to
Rule 415 under the Securities Act; the Initial Registration Statement
and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained
therein, have been declared effective by the Commission in such form
and meet the requirements of the Securities Act and the Rules and
Regulations; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act and the Rules
and Regulations, which became effective upon filing, and any Form 8-K
to be filed under the Securities Act regarding the execution of this
Agreement and related matters, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the Rules and Regulations, is hereinafter
called a "Preliminary Prospectus"); the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act and deemed by virtue
of Rule 430A under the Securities Act to be part of the Initial
Registration
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Statement at the time it was declared effective and (ii) the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statements"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Securities Act, is hereinafter
called the "Prospectus"; and any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statements shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statements. No document has been or will be prepared or
distributed in reliance on Rule 434 under the Securities Act. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the
case may be, will conform) in all material respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto) and
the First Closing Date (as defined below) and the Option Closing Date
(as defined below) contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the foregoing representations and warranties shall not
apply to information contained in or omitted from the Registration
Statements or the Prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein, which information the parties
hereto agree is limited to the Underwriter's Information (as defined in
Section 16).
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the Rules and
Regulations or the rules and regulations of the Commission under the
Exchange Act, as applicable, and none of such documents contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with Commission, as the case may be, will
conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the Rules and Regulations
or the rules and regulations of the Commission under the Exchange Act,
as applicable, and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
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(d) The Company and each of its subsidiaries (as defined in Section 14)
have been duly organized and are validly existing as corporations or
other legal entities in good standing (or the foreign equivalent
thereof, if any) under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing as foreign corporations or other legal entities in each
jurisdiction in which their respective ownership or lease of property
or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which
they are engaged, except where the failure to so qualify or have such
power or authority would not have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
results of operations, business or prospects of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The
Company owns or controls, directly or indirectly, only the following
corporations, partnerships, limited liability partnerships, limited
liability companies, associations or other entities: (i)
ImmunoPharmaceutics, Inc., a California corporation and wholly owned
subsidiary of the Company; (ii) EP-ET, LLC, a Delaware limited
liability company and wholly owned subsidiary of the Company; (iii)
Encysive, L.P., a Delaware limited partnership, of which the Company is
the sole limited partner and EP-ET, LLC is the sole general partner;
(iv) Revotar Biopharmaceuticals, AG, a German corporation and
majority-owned subsidiary of the Company; and (v) Encysive (UK)
Limited, a United Kingdom private limited company and wholly owned
subsidiary of the Company.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
(f) The Stock to be issued and sold by the Company to the Underwriter
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any preemptive
or similar rights and will conform to the description thereof contained
in the Prospectus.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company, have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal
and state securities laws, and conform to the description thereof
contained in the Prospectus. None of the outstanding shares of Common
Stock was issued in violation of any preemptive rights, rights of first
refusal or other similar rights to subscribe for or purchase securities
of the Company. There are no authorized or outstanding options,
warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable
or exercisable for, any capital stock of the Company or any of its
subsidiaries other than those accurately described in the Prospectus.
The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted
thereunder, as described in the Prospectus accurately and fairly
present the information required to be shown with respect to such
plans, arrangements, options and rights.
(h) All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
Prospectus, are owned by the Company directly or indirectly through one
or more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which
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the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the charter or by-laws (or analogous governing
instruments, as applicable) of the Company or any of its subsidiaries
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets.
(j) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, applicable
state securities laws and the Nasdaq National Market ("Nasdaq") in
connection with the purchase and distribution of the Stock by the
Underwriter, no consent, approval, authorization or order of, or filing
or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
hereby.
(k) KPMG LLP, who has expressed its opinions on the audited financial
statements and related schedules included or incorporated by reference
in the Registration Statements and the Prospectus are independent
public accountants as required by the Securities Act and the Rules and
Regulations.
(l) The financial statements, together with the related notes and
schedules, included or incorporated by reference in the Prospectus and
in each Registration Statement fairly present the financial position
and the results of operations and changes in financial position of the
Company and its consolidated subsidiaries and other consolidated
entities at the respective dates or for the respective periods therein
specified, except as noted therein and except, in the case of unaudited
financial statements, for normal year-end audit adjustments. Such
statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles recognized in
the United States ("GAAP") applied on a consistent basis except as may
be set forth in the Prospectus. The financial statements, together with
the related notes and schedules, included in the Prospectus comply in
all material respects with the Securities Act and the Rules and
Regulations thereunder. No other financial statements or supporting
schedules or exhibits are required by the Securities Act or the Rules
and Regulations thereunder to be included in the Prospectus.
(m) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since such
date, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the business, general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Prospectus.
(n) Except as set forth in the Prospectus and except for the
modification of intellectual property rights pursuant to proceedings
involving the processing and examination of patent and trademark
applications and patents before governmental agencies or bodies, there
is no legal or governmental proceeding pending to which the Company or
any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which is
required to be described in the Registration Statement or the
Prospectus and is not described therein, or which, singularly or in the
aggregate, if determined adversely to the Company or any
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of its subsidiaries, might have a Material Adverse Effect or would
prevent or adversely affect the ability of the Company to perform its
obligations under this Agreement; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others. The Company and its
subsidiaries are in compliance with all applicable federal, state,
local and foreign laws, regulations, orders and decrees governing their
business as prescribed by the United States Food and Drug
Administration (the "FDA"), or any other federal, state or foreign
agencies or bodies, including those bodies and agencies engaged in the
regulation of pharmaceuticals or biohazardous substances or materials,
except where noncompliance would not, singly or in the aggregate, have
a Material Adverse Effect. All preclinical and clinical studies
undertaken to support approval of products for commercialization have
been conducted in compliance with all applicable federal, state or
foreign laws, rules, orders or regulations, including current Good
Laboratory and Good Clinical Practices in all material respects. No
filing or submission to the FDA or any other federal, state or foreign
regulatory body, that is intended to be the basis for any approval,
contains any material omission or material false information.
(o) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws (or analogous governing instrument, as
applicable), (ii) is in default in any respect, and no event has
occurred which, with notice or lapse of time or both, would constitute
such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets
is subject or (iii) is in violation in any respect of any law,
ordinance, governmental rule, regulation or court decree to which it or
its property or assets may be subject except, in the case of clauses
(ii) and (iii), any violations or defaults which, singularly or in the
aggregate, would not have a Material Adverse Effect.
(p) The Company and each of its subsidiaries possess all licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate local, state, federal or
foreign regulatory agencies or bodies which are necessary or desirable
for the ownership of their respective properties or the conduct of
their respective businesses as described in the Prospectus, including
without limitation all such licenses, certificates, authorizations and
permits required by the FDA or any other federal, state or foreign
agencies or bodies engaged in the regulation of pharmaceuticals or
biohazardous materials, except where any failures to possess or make
the same, singularly or in the aggregate, would not have a Material
Adverse Effect; all of such licenses, certificates, authorizations and
permits are valid and in full force and effect, except where the
invalidity of such licenses, certificates, authorizations and permits
or the failure of such licenses, certificates, authorizations and
permits to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect; all such licenses,
certificates, authorizations and permits are free and clear of any
restrictions or conditions that are in addition to, or materially
different from, those normally applicable to similar licenses,
certificates, authorizations and permits; and neither the Company nor
any of its subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit
and has no reason to believe that any such license, certificate,
authorization or permit will not be renewed.
(q) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Stock and the application of the proceeds
thereof as described in the Prospectus will become an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended and the rules and regulations of the Commission thereunder.
(r) The Company has not taken and will not take, directly or
indirectly, any action designed or intended to stabilize or manipulate
the price of any security of the Company, or which caused
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or resulted in, or which might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any
security of the Company.
(s) The Company and its subsidiaries own or possess the right to use
all patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, know-how and other intellectual property
rights which are necessary for the conduct of their respective
businesses as described in the Prospectus, and the Company is not aware
of any claim to the contrary or any challenge by any other person to
the rights of the Company and its subsidiaries with respect to the
foregoing. The Company and its subsidiaries have made all declarations
and filings, including, without limitation, assignments and payment of
fees, with the appropriate local, state or federal regulatory bodies
which are necessary to maintain in full force and effect ownership and
possession of the intellectual property rights of the Company and its
subsidiaries, except where such failure to make the same would not,
singularly or in the aggregate, have a Material Adverse Effect, and,
except for the modification of intellectual property rights pursuant to
proceedings involving the processing and examination of patent and
trademark applications and patents before governmental agencies or
bodies, the Company has not received written notification of any
revocation or modification of any intellectual property right, and has
no reason to believe that any renewable intellectual property right
will not be renewed, other than any revocation, modification or failure
to renew that would not, singularly or in the aggregate, have a
Material Adverse Effect. The Company's and its subsidiaries' businesses
as now conducted and as currently proposed to be conducted do not and
will not infringe or conflict with any patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses, know-how or
other intellectual property right or franchise right of any person.
Except as described in the Prospectus, no claim has been made against
the Company or any of its subsidiaries alleging the infringement by the
Company or any of its subsidiaries of any patent, trademark, service
xxxx, trade name, copyright, trade secret, license, know-how or other
intellectual property right or franchise right of any person.
(t) Except as disclosed in the Prospectus, the Company and each of its
subsidiaries have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real or personal
property which are material to the business of the Company and its
subsidiaries taken as a whole, in each case free and clear of all
liens, encumbrances, security interests, claims and defects that may
result in a Material Adverse Effect.
(u) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which might be expected to, singularly or in the aggregate,
have a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any
subsidiary plans to terminate employment with the Company or any such
subsidiary.
(v) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time (the "Code")) or "accumulated funding deficiency" (as defined
in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan which could,
singularly or in the aggregate, have a Material Adverse Effect; each
employee benefit plan of the Company and its subsidiaries is in
compliance in all material respects with applicable law, including
ERISA and the Code; the Company has not incurred and does not expect to
incur liability under Title IV of ERISA with respect to the termination
of, or withdrawal from, any "pension plan"; and each "pension plan" (as
defined in ERISA) for which the Company would have any liability that
is
7
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such
qualification.
(w) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the best of
the Company's knowledge, any other entity for whose acts or omissions
the Company or any of its subsidiaries is or may be liable) upon any of
the property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
(x) The Company and its subsidiaries each (i) have filed all necessary
federal, state and foreign income and franchise tax returns, all of
which, when filed, were true, complete and correct in all material
respects, (ii) have paid all federal state, local and foreign taxes due
and payable for which it is liable, and (iii) do not have any tax
deficiency or claims outstanding or assessed or, to the best of the
Company's knowledge, proposed against them which could reasonably be
expected to have a Material Adverse Effect.
(y) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries.
(z) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(aa) The minute books of the Company and each of its domestic
subsidiaries have been made available to the Underwriter and counsel
for the Underwriter, and such books (i) contain a complete summary of
all meetings and actions of the board of directors (including each
board committee) and shareholders (or analogous governing bodies and
interest holders, as applicable) of the Company and each of its
domestic subsidiaries since the time of its respective organization
through the date of the latest meeting and action, and (ii) accurately
in all material respects reflect all transactions referred to in such
minutes.
(bb) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit
8
to the Registration Statements which is not described or filed therein
as required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration
Statements are accurate and complete descriptions of such documents in
all material respects, except for certain portions of such franchises,
leases, contracts, agreements or documents omitted in reliance on Rule
24b-2 under the Exchange Act. Other than as described in the
Prospectus, no such franchise, lease, contract or agreement has been
suspended or terminated for convenience or default by the Company or
any of the other parties thereto, and neither the Company nor any of
its subsidiaries has received notice or any other knowledge of any such
pending or threatened suspension or termination, except for such
pending or threatened suspensions or terminations that would not
reasonably be expected to, singularly or in the aggregate, have a
Material Adverse Effect. Further, other than as described in the
Prospectus, all such franchises, leases, contracts, agreements and
documents are in full force and effect and the Company and its
subsidiaries, as applicable, are not in breach, violation or default of
any such franchises, leases, contracts, agreements or documents and no
event has occurred which with notice or lapse of time or both would
constitute a breach, violation or default of any such franchises,
leases, contracts, agreements or documents. The Company has not
received any communication (whether written or oral) notifying the
Company as to the termination or threatened termination or modification
or threatened modification of any consulting, licensing, marketing,
research and development, cooperative or any similar agreement.
(cc) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is
required to be described in the Prospectus and which is not so
described.
(dd) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statements or
otherwise, except for persons and entities who have expressly waived
such right or who have been given timely and proper notice and have
failed to exercise such right within the time or times required under
the terms and conditions of such right.
(ee) Neither the Company nor any of its subsidiaries own any "margin
securities" as that term is defined in Regulation U of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"),
and none of the proceeds of the sale of the Stock will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Securities to be considered a "purpose credit" within the meanings of
Regulation T, U or X of the Federal Reserve Board.
(ff) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or the Underwriter for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(gg) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(hh) The Stock has been approved for listing subject to notice of
issuance on the Nasdaq.
(ii) The Company is in compliance with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "Xxxxxxxx-Xxxxx
Act") that are then in effect and is actively taking steps to ensure
9
that it will be in compliance with other applicable provisions of the
Xxxxxxxx-Xxxxx Act not currently in effect upon and at all times after
the effectiveness of such provisions.
(jj) The Company has taken all necessary actions to ensure that, upon
and at all times after Nasdaq shall have approved the Stock for
inclusion, it will be in compliance with all applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules that
are then in effect and is actively taking steps to ensure that it will
be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in
effect upon and all times after the effectiveness of such requirements.
(kk) Neither the Company nor any of its subsidiaries nor, to the best
of the Company's knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the
Prospectus.
(ll) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term
is defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structure finance, special
purpose or limited purpose entity that could reasonably be expected to
materially affect the Company's liquidity or the availability of or
requirements for its capital resources required to be described in the
Prospectus which have not been described as required.
(mm) There are no outstanding loans, advances (except normal advances
for business expense in the ordinary course of business) or guarantees
or indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company, except as disclosed in the
Prospectus.
(nn) There are no rulemaking or similar proceedings before the FDA or
comparable federal, state, local or foreign government bodies which
involve the Company or any of its subsidiaries, which, if the subject
of an action unfavorable to the Company or any such subsidiary, could
result in a Material Adverse Effect.
(oo) The statements set forth in the Prospectus under the caption
"Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the capital stock of the Company, including the
Common Stock, and under the captions "Risk Factors" and "Prospectus
Supplement Summary," insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate, complete
and fair.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, the Firm
Stock.
The purchase price per share to be paid by the Underwriter to the
Company for the Stock will be $7.76 per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Underwriter through the
facilities of The Depository Trust Company or, at the election of the
Underwriter, in the form of definitive certificates, in either case, issued in
such names and in such denominations as the Underwriter may direct by notice in
writing to the Company given at or prior to 12:00 Noon, New York time, on the
second full business day preceding the First Closing Date against payment of the
aggregate Purchase Price therefor in federal (same day) funds by wire transfer
to an account at X.X. Xxxxxx Xxxxx Bank - Houston, Texas, payable to the order
of the Company, all at the offices of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
10
77002-2764. Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Underwriter hereunder. The time and date of the delivery and closing
shall be at 10:00 A.M., New York time, on September 13, 2004, in accordance with
Rule 15c6-1 of the Exchange Act. The time and date of such payment and delivery
are herein referred to as the "First Closing Date". The First Closing Date and
the location of delivery of, and the form of payment for, the Firm Stock may be
varied by agreement between the Company and Wachovia.
In the event the Underwriter elects to take delivery of the
certificates instead of delivery of the certificates through the facilities of
The Depository Trust Company, the Company shall make the certificates for the
Stock available to the Underwriter for examination in New York, New York at
least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriter may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriter the number of shares of Optional Stock
specified in the written notice by Wachovia described below and the Underwriter
agrees to purchase such shares of Optional Stock. The option granted hereby may
be exercised as to all or any part of the Optional Stock at any time, and from
time to time, not more than thirty (30) days subsequent to the date of this
Agreement. No Optional Stock shall be sold and delivered unless the Firm Stock
previously has been, or simultaneously is, sold and delivered. The right to
purchase the Optional Stock or any portion thereof may be surrendered and
terminated at any time upon notice by Wachovia to the Company.
The option granted hereby may be exercised by written notice being
given to the Company by Wachovia setting forth the number of shares of the
Optional Stock to be purchased by the Underwriter and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriter through
the facilities of The Depository Trust Company or, at the election of the
Underwriter, in the form of definitive certificates, in either case, issued in
such names and in such denominations as the Underwriter may direct by notice in
writing to the Company given at or prior to 12:00 Noon, New York time, on the
second full business day preceding the Option Closing Date against payment of
the aggregate Purchase Price therefor in federal (same day) funds by wire
transfer to an account at X.X. Xxxxxx Chase Bank - Houston, Texas, payable to
the order of the Company, all at the offices of Xxxxxx & Xxxxxx, L.L.P., 000
Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000-0000. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligations of the Underwriter hereunder. In the
event the Underwriter elects to take delivery of the certificates instead of
delivery of the certificates through the facilities of The Depository Trust
Company, the Company shall make the certificates for the Optional Stock
available to the Underwriter for examination in New York, New York not later
than 10:00 A.M., New York Time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement between the Company
and Wachovia.
The Underwriter proposes to offer the Stock for sale upon the terms and
conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Underwriter
that:
11
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Underwriter and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Underwriter and file
such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the second business day following the execution and delivery
of this Agreement; make no further amendment or any supplement to the
Registration Statements or to the Prospectus prior to the Option
Closing Date to which the Underwriter shall reasonably object by notice
to the Company after a reasonable period to review; advise the
Underwriter, promptly after it receives notice thereof, of the time
when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriter with copies
thereof; file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock; advise the Underwriter, promptly after
it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statements or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, use
promptly its best efforts to obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered 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 light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
to comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Underwriter thereof and upon its request will
prepare an amended or supplemented Prospectus or make an appropriate
filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission or effect such compliance. The
Company will furnish without charge to the Underwriter and to any
dealer in securities as many copies as the Underwriter may from time to
time reasonably request of such amended or supplemented Prospectus; and
in case the Underwriter is required to deliver a prospectus relating to
the Stock nine months or more after the effective date of the Initial
Registration Statement, the Company upon the request of the Underwriter
and at the expense of the Underwriter will prepare promptly an amended
or supplemented Prospectus as may be necessary to permit compliance
with the requirements of Section 10(a)(3) of the Securities Act.
(c) To furnish promptly to the Underwriter and to counsel for the
Underwriter a signed copy of each of the Registration Statements as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed
therewith.
(d) To deliver promptly to the Underwriter in New York City such number
of the following documents as the Underwriter shall reasonably request:
(i) conformed copies of the Registration Statements as originally filed
with the Commission and each amendment thereto (in each case excluding
exhibits), (ii) each Preliminary Prospectus, (iii) the Prospectus (not
later than 10:00 A.M., New York time, of the business day following the
execution and delivery of this Agreement) and any amended or
supplemented Prospectus (not later than 10:00 A.M., New York
12
City, on the business day following the date of such amendment or
supplement) and (iv) any document incorporated by reference in the
Prospectus (excluding exhibits thereto).
(e) To make generally available to its shareholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as
the Underwriter may reasonably request to qualify the Stock for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriter may designate and to continue such
qualifications in effect for so long as required for the distribution
of the Stock; provided that the Company and its subsidiaries shall not
be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service
of process in any jurisdiction.
(g) During the period of five years from the date hereof, the Company
will deliver, upon request, to the Underwriter, (i) as soon as they are
available, copies of all reports or other communications furnished to
shareholders and (ii) as soon as they are available, copies of any
reports and financial statements furnished or filed with the Commission
pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Stock is listed or quoted.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days (the "Restricted
Period") from the date of the Prospectus without the prior written
consent of Wachovia other than the Company's sale of the Stock
hereunder, the issuance of restricted Common Stock or options to
acquire shares of Common Stock pursuant to the Company's employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof and the issuance of
shares of Common Stock pursuant to valid exercises of currently
outstanding options, warrants or rights. Notwithstanding the foregoing,
if (1) during the last eighteen (18) days of the Restricted Period the
Company issues an earnings release or (2) prior to the expiration of
the Restricted Period the Company announces that it will release
earnings results during the 16-day period beginning on the last day of
the Restricted Period, the restrictions imposed by this Section 4(h)
shall continue to apply until the expiration of the 19-day period
beginning on the issuance of the earnings release. The Company will
cause each officer and director listed in Schedule A to furnish to the
Underwriter, prior to the First Closing Date, a letter, substantially
in the form of Exhibit I hereto, pursuant to which each such person
shall agree not to directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of
the Prospectus, without the prior written consent of Wachovia and not
to engage in any short selling of the Common Stock.
(i) The Company will supply the Underwriter with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates the Company will furnish to the
Underwriter, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for
any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
13
(k) Prior to each of the Closing Dates, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the
Company and of which the Underwriter is notified), without the prior
written consent, such consent not to be unreasonably withheld or
delayed, of the Underwriter, unless in the judgment of the Company and
its counsel, and after notification to the Underwriter, such press
release or communication is required by law.
(l) Without limiting the provisions of section 4(h), in connection with
the offering of the Stock, until Wachovia shall have notified the
Company of the completion of the resale of the Stock, the Company will
not, and will cause its affiliated purchasers (as defined in Regulation
M under the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Stock, or
attempt to induce any person to purchase any Stock; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the
purpose of creating actual, or apparent, active trading in or of
raising the price of the Stock.
(m) The Company will not take any action prior to the Option Closing
Date which would require the Prospectus to be amended or supplemented
pursuant to Section 4(b).
(n) The Company shall at all times comply with all applicable
provisions of the Xxxxxxxx-Xxxxx Act in effect from time to time.
(o) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds".
(p) The Company shall at all times engage and maintain, at its
expense, a registrar and transfer agent for the Stock.
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus any amendments and exhibits thereto or any
document incorporated by reference therein; (d) the costs of printing,
reproducing and distributing this Agreement by mail, telex or other means of
communications; (e) any applicable listing or other fees; (f) the fees and
expenses (including related fees and expenses of counsel to the Underwriter) of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(f) and of preparing, printing and distributing Blue Sky
Memoranda and Legal Investment Surveys (including related fees and expenses of
counsel to the Underwriter); (g) all fees and expenses of the registrar and
transfer agent of the Stock; and (h) all other costs and expenses incident to
the performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the Company's counsel
and the Company's independent accountants); provided that, except as otherwise
provided in this Section 5 and in Section 9, the Underwriter shall pay its own
costs and expenses, including the fees and expenses of its counsel, any transfer
taxes on the Stock which it may sell and the expenses of advertising any
offering of the Stock made by the Underwriter.
6. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of the Underwriter
are subject to the accuracy, when made and on each of the Closing Dates, of the
representations and warranties of the Company contained herein, to the accuracy
of the statements of the Company made in any certificates
14
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the Commission,
and any request for additional information on the part of the
Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriter. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(a).
(b) The Underwriter shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Underwriter, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock,
the Registration Statement and the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriter, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxx & Xxxxxx, L.L.P. or Wood, Phillips, Xxxx, Xxxxx & Mortimer
shall have furnished to the Underwriter such counsel's or counsels'
written opinion or opinions, as counsel to the Company, addressed to
the Underwriter and dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriter, to the effect that:
(i) The Company and each of its domestic subsidiaries have
been duly incorporated and are validly existing as
corporations or other legal entities in good standing
under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction
identified to us by the Company as those in which their
respective ownership or lease of property or the conduct
of their respective businesses requires such
qualification, and have all power and authority necessary
to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the
failure to so qualify or have such power or authority
would not have, singularly or in the aggregate, a Material
Adverse Effect.
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital
stock of the Company, including the Stock being delivered
on the Closing Date, have been duly and validly authorized
and issued, are fully paid and nonassessable and conform
to the description thereof contained in the Prospectus.
(iii) All the outstanding shares of capital stock (or analogous
ownership interests, as applicable) of each domestic
subsidiary of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and,
except to the extent set forth in the Prospectus, are
owned by the Company directly or indirectly through one or
more wholly-owned domestic subsidiaries, free and
15
clear of any claim, lien, encumbrance, security interest,
restriction upon voting or transfer or any other claim of
any third party.
(iv) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Stock pursuant to the
Company's charter or by-laws or any agreement or other
instrument known to such counsel.
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute (with or without notice or lapse of time or
both) a default under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument
known to such counsel after reasonable investigation to
which the Company or any of its domestic subsidiaries is a
party or by which the Company or any of its domestic
subsidiaries is bound or to which any of the properties or
assets of the Company or any of its domestic subsidiaries
is subject, nor will such actions result in any violation
of the Charter or by-laws (or analogous governing
instruments, as applicable) of the Company or of any of
its domestic subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or
body or court having jurisdiction over the Company or any
of its domestic subsidiaries or any of their properties or
assets.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriter, no consent,
approval, authorization or order of, or filing or
registration with, any court or governmental agency or
body is required for the execution, delivery and
performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(viii) The statements in the Prospectus under the heading
"Description of Capital Stock," "Risk Factors - Risks
Relating to Intellectual Property" and "Risk Factors -
Risks Related To Our Common Stock Outstanding," to the
extent that they constitute summaries of matters of law or
regulation or legal conclusions, have been reviewed by
such counsel and fairly summarize the matters described
therein in all material respects. The statements set forth
in the Company's Annual Report on Form 10-K for the year
ended December 31, 2003, as amended, set forth under "Part
I - Item 1 - Business - Licenses and Patents," to the
extent that they constitute summaries of matters of law or
regulation or legal conclusions, have been reviewed by
such counsel and fairly summarize the matters described
therein in all material respects.
(ix) Except for descriptions with respect to statutes, legal or
governmental proceedings relating to the FDA, the
description in the Registration Statements and Prospectus
of statutes, legal or governmental proceedings and
contracts and other documents are accurate in all material
respects; and, except with respect to statutes, legal or
governmental proceedings relating to the FDA, to the best
of
16
such counsel's knowledge, there are no statutes, legal or
governmental proceedings, contracts or other documents of
a character required to be described in the Registration
Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as
required.
(x) Neither the Company nor any of its domestic subsidiaries
(i) is in violation of its charter or by-laws (or
analogous governing instruments, as applicable), (ii) is
in default, and no event has occurred, which, with notice
or lapse of time or both, would constitute a default, in
the due performance or observance of any term, covenant or
condition contained in any agreement or instrument to
which it is a party or by which it is bound or to which
any of its properties or assets is subject of which we
have knowledge or (iii) is in violation of any law,
ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject of
which we have knowledge or has failed to obtain any
license, permit, certificate, franchise or other
governmental authorization or permit necessary to the
ownership of its property or to the conduct of its
business except, in the case of clauses (ii) and (iii),
for those defaults, violations or failures which,
singularly or in the aggregate, would not have a Material
Adverse Effect.
(xi) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending, except for the
modification of intellectual property rights pursuant to
proceedings involving the processing and examination of
patent and trademark applications and patents before
governmental agencies or bodies, to which the Company or
any of its domestic subsidiaries is a party or of which
any property or asset of the Company or any of its
domestic subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company
or any of its domestic subsidiaries, might have a Material
Adverse Effect or would prevent or adversely affect the
ability of the Company to perform its obligations under
this Agreement; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(xii) To the best of such counsel's knowledge, the Company and
its domestic subsidiaries own or possess valid and
enforceable licenses or other rights to use all patents,
patent applications, trademarks, trademark registrations,
service marks, service xxxx registrations, trade names,
domain names, domain name registrations, copyrights,
licenses, inventions, trade secrets and rights used by the
Company or its domestic subsidiaries in connection with
their respective businesses (collectively, the
"Intellectual Property"). To the best of such counsel's
knowledge and other than as described in the Prospectus
(A) there are no third parties who have any rights in the
Intellectual Property that could preclude the Company or
any of its domestic subsidiaries, as applicable, from
conducting its business as currently conducted or as
presently contemplated to be conducted as described in the
Prospectus, (B) there are no pending or threatened
actions, suits, proceedings, investigations or claims by
others challenging the rights of the Company or any of its
domestic subsidiaries, as applicable, or, if the
Intellectual Property is licensed to the Company or any of
its domestic subsidiaries, as applicable, in respect of
any third party licensor, and (C) neither the Company nor
any of its domestic subsidiaries has and, to the extent
any Intellectual Property is licensed to the Company or
any of its domestic subsidiaries, as applicable, no third
party licensor has, infringed, or received any
17
notice of infringement of or conflict with, any rights of
others with respect to the Intellectual Property.
(xiii) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in
such opinion, the Rule 462(b) Registration Statement, if
any, was filed with the Commission on the date specified
therein, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) of the Rules
and Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by
the Commission.
(xiv) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date, and
any further amendments or supplements thereto, as of their
respective dates, made by the Company prior to the Closing
Date (other than the financial statements and other
financial data contained therein, as to which such counsel
need express no opinion) complied as to form in all
material respects with the requirements of the Securities
Act and the Rules and Regulations and the documents
incorporated by reference in the Prospectus and any
further amendment or supplement to any such incorporated
document made by the Company prior to the Closing Date
(other than the financial statements and related schedules
therein, as to which such counsel need express no
opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in
all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable, and the
Rules and Regulations and the rules and regulations of the
Commission under the Exchange Act, as applicable.
(xv) To the best of such counsel's knowledge no person or
entity has the right to require registration of shares of
Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statements
or otherwise, except for persons and entities who have
expressly waived such right or who have been given proper
notice and have failed to exercise such right within the
time or times required under the terms and conditions of
such right.
(xvi) Neither the Company nor any of its domestic subsidiaries
is an "investment company" within the meaning of the
Investment Company Act and the rules and regulations of
the Commission thereunder.
(xvii) The Company meets the requirements for the use of Form S-3
under the Securities Act and the Rules and Regulations.
The Registration Statements meet the requirements set
forth in Rule 415(a)(1)(x) of the Rules and Regulations.
(xviii) The Company and its domestic subsidiaries possess all
licenses, certificates, authorizations and permits issued
by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their businesses, except
for such licenses, certificates, authorizations or permits
the failure of which to maintain would not have a Material
Adverse Effect. Neither the Company nor any of its
domestic subsidiaries has received any notice of
proceedings relating to the revocation or modification of
any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a
Material Adverse Effect. To the best of such counsel's
18
knowledge, the Company and its domestic subsidiaries are
in compliance with all applicable federal, state, local
and foreign laws, regulations, orders and decrees
governing their business, except where noncompliance would
not, singly or in the aggregate, have a Material Adverse
Effect.
Such counsel shall also have furnished to the Underwriter a
written statement, addressed to the Underwriter and dated the Closing
Date, in form and substance satisfactory to the Underwriter, to the
effect that (x) such counsel has acted as counsel to the Company in
connection with the preparation of the Registration Statements (y)
based on such counsel's examination of the Registration Statements and
such counsel's investigations made in connection with the preparation
of the Registration Statements and "conferences with certain officers
and employees of and with auditors for and counsel to the Company",
such counsel has no reason to believe that (I) the Registration
Statements, as of the respective effective dates, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that the Prospectus contains any
untrue statement of a material fact or omits 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 or (II) any document incorporated by reference in
the Prospectus or any further amendment or supplement to any such
incorporated document, when they became effective or were filed with
the Commission, as the case may be, contained, in the case of a
registration statement which became effective under the Securities Act,
any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or, in the case of other
documents which were filed under the Exchange Act with the Commission,
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
it being understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement or the Prospectus.
The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel has not independently
verified the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and takes no
responsibility therefor except to the extent set forth in the opinion
described in clauses (viii) and (ix) above.
(e) The Underwriter shall have received from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel for the Underwriter, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Underwriter may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(f) On the date hereof, the Underwriter shall have received from KPMG
LLP a letter, addressed to the Underwriter and dated such date, in form
and substance satisfactory to the Underwriter (i) confirming that they
are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Securities Act
and the Rules and Regulations and (ii) stating the conclusions and
findings of such firm with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Prospectus.
(g) On the Closing Date, the Underwriter shall have received a letter
(the "bring-down letter") from KPMG LLP addressed to the Underwriter
and dated the Closing Date confirming, as of the date of the bring-down
letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus as of a date not more than three business
days prior to the date of the bring-down
19
letter), the conclusions and findings of such firm with respect to the
financial information and other matters covered by its letter delivered
to the Underwriter on the same date as the date of execution of this
Agreement pursuant to Section 6(f).
(h) The Company shall have furnished to the Underwriter a certificate,
dated the Closing Date, of its Chairman of the Board, its President or
a Vice President and its chief financial officer stating that (i) such
officers have carefully examined the Registration Statements and the
Prospectus and, in their opinion, the Registration Statements as of
their respective effective dates and the Prospectus, as of each such
effective date, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) since
the effective date of the Initial Registration Statement no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statements or the Prospectus, (iii) to the best of
their knowledge after reasonable investigation, as of the Closing Date,
the representations and warranties of the Company in this Agreement are
true and correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) subsequent to the
date of the most recent financial statements included or incorporated
by reference in the Prospectus, there has been no material adverse
change in the financial position or results of operation of the Company
and its subsidiaries, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, except as set forth in the
Prospectus.
(i) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus and (ii) since such
date there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Underwriter, so material and
adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
(j) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Stock or materially and adversely affect or
potentially materially and adversely affect the business or operations
of the Company; and no injunction, restraining order or order of any
other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Stock or materially and adversely affect or
potentially materially and adversely affect the business or operations
of the Company.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange
or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum or maximum prices or maximum range for prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory
20
body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities or
a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, (iii) the United
States shall have become engaged in further hostilities, or the subject
of any further act or acts of terrorism, or there shall have been an
escalation in hostilities involving the United States, or there shall
have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect
of international conditions on the financial markets in the United
States shall be such) as to make it, in the judgment of the
Underwriter, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in
the Prospectus.
(l) Nasdaq shall have approved the Stock for listing, subject only to
official notice of issuance.
(m) Wachovia shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the officers and directors of the
Company listed in Schedule A to this Agreement.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Underwriter, its
officers, employees, representatives and agents and each person, if
any, who controls the Underwriter within the meaning of the Securities
Act (collectively the "Underwriter Indemnified Parties" and, each an
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus or in any
amendment or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading and
shall reimburse each Underwriter Indemnified Party promptly upon demand
for any legal or other expenses reasonably incurred by that Underwriter
Indemnified Party in connection with investigating or preparing to
defend or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged
omission from the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Underwriter specifically for use
therein, which information the parties hereto agree is limited to the
Underwriter's Information (as defined in Section 16). This indemnity
agreement is not exclusive and will be in addition to any liability
which the Company might otherwise have and shall not limit any rights
or remedies which may otherwise be available at law or in equity to
each Underwriter Indemnified Party.
21
(b) The Underwriter shall indemnify and hold harmless the Company its
officers, employees, representatives and agents, each of its directors
and each person, if any, who controls the Company within the meaning of
the Securities Act (collectively the "Company Indemnified Parties" and
each a "Company Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company Indemnified Parties may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter
specifically for use therein, and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably incurred
by such parties in connection with investigating or preparing to defend
or defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability or action as such expenses
are incurred; provided that the parties hereto hereby agree that such
written information provided by the Underwriter consists solely of the
Underwriter's Information. This indemnity agreement is not exclusive
and will be in addition to any liability which the Underwriter might
otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to the Company Indemnified
Parties.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or
22
related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys at any time
for all such indemnified parties, which firm shall be designated in
writing by Wachovia, if the indemnified parties under this Section 7
consist of any Underwriter Indemnified Party, or by the Company if the
indemnified parties under this Section 7 consist of any Company
Indemnified Parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 7(a) and 7(b), shall use all
reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of
Section 7(d) below, no indemnifying party shall be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with
its written consent or if there be a final judgment for the plaintiff
in any such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter on the
other from the offering of the Stock or if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on the
one hand and the Underwriter on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriter with
respect to the Stock purchased under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriter
on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission; provided that the parties hereto agree that the
written information furnished to the Company by or on behalf of the
Underwriter for use in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus consists solely of the
Underwriter's Information. The Company and the Underwriter agree that
it would not be just and equitable if contributions pursuant to this
Section 7(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 7(e) shall be deemed to include, for purposes of
23
this Section 7(e), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
Section 7(e), the Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public was offered to
the public less the amount of any damages which the Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. 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.
8. TERMINATION. The obligations of the Underwriter hereunder may be terminated
by Wachovia, in its absolute discretion by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 6(i) or 6(k) have occurred or if
the Underwriter shall decline to purchase the Stock for any reason permitted
under this Agreement.
9. REIMBURSEMENT OF UNDERWRITER'S EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8, (b) the Company shall fail to tender the
Stock for delivery to the Underwriter for any reason not permitted under this
Agreement, or (c) the Underwriter shall decline to purchase the Stock for any
reason permitted under this Agreement the Company shall reimburse the
Underwriter for the fees and expenses of its counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by it in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to Wachovia. If this
Agreement is terminated pursuant to Section 10 by reason of the default of the
Underwriter, the Company shall not be obligated to reimburse the defaulting
Underwriter on account of those expenses.
10. UNDERWRITER DEFAULT. If the Underwriter shall default in its obligations to
purchase shares of Stock hereunder, this Agreement shall terminate. Any
termination of this Agreement pursuant to this Section 10 shall be without
liability on the part of the Company, except expenses to be paid or reimbursed
pursuant to Sections 5 and 9 and except the provisions of Section 7 shall not
terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Company and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person other than the persons
mentioned in the preceding sentence any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants,
agreements and indemnities of the Company contained in this Agreement shall also
be for the benefit of the Underwriter Indemnified Parties, and the indemnities
of the Underwriter shall also be for the benefit of the Company Indemnified
Parties. It is understood that the Underwriter's responsibility to the Company
is solely contractual in nature and the Underwriter does not owe the Company, or
any other party, any fiduciary duty as a result of this Agreement.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the Underwriter, as set forth in this Agreement or
made by them respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter, the Company or any person controlling any of them and shall survive
delivery of and payment for the Stock.
24
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, telex or
facsimile transmission to Wachovia Capital Markets, LLC, Equity Capital
Markets, 0 Xx. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: West
Xxxxx (Fax: 000-000-0000), or to such other address as Wachovia may
designate in writing to the Company; and
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Encysive Pharmaceuticals Inc., 0000 Xxxx
Xxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxx 00000, Attention: Xxxxx X. Given, M.D.
(Fax: 000-000-0000).
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITER'S INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriter's Information consists
solely of the statements concerning the Underwriter contained in the fourth and
tenth paragraphs under the heading "Underwriting" in the Company's Prospectus
Supplement dated September 8, 2004.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Underwriter.
19. COUNTERPARTS. 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.
25
If the foregoing is in accordance with your understanding of the
agreement between the Company and the Underwriter, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
ENCYSIVE PHARMACEUTICALS INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: VP, Finance and Administration,
Secretary and Treasurer
Accepted as of the date first above written:
WACHOVIA CAPITAL MARKETS, LLC
By: WACHOVIA CAPITAL MARKETS, LLC
By: /s/ West Xxxxx
-----------------------------
Name: West Xxxxx
Title: Director
26
SCHEDULE A
Xxx X. Xxxxxxxx, M.D.
Xxxxx X. Brook, Ph.D.
J. Xxxxx Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxx, M.D.
Xxxxxx X. Xxxxxxxxxx
Xxxxxxx X.X. Xxxxx
Xxxxxxx Xxxxx, Ph.D.
Xxxxx X. Given, M.D.
Xxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx, M.D.
Xxxx X. Xxxxxxxxx
Xxx Xxxxxx
Xxxxx X. Xxxxxxx, Ph.D.
Xxxxxxx Xxxx
Xxxxx X. Xxxxxxxxx, M.D.
27
EXHIBIT I
[Form of Lock-Up Agreement]
September 8, 2004
Wachovia Capital Markets, LLC
000 Xxxxx Xxxxxxx Xxxxxx, XX0000
Xxxxxxxxx, XX 00000
Re: Encysive Pharmaceuticals Inc. Shares of Common Stock
Dear Sirs:
In order to induce Wachovia Capital Markets, LLC ("Wachovia") to enter
in to a certain underwriting agreement with Encysive Pharmaceuticals Inc., a
Delaware corporation (the "Company"), with respect to the public offering of
shares of the Company's common stock, par value $.005 per share ("Common
Stock"), the undersigned hereby agrees that for a period of 90 days following
the date of the final prospectus filed by the Company with the U.S. Securities
and Exchange Commission in connection with such public offering (the "Restricted
Period"), the undersigned will not, without the prior written consent of
Wachovia, directly or indirectly, (i) offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")) or securities convertible into or exercisable or exchangeable in
Common Stock, (ii) enter into any swap, hedge or similar agreement or
arrangement that transfers in whole or in part, the economic risk of ownership
of the Beneficially Owned Shares or securities convertible into or exercisable
or exchangeable in Common Stock or (iii) engage in any short selling of the
Common Stock[; provided, however, that notwithstanding the foregoing, the
undersigned may sell up to an aggregate of * shares of Common Stock within such
90-day period without the prior written consent of Wachovia upon prior notice to
Wachovia].
If:
(1) during the last 18 days of the Restricted Period, the Company
issues an earnings release; or
(2) prior to the expiration of the Restricted Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Restricted Period, the restrictions set forth
xxxxx shall continue to apply until the expiration of the 19-day period
beginning on the issuance of the earnings release.
Anything contained herein to the contrary notwithstanding, any person
to whom shares of Common Stock or Beneficially Owned Shares are transferred from
the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until
the expiration of the Restricted Period, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as the same may
be amended or supplemented from time to time, of any shares of Common
---------------------------------
* As agreed with Wachovia.
28
Stock that are registered in the name of the undersigned or that are
Beneficially Owned Shares. In order to enable the aforesaid covenants to be
enforced, the undersigned hereby consents to the placing of legends and/or
stop-transfer orders with the transfer agent of the Common Stock with respect to
any shares of Common Stock or Beneficially Owned Shares.
[Signatory]
By:
-------------------------------
Name:
Title:
