Exhibit 1.1
PRAECIS PHARMACEUTICALS INCORPORATED
8,000,000 Shares(1)
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
April __, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets Corp.
Credit Suisse First Boston Corporation
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
PRAECIS PHARMACEUTICALS INCORPORATED, a corporation organized under the
laws of the State of Delaware (the "COMPANY"), proposes to sell to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"), for whom you (the
"REPRESENTATIVES") are acting as representatives, 8,000,000 shares of Common
Stock, $.01 par value ("COMMON STOCK") of the Company (said shares to be issued
and sold by the Company being hereinafter called the "UNDERWRITTEN SECURITIES").
The Company also proposes to grant to the Underwriters an option to purchase up
to 1,200,000 additional shares of Common Stock to cover over-allotments (the
"OPTION SECURITIES"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "SECURITIES"). To the extent there are
no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Certain terms used herein are defined in Section 17 hereof. As
part of the offering contemplated by this Agreement, Xxxxxxx Xxxxx Xxxxxx Inc.
has agreed to reserve out of the Securities set forth opposite its name on the
Schedule I to this Agreement, up to 400,000 shares of Common Stock, for sale to
the Company's employees, officers, and directors and customers and vendors of
the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under
the heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Securities to be
sold by Xxxxxxx Xxxxx Barney Inc. pursuant to the Directed Share Program (the
"Directed Shares") will be sold by Xxxxxxx Xxxxx Xxxxxx Inc. pursuant to this
Agreement at the public offering price. Any Directed Shares not orally confirmed
for
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(1) Plus an option to purchase from the Company, up to 1,200,000
additional Securities to cover over-allotments.
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by Xxxxxxx Xxxxx Barney Inc.
as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-96351) on Form S-1, including a related
preliminary prospectus, for registration under the Act of the offering and sale
of the Securities. The Company has filed [ ] amendments thereto, each including
a related preliminary prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either (1) prior to the
Effective Date of such registration statement, a further amendment to such
registration statement (including the form of final prospectus) or (2) after the
Effective Date of such registration statement, a final prospectus in accordance
with Rules 430A and 424(b). In the case of clause (2), the Company has included
in such registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Prospectus. As
filed, such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be included or
made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on which
Option Securities are purchased, if such date is not the Closing Date (a
"SETTLEMENT DATE"), the Prospectus (and any supplements thereto) will, comply in
all material respects with the applicable requirements of the Act and the rules
thereunder. On the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. On the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Notwithstanding
anything in this Agreement to the contrary, the Company makes no representations
or warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Prospectus (or
any supplement thereto).
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(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and conduct its
business as described in the Prospectus, and is duly qualified to do business as
a foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification, except where the failure to be
so qualified would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto);
(d) The Company does not and as of the Closing Date will not
have any subsidiaries;
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and nonassessable; the Securities have been duly and
validly authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully paid and nonassessable;
the Securities are duly listed, and admitted and authorized for trading, subject
to official notice of issuance and evidence of satisfactory distribution, on the
Nasdaq National Market; the certificates for the Securities are in valid and
sufficient form in accordance with applicable laws; the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in the Company are outstanding;
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under the
Act and the Exchange Act, and such as may be required (i) under the state
securities or blue sky laws of any jurisdiction in connection with the purchase
and distribution of the Securities by the Underwriters in the manner
contemplated
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herein and in the Prospectus, (ii) in connection with the listing of the
Securities on the Nasdaq National Market and (iii) by the federal and provincial
laws of Canada.
(j) Neither the issuance and sale of the Securities nor the
consummation of any other transactions herein contemplated nor the fulfillment
of the terms hereof will conflict with or, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, (i) the certificate of incorporation or by-laws of the
Company, (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties, except, with respect to
clauses (ii) and (iii) above, for such conflicts, breaches, violations and
impositions which would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company.
(k) Except as described in the Prospectus, no holders of
securities of the Company have rights to the registration of such securities
under the Registration Statement.
(l) The historical financial statements and schedules of the
Company included in the Prospectus and the Registration Statement present fairly
in all material respects the financial condition, results of operations and cash
flows of the Company as of the dates and for the periods indicated, comply as to
form with the applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "SELECTED
FINANCIAL DATA" in the Prospectus and Registration Statement fairly present, on
the basis stated in the Prospectus and the Registration Statement, the
information included therein.
(m) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator
involving the Company or its property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to have a material
adverse effect on the performance by the Company of this Agreement or the
consummation by the Company of any of the transactions contemplated hereby or
(ii) could reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company.
(n) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), the Company owns or leases all such
properties as are necessary to the conduct of its operations as presently
conducted.
(o) The Company is not in violation or default of (i) any
provision of its certificate of incorporation or bylaws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
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or instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or decree
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of its
properties, as applicable, except, in the case of clauses (ii) and (iii) above,
for such violations or defaults which would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company.
(p) Ernst & Young, LLP, who have certified certain financial
statements of the Company and delivered their report with respect to the audited
financial statements and schedules included in the Prospectus, are independent
public accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations of the Commission thereunder.
(q) There are no transfer taxes or other similar fees or
charges under federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and delivery of
this Agreement or the issuance or sale by the Company of the Securities.
(r) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions
thereof, except in any case in which the failure so to file would not have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company.
(s) No labor problem or dispute with the employees of the
Company exists or, to the best knowledge of the Company, is threatened or
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, contractors or
customers, that would have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(t) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses (and at the stage of such business)
in which they are engaged. All policies of insurance and fidelity or surety
bonds insuring the Company or any of its businesses, assets, employees, officers
and directors are in full force and effect. The Company is in compliance with
the terms of such policies and instruments in all material respects. There are
no claims by the Company under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause. The Company has not been refused any insurance coverage sought or
applied for; and the Company has no reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to
obtain similar
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coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(u) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), the Company possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its
business. The Company has not 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 on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company.
(v) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(w) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(x) The Company is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii)
has received and is in compliance with all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct business and (iii)
has not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have a material adverse change in the condition (financial or
otherwise), prospects, earnings, business or properties of the Company, except
as set forth in or contemplated in the Prospectus (exclusive of any supplement
thereto). The Company has not been named as a "potentially responsible party"
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended.
(y) The Company has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee
Retirement Income Security Act
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of 1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and such
regulations and published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. The Company has not incurred any unpaid liability
to the Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of ERISA.
(z) The Company owns, possesses, licenses or has other rights
to use, all patents, patent rights, inventions, know-how, technology, trade
secrets (including other unpatentable proprietary or confidential information,
systems or procedures), copyrights, trademarks, service marks, trade names,
trade dress, logos, and all applications for any of the foregoing necessary for
the conduct of the Company's business in all material respects as now conducted
as described in the Prospectus (collectively, the "INTELLECTUAL PROPERTY").
Except as set forth in the Prospectus, (a) there are no third parties, other
than parties to agreements whereby the Company licenses Intellectual Property,
that have rights to any such Intellectual Property; (b) there is no material
infringement by third parties of any such Intellectual Property; (c) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (d) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (e)
there is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; (f) there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by or licensed
to the Company or that interferes with the issued or pending claims of any such
Intellectual Property; and (g) there is no prior art of which the Company is
aware that may render any U.S. patent held by the Company invalid or any U.S.
patent application held by the Company unpatentable which has not been disclosed
to the U.S. Patent and Trademark Office; except, in each case, other than such
rights, infringements, actions, suits proceedings or claims that, individually
and in the aggregate, would not have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company.
(aa) The statements contained in (A) the "PROSPECTUS SUMMARY"
section of the Prospectus under the caption "OUR CORPORATE COLLABORATORS," (B)
the "RISK FACTORS" section of the Prospectus under the captions "IF OUR CLINICAL
TRIALS ARE NOT SUCCESSFUL, OR IF WE ARE OTHERWISE UNABLE TO OBTAIN AND MAINTAIN
THE REGULATORY APPROVAL REQUIRED TO MARKET AND SELL OUR PRODUCTS, WE WOULD INCUR
INCREASING OPERATING LOSSES," "IF OUR STRATEGIC PARTNERS REDUCE, DELAY OR
TERMINATE THEIR FINANCIAL SUPPORT, WE MAY BE UNABLE TO SUCCESSFULLY DEVELOP,
MARKET, DISTRIBUTE OR SELL OUR PRODUCTS," "IF WE ARE UNABLE TO OBTAIN AND
ENFORCE VALID PATENTS, WE COULD LOSE OUR COMPETITIVE ADVANTAGE," and
"ANTI-TAKEOVER PROVISIONS IN OUR CHARTER, BY-LAWS AND UNDER
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DELAWARE LAW MAY MAKE AN ACQUISITION OF US MORE DIFFICULT, EVEN IF AN
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS," (C) the "BUSINESS" section
of the Prospectus under the captions "CORPORATE COLLABORATIONS," "TECHNOLOGY
LICENSES," "MANUFACTURING," "PATENTS AND PROPRIETARY RIGHTS," and "GOVERNMENT
REGULATION," (D) the "MANAGEMENT" section of the Prospectus under the caption
"INCENTIVE PLANS," and (E) the "DESCRIPTION OF CAPITAL STOCK" and "SHARES
ELIGIBLE FOR FUTURE SALE" sections of the Prospectus, insofar as such statements
summarize legal or regulatory matters, agreements, documents, or proceedings
discussed therein, are accurate and fair summaries of such legal or regulatory
matters, agreements, documents or proceedings.
(bb) The Company (i) does not have any material lending or
other relationship with any bank or lending institution, which to the best
knowledge of the Company, is an affiliate of Xxxxxxx Xxxxx Xxxxxx Holdings Inc.
and (ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any person or entity,
which to the best knowledge of the Company, is an affiliate of Xxxxxxx Xxxxx
Barney Holding Inc.
(cc) The Registration Statement, the Prospectus, and the
Preliminary Prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental instrumentality or
court, other than such as have been obtained, is necessary under the securities
laws and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the amount
of the Underwritten Securities set forth opposite such Underwriter's name in
Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, jointly and severally, up to
1,200,000 Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the
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several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion shall
make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York, New York time, on April
___, 2000, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "CLOSING DATE"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective as soon as practicable following the
Execution Time and not later than the time set forth in Section 6(a) below.
Prior to the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the Prospectus
or any Rule 462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under
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Rule 424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence reasonably satisfactory to the Representatives of such timely filing.
The Company will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become effective,
(2) when the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, the Company shall promptly (1) notify the Representatives of any
such event, (2) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance; and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters one signed copy of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as many
copies of each Preliminary Prospectus and the Prospectus and any supplement
thereto as the Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such jurisdictions as
the Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities; provided that
in no event shall the Company be obligated to qualify to do business, or
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subject itself to taxation in respect thereof, in any jurisdiction where it is
not now so qualified or taxed, or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so subject.
(f) Except as expressly contemplated hereby, the Company will
not, without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer,
sell, contract to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any affiliate of the
Company) directly or indirectly, including by filing (or participation in the
filing of) a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act, any
other shares of Common Stock, or any securities convertible into, or exercisable
or exchangeable for, shares of Common Stock, or publicly announce an intention
to effect any such transaction, for a period of 180 days after the date of the
Underwriting Agreement; PROVIDED, HOWEVER, that the Company may (i) grant
options to purchase common stock and issue and sell Common Stock pursuant to any
employee stock option plan, stock ownership plan or dividend reinvestment plan
of the Company described in the Prospectus and (ii) issue Common Stock issuable
upon the conversion of securities or the exercise of warrants outstanding at the
Execution Time.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and all amendments or supplements to any
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original issuance
and sale of the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange Act and
the listing of the Securities on the Nasdaq National Market; (vi) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the
reasonable fees and expenses of counsel for the Underwriters relating to such
registration and qualification); (vii) any filings required to
11
be made with the National Association of Securities Dealers, Inc. (including
filing fees and the reasonable fees and expenses of one counsel for the
Underwriters relating to such filings); (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (x) all other costs
and expenses incident to the performance by the Company of its obligations
hereunder.
(i) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent required
by the National Association of Securities Dealers, Inc. (the "NASD") or the NASD
rules from sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the Registration
Statement. Xxxxxxx Xxxxx Xxxxxx Inc. will notify the Company as to which
Participants will need to be so restricted. The Company will direct the removal
of such transfer restrictions upon the expiration of such period of time.
(j) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program, up to $25,000 in the
aggregate. Furthermore, the Company covenants with Xxxxxxx Xxxxx Barney Inc.
that the Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
(k) The Company shall promptly amend its charter to effectuate
such changes consistent with the description contained in the Registration
Statement and the Prospectus, including the information set forth under the
caption "DESCRIPTION OF CAPITAL STOCK."
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later than (i)
6:00 PM New York, New York time on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New York,
New York time on such date or (ii) 9:30 AM on the Business Day following the day
on which the public offering price was determined, if such determination
occurred after 3:00 PM New York, New York time on such date; if filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and within the
time period required by Rule 424(b); and no stop order
12
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have requested and caused Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, special counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, substantially in the form of EXHIBIT A attached hereto. In
rendering the opinion contained in EXHIBIT A, such counsel may rely as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
(c) The Company shall have requested and caused Lahive and
Xxxxxxxxx, LLP, special patent counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that the statements contained in (A) the "RISK
FACTORS" section of the Prospectus under the caption "IF WE ARE UNABLE TO OBTAIN
AND ENFORCE VALID PATENTS, WE COULD LOSE OUR COMPETITIVE ADVANTAGE," and (B) the
"BUSINESS" section of the Prospectus under the captions "TECHNOLOGY LICENSES,"
"PATENTS AND PROPRIETARY RIGHTS," and "LEGAL PROCEEDINGS," in each case, insofar
as such statements constitute matters of law or legal conclusions or summarize
legal or regulatory matters or proceedings, have been reviewed by them and are
accurate and fair descriptions of such matters of law or legal conclusions or
summaries of such legal or regulatory matters or proceedings.
In rendering such opinion such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
Commonwealth of Massachusetts or the federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
(d) The Company shall have requested and caused Xxxxx Xxxxxx &
XxXxxxxx P.C., special regulatory counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that the statements contained in (A) the "RISK
FACTORS" section of the Prospectus under the caption "IF OUR CLINICAL TRIALS ARE
NOT SUCCESSFUL, OR IF WE ARE OTHERWISE UNABLE TO OBTAIN AND MAINTAIN REGULATORY
APPROVAL REQUIRED TO MARKET AND SELL OUR PRODUCTS, WE WOULD INCUR INCREASING
OPERATING LOSSES" AND (B) the "BUSINESS" section of the Prospectus under the
caption "GOVERNMENT REGULATION," insofar as such statements constitute matters
of law or legal conclusions or summarize legal or regulatory matters or
proceedings, have been reviewed by them and are accurate and fair descriptions
of such matters of law or legal conclusions or summaries of such legal or
regulatory matters or proceedings.
(e) The Representatives shall have received from Xxxxxxx,
Procter & Xxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement, the Prospectus
(together with any supplement thereto) and other related
13
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by (i) the Chief Executive Officer and
President of the Company and (ii) the Chief Financial Officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any supplements
to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse effect
on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, except as set
forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(g) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives letters, dated respectively as of
the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the applicable rules and
regulations adopted by the Commission thereunder and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Prospectus and reported on by them comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and audit and compensation committees
of the Company; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company as
14
to transactions and events subsequent to December 31, 1999,
nothing came to their attention which caused them to believe
that:
(1) with respect to the period subsequent to
December 31, 1999, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the capital stock of the
Company or decreases in the stockholders' equity of
the Company as compared with the amounts shown on the
December 31, 1999 balance sheet included in the
Registration Statement and the Prospectus; or for the
period from January 1, 2000 to such specified date
there were any decreases, as compared with the period
from January 1, 1999 to __________ 1999 in income
before income taxes or in total or per share amounts
of net income of the Company, except in all instances
for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Representatives; and
(2) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
is not in conformity with the applicable disclosure
requirements of Regulation S-K.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company) set forth in the Registration Statement and the
Prospectus, including the information set forth under the
captions "SELECTED FINANCIAL DATA" and "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" in the Prospectus, agrees with the accounting
records of the Company, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified pursuant to
paragraph (g)(ii)(1) in the letter or letters referred to in paragraph (g) of
this Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto) the effect
of which, in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the
15
Registration Statement (exclusive of any amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
(i) On or prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
this Agreement and all obligations of the Underwriters hereunder may be canceled
at, or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxxx, Procter & Xxxx LLP, counsel for the
Underwriters, at Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, on the Closing
Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Xxxxxx Inc. on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them solely in connection with the proposed
purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as originally
filed or in any amendment thereof, or in any Preliminary Prospectus or the
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
16
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein;
PROVIDED FURTHER, that with respect to any untrue statement or omission of
material fact made in any Preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
The Company agrees to indemnify and hold harmless Xxxxxxx Xxxxx Barney
Inc., the directors, officers, employees and agents of Xxxxxxx Xxxxx Xxxxxx Inc.
and each person who controls Xxxxxxx Xxxxx Barney Inc. within the meaning of
either the Act or the Exchange Act ("XXXXXXX XXXXX XXXXXX INC. ENTITIES"), from
and against any and all losses, claims, damages and liabilities to which they
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim), insofar as such losses,
claims damages or liabilities (or actions in respect thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue statement of a material
fact contained in the prospectus wrapper material prepared by or with the
consent of the Company for distribution in foreign jurisdictions in connection
with the Directed Share Program attached to the Prospectus or any preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statement therein, when considered in conjunction with the Prospectus
or any applicable preliminary prospectus, not misleading; (ii) are caused by the
failure of any Participant to pay for and accept delivery of the securities
which immediately following the Effective Date of the Registration Statement
were subject to a properly confirmed agreement to purchase, provided that in any
such event the Company shall have the express right to mitigate any such losses,
claims, damages or liabilities through the re-allocation of any such Directed
Shares to other Participants; or (iii) are related to, arising out of, or in
connection with the Directed Share Program, provided that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of Xxxxxxx Xxxxx Barney Inc. specifically for inclusion therein.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each
17
Underwriter, but only with reference to written information relating to such
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities, and, under the heading "UNDERWRITING", (i) the list
of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances (iii) the
paragraph related to stabilization, syndicate covering transactions and penalty
bids and (iv) the paragraph relating to electronic distributions of the Common
Stock in any Preliminary Prospectus and the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to the second paragraph of 8(a) hereof in respect of such
action or proceeding, then in addition to such separate firm for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees and
expenses of counsel (in addition to any local counsel) for Xxxxxxx Xxxxx Xxxxxx
Inc., the directors, officers, employees and agents of Xxxxxxx Xxxxx Barney
Inc., and all persons, if any, who control Xxxxxxx Xxxxx Xxxxxx Inc. within the
meaning of either the Act or the Exchange Act for the defense of any losses,
claims, damages and liabilities arising out of the Directed Share Program.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such
18
action or (iv) the indemnifying party shall authorize the indemnified party to
employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively "LOSSES") to which the
Company and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Underwriters on the other from the offering of the
Securities; PROVIDED, HOWEVER, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company on the
one hand and of the Underwriters on the other in connection with the statements
or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
19
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
exchange or the Nasdaq National Market, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon
20
Xxxxx Xxxxxx Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Xxxxxxx Xxxxx Xxxxxx Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the Company, will be
mailed, delivered or telefaxed to PRAECIS PHARMACEUTICALS INCORPORATED, 0
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000, (fax no.: (000) 000-0000)
and confirmed to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Xxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: Xxxx X. Xxxx, Esq.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New
York, New York, or Boston, Massachusetts.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
21
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
PRAECIS PHARMACEUTICALS INCORPORATED
By:
-------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer and President
23
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney Inc.
CIBC World Markets Corp.
Credit Suisse First Boston Corporation
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By:
---------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
24
SCHEDULE I
NUMBER OF UNDERWRITTEN
SECURITIES TO BE
UNDERWRITERS PURCHASED
Xxxxxxx Xxxxx Barney Inc. . . . . . . .
CIBC World Markets Corp.. . . . . . . . . . . .
Credit Suisse First Boston Corporation. . . . . . . .
------------
Total . . . . . . . . .
============
Lock-up Agreement
PRAECIS PHARMACEUTICALS INCORPORATED
PUBLIC OFFERING OF COMMON STOCK
____________, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
CIBC World Markets
Credit Suisse First Boston
As Representative of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between PRAECIS
PHARMACEUTICALS INCORPORATED, a Delaware corporation (the "Company"), and you as
representative of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxxxx Xxxxx Xxxxxx Inc., offer to sell, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including by filing (or participating in the filing of) a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
and Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 180 days after the
date of the Underwriting Agreement, other than shares of Common Stock disposed
of either (i) as bona fide gifts or (ii) as a distribution to the undersigned's
partners or shareholders of such entities, provided that the donee(s) or such
partners or shareholders agree in writing prior to such disposition to be bound
by the restrictions set forth herein.
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
-----------------------------------
Name:
Title:
EXHIBIT A
Form of Opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
1. The Company has been duly incorporated and is existing and
in good standing under the laws of the State of Delaware. The Company is
qualified to do business and is in good standing as a foreign corporation under
the laws of the Commonwealth of Massachusetts, the State of New Jersey and the
State of Califor nia.
2. The Company has the corporate power and corporate authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement.
3. Upon the filing of the Restated Charter with the Delaware
Secretary on the date hereof, the authorized capital stock of the Company will
be as set forth in the Prospectus and will conform in all material respects to
the description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, and were not issued in violation of any
preemptive rights arising under the General Corporation Law of the State of
Delaware (the "DGCL") or under any Applicable Contract. In rendering the opinion
set forth in this paragraph 3, we have with your permission relied solely on the
Stock Records of the Company in determining the number of all issued and
outstanding shares of capital stock of the Company and have relied solely on the
Officer's Certificate as to the receipt by the Company of the consideration
referred to therein in respect of the issuance of shares of capital stock of the
Com pany.
4. Except as described or referred to in the Prospectus or the
Registration Statement, no options, warrants or other similar rights to
purchase, agreements or other obligations to issue, or rights to convert any
obligation into or exchange any securities for, shares of capital stock of the
Company, in each case pursuant to any Applicable Contract, are outstanding.
5. The Shares to be issued and sold by the Company pursuant to
the Underwriting Agreement have been duly authorized by the Company, and, when
issued and
delivered against payment therefor in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and nonassessable.
The issuance of the Shares is not subject to any preemptive or other similar
rights to subscribe to purchase any such Shares arising under the Charter, the
By-Laws, the DGCL or under any Applicable Contract.
6. The Specimen Certificate complies with all applicable
statutory requirements under the DGCL.
7. The Company has the corporate power and corporate authority
to enter into the Underwriting Agreement and to perform its obligations
thereunder and to consummate the transactions contemplated thereby, including
the issuance, sale and delivery of the Shares to be issued, delivered and sold
by it to the Under writers.
8. The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
9. No Governmental Approval is legally required to be obtained
or made by the Company for the Company to execute and deliver the Underwriting
Agreement, or for the issuance or sale to the Underwriters of the Shares as
provided in the Underwriting Agreement, except such as may be required under the
Act and the Securities Exchange Act of 1934, as amended, which have been
obtained or made.
10. The execution and delivery by the Company of the Underwrit
ing Agreement, and the performance by the Company of its obligations thereunder,
including the issuance and sale to the Underwriters of the Shares as provided
therein, does not breach or violate, or impose any lien, charge or encumbrance
upon any property or assets of the Company pursuant to, (i) the Certificate of
Incorporation or By-Laws, (ii) the terms of any Applicable Contract (except that
we do not express any opinion as to any covenant, restriction or provision of
any such agreement or instrument with respect to financial covenants, ratios or
tests or any aspect of the financial condition or results of operations of the
Company) or (iii) any Applicable Law or any Applicable Order.
11. The Registration Statement, as of its effective date, and
the Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the Rules and Regulations, except that, in each case, we express no opinion as
to the financial statements, schedules and other financial and statistical data
included or excluded therefrom or the exhibits to the Registration Statement,
and we do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Regis tration Statement or the
Prospectus, except to the extent specifically stated in paragraphs 14 and 15
below.
12. To our knowledge, there are no contracts or documents of a
character required to be filed as exhibits to the Registration Statement which
are not filed as required.
13. To our knowledge, no holders of securities of the Company
have rights to the registration of shares of Common Stock or other securities of
the Company pursuant to any Applicable Contract because of the filing of the
Registra tion Statement by the Company or the offering contemplated thereby.
14. The descriptions in the Prospectus of certain provisions
of the DGCL, Restated Charter and Restated By-Laws set forth under the caption
"Descrip tion of Capital Stock," to the extent that such descriptions purport to
summarize such provisions (or portions thereof) referred to therein, fairly
summarize such provisions (or portions thereof) in all material respects.
15. The descriptions in the Prospectus of certain provisions
of Rules 144 and 701 under the Act set forth under the caption "Shares Eligible
for Future Sale," to the extent that such descriptions purport to summarize such
provi sions (or portions thereof) referred to therein, fairly summarize such
provisions (or portions thereof) in all material respects.
16. To our knowledge, there are no legal or governmental pro
ceedings pending against the Company of a character required to be described in
the Registration Statement or the Prospectus that are not described as required.
17. The Company is not, and upon completion of the sale of the
Shares and the application of the net proceeds thereof as described in the
Prospectus, will not be, an "investment company" within the meaning of the
Investment Com pany Act of 1940, as amended.
We have been orally advised by the Commission that the
Registration Statement was declared effective under the Act at [ ], Washington,
D.C. time, on [ ], 2000. We have been orally advised by the Commission that no
stop order suspend ing the effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceedings for that purpose have
been instituted or are pending or threatened by the Commission. The Prospectus
was filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations within the time period required by Rule 424(b). Based solely on our
review of the Nasdaq Letter, the Shares have been included for quotation, and
are admitted and authorized for trading, subject to official notice of issuance
and evidence of satisfactory distribution, on the Nasdaq National Market.
In addition, we have participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants of the Company, your counsel and you, at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (except for those made under the caption "Description of
Capital Stock" in the Prospectus, insofar as they relate to provisions (or
portions thereof) of the DGCL, the Restated Charter or Restated By-Laws
described therein and for those made under the caption "Shares Eligible for
Future Sale" in the Prospectus, insofar as they relate to certain provisions (or
portions thereof) of Rules 144 and 701 under the Act), on the basis of the
foregoing, no facts have come to our attention that have led us to believe that
the Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date, contained an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that, in each case, we express no opinion or belief with
respect to the financial statements, schedules and other financial and
statistical data included therein or excluded therefrom or the exhibits to the
Registration Statement.
