EXHIBIT 1.1
U.S. and International Underwriting Agreement
July __, 2000
Xxxx Capital Partners, Inc.
Gruntal & Co., L.L.C.
As Representatives of the Several U.S. Underwriters
c/x Xxxx Capital Partners, Inc.
00000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
WestLB Panmure Limited
New Broad Street House
35 New Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Ladies and Gentlemen:
Introductory. Keryx Biopharmaceuticals, Inc., a Delaware corporation
(the "Company"), proposes to issue and sell to the several Underwriters (as
-------
defined below) and to the places procured by the International Underwriter (as
defined below), shares of its common stock, $.001 par value per share (the
"Common Shares"). It is understood that, subject to the conditions hereinafter
--------------
stated: (a) _____ Common Shares (the "U.S. Firm Shares") will be sold to the
----------------
several U.S. underwriters named in Schedule A hereto (the "U.S. Underwriters")
-----------------
in connection with the offering (the "U.S. Offering") and sale of such U.S. Firm
-------------
Shares in the United States, and (b) _______ Common Shares (the "International
-------------
Firm Shares") will be sold to WestLB Panmure Limited (the "International
----------- -------------
Underwriter") in connection with the offering (the "International Offering" and,
----------- ----------------------
together with the U.S. Offering, the "Offering") and sale of such International
--------
Firm Shares outside the United States. Xxxx Capital Partners, Inc. (the "U.S.
----
Lead Manager") and Gruntal & Co., L.L.C. (together with the U.S. Lead Manager,
------------
the "U.S. Representatives") shall act as the representatives of the several U.S.
--------------------
Underwriters. The U.S. Representatives and the International Underwriter are
hereinafter collectively referred to as the "Representatives." U.S. Lead
Manager and the International Underwriter will also serve as the joint global
coordinators of the Offering (the "Global Coordinators"). The U.S. Underwriters
-------------------
and the International Underwriter are hereinafter collectively referred to as
the "Underwriters."
In addition, for the sole purpose of covering over-allotments from
sale of the U.S. Firm Shares and the International Firm Shares, the Company
proposes to issue and sell: (a) to the U.S. Underwriters, at the option of the
U.S. Representatives, an aggregate of not more than ________ Common Shares (the
"U.S. Option Shares"), and (b) to the International Underwriter, at the option
------------------
of the International Underwriter, an aggregate of not more than _____ Common
Shares (the "International Option Shares"). The U.S. Firm Shares and the U.S.
---------------------------
Option Shares are hereinafter called the "U.S. Shares;" the International Firm
-----------
Shares and the International Option Shares are hereinafter collectively referred
to as the "International Shares;" the U.S. Firm
--------------------
Shares and the International Firm Shares are hereinafter collectively referred
to as the "Firm Shares;" the U.S. Option Shares and the International Option
Shares are hereinafter collectively referred to as the "Option Shares." The U.S.
Shares and the International Shares are hereinafter collectively referred to as
the "Shares."
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
----------
333-37402), which contains the form of prospectus, subject to completion, to be
used in connection with the public offering and sale of the Shares (it being
understood that all of the Shares are being registered under the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Securities Act")). Each such prospectus, subject to
--------------
completion, used in connection with such public U.S. Offering and International
Offering is called a "preliminary prospectus." Such registration statement, as
----------------------
amended, including the financial statements, exhibits and schedules thereto, in
the form in which it was declared effective by the Commission under the
Securities Act, including any information deemed to be a part thereof at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is called
the "Registration Statement." Any registration statement filed by the Company
----------------------
pursuant to Rule 462(b) under the Securities Act is called the "Rule 462(b)
-----------
Registration Statement," and from and after the date and time of filing of the
----------------------
Rule 462(b) Registration Statement the term "Registration Statement" shall
----------------------
include the Rule 462(b) Registration Statement. The form of prospectus relating
to the Shares, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act or, if no such filing
-----------
is required, as included in the Registration Statement, is called the
"Prospectus." All references in this underwriting agreement (the "Agreement")
----------- ---------
to the Registration Statement, the Rule 462(b) Registration Statement, a
preliminary prospectus, the Prospectus or any amendments or supplements to any
of the foregoing, shall include any copy thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("XXXXX").
-----
The Company hereby confirms its agreements with the Underwriters as
follows:
Section 1. Representations and Warranties of the Company.
The Company hereby represents, warrants and covenants to each Underwriter
as follows:
(a) Compliance with Registration Requirements. (i) The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending, contemplated or threatened by the Commission.
(ii) Each preliminary prospectus and the Prospectus, when filed, complied
in all material respects with the Securities Act and complied in all respects
with the Public Offers of Securities Regulations 1995 (the "Pos Regs"), and, if
filed by electronic transmission pursuant to XXXXX (except as may be permitted
by Regulation S-T under the Securities Act), was identical
2
to the copy thereof delivered to the Underwriters for use in connection with the
offer and sale of the Shares. Each of the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendment thereto, at the
time it became effective and at all subsequent times, complied and will comply
in all material respects with the Securities Act and in all respects with the
Pos Regs and did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. Each preliminary prospectuses, as
of its date, and the Prospectus, each as amended or supplemented, as of its date
and at all subsequent times through the 30th day after the date hereof, did not
and will not contain 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. The
representations and warranties set forth in the two immediately preceding
sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, preliminary prospectus or the Prospectus, or any amendments
or supplements thereto, made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by the
Representatives expressly for use therein. The expert reports (the "Expert
Reports") prepared by each of PA Consulting Group and Xxxx Xxxxxxxx & Every, as
of their date, each as amended or supplemented, as of their date and at all
subsequent times through the 30th day after the date hereof, did not and will
not contain 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.
(iii) The Prospectus and the press announcement to be released on
_____, 2000 announcing the Offering (the "Press Announcement") contain all
------------------
information required by, and the allotment and issue of the Shares and the issue
of the Press Announcement and the issue and distribution of the Prospectus in
the manner proposed will comply with, the Financial Services Xxx 0000 (the
"FSA"), the Pos Regs, the rules and regulations of the London Stock Exchange and
---
all other applicable laws, rules and regulations of the United Kingdom and all
other relevant jurisdictions.
(iv) There are no contracts, agreements, instruments, leases,
licenses, certifications or permits or other arrangements, whether written or
oral, or other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement, which have not been described
or filed as required. The statements in the Registration Statement, preliminary
prospectuses and the Prospectus summarizing the provisions of laws, rules,
regulations, contracts, or other arrangements, whether written or oral,
including, without limitation, the statements set forth under the captions "Risk
Factors--We may be unable to obtain FDA or other regulatory approval for our
drug candidates," "Business-Government Regulation" and "Business--Intellectual
Property" accurately reflect the provisions of laws, rules, regulations,
contracts, leases and other arrangements purported to be summarized and, to the
Company's knowledge, there are no proposed amendments or additions to any such
provisions of laws, rules, regulations, contracts, leases or other arrangements.
(v) In light of the matters referred to in paragraph 9(3) of the Pos
Regs, the Prospectus contains all such information as investors would reasonably
require and reasonably
3
expect to find there for the purpose of making an informed assessment of the
assets and liabilities, financial position, profits or losses and prospects of
the Company and the rights attaching to the Common Shares.
(b) Offering Materials Furnished to Underwriters. The Company has delivered
to the Representatives four complete conformed (and four original) copies of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and each of the preliminary prospectuses and the Prospectus, as
amended or supplemented, in such quantities and at such places as the
Representatives have reasonably requested for each of the Underwriters. The
Company has delivered one copy of the Prospectus to the registrar of companies
(the "Registrar of Companies") in England and Wales in accordance with paragraph
4(2) of the Pos Regs.
(c) Distribution of Offering Material by the Company. The Company has not
distributed and will not distribute, prior to the Second Closing Date (as
defined below) and the completion of the Underwriters' distribution of the
Shares, any offering material in connection with the offering and sale of the
Shares other than the preliminary prospectuses, the Prospectus or the
Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(e) Authorization of the Shares to be Sold by the Company. The Shares to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable. None of the shares will be issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offerings contemplated by this Agreement.
(g) No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the Prospectus: (i) there has been no material
adverse change, or any development that could reasonably be expected to result
in a material adverse change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and the
Subsidiary, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and the Subsidiary, considered as one entity,
have not incurred any liability or obligation, indirect, direct or contingent,
not in the ordinary course of business nor entered into any transaction or
agreement not in the ordinary course of business; and (iii) there has been (A)
no dividend or
4
distribution of any kind declared, paid or made by the Company or its subsidiary
on any class of capital stock, or (B) no repurchase or redemption by the Company
or its subsidiary of any class of capital stock.
(h) Independent Accountants. Somekh Xxxxxxx (a member firm of KPMG
International), who has expressed its opinion with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) of the Company and its subsidiary, Keryx (Israel) Biopharmaceuticals
Limited (the "Subsidiary"), filed with the Commission as a part of the
Registration Statement and included in the Prospectus, are independent public or
certified public accountants as required by the Securities Act.
(i) Preparation of the Financial Statements. The financial statements filed
with the Commission as a part of the Registration Statement and included in the
Prospectus present fairly the consolidated financial position of the Company and
the Subsidiary as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. The financial statements of
the Company and the Subsidiary have been prepared in conformity with generally
accepted accounting principles in the U.S. applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the captions "Prospectus Summary--Summary
Consolidated Financial Information," "Capitalization" and "Selected Financial
Data" fairly present the information set forth therein on a basis consistent
with that of the audited financial statements contained in the Registration
Statement.
The as adjusted condensed financial statements of the Company and the
Subsidiary and the related notes thereto included under the captions "Prospectus
Summary--Summary Consolidated Financial Information," "Selected Financial Data"
and elsewhere in the Prospectus and in the Registration Statement present fairly
the information contained therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to such financial statements and
have been properly presented on the bases described therein, and the assumptions
used in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances referred to
therein.
(j) Company's Accounting Systems. Each of the Company and the Subsidiary
maintain a system of accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles in the U.S. 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.
(k) Subsidiaries of the Company. Except as otherwise disclosed in the
Prospectus, the Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiary.
5
(l) Incorporation and Good Standing of the Company and the Subsidiary. Each
of the Company and the Subsidiary has been duly organized and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is organized with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such qualification.
(m) Capitalization of the Company's Subsidiary. All the outstanding shares
of the Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable and, all outstanding shares of capital stock of the
Subsidiary are owned by the Company free and clear of any security interests,
claims, liens or encumbrances.
(n) No Prohibition from Paying Dividends or Making Other Distributions. The
Subsidiary is not currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary's property or assets to the Company.
(o) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization." The Common Shares (including the Shares)
conform in all material respects to the description thereof contained in the
Prospectus. All of the issued and outstanding Common Shares have been duly
authorized and validly issued, are fully paid and nonassessable and have been
issued in compliance with federal and state securities laws. None of the
outstanding Common Shares were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. The Underwriters will receive good and valid title to
the Shares purchased by them, free and clear of all liens, claims, security
interests, pledges, charges, encumbrances and other defects of title. 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 the Subsidiary other than those accurately described in the
Prospectus. The description of the Company's stock option and other stock plans
and arrangements, and the options or other rights granted thereunder, in each
case as set forth in the Prospectus, accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(p) Stock Exchange Listing. The Shares have been approved for inclusion on
The Nasdaq National Market ("Nasdaq") and AIM, subject only to official notice
of issuance.
(q) No Consents, Approvals or Authorizations Required. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and such as may be required (and which have been obtained) (i)
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters in the manner contemplated herein
and in the
6
Prospectus, (ii) by the National Association of Securities Dealers, Inc. (the
"NASD"), and (iii) by the Nasdaq Stock Market, Inc.
(r) Non-Contravention of Existing Instruments Agreements. Neither the issue
and sale of the Shares nor the consummation of the Offering or any other of the
transactions herein contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or will result in the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Subsidiary pursuant to (i) the charter or by-laws of the Company
or the Subsidiary, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or the Subsidiary is a
party or is bound or to which its property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to the Company or
the Subsidiary of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or the Subsidiary or any of its respective properties.
(s) No Defaults or Violations. Neither the Company nor the Subsidiary is in
violation or default of (i) any provision of its charter or by-laws, (ii) the
terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or is 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 the
Subsidiary or any of its respective properties.
(t) No Actions, Suits or Proceedings. No action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator
involving the Company or the Subsidiary or any of its respective property is
pending or threatened. Except as otherwise as disclosed in the Prospectus, no
officer or director of the Company nor any person for whom the Company is or may
be vicariously liable has any claim outstanding against them or is engaged in or
has been engaged in any legal or arbitration or similar proceedings which,
individually or collectively, are of material importance and no such legal or
arbitration or similar proceedings are threatened or pending nor, to the best of
the knowledge, information and belief of the Company's directors, are there any
circumstances which are likely to give rise to any such legal or arbitration or
similar proceedings. For this purpose "similar proceedings" includes any civil
or criminal proceedings and any action by any governmental, public or regulatory
authority (including any investment exchange and any authority or body which
regulates investment business or takeovers or which is concerned with mergers or
taxation matters) which did or could result in public censure.
(u) All Necessary Permits, Etc. Each of the Company and the Subsidiary
possesses such valid and current certificates, authorizations or permits issued
by the appropriate state, federal or foreign regulatory agencies or bodies as is
necessary to conduct its business, and neither the Company nor the Subsidiary
has received any notice of proceedings relating to the revocation or
modification of, or noncompliance with, any such certificate, authorization or
permit.
7
(v) Title to Properties. Each of the Company and the Subsidiary has good
and marketable title to all the properties and assets reflected as owned in the
financial statements of the Company and the Subsidiary referred to in Section
1(i) above (or elsewhere in the Prospectus), in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects. The real property, improvements, equipment and personal property held
under lease by the Company or the Subsidiary, as the case may be, are held under
valid and enforceable leases.
(w) Tax Law Compliance. Each of the Company and the Subsidiary has filed
all necessary federal, state and foreign income, franchise and other applicable
tax returns and has paid all taxes required to be paid by such entity and, if
due and payable, any related or similar assessment, fine or penalty levied
against any of them. The Company has made adequate charges, accruals and
reserves in the financial statements of the Company and the Subsidiary referred
to in Section 1(i) above in respect of all federal, state and foreign income,
franchise and other applicable taxes for all periods as to which the tax
liability of the Company and the Subsidiary has not been paid. The Company is
not aware of any tax deficiency that has been or might be asserted or threatened
against the Company or the Subsidiary.
(x) Intellectual Property Rights. Each of the Company and the Subsidiary
own or possess adequate rights to use all patents, patent applications, patent
rights or licenses, inventions, collaborative research agreements, trade
secrets, know-how, trademarks, service marks, trade names and copyrights which
are necessary to conduct its businesses as described in the Registration
Statement and Prospectus; the expiration of any patents, patent applications,
patent rights, trade secrets, trademarks, service marks, trade names or
copyrights would not result in a Material Adverse Change that is not otherwise
disclosed in the Prospectus; neither the Company nor the Subsidiary has received
any notice of, nor has knowledge of, any infringement of or conflict with
asserted rights of the Company or the Subsidiary by others with respect to any
patents, patent applications, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights; and neither of
the Company nor the Subsidiary has received any notice of, nor has knowledge of,
any infringement of or conflict with asserted rights of others with respect to
any patents, patent applications, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names or copyrights. There is no
claim being made against the Company or the Subsidiary regarding patents, patent
rights or licenses, inventions, collaborative research, trade secrets, know-how,
trademarks, service marks, trade names or copyrights. Each of the Company and
the Subsidiary do not, in the conduct of its business as now conducted or
proposed to be conducted, in each case as described in the Prospectus, infringe
or conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application filed
by any third party, known to the Company or the Subsidiary.
(y) No Transfer Taxes or Other Fees. There are no stamp or transfer taxes
or other similar fees or charges under Federal law or the laws of any country or
any state or county, or any political subdivision thereof, required to be paid
in connection with the execution and delivery of this Agreement or the issuance
and sale by the Company of the Shares.
8
(z) Company not an "Investment Company." The Company has been advised by
Xxxxxx, Xxxxx & Bockius LLP of the rules and requirements under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). The Company is
not, and after receipt of payment for the Shares will not be, an "investment
company" or an entity "controlled" by an "investment company" within the meaning
of the Investment Company Act and will conduct its business in a manner so that
it will not become subject to the Investment Company Act.
(aa) Insurance. Each of the Company and the Subsidiary are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for its business including, but not limited to,
policies covering real and personal property owned or leased by the Company or
the Subsidiary, as the case may be, against product liability, clinical trial
liability, theft, damage, destruction, acts of vandalism and earthquakes and
general liability, directors and officers liability and key man life insurance
for each of Xxxxxx Xxxxxx and Xxxxxx Xxx-Xxxxxx. The Company has no reason to
believe that it or the Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire, or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change. Neither the Company nor the Subsidiary has been
denied any insurance coverage, which it has sought or for which it has applied.
(bb) Labor Matters. No labor disturbance by the employees of the Company or
the Subsidiary exists or is imminent. The Company is not aware of any existing
or imminent labor disturbance by the employees of any of its or the Subsidiary's
principal suppliers that might be expected to result in a Material Adverse
Change.
(cc) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Common Shares to facilitate the sale or resale of the Shares.
(dd) Lock-Up Agreements. The persons listed on Schedule C have signed an
agreement substantially in the form attached hereto as Exhibit A-1 (the
"12-Month Lock-up Agreement"). The persons listed on Schedule D have signed an
agreement substantially in the form attached hereto as Exhibit X- 0 (the
"Six-Month Lock-up Agreement" and collectively with the 12-Month Lock-up
Agreement, the "Lock-Up Agreements"). The Company has provided to counsel for
the Underwriters a complete and accurate list of all securityholders of the
Company and the number and type of securities held by each securityholder. The
Company has provided to counsel for the Underwriters true, accurate and complete
copies of all of the Lock-up Agreements presently in effect or effected hereby.
(ee) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or the Subsidiary or any other
person required to be described in the Prospectus that have not been described
as required.
9
(ff) Officers' Certificates. Any certificate signed by an officer of the
Company and delivered to the Representatives or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters set forth therein.
(gg) No Unlawful Contributions or Other Payments. Neither the Company, nor
the Subsidiary, nor 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.
(hh) ERISA Compliance. Each of the Company and the Subsidiary and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained by
the Company, the Subsidiary or their "ERISA Affiliates" (as defined below) is in
compliance in all material respects with ERISA. "ERISA Affiliate" means, with
respect to the Company or the Subsidiary, any member of any group of
organizations described in Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "Code") of which the Company or such Subsidiary
is a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, the Subsidiary or any of their ERISA
Affiliates. No "employee benefit plan" established or maintained by the Company,
the Subsidiary or any of their ERISA Affiliates, if such "employee benefit plan"
were terminated, would have any "amount of unfounded benefit liabilities" (as
defined under ERISA). Neither the Company, the Subsidiary nor any of their ERISA
Affiliates has incurred, or reasonably expects to incur, any liability under (i)
Title IV of ERISA with respect to termination of, or withdrawal from, any
"employee benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code.
Each "employee benefit plan" established or maintained by the Company, the
Subsidiary or any of their ERISA Affiliates that is intended to be qualified
under Section 401(a) of the Code is so qualified and nothing has occurred,
whether by action or failure to act, which would cause the loss of such
qualification.
(ii) Brokers and Finders. Other than as expressly provided for by this
Agreement, the Company has not incurred any liability for any finder's or
broker's fee or agent's commission in connection with the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
(jj) Working Capital. The cashflow and working capital projections prepared
by the Company to support the statements contained in the Prospectus, including
those statements in paragraph 7 under the heading "Additional Information for
the Alternative Investment Market" have been prepared with all due care and
attention by the Company and its directors on the basis of the assumptions set
out in such projections and such assumptions are fair and reasonable and there
are no facts known or which could on reasonable enquiry have been known to the
Company or its directors which have not been taken into account in the
preparation of such projections and which could reasonably be expected to have
an effect thereon and all information supplied to the Representatives for the
purpose of their examination and review of
10
the working capital projections of the Company was when given and remains true
and accurate in all material aspects and not misleading in any material respect.
In light of the Company's available bank and other facilities and the proceeds
of the Offering the Company will have sufficient working capital for its present
and reasonably foreseeable future requirement.
(kk) Y2K. There are no Y2K issues related to the Company or any of its
subsidiaries that (i) are of a character required to be described or referred to
in the Registration Statement or Prospectus by the Securities Act or by the
Exchange Act which have not been accurately described in all material respects
in the Registration Statement or Prospectus or (ii) might reasonably be expected
to result in any Material Adverse Change or that might materially affect their
properties, assets or rights.
(ll) Environmental Laws. (i) The Company is in compliance with all rules,
laws and regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment ("Environmental
Laws") which are applicable to its business, except where the failure to comply
would not reasonably be expected to result in a Material Adverse Change, (ii)
the Company has received no notice from any governmental authority or third
party of an asserted claim under Environmental Laws, which claim is required to
be disclosed in the Registration Statement or the Prospectus, (iii) the Company
is not currently aware that it will be required to make future material capital
expenditures to comply with Environmental Laws and (iv) to the knowledge of the
Company, no property that is owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. (S) 9601, et
seq.), or otherwise designated as a contaminated site under applicable state or
local law.
(mm) Periodic Review of Costs of Environmental Compliance. The Company has
conducted reviews of the effect of Environmental Laws on the business,
operations and properties of the Company and the Subsidiary, in the course of
which it has identified and evaluated associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). On the basis of such reviews and
the amount of its established reserves, the Company has reasonably concluded
that such associated costs and liabilities would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change.
Section 2. Purchase, Sale and Delivery of the U.S. Shares and the
International Shares.
(a) The Firm Shares. The Company agrees to issue and sell to the several
U.S. Underwriters and agrees to issue and sell to the International Underwriter
or to persons nominated by the International Underwriter the U.S. Firm Shares
and the International Firm Shares, respectively, upon the terms herein set
forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
(i) the several U.S. Underwriters agree, severally and not jointly, to purchase
11
from the Company the respective number of U.S. Firm Shares set forth opposite
their names on Schedule A hereto, and (ii) the International Underwriter agrees
to purchase from the Company or procure placees to purchase from the Company the
number of International Firm Shares set forth opposite its name on Schedule B
hereto. The purchase price per U.S. Firm Share to be paid by the several U.S.
Underwriters to the Company shall be $______/(Pounds)______ (the "Offer Price").
The purchase price per Firm Shares to be paid by the International Underwriter
shall be the Offer Price, and by persons nominated by the International
Underwriter shall be $_____/(Pounds)______ (the "Placing Price").
(b) The First Closing Date. Delivery of the Firm Shares to be purchased by
the Underwriters and payment therefor shall be made by the Company and the
Representatives at 10:00 a.m. New York time, at the offices of Xxxxxx, Xxxxx &
Xxxxxxx LLP, New York, New York (or at such other place as may be agreed upon
among the Representatives and the Company), on the fifth (5th) business day
following the first day that the Shares are traded (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 8
hereof), such time and date of payment and delivery being herein called the
"First Closing Date;" provided, however, that if the Company has not made
available to the Representatives copies of the Prospectus within the time
provided in Sections 2(g) and 3(e) hereof, the Representatives may, in their
sole discretion, postpone the Closing Date until no later that two (2) full
business days following delivery of copies of the Prospectus to the
Representatives.
(c) The Option Shares; the Second Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of ___ Option Shares from the Company at the Offer Price. The
option granted hereunder is for use by the Underwriters solely in covering any
over-allotments in connection with the sale and distribution of the Firm Shares.
The option granted hereunder may be exercised at any time upon notice by the
U.S. Representatives to the Company, which notice may be given at any time
within 30 days from the date of this Agreement. The time and date of delivery of
the Option Shares, if subsequent to the First Closing Date, is called the
"Second Closing Date" and shall be determined by the Representatives, and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Option Shares are to be purchased,
(i) each Underwriter agrees, severally and not jointly, to purchase the number
of Option Shares (subject to such adjustments to eliminate fractional shares as
determined by the Representatives) that bears the same proportion to the total
number of Option Shares to be purchased as the number of Firm Shares set forth
on Schedule A or B, as the case may be, opposite the name of such Underwriter
bears to the total number of Firm Shares, and (ii) the Company agrees to sell
the number of Option Shares which the Representatives shall specify upon
exercise of the option as set forth in the paragraph "Introductory" of this
Agreement. The Representatives may cancel its option at any time prior to
their expiration by giving written notice of such cancellation to the Company.
(d) Public Offering of the Shares. The U.S. Representatives hereby advise
the Company that the U.S. Underwriters intend to offer for sale to the public,
as described in the
12
Prospectus, their respective portions of the Shares as soon after this Agreement
has been executed and the Registration Statement has been declared effective as
the U.S. Representatives, in their sole judgment, have determined is advisable
and practicable.
(e) Payment for the Shares. Payment for the Firm Shares shall be made at
the First Closing Date (and, if applicable, payment for the Option Shares shall
be made at the Second Closing Date) by wire transfer in immediately available
funds to the order of the Company. The International Underwriter shall be
entitled to deduct and retain for its own benefit a commission of ___ percent of
the aggregate value of the Placing Price of the Firm Shares bought by persons
procured by it pursuant to Section 2(a) above. It is understood that the
Representatives have been authorized, for their own account and the accounts of
the several Underwriters, to accept delivery of and receipt for, and make
payment of the purchase price for, the Firm Shares and any Option Shares the
Underwriters have agreed to purchase. The Representatives, individually and not
as a representative of the Underwriters, may (but shall not be obligated to)
make payment for any Shares to be purchased by any Underwriter whose funds shall
not have been received by the Representatives by the First Closing Date or the
Second Closing Date, as the case may be, for the account of such Underwriter,
but any such payment shall not relieve such defaulting Underwriter from any of
its obligations under this Agreement.
(f) Delivery of the Shares. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or accounts at
The Depository Trust Company, as designated by the Representatives for the
accounts of the Representatives and the several Underwriters at the First
Closing Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company shall
also deliver, or cause to be delivered, a credit representing the Option Shares
the Underwriters have agreed to purchase at the First Closing Date (or the
Second Closing Date, as the case may be), to an account or accounts at The
Depository Trust Company as designated by the Representatives for the accounts
of the Representatives and the several Underwriters at the Second Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 noon
on the second business day following the date of this Agreement, the Company
shall deliver or cause to be delivered copies of the Prospectus in such
quantities and at such places as the Representatives shall request. The Company
shall deliver two copies of the Prospectus to the Registrar of Companies in
England and Wales as required by Regulation 4(2) of the Pos Regs within one
business day following the effective date of the Registration Statement.
(h) Stabilization. In connection with the distribution of the Shares, the
Representatives on behalf of the Underwriters may, to the extent permitted by
applicable laws, regulations and the rules of the Commission and the Financial
Services (Conduct of Business) Rules 1990 as amended by the Financial Services
(Conduct of Business) Rules 1994, over-allot and effect transactions in the
Shares in any over-the-counter market or otherwise, with a view to
13
stabilizing or maintaining the market price of the Shares at a level other than
that which might otherwise prevail in the open market, but in doing so, the
Representatives shall, as between the Underwriters on the one hand and the
Company on the other hand, act as principal and not as agent for the Company and
any loss resulting from over-allotment or stabilization shall be borne, and any
profit arising therefrom shall be beneficially retained, by the Representatives
on behalf of the Underwriters. The Representatives shall act as stabilization
agent in connection with actions taken in accordance with this paragraph (i).
Section 3. Covenants of the Company.
The Company further covenants and agrees with each Underwriter as follows:
(a) Registration Statement Matters. The Company will (i) use its best
efforts to cause a registration statement on Form 8-A (the "Form 8-A
Registration Statement") as required by the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to become effective simultaneously with the
Registration Statement, (ii) use its best efforts to cause the Registration
Statement to become effective and, if the procedure in Rule 430A of the
Securities Act is followed, to prepare and timely file with the Commission under
Rule 424(b) under the Securities Act a Prospectus in a form approved by the
Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Securities Act, and (iii) not file any amendment to the Registration Statement
or supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not in
compliance with the Securities Act. If the Company elects to rely on Rule 462(b)
under the Securities Act, the Company shall file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b) under the
Securities Act prior to the time confirmations are sent or given, as specified
by Rule 462(b)(2) under the Securities Act, and shall pay the applicable fees in
accordance with Rule 111 under the Securities Act.
(b) Securities Act Compliance. The Company will advise the Representatives
promptly (i) when the Registration Statement or any post-effective amendment
thereto shall have become effective, (ii) of receipt of any comments from the
Commission, (iii) of any request of the Commission for amendment of the
Registration Statement or for supplement to the Prospectus or for any additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the use of either
of the Prospectus or of the institution of any proceedings for that purpose and
will promptly provide them with copies of all correspondence including summaries
of all oral correspondence. The Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(c) Blue Sky Compliance. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both national
and foreign) as the Representatives may reasonably have designated in writing
and will make such applications, file such documents,
14
and furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company will,
from time to time, prepare and file such statements, reports and other
documents, as are or may be required to continue such qualifications in effect
for so long a period as the Representatives may reasonably request for
distribution of the Shares.
(d) Amendments and Supplements to the Prospectus and Other Securities Act
Matters. The Company will comply with the Securities Act and the Exchange Act
and the rules and regulations of the Commission thereunder, the Pos Regs and the
Rules of the London Stock Exchange, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the Prospectus.
If prior to the Second Closing Date any event shall occur which does or may
constitute a significant change or new matter for the purposes of Regulation 10
of the Pos Regs, the Company shall notify the Representatives forthwith upon the
Company becoming aware of the same, and without prejudice to Section 9 of this
Agreement shall procure that any such change or new matter shall be dealt with
in accordance with the Securities Act and the Exchange Act and the rules and
regulation of the Commission thereunder, Pos Regs and the Rules of the London
Stock Exchange, and shall prepare and file with the Commission and the Registrar
of Companies in England and Wales, and furnish at its own expense to the
Underwriters and to dealers an appropriate amendment to the Registration
Statement or supplement to such Prospectus so that such Prospectus as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that such Prospectus will comply with all
applicable laws and regulations. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representatives or counsel for the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at any time
to amend or supplement the Prospectus to comply with any law, the Company
promptly will prepare and file with the Commission, and furnish at its own
expense to the Underwriters and to dealers, an appropriate amendment to the
Registration Statement or supplement to the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with the
law.
(e) Copies of any Amendments and Supplements to the Prospectus. The Company
agrees to furnish the Representatives, without charge, during the period
beginning on the date hereof and ending on the later of the First Closing Date
or such date, as in the opinion of counsel for the Underwriters, the Prospectus
is no longer required by law to be delivered in connection with sales by an
Underwriter or dealer (the "Prospectus Delivery Period"), as many copies of the
Prospectus and any amendments and supplements thereto as the Representatives may
request.
15
(f) Notice of Subsequent Events; Public Statements.
(i) During the Offering and for a period of 25 days thereafter, the
Company shall obtain the written consent of the Representatives prior to
making any public presentations, statements or announcements regarding the
Company or its affiliates or any terms of the Offering. If at any time
during the ninety (90) day period after the Registration Statement becomes
effective, any rumor, publication or event relating to or affecting the
Company shall occur as a result of which, in the opinion of the
Representatives, the market price of the Common Shares has been or is
likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of either of
the Prospectus), the Company will, after written notice from the
Representatives advising the Company to the effect set forth above,
forthwith prepare, consult with the Representatives concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to the Representatives, responding to or commenting
on such rumor, publication or event.
(ii) The Company hereby undertakes to the Representatives for itself
and on behalf of the Underwriters that the Company will use all reasonable
endeavors to procure that the Company will, during the period from the date
hereof until (and including) the publication of the audited accounts of the
Company for the quarter ending March 31, 2001:
(1) notify the Representatives in advance of, and discuss with the
Representatives both the content and timing and manner of making or dispatch of,
any announcement concerning the financial position or affairs of the Company or
the Subsidiary or any announcement of profits or losses and dividends in respect
of any financial period or part thereof and discuss with the Representatives any
other material information which is likely to affect the general character or
nature of the business of any member of the Company, the Subsidiary or may be
necessary to be made known to the public in order to enable the Shareholders and
the public to appraise the position of the Company and to avoid the
establishment of a false market in its securities;
(2) forward to the Representatives for their review all proofs or
drafts of all documents proposed to be dispatched to holders of the Company's
securities and all press announcements; and
(3) notify the Representatives forthwith of any proposal to make any
material alteration, revision or release in respect of any of the service
agreements of the Company's officers or directors and of any material breach of
any covenant, undertaking or warranty in any such agreement by any officer or
director and consult with the Representatives prior to taking any action with
regard to the foregoing.
(g) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus.
16
(h) Transfer Agent and Registrar. The Company shall engage and maintain, at
its expense, registrars and transfer agents for the Common Shares both in the
United States and in the United Kingdom.
(i) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending December 31, 2001 that satisfies the provisions of Section 11(a) of the
Securities Act.
(j) Nasdaq Reporting Obligations. The Company shall file, on a timely
basis, with Nasdaq all reports and documents required to be filed under the
Exchange Act or the rules and regulations of Nasdaq.
(k) Agreement Not to Offer or Purchase or Sell Additional Securities. The
Company will not, without the Representatives' prior written consent, offer,
sell or contract to sell, or otherwise dispose of or enter into any transaction
which is designed to, or could 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, or announce the offering of, any Common Shares or any securities
convertible into, or exchangeable for, Common Shares other than the Shares;
provided, however, that the Company may (i) issue and sell Common Shares
pursuant to any employee stock option plan of the Company in effect at the date
of the Prospectus and described in the Prospectus so long as none of those
shares may be transferred, the options are granted or issued at an exercise
price not less than the fair market value of the Common Shares on the date of
grant and the Company shall enter stop transfer instructions with its transfer
agent and registrar against the transfer of any such Common Shares, and (ii)
issue Common Shares issuable upon the conversion of securities or the exercise
of warrants outstanding at the date of the Prospectus and described in the
Prospectus. The Company will not, without the Representatives' prior written
consent, purchase or contract to purchase or enter into any transaction which is
designed to, or could be expected to, result in the acquisition, directly or
indirectly, of any Common Shares or any securities convertible into or
exchangeable for Common Shares. These restrictions terminate after the close of
trading of the Shares on the 90th day of (and including) the day the Shares
commenced trading on Nasdaq.
(l) Future Reports to the Representatives. During the period of five years
hereafter, the Company will furnish to the Representatives: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
17
(m) Regulatory Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act. Following the Offering, the
Company shall use its best efforts to continue to comply with the rules and
regulations of the Commission, Nasdaq and AIM, and the Pos Regs.
(n) Management and Directors. It is the Company's current intention that
the management, as disclosed in the Registration Statement, will continue to be
in place after the Offering for a reasonable period of time. Additionally, the
Company will maintain a professional board of directors that will include at
least two outside directors and complies with the Commission's Release No.
34-42266. The Representatives acknowledge that the Company's board of director
as it exists on the date hereof meets this requirement.
(o) Future Advertisements. The Company agrees that the Representatives have
the right to place advertisements in financial and other newspapers and journals
at their own expense describing their services to the Company hereunder.
Section 4. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the
Shares as provided herein on the First Closing Date and, with respect to the
Option Shares, on the Second Closing Date, shall be subject to (i) the accuracy
of the representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Option Shares, as of the Second
Closing Date as though then made, (ii) the timely performance by the Company of
its covenants and other obligations hereunder, and (iii) each of the following
additional conditions:
(a) Compliance with Registration Requirements; No Stop Order, No Objection
from the NASD. The Registration Statement shall have become effective prior to
the execution of this Agreement, or at such later date as shall be consented to
in writing by the Representatives; and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that purpose
shall have been initiated or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the satisfaction of
Underwriters' counsel; and the NASD shall have raised no objection to the
fairness and reasonableness of the underwriting terms and arrangements.
(b) Corporate Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectus, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to Underwriters'
counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) No Material Adverse Change. Subsequent to the execution and delivery of
this Agreement and prior to the First Closing Date on the Second Closing Date,
as the case
18
may be, there shall not have been any material adverse change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and the Subsidiary considered as one enterprise from that set
forth in the Registration Statement or Prospectus, which, in the sole judgment
of the Representatives, is material and adverse or that makes it, in the sole
judgment of the Representatives, impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus.
(d) Opinion of Counsel for the Company. (i) You shall have received on the
First Closing Date, or the Second Closing Date, as the case may be, an opinion
of Xxxxxx, Xxxxx & Xxxxxxx, LLP, counsel for the Company, substantially in the
form of Exhibit B attached hereto, dated the First Closing Date, or the Second
Closing Date, as the case may be, addressed to the Underwriters and with
reproduced copies or signed counterparts thereof for each of the Underwriters.
(ii) Counsel rendering the opinion contained in Exhibit B may rely as to
questions of law not involving the laws of the United States, the State of
Delaware or the State of New York upon opinions of local counsel reasonably
acceptable to the Representatives, and as to questions of fact upon
representations or certificates of officers of the Company and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Representatives of the Underwriters, and to Underwriters' counsel.
(e) Opinion of Intellectual Property Counsel for the Company. You shall
have received on the First Closing Date or the Second Closing Date, as the case
may be, an opinion of Xxxxxx & Xxxxxxx LLP, patent counsel for the Company,
substantially in the form of Exhibit C hereto, dated the First Closing Date or
the Second Closing Date, as the case may be. The Company shall have furnished to
such counsel such documents as they may have requested for the purpose of
enabling them to pass upon such matters.
(f) Accountants' Comfort Letter. You shall have received on the First
Closing Date and on the Second Closing Date, as the case may be, a letter from
Somekh Xxxxxxx addressed to the U.S. Representatives and the International
Underwriter, dated the First Closing Date, or the Second Closing Date, as the
case may be, confirming that they are independent certified public accountants
with respect to the Company and the Subsidiary within the meaning of the
Securities Act and the applicable published rules and regulations and based upon
the procedures described in such letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to a date not more than four (4) business days prior to the First Closing
Date or the Second Closing Date, as the case maybe, (A) confirming, to the
extent true, that the statements and conclusions set forth in the Original
Letter are accurate as of the First Closing Date or the Second Closing Date, as
the case may be, and (B) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall disclose any change in the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and the
19
Subsidiary considered as one enterprise, from that set forth in the Registration
Statement or Prospectus. The Original Letter shall be addressed to or for the
use of the Underwriters in form and substance satisfactory to the Underwriters
and shall (A) represent, to the extent true, that they are independent certified
public accountants with respect to the Company and its subsidiaries, within the
meaning of the Securities Act and the applicable published rules and regulations
thereto and (B) set forth their opinion with respect to their examination of the
consolidated balance sheet of the Company as of December 31, 1999 and 1998 and
related consolidated statements of operations, shareholders' equity, and cash
flows for the three years ended December 31, 1999. In addition, you shall have
received from Somekh Xxxxxxx a letter addressed to the Company, and made
available to the Underwriters for the use of the Underwriters, stating that
their review of the Company's systems of internal accounting controls, to the
extent they are deemed necessary in establishing the scope of their examination
of the Company's consolidated financial statements as of December 31, 1999 and
1998, did not disclose any weaknesses in internal controls that they considered
to be material weaknesses.
(g) Officers' Certificate. You shall have received on the First Closing
Date and the Second Closing Date, as the case may be, a certificate of the
Company, dated the First Closing Date or the Second Closing Date, as the case
may be, signed by the Chief Executive Officer and Chief Financial Officer of the
Company, to the effect that, and the Underwriters shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as made on and as of the First Closing Date
or the Second Closing Date, as the case may be, 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 First Closing Date or
the Second Closing Date, as the case may be;
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act;
(iii) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, contained all information required to be included
therein by the Securities Act, and the applicable rules and regulations of
the Commission thereunder, the Pos Regs and the Rules of the London Stock
Exchange and conformed in all respects to the requirements of the
Securities Act, and the applicable rules and regulations of the Commission
thereunder, the Pos Regs and the Rules of the London Stock Exchange, (A)
the Registration Statement and any amendments thereto, did not and does not
include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (B) the Prospectus and any amendments or
supplements thereto, did not and does not include any untrue statement of a
material fact or omit the statement of material fact required to be stated
therein or necessary to make the statement therein not misleading in light
of the circumstances under which they were made; and, since the effective
date of the Registration Statement, there has occurred no
20
event required to be set forth in an amended or supplemented Prospectus
which has not been so set forth; and
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been (a)
any material adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and the
Subsidiary considered as one enterprise, (b) any transaction involving the
Company and the Subsidiary, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
incurred by the Company or the Subsidiary, except obligations incurred in
the ordinary course of business consistent with past practices, (d) any
change in the capital stock or outstanding indebtedness of the Company or
the Subsidiary, (e) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company or the Subsidiary, or (f) any
loss or damage (whether or not insured) to the property of the Company or
the Subsidiary which has been sustained or will have been sustained.
(h) Lock-up Agreement from Certain Stockholders of the Company. The Company
shall have obtained and delivered to you agreements, substantially in the form
of Exhibit A-1, attached hereto from the persons listed in Schedule C attached
hereto, and agreements, substantially in the form of Exhibit A-2, from the
persons listed on Schedule D which is annexed hereto.
(i) Stock Exchange Listing. The Shares shall have been approved for
inclusion on Nasdaq, subject only to official notice of issuance, and AIM has
agreed to admit the Common Shares, that are issued and are to be issued pursuant
to the Offering, to the Official List of AIM.
(j) Compliance with Prospectus Delivery Requirements. The Company shall
have complied with the provisions of Sections 2(g) and 3(e) hereof with respect
to the furnishing of the Prospectus.
(k) Opinion of Counsel for the Underwriters. You shall have received on the
First Closing Date or the Second Closing Date, as the case may be, an opinion of
Xxxx Marks & Xxxxx LLP, counsel for the Underwriters, substantially in the form
of Exhibit D hereto. The Company shall have furnished to such counsel such
documents as they may have requested for the purpose of enabling them to pass
upon such matters.
(l) Insurance. The Company shall acquire and maintain a reasonable amount
of director and officer liability insurance (provided that such insurance can be
obtained at a reasonable cost as determined by the Company and the
Representatives) from a responsible insurer, all satisfactory to the
Representatives, prior to the effectiveness of the Registration Statement. The
Company shall obtain key man life insurance for each of Xxxxxx Xxxxxx and Xxxxxx
Xxx-Xxxxxx in the amount of $2 million per person.
(m) Deliveries to the Representatives. The Company shall deliver to the
Underwriters the following documents:
21
(i) three original signed copies of the Expert's Report of PA Strategy
Partners Ltd and the Patent Agent's Report of Xxxx Xxxxxxxx & Every;
(ii) three original signed copies of the written consent of Somekh
Xxxxxxx to the inclusion in the Prospectus of the Report set out on pages
F-1 to F-21 of the Prospectus and to their name in the form and context in
which they are included;
(iii) three original signed responsibility statements and powers of
attorney executed by each director of the Company in the form previously
approved by the Representatives;
(iv) three original signed copies of the nominated advisor's agreement
and the nominated broker's agreement;
(v) one certified copy of each of the employment agreements described
in the Prospectus under the caption;
(vi) three original signed copies of a letter from Somekh Xxxxxxx
confirming the accuracy of certain financial information contained in the
Prospectus;
(vii) three original signed copies of a letter from the Company
addressed to the Representatives confirming that the working capital
available to the Company is sufficient for its present requirements in the
agreed form;
(viii) three original letters, referencing paragraph 16.30 of the
Rules of the London Stock Exchange, from each of the Company, Xxxxxx, Xxxxx
& Bockius LLP, Somekh Xxxxxxx, PA Strategy Partners Ltd. and Xxxx Xxxxxxxx
& Every; and
(ix) three original signed copies of the written consent of PA
Strategy Partners Ltd. to the inclusion in the Prospectus of their report
set out on pages X- 0 to A-14 of the Prospectus.
(n) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, as the case may be, the Representatives and counsel for
the Underwriters shall have received such information, documents, certificates
and opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, and in
order for them to determine the accuracy of any of the representations and
warranties and the satisfaction of any of the conditions or agreements herein
contained.
If any condition specified in this Section 4 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Option Shares, at any time prior to the
Second Closing Date which termination shall be without liability on the part of
any party to any other party, except that Section 5 (Payment of Expenses),
Section 6 (Reimbursement of Underwriters' Expenses), Section 7 (Indemnification
and Contribution) and
22
Section 12 (Representations and Indemnities to Survive Delivery) shall at all
times be effective and shall survive such termination.
Section 5. Payment of Expenses.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Shares, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees and expenses incurred by the Company and
the Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale in the U.S. under the state securities or blue sky
laws or the securities laws, including any Blue Sky fees of the Underwriters'
counsel in an amount not to exceed $10,000, and applicable laws in the U.K.,
(viii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD review and approval of
the Underwriters' participation in the offering and distribution of the Common
Shares, (viii) the fees and expenses associated with including the Common Shares
on Nasdaq and AIM, (x) all expert reports related to the listing of the Common
Shares on AIM or as otherwise required by the Representatives (including those
reports prepared by PA Consulting Group and Xxxx, Xxxxxxxx & Every), (xi) the
costs of preparing up to eight bound volumes of the Offering documents for the
Representatives and their counsel, (xi) all costs and expenses incident to the
travel and accommodation of the Company's employees on the "roadshow," and (xii)
all other fees, costs and expenses referred to in Item 12 and Item 13 of Part II
of the Registration Statement. All fees shall be payable together with all value
added tax thereon, if any.
Section 6. Reimbursement of Underwriters' Expenses.
If this Agreement is terminated by the Representatives pursuant to Section
4, Section 8 or Section 9, or if the sale to the Underwriters of the Shares is
not consummated, the Company agrees to reimburse the Representatives and the
other Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally, upon demand for all out-of- pocket expenses
(and any related value added tax) that shall have been reasonably incurred by
the Representatives and the other Underwriters in connection with the proposed
purchase and the offering and sale of the Shares, including but not limited to
fees and disbursements of counsel, including Blue Sky legal fees not to exceed
$10,000, printing expenses, travel and accommodation expenses, postage,
facsimile and telephone charges, provided, however, that the Company's
obligation for reimbursement hereunder shall be limited to an aggregate of
$600,000.
23
Section 7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. (i) The Company agrees to
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or other federal,
state or foreign statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company, which consent shall not be unreasonably
withheld), including, without limitation, such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a fact
contained in the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430A under the
Securities Act, or the omission or alleged omission therefrom of a fact required
to be stated therein or necessary to make the statements therein not misleading;
or (ii) upon any untrue statement or alleged untrue statement of a fact
contained in any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) in whole or
in part upon any inaccuracy in the representations and warranties of the Company
contained herein; or (iv) in whole or in part upon any failure of the Company to
perform its obligations hereunder or under law; or (v) any untrue statement or
alleged untrue statement of any fact contained in any audio or visual materials
provided by the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos, films or
tape recordings, used in connection with the marketing of the Shares, including
without limitation, statements communicated to securities analysts employed by
the Underwriters; or (vi) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Shares or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action arising
out of or based upon any matter covered by clause (i), (ii), (iii), (iv) or (v)
above, provided that the Company shall not be liable under this clause (vi) to
the extent that a court of competent jurisdiction shall have determined by a
final non-appealable judgment that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such Underwriter through its bad faith or willful misconduct; and to
reimburse each Underwriter and each such controlling person for any and all
expenses (including the fees and disbursements of counsel chosen by the
Representatives) as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting any
24
loss, claim, damage, liability or expense purchased Shares, or any person
controlling such Underwriter, if copies of the Prospectus were timely delivered
to the Underwriter pursuant to Section 2(g) and a copy of the Prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or expense. The indemnity
agreement set forth in this Section 7(a) shall be in addition to any liabilities
that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is 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, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discounts and commissions applicable to the
Shares purchased by such Underwriter. The indemnity agreement set forth in this
Section 7(b) shall be in addition to any liabilities that each Underwriter may
otherwise have.
(c) Information Provided by the Underwriters. The Company and each person,
if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, hereby acknowledges that the only information that the
Underwriters (including the Representatives) have furnished to the Company
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth in the fourth paragraph under the caption "Underwriting" in the
Prospectus; and the Underwriters confirm that such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any
25
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 7, notify the indemnifying
party in writing of the commencement thereof, but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or 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, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties at the expense of the
indemnifying party. Upon receipt of notice from the indemnifying party to such
indemnified party of such indemnifying party's election so to assume the defense
of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (the Representatives in the case of Section 7(b) and Section 12),
representing the indemnified parties who are parties to such action), (ii) 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 commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(d) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the
26
entry of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(f) Contribution. (i) If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by such party on the one hand and the Underwriters on
the other from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such party on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) as well as any other relevant equitable
considerations. The relative 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 or its "control" stockholders on the one
hand, or the Underwriters on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(ii) The Company and Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(f) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7(f). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 7(f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (f), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter, and (ii) 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. The Underwriters' obligations in this Section 7(f)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) Timing of Any Payments of Indemnification. Any losses, claims, damages,
liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than
27
forty-five (45) days of invoice to the indemnifying party. All sums payable to
any indemnified party under this Section 7 shall be paid free and clear of all
deductions or withholdings unless the deduction or withholding is required by
law, in which event the person making payment shall pay such additional amount
as shall be required to ensure that the net amount received by the indemnified
party will equal the full amount which would have been received by it had no
such deduction or withholding been made. If the United Kingdom Inland Revenue or
any other taxing authority in any jurisdiction brings into any charge to tax (or
into any computation of income, profits or gains for the purposes of any charge
to tax) any sum payable to any indemnified party under this Section 7 then the
amount so payable shall be grossed up by such amount as will ensure that after
deduction of the taxation so chargeable there shall remain a sum equal to the
amount that would otherwise be payable (additional payments being made on demand
as may be necessary).
(h) Survival. The indemnity and contribution agreements contained in this
Section 7 of this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any persons controlling the Company, (ii) acceptance of any Shares and
payment therefor hereunder, or (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7.
(i) Acknowledgments of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 7, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 7 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectus as required by
the Securities Act, the Exchange Act and the Pos Regs.
Section 8. Default of One or More of the Several Underwriters.
(i) If, on the First Closing Date or the Second Closing Date, as the case
may be, any one or more of the several Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Shares set forth opposite their respective names on Schedule A and
Schedule B hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with
28
respect to which such default occurs exceeds 10% of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Shares are not made
within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party other than the defaulting Underwriter,
except that the provisions of Sections 5, 6, 7, 10 and 12 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.
(ii) As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
8. Any action taken under this Section 8 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
Section 9. Termination of this Agreement.
This Agreement may be terminated by the Representatives by notice given to
the Company if: (a) at any time after the execution and delivery of this
Agreement and prior to the First Closing Date (i) trading or quotation in any of
the Company's securities shall have been suspended or limited by the Commission,
Nasdaq, the London Stock Exchange or AIM, or trading in securities generally on
either Nasdaq, AIM, the London Stock Exchange or the New York Stock Exchange
shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such stock exchanges by the Commission, the
NASD, the New York Stock Exchange or otherwise; (ii) a general banking
moratorium shall have been declared by any of federal or State of New York or
U.K. authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States, the U.K. or international financial markets, or any
substantial change or development involving a prospective change in the
political, financial or economic conditions of the United States, the U.K. or
internationally, as in the judgment of the Representatives is material and
adverse and makes it impracticable or inadvisable to market the Shares in the
manner and on the terms contemplated in the Prospectus or to enforce contracts
for the sale of securities; (iv) in the judgment of the Representatives there
shall have occurred any Material Adverse Change; or (v) the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Representatives may interfere
materially with the conduct of the business or operations of the Company
regardless of whether or not such loss shall have been insured; or (b) in the
case of any of the events specified in Section 9(i) through (v), such event
singly or together with any other event, makes it, in the judgment of the
Representatives, impracticable or inadvisable to market the Shares in the manner
and on the terms contemplated in the Prospectus. Any termination pursuant to
this Section 9 shall be without liability on the part of (x) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 5, 6,
7 and 10 hereof, (y) any Underwriter to the Company or any person controlling
the Company, or (z) of any party hereto
29
to any other party except that the provisions of Sections 5, 6, 7 and 10 shall
at all times be effective and shall survive such termination.
Section 10. Pre-Offering Transaction Involving the Company; Break-Up Fee.
If (i) the Offering does not proceed and (ii) the Company is acquired,
merges or sells all or substantially all of its assets or otherwise effects a
corporate reorganization or other business combination or extraordinary
corporate transaction, including a private or public financing (collectively, a
"Transaction") on or prior to September 30, 2000, then the Company shall
promptly pay to the Representatives a breakup fee equal to $150,000 in the
aggregate (and any related value added tax) in immediately available funds. Such
$150,000 fee shall be payable as follows: 55% shall be payable to the
International Underwriter and 45% shall be payable to the U.S. Lead Manager.
Such cash fee will be in addition to reimbursement by the Company of all fees
and expenses of the Underwriters (without giving effect of the limitations
contained in Section 6 above). If, however, one of the Representatives is
engaged by the Company as its exclusive financial advisor in connection with a
Transaction on terms satisfactory to the Representatives, the portion of the fee
that is payable to such Representative as described immediately above will be
deducted from the fees paid to the Representative in connection with such new
engagement.
Section 11. Value Added Tax.
(a) Where, pursuant to this Agreement, a sum (a "Relevant Sum") is to be
paid or reimbursed to the Representatives in respect of any cost or expense paid
or incurred by the Representatives and that cost or expense includes an amount
in respect of value added tax (the "VAT Element"), the Company shall pay an
amount to the Representatives in respect of the VAT Element that shall be
determined as follows:
(i) if the Relevant Sum constitutes for value added tax purposes
payment to the Representatives for the supply by it of goods or services to
the Company, a sum equal to the proportion of the VAT Element that the
Representatives certify as representing irrecoverable input tax in the
hands of the Representatives, that certificate to be conclusive except in
the case of manifest error; and
(ii) if the Relevant Sum constitutes for value added tax purposes the
reimbursement of a cost or expense incurred by the Representatives as
agent, for the Company, a sum equal to the whole of the VAT Element,
and where a sum equal to the VAT Element has been reimbursed to the
Representatives under paragraph (ii) above, the Representatives shall provide
the Company with a proper tax invoice in respect of the supply to which the
Relevant Sum relates, that is to say a tax invoice naming the Company as the
recipient of the supply and issued either by the Representatives or, if the
Representatives have treated the relevant cost or expense as a disbursement for
value added tax purposes, by the person making the supply.
(b) If the performance by the Representatives of any of their obligations
under this Agreement shall represent for value added tax purposes the making by
the Representatives
30
of any supply of goods or services to the Company that is taxable at a positive
rate, the Company shall pay to the Representatives, in addition to the amounts
otherwise payable by the Company to the Representatives pursuant to this
Agreement (including, without limitation, amounts payable by the Company to the
Representatives pursuant to clause (a), above, an amount equal to the value
added tax chargeable on any such supply, that payment to be made within seven
days of the Representatives requesting the same and against production by the
Representatives of a proper tax invoice.
Section 12. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and
other statements of the Company or any person controlling the Company, of its
officers, and of the several 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 its or their
partners, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Shares sold hereunder and any
termination of this Agreement.
Section 13. Notices.
All communications hereunder shall be in writing and shall be mailed, hand
delivered, delivered by a nationally recognized overnight delivery service or
telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
Xxxx Capital Partners, Inc.
00000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx-Xxxxxxx, Managing Director
Gruntal & Co., L.L.C.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx, Senior Managing Director
31
WestLB Panmure Limited
New Broad Street House
35 New Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Telephone: x00 000 000 0000
Facsimile: x00 000 000 0000
Attention: Xxxxx Xxxxxxx, Managing Director
with a copy to:
Xxxx Marks & Xxxxx LLP
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq. and
Xxxxxxxx X. Xxxxx, Esq.
If to the Company:
Keryx Biopharmaceuticals, Inc.
000 Xxxxx Xxxx
Xxx' xxxx Xx'xx
Xxxxxxxxx
00000 Israel
Telephone: x000 (0) 000 0000
Facsimile: x000 (0) 000 0000
Attention: Xxx Xxxxxxxxxxxx, Esq.
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
32
Section 14. Successors.
This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Underwriters pursuant to Section 8 hereof, and
to the benefit of the employees, officers and directors and controlling persons
referred to in Section 7, and to their respective successors and assigns, and no
other person will have any right or obligation hereunder. The term "successors"
shall not include any purchaser of the Shares as such from any of the
Underwriters merely by reason of such purchase.
Section 15. 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.
Section 16. Governing Law Provisions.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in such state.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding arising
out of or based upon this Agreement or the transactions contemplated hereby (a
"Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the "Specified Courts"), and each party irrevocably submits to
the exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "Related Judgment"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
Section 17. General Provisions.
This Agreement constitutes the entire agreement of the parties and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to
33
benefit. Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
[The remainder of this page has been intentionally left blank.]
34
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.
Very truly yours,
KERYX BIOPHARMACEUTICALS, INC.
By:__________________________________
Xxxxxx Xxxxxx, M.D.
Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.
On their behalf and on behalf of each of the several U.S. Underwriters named in
Schedule A hereto.
BY: XXXX CAPITAL PARTNERS, INC. On its own behalf:
By: __________________________________ BY: WEST LB PANMURE LIMITED
Xxxx Xxxxxxx-Xxxxxxx
Managing Director
By:___________________________
X.X. Xxxxxxx
BY: GRUNTAL & CO., L.L.C. Managing Director
By:________________________ By:___________________________
Xxxxx X. Xxxx J. Xxxxxx Xxxxxxxx
Senior Managing Director Executive Director
35
Schedule A
NUMBER OF U.S. FIRM
U. S. UNDERWRITERS SHARES TO BE PURCHASED
------------------ ----------------------
XXXX CAPITAL PARTNERS, INC................
GRUNTAL & CO., L.L.C......................
Total................................
Schedule B
NUMBER OF INTERNATIONAL
FIRM SHARES TO BE
INTERNATIONAL UNDERWRITER PURCHASED
------------------------- ---------
WESTLB PANMURE LIMITED..................................
Total..............................................
Schedule C
Persons to Enter into 12-Month Lock-Up Agreement
Xxxxxxx X. Xxxxxxxxx Xxxxxx Xxxxxx
Paramount Capital, Inc. Xxx Xxxxxxxxx
Paramount Capital Investments, LLC Xxx Xxxxxxxxxxxx
Xxxxx X. Xxxx Xxxxxxx Xxxxx
Xxxx X. Xxxxxx Xxxxxxxx X. Xxxx
Xxxxxx Xxx-Xxxxxx Xxxxx Xxxxxxxx
Xxxx X. Xxxxxxxx S. Xxxxxx Xxxxxxx
Schedule D
Persons to Enter into Six-Month Lock-up Agreement
Xxxxx Xxxxxx Xxxxxx X. Xxxx
Xxxxx Xxxxx Xxxxxxxx Xxxxxxx
Xxxx Xxxx Xxx Xxxxxx
Children's Medical Center Corporation Caxton Select I
N Shellac Daisy Way Limited
S Green Diversified Investment Fund
Banque SCS Alliance SA Limited
Beacon Global Advisors Private Equity Xxxxx Xxxxxxx
Fund, Ltd. Pretac Investors LLC
Drax Holdings, L.P. Xxxxxx Xxxxxx
Xxxxxxxxx Partners Xxxxxx Xxxx
Xxxxxxx X. Xxxxxxx Sonostar Ventures, LLC
X.X. Xxxx Co., Inc. as Nominee 1999-117 The Holding Company
Keys Foundation The Xxxxxxx Family Trust
Nomura Bank (Switzerland) Ltd.
Exhibit A-1
12-Month Lock-Up Agreement
A-1
DATED 2000
-----------------
(1) THE COVENANTORS
and
(2) XXXX CAPITAL PARTNERS, INC.
and
(3) WEST LB PANMURE LIMITED
---------------------------------------
ORDERLY MARKETING AGREEMENT
IN RELATION TO KERYX BIOPHARMACEUTICALS, INC.
----------------------------------------
ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 000-0000 0000
Fax: 000-0000 0000
MCJ/PXR/O51W00027
THIS AGREEMENT is made on _________, 2000
BETWEEN:
(1) THE SEVERAL PERSONS whose names are set out in the schedule hereto (the
"Covenantors"); and
(2) Xxxx Capital Partners, Inc. whose registered office is at 00 Xxxxxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, and West LB Panmure Limited, whose
registered office is at New Xxxxx Xxxxxx Xxxxx, 00 Xxx Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX, as representatives of the Underwriters (collectively the
"Representatives").
WHEREAS:-
(A) The Company wishes to raise additional funds by the issue of shares of its
common stock for cash and desires to obtain the admission to trading on the
Nasdaq National Market and the Alternative Investment Market of its share
capital in issue and to be issued pursuant to the IPO.
(B) The Covenantors are the registered holders of the Shares and/or options set
against their respective names as set out in columns 2 and 3 of schedule 1.
(C) The Covenantors have agreed with the Representatives to enter into certain
restrictions with regard to the disposal by them of the Shares and
interests in shares in the Company held by them.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
The following provisions of this clause shall have effect for the interpretation
of this Agreement.
The following words and expressions shall, unless the context otherwise
requires, have the following meanings:
"Admission" means admission to trading on the Alternative Investment
Market and the Nasdaq National Market of the share capital of the
Company in issue and to be issued pursuant to the IPO;
"Alternative Investment Market" means the Alternative Investment
Market of the London Stock Exchange;
the "Company" means Keryx Biopharmaceuticals, Inc.;
"immediate family" means spouse, lineal descendants, father, mother,
brother or sister;
"IPO" means the initial public offering of the Shares;
"London Stock Exchange" means London Stock Exchange Limited;
"Shares" means shares of common stock of par value $0.001 each in the
capital of the Company; and
"Underwriters" means those persons who are to act as underwriters to
the IPO.
Terms used in this agreement which are defined in the Companies Xxx 0000 shall
bear the same meanings herein.
RESTRICTIONS
In consideration of the Representatives procuring the Admission, each of the
Covenantors hereby severally undertakes to the Representatives not, at any time
prior to the first anniversary of the date of Admission, to dispose of, or agree
to dispose of, directly or indirectly, any Shares or any interest in any Shares
in which it has a beneficial interest or which are registered in its name at the
date hereof or any Shares resulting from the exercise of options or warrants
issued by the Company or any securities convertible into or exercisable for, or
any rights to purchase or acquire Shares, whether now owned or hereinafter
acquired.
In this clause 2.1 "dispose" includes mortgaging, pledging, charging,
assigning, offering, selling, contracting to sell, hypothecating,
transferring or otherwise disposing directly or indirectly.
The provisions of clause 2.1 shall not apply to:
an acceptance of an offer for the entire issued share capital of the Company or
the giving of an irrevocable undertaking to accept an offer for the entire
issued share capital of the Company (in either case excluding Shares already
held by the offeror) which has either been recommended for acceptance by the
directors of the Company or has become unconditional as to acceptances;
transfers to a personal representative on the death of a Covenantor;
transfers pursuant to an intervening court order;
transfers by Covenantor to his or her immediate family or to a trust the
beneficiaries of which are exclusively that Covenantor and/or a member or
members of his or her immediate family;
transfers by Covenantor to its parent undertaking or another subsidiary
undertaking of such parent undertaking,
PROVIDED ALWAYS that in the event of transfers permitted by paragraphs
(d) and (e) above, prior to any such transfer each transferee shall
execute an agreement satisfactory to the Representatives agreeing to
hold such Shares or interest in Shares subject to the terms of this
agreement, and in the case of a transfer permitted by paragraph (e)
above, additionally agreeing to transfer the Shares or interest in
Shares back to the relevant Covenantor upon the transferee ceasing to
be the holding company of, or another subsidiary undertaking of the
holding company of, that Covenantor.
EFFECT OF UNAUTHORIZED TRANSFERS
Any purported transfer of any Shares or other securities in violation
of clause 2 hereof (an "Unauthorized Transfer") will be null and void.
The Company will not be required to register, recognize or give effect
to any Unauthorized Transfer and the purported transferee of any
securities or any interest therein pursuant to an Unauthorized
Transfer will not acquire any rights in such securities. The Company
may issue stop transfer or similar instructions to the transfer agent
for its Shares covering all such securities, but shall not be required
to do so.
COUNTERPARTS
This agreement may be executed in any number of counterparts which
together shall constitute one agreement.
GOVERNING LAW AND JURISDICTION
This agreement (and any dispute, controversy, proceedings or claim of whatever
nature arising out of or in any way relating to this agreement or its formation)
shall be governed by and construed in accordance with English law.
Each of the parties to this agreement irrevocably agrees that the courts of
England shall have exclusive jurisdiction to hear and decide any suit, action or
proceedings, and/or to settle any disputes, which may arise out of or in
connection with this agreement and, for these purposes, each party irrevocably
submits to the jurisdiction of the courts of England.
The Contracts (Rights of Third Parties) Act 1999 shall not apply to this
agreement and no rights or benefits expressly or impliedly conferred by it shall
be enforceable under that Act against the parties to it by any other person.
AS WITNESS whereof this agreement has been executed on the date first above
written.
SCHEDULE 1
The Covenantors
(1) (2) (3)
Name Shares held Options held
Xxxxxx Xxxxxx 1,014,733
Xxxxxxxx Xxxx 52,684
Xxx Xxxxxxxxx 113,413
Xxx Xxxxxxxxxxxx 113,413
Xxxxxxx X. Xxxxxxxxx 3,878,356 120,176
Xxxxx Xxxx 578,500 75,000
Paramount Capital Inc. 166,990
M Xxxxxx 108,500
S Xxx Xxxxxx 268,512
Xxxx Xxxxxxxx 85,900 40,000
M Xxxxx 86,622
Xxxxx Xxxxxxxx 40,000
Xxxxxx Xxxxxxx 40,000
Signed by XXXXXX XXXXXX in the presence of:- )
)
)
)
)
Signed by XXXXXXXX XXXX in the presence of:- )
)
)
)
)
Signed by XXX XXXXXXXXX in the presence of:- )
)
)
)
)
Signed by XXX XXXXXXXXXXXX in the presence of:- )
)
)
)
)
Signed by XXXXXXX X. XXXXXXXXX in the presence )
of:- )
)
)
)
Signed by XXXXX XXXX in the presence of:- )
)
)
)
)
Exhibit A-2
Six-Month Lock-up Agreement
Xxxx Capital Partners, Inc.,
As Representative of the Several U.S. Underwriters
- and -
WestLB Panmure Limited,
As the International Manager
Re: Lock-up Agreement in Respect to Keryx Biopharmaceuticals, Inc.
--------------------------------------------------------------
Ladies and Gentlemen:
The undersigned officer, director, and/or shareholder (the "Shareholder")
of Keryx Biopharmaceuticals, Inc., a Delaware corporation (the "Company"),
wishes to facilitate the initial public offering (the "Offering") of shares of
common stock of the Company. The Shareholder recognizes that the Offering will
be of benefit to the Company and the Shareholder.
To induce you, as the representative and/or the manager (collectively, the
"Representatives") of the underwriters of the Offering (collectively, the
"Underwriters"), to enter into an underwriting agreement with the Company (the
"Underwriting Agreement") relating to the Offering and to induce you and the
Underwriters to complete the purchase of the shares of common stock pursuant to
such Underwriting Agreement, the Shareholder hereby agrees with the Underwriters
as follows:
1. During the term of this Agreement, as specified in paragraph 3 hereof,
the Shareholder will not, directly or indirectly, offer, sell, contract to sell,
pledge, hypothecate or otherwise dispose of any shares of the Company's common
stock or any securities convertible into or exercisable or exchangeable for, or
any rights to purchase or acquire, shares of the Company's common stock or the
beneficial ownership thereof, whether now owned or hereinafter acquired
(collectively the "Subject Securities"), without your prior written consent as
Representatives of the Underwriters. Notwithstanding the foregoing, (i) if the
undersigned is an individual, he or she may transfer any shares of common stock
or securities convertible into or exchangeable or exercisable for the Company's
common stock either during his or her lifetime or on death by will or intestacy
to his or her immediate family; (ii) if the undersigned is an entity, such
entity may transfer any securities of the Company to (a) a beneficial owner (as
that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of such entity, in accordance with such beneficial owner's pro rata
interest in such entity, or (b) an entity, the beneficial owner or owners of
which are exclusively the beneficial owner or owners of the transferor entity
and/or a member of his or her immediate family, (iii) the undersigned may make
dispositions of common stock as bona fide gifts with the prior written consent
of the Representatives, (iv) the undersigned may make dispositions of common
stock in connection with any merger, tender offer or other change of control
transaction involving the Company, and (v) the undersigned may sell or transfer
shares acquired in open market transactions after
completion of the Offering, provided, however, that prior to any such transfer
under clauses (i), (ii) or (iii) above, each transfer shall execute an
agreement, satisfactory to the Representatives, pursuant to which each
transferee shall agree to receive and hold such shares of common stock, or
securities convertible into or exchangeable or exercisable for the common stock,
subject to the provisions hereof.
2. Any purported transfer of any Subject Securities in violation of
paragraph 1 hereof (an "Unauthorized Transfer") will be null and void. The
Company will not be required to register, recognize or give effect to any
Unauthorized Transfer and the purported transferee of any Subject Securities or
any interest therein pursuant to an Unauthorized Transfer will not acquire any
rights in such Subject Securities. The Company may issue stop transfer or
similar instructions to the transfer agent for its common stock covering all
Subject Securities, but shall not be required to do so.
3. This Agreement shall become effective upon the execution hereof by the
Shareholder. This Agreement shall terminate without any prior notice upon the
earlier of (i) the date which is one hundred and eighty (180) days after the
effective date of the Registration Statement filed by the Company with the
Securities and Exchange Commission in connection with the Offering, (ii) the
termination or cancellation of the Underwriting Agreement for any reason prior
to the sale of the common stock to the Underwriters, (iii) the abandonment of
the Offering, or (iv) December 31, 2000, if the Offering is not consummated by
such date.
4. This Agreement shall be construed and enforced in accordance with the
laws of the State of New York. The Underwriters shall be entitled to all legal
and equitable remedies in enforcing this Agreement, including without limitation
an injunction against any sale of shares of the common stock in contravention of
this Agreement. If at any time subsequent to the date of this Agreement any
provision hereof shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon, and shall not impair the legality or enforceability of, any other
provision of this Agreement.
5. This Agreement may be executed in one or more counterparts, each of
which shall be an original, but all of which taken together shall constitute one
and the same instrument.
6. All of the terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the respective heirs, successors, personal
representatives and permitted assigns of the parties hereto.
If the foregoing correctly sets forth the agreement between the undersigned
and the Underwriters, please indicate your acceptance in the space provided
below for that purpose.
Very truly yours,
-----------------------------
(Signature)
-----------------------------
Print Name
-----------------------------
Print name of organization
(if other than an individual)
Exhibit B
Matters to be covered in the opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP
[To be inserted.]
B-1
Exhibit C
Matters to be Covered in Opinion of Xxxxxx & Xxxxxxx LLP
[To be inserted.]
C-1
Exhibit D
Matters to be Covered in the Opinion of Xxxx Marks Xxxxx LLP
[To be inserted.]
D-1
