EXHIBIT 1.3
Antigenics Inc.
3,450,000 Shares
Common Stock
($0.01 Par Value)
UNDERWRITING AGREEMENT
January 23, 2003
UNDERWRITING AGREEMENT
January 23, 2003
UBS Warburg LLC
Morgan Keegan & Company, Inc.
Needham & Company, Inc.
Ryan, Beck & Co. LLC
As the Representatives of the several Underwriters
c/o UBS Warburg LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
Antigenics Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the Underwriters named in Schedule A annexed
hereto (the "Underwriters") an aggregate of 3,450,000 shares of Common Stock,
$0.01 par value per share (the "Common Stock"), of the Company (the "Firm
Shares"). In addition, solely for the purpose of covering over-allotments, the
Company proposes to grant to the Underwriters the option to purchase from the
Company up to an additional 517,500 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the "Shares". The Shares are described in the
Prospectus which is referred to below.
Simultaneously with the purchase and sale of the Firm Shares
to the Underwriters, the Company is issuing and selling to an individual
investor (the "Investor") 2,800,000 shares of Common Stock (the "Direct
Placement Shares") on the terms described in the Prospectus (the "Direct
Placement"). The offer and sale of the Direct Placement Shares is being made
pursuant to the Registration Statement described below, and confirmation of the
sale of such shares shall be accompanied by the Prospectus (in a form which
includes the final prospectus supplement referred to in the last sentence of the
paragraph that follows), which shall relate to the offer and sale of the Shares
and the Direct Placement Shares.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 333-74002) under the Act (the "first registration statement").
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Amendments to the first registration statement have been similarly prepared and
filed with the Commission. The first registration statement, as so amended, has
been declared by the Commission to be effective under the Act. The Company has
also prepared and filed with the Commission, in accordance with the provisions
of the Act, a registration statement on Form S-3 (File No. 333-90380) under the
Act (the "second registration statement" and, together with the first
registration statement, the "registration statement"). Amendments to the second
registration statement have been similarly prepared and filed with the
Commission. The second registration statement, as amended, has been declared by
the Commission to be effective under the Act. Pursuant to Rule 429 under the
Act, the second registration statement constitutes a post-effective amendment to
the first registration statement and includes a combined prospectus relating to
any offering of securities of the Company under both the first registration
statement and the second registration statement. The Company will next file with
the Commission pursuant to Rule 424(b) under the Act a final prospectus
supplement to the basic prospectus included within the second registration
statement, describing the Shares, the Direct Placement Shares and the offering
thereof, in such form as has been provided to or discussed with, and approved,
by the Underwriters.
The first registration statement, as amended at the time it
became effective and as supplemented or amended, or deemed to have been amended
pursuant to Rule 429 under the Act, prior to the execution of this Agreement and
the second registration statement, as amended at the time it became effective
and as supplemented or amended prior to the execution of this Agreement, in each
case including (i) all financial schedules and exhibits thereto and (ii) all
documents incorporated by reference or deemed to be incorporated by reference
therein, are hereinafter referred to individually as a "Registration Statement"
and collectively as the "Registration Statements." If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Abbreviated Registration Statement"), the
term "Registration Statement" includes the Abbreviated Registration Statement.
The term "Basic Prospectus" as used in this Agreement means the basic prospectus
dated as of August 2, 2003 and to be filed with the Commission pursuant to Rule
424(b) January 8, 2003. The term "Prepricing Prospectus" as used in this
Agreement means any form of preliminary prospectus used in connection with the
marketing of the Shares, including the preliminary prospectus supplement dated
as of January 8, 2003 and filed with the Commission on January 8, 2003 pursuant
to Rule 424 under the Act and any basic prospectus (whether or not in
preliminary form) used with any such preliminary prospectus supplement in
connection with the marketing of the Shares, in each case as any of the
foregoing may be amended or supplemented by the Company. The term "Prospectus
Supplement" as used in this Agreement means any final prospectus supplement
specifically relating to the Shares, in the form filed with, or transmitted for
filing to, the Commission pursuant to Rule 424 under the Act. The term
"Prospectus" as used in this Agreement means the Basic Prospectus together with
the Prospectus Supplement except that if such Basic Prospectus is amended or
supplemented on or prior to the date on which the Prospectus
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Supplement was first filed pursuant to Rule 424, the term "Prospectus" shall
refer to the Basic Prospectus as so amended or supplemented and as supplemented
by the Prospectus Supplement. Any reference herein to the registration
statement, a Registration Statement, the Basic Prospectus, any Prepricing
Prospectus, any Prospectus Supplement or the Prospectus shall be deemed to refer
to and include (i) the documents incorporated by reference therein pursuant to
Form S-3 (the "Incorporated Documents") and (ii) the copy of such Registration
Statement, the Basic Prospectus, Prepricing Prospectus, Prospectus Supplement or
Prospectus and the Incorporated Documents related thereto filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR"). Any reference herein to the terms "amend", "amendment" or
"supplement" with respect to a Registration Statement, any Prepricing
Prospectus, any Prospectus Supplement or the Prospectus shall be deemed to refer
to and include the filing of any document under the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the
"Exchange Act") after the effective date of a Registration Statement, or the
date of the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the
representations and warranties and subject to the terms and conditions herein
set forth, the Company agrees to sell to the respective Underwriters and each of
the Underwriters, severally and not jointly, agrees to purchase from the Company
the respective number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A annexed hereto, in each case at a purchase price of
$9.40 per Share. The Company is advised by you that the Underwriters intend (i)
to make a public offering of their respective portions of the Firm Shares as
soon after the execution of this Agreement as in your judgment is advisable and
(ii) initially to offer the Firm Shares upon the terms set forth in the
Prospectus. You may from time to time increase or decrease the public offering
price after the initial public offering to such extent as you may determine in a
manner consistent with applicable law, rules and regulations.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company all or a portion of the Additional Shares as may be necessary to
cover over-allotments made in connection with the offering of the Firm Shares,
at the same purchase price per share to be paid by the Underwriters for the Firm
Shares. This option may be exercised by you once on behalf of the several
Underwriters at any time on or before the 30th day following the date hereof by
written notice to the Company. Such notice shall set forth the aggregate number
of Additional Shares as to which the option is being exercised and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the "additional time of purchase"); provided, however,
that the
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additional time of purchase shall not be earlier than the time of
purchase (as defined below) nor earlier than the second business day(1) after
the date on which the option shall have been exercised nor later than the tenth
business day after the date on which the option shall have been exercised. The
number of Additional Shares to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to such adjustment as you may determine solely to
eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds wire transfer,
against delivery of the certificates for the Firm Shares to you through the
facilities of the Depository Trust Company ("DTC") for the respective accounts
of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time, on January 28, 2003 (unless another time shall be agreed to by
you and the Company or unless postponed in accordance with the provisions of
Section 8 hereof) at the offices of Dewey Ballantine LLP, 1301 Avenue of the
Americas, New York, New York 10019. The time at which such payment and delivery
are actually made is hereinafter called the "time of purchase." Electronic
transfer of the Firm Shares shall be made to you at the time of purchase in such
names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
3. Representations and Warranties of the Company. The
Company represents and warrants to each of the Underwriters that:
(a) The Company has not received nor has notice of any
order of the Commission preventing or suspending the use of the Basic
Prospectus, any Prepricing Prospectus, the Prospectus Supplement or the
Prospectus or instituting proceedings for that purpose, and the Basic
Prospectus, the Prospectus Supplement and the Prospectus, at the time
of filing thereof, conformed or will conform in all material respects
to the requirements of the Act; the Company is eligible to use Form S-3
and the offering of the Shares and the Direct Placement Shares complies
with the requirements of Rule 415 (assuming that the Shares are
distributed by the Underwriters as described in the
- -----------------------
(1) As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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Prospectus Supplement). Each registration statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule 415
under the Act and complies in all material respects with said Rule 415;
when each Registration Statement became effective, each Registration
Statement conformed in all material respects with the provisions of the
Act; and neither Registration Statement contains or will contain an
untrue statement of a material fact or omits or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus will not contain
an 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, in light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation
or warranty with respect to any statement contained in or omitted from
either Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters and furnished
in writing by or on behalf of any Underwriter through you to the
Company expressly for use in either Registration Statement or the
Prospectus; and neither the Company nor any of its affiliates has
distributed any offering material in connection with the offer or sale
of the Shares or the Direct Placement Shares other than the second
registration statement, the Prepricing Prospectus and the Prospectus or
any other materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company's
capitalization is as set forth under the heading entitled "Actual" in
the section of the Prospectus entitled "Capitalization" and, as of the
time of purchase and the additional time of purchase, as the case may
be, the Company's capitalization shall be as set forth under the
heading entitled "As Adjusted" in the section of the Prospectus
entitled "Capitalization," subject, in the case of both the "Actual"
and "As Adjusted" figures, to the issuance of shares of Common Stock
upon the exercise of stock options disclosed as outstanding in the
Prospectus, and further subject, in the case of the "As Adjusted"
figures, to the assumptions disclosed in the section of the Prospectus
entitled "Capitalization"; all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of
first refusal or similar right;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statements and the Prospectus;
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(d) the Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to so
qualify would not reasonably be expected to have a material adverse
effect on the business, operations, prospects, properties, condition
(financial or otherwise) or results of operation of the Company and the
subsidiaries of the Company listed on Exhibit 21.1 to the Annual Report
of the Company on Form 10-K for the fiscal year ended December 31, 2001
(the "Subsidiaries") taken as a whole (a "Material Adverse Effect").
Except as described in the Registration Statements and the Prospectus,
the Company owns, directly or indirectly, 100% of the outstanding
capital stock of the Subsidiaries; except for the Subsidiaries or as
set forth in Schedule B hereto and/or described in the Registration
Statements and the Prospectus, the Company does not own, directly or
indirectly, any long-term debt or any equity interest in any firm,
corporation, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation and of
the bylaws of the Company and each of the Subsidiaries and all
amendments thereto have been delivered to you; each of the Subsidiaries
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with the requisite corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statements and the Prospectus; each of the Subsidiaries is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the ownership or leasing of the
properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not reasonably be expected
to have a Material Adverse Effect; all of the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable, have been issued in
compliance with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal
or similar right, except for any violation that would not, individually
or in the aggregate, have a Material Adverse Effect;
(e) the subsidiaries of the Company listed on Schedule B
hereto do not own or possess any property or assets, or have any
obligations or liabilities, or possess any rights (by contract,
franchise, permit or otherwise) or engage in any operations that are,
individually or in the aggregate, material to the Company or its
business, prospects, properties, condition (financial or otherwise) or
results of operations; and such entities are the only "subsidiaries"
(as defined in the Act) of the Company other than the Subsidiaries.
(f) neither the Company nor any of the Subsidiaries
is in breach or violation of, or in default under (nor has any event
occurred which with notice, lapse
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of time, or both would result in any breach or violation of, or
constitute a default under) (each such breach, violation, default or
event, a "Default Event"), (i) its charter, bylaws or other
organizational documents, (ii) any obligation, agreement, covenant or
condition contained in any license, permit, indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which
any of them or any of their properties is bound or affected, (iii) any
federal, state, local or foreign law, regulation or rule or (iv) any
decree, judgment or order applicable to the Company, any of the
Subsidiaries or any of their respective properties, other than, in the
case of clause (ii), such Default Events as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
including the issuance and sale of the Shares and the consummation of
the other transactions contemplated hereby, and the issuance and sale
of the Direct Placement Shares, do not constitute and will not result
in a Default Event under (w) any provisions of the charter, bylaws or
other organizational documents of the Company or any of the
Subsidiaries, (x) under any provision of any license, permit,
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries
or by which any of them or their respective properties may be bound or
affected, (y) under any federal, state, local or foreign law,
regulation or rule or (z) under any decree, judgment or order
applicable to the Company, any of the Subsidiaries or any of their
respective properties, except in the case of clause (x) for such
Default Events as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(g) this Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of
the Company;
(h) the capital stock of the Company, including the
Shares and the Direct Placement Shares, conforms in all material
respects to the description thereof contained in the Registration
Statements and the Prospectus;
(i) the Shares and the Direct Placement Shares have been
duly and validly authorized by the Company and, when issued and
delivered by the Company against payment therefor as provided herein
(in the case of the Shares) or as provided in the Prospectus (in the
case of the Direct Placement Shares), will be validly issued, fully
paid and non-assessable;
(j) no approval, authorization, consent or order of
or filing with any national, state, local or other governmental or
regulatory commission, board, body, authority or agency is required to
be obtained or made by the Company or any of the
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Subsidiaries in connection with the issuance and sale of the Shares or
the consummation by the Company of the other transactions contemplated
hereby, or in connection with the issuance and sale of the Direct
Placement Shares, other than registration of the offer and sale of the
Shares and the Direct Placement Shares under the Act, which has been
effected, and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters and under the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD") with respect
to the reasonableness of the terms of the offering;
(k) except as set forth in the Registration Statements
and the Prospectus (i) no person has the right, contractual or
otherwise, to cause the Company to issue or sell to it any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, (ii) no person has any preemptive rights,
resale rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock or other
equity interests of the Company and (iii) no person has the right to
act as an underwriter, or as a financial advisor to the Company, in
connection with the offer and sale of the Shares or the Direct
Placement Shares, in the case of each of the foregoing clauses (i),
(ii) and (iii), whether as a result of the filing or effectiveness of
the Registration Statements or the sale of the Shares or the Direct
Placement Shares as contemplated thereby or otherwise; no person has
the right, contractual or otherwise, to cause the Company to register
under the Act any shares of Common Stock or shares of any other capital
stock or other equity interests of the Company, or to include any such
shares or interests in the Registration Statements or the offering
contemplated thereby whether as a result of the filing or effectiveness
of the Registration Statements or the sale of the Shares or the Direct
Placement Shares as contemplated thereby or otherwise, except for such
rights as have been complied with or waived;
(l) KPMG LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the
Commission as part of each Registration Statement and the Prospectus,
are independent public accountants as required by the Act;
(m) the Company and each of the Subsidiaries has all
necessary licenses, permits, authorizations, consents and approvals and
has made all necessary filings required under any federal, state, local
or foreign law, regulation or rule (collectively, "Permits"), and has
obtained all necessary authorizations, consents and approvals from
other persons (collectively, "Approvals"), in order to conduct its
business as described in the Registration Statements and the
Prospectus, other than such Permits and Approvals the failure of which
to obtain would not, individually or in the aggregate,
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reasonably be expected to have a Material Adverse Effect; neither the
Company nor any of the Subsidiaries is in violation of, or in default
under, any such Permit or Approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries the effect of
which would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(n) all legal or governmental proceedings, contracts,
leases or documents of a character required to be described in either
of the Registration Statements or the Prospectus or any document
incorporated by reference therein or to be filed as an exhibit to
either of the Registration Statements or any document incorporated by
reference therein have been so described or filed as required;
(o) except as disclosed in the Registration Statements
and the Prospectus, there are no actions, suits, claims, investigations
or proceedings pending or threatened to which the Company or any of the
Subsidiaries or, to the Company's knowledge, any of their respective
directors or officers is a party or of which any of their respective
properties is subject at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board,
body, authority or agency which, if adversely decided, would reasonably
be expected to result in a judgment, decree or order having a Material
Adverse Effect or prevent consummation of the transactions contemplated
hereby;
(p) the consolidated financial statements, together
with the related schedules and notes, included in the Registration
Statements and the Prospectus present fairly, in all material respects,
the consolidated financial position of the Company and the Subsidiaries
as of the dates indicated and the consolidated results of operations
and cash flows of the Company and the Subsidiaries for the periods
specified and have been prepared in compliance with the requirements of
the Act and in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved; all pro
forma financial statements or data included in the Registration
Statements and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X
of the Act, and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements; the
other financial and statistical data set forth in the Registration
Statements and the Prospectus are accurately presented, in all material
respects and prepared on a basis consistent with such financial
statements and books and records of the Company; and there are no
financial statements (historical or pro forma) that are required to be
included in either of the Registration Statements or the Prospectus
that are not included as required;
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(q) subsequent to the respective dates as of which
information is given in the Registration Statements and the Prospectus,
there has not been (i) any Material Adverse Effect, or any development
which would reasonably be expected to cause a Material Adverse Effect,
(ii) any transaction which is material to the Company or any of the
Subsidiaries taken as a whole, except for the Direct Placement and
transactions pursuant to this Agreement, (iii) any obligation, direct
or contingent, which is material to the Company and the Subsidiaries
taken as a whole, incurred by the Company or any of the Subsidiaries,
(iv) any change in the capital stock or outstanding indebtedness of the
Company or any of the Subsidiaries (other than pursuant to the exercise
of stock options described in the Registration Statements and the
Prospectus as outstanding, the grant of stock options under stock
option plans described in the Registration Statements and the
Prospectus, the issuance of Common Stock pursuant to stock purchase
plans described in the Registration Statements and the Prospectus or
the issuance of the Direct Placement Shares as described in the
Prospectus) or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company; neither the Company
nor any of the Subsidiaries has any material contingent obligation
which is not disclosed in the Registration Statements and the
Prospectus;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), substantially in
the form set forth as Exhibit A hereto, of each of its officers and
directors listed on Schedule C hereto and Antigenics Holdings L.L.C.;
the Company will not release or purport to release any person from any
Lock-Up Agreement without the prior written consent of UBS Warburg LLC;
(s) the Company is not and, after giving effect to the
offering and sale of the Shares and the Direct Placement Shares, will
not be an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(t) any statistical and market-related data included in
the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained the
written consent to the use of such data from such sources to the extent
required;
(u) neither the Company nor any of the Subsidiaries nor
any of their respective affiliates has taken, directly or indirectly,
any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
or the Direct Placement Shares;
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(v) the Incorporated Documents, when they were filed with
the Commission, conformed in all material respects to the requirements
of the Exchange Act, and none of such documents, when they were filed
with the Commission, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Registration Statements and/or the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act, as applicable, and will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein not misleading;
(w) the Company and each of the Subsidiaries maintain
insurance of the types and in amounts reasonably adequate for their
respective businesses, including, but not limited to, insurance
covering real and personal property owned or leased by the Company and
each of the Subsidiaries against theft, damage, destruction, acts of
vandalism and other risks customarily insured against, all of which
insurance is in full force and effect;
(x) neither the Company nor any of the Subsidiaries has
sustained since the date of the latest financial statements included in
the Prospectus any losses or interferences with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Registration Statements and the Prospectus or other than any losses or
interferences which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(y) the Company and each of the Subsidiaries have good
title to all personal property owned by them, respectively, as
described in the Registration Statements and the Prospectus, free and
clear of all liens, encumbrances and defects except such as are
described in the Registration Statements and the Prospectus or such as
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; except as described in the Registration
Statements and the Prospectus, any real property and buildings held
under lease by the Company or any of the Subsidiaries are held by it
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company or any of the
Subsidiaries, as the case may be;
(z) neither the Company nor any of the Subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes,
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pollutants or contaminants, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which would, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect;
(aa) the Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences; the chief executive officer and
principal financial officer of the Company has made all certifications
required by the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act")
and any related rules and regulations promulgated by the Commission,
and the statements contained in any such certification are complete and
correct; the Company maintains "disclosure controls and procedures" (as
defined in Rule 13a-14(c) under the Exchange Act); the Company is
otherwise in compliance with all applicable effective provisions of the
Sarbanes-Oxley Act;
(bb) all tax returns required to be filed by the Company
and each of the Subsidiaries have been filed, other than those filings
being contested in good faith, and all taxes, including withholding
taxes, penalties and interest, assessments, fees and other charges due
pursuant to such returns or pursuant to any assessment received by the
Company or any of the Subsidiaries have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided;
(cc) other than as set forth in the Registration
Statements and the Prospectus, or as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect: to
the Company's knowledge, the Company and the Subsidiaries own, possess,
license or have other rights to use, all material patents, trademarks,
servicemarks, trade names, copyrights, trade secrets, information,
proprietary rights and processes ("Intellectual Property") necessary
for their business as described in the Registration Statements and the
Prospectus and necessary in connection with the commercialization of
the existing products of the Company and the Subsidiaries and the
products described in the Registration Statements and the Prospectus as
being under development, and the Company and the Subsidiaries have
taken all reasonable steps necessary to secure interests in such
Intellectual Property;
12
except as described in the Registration Statements and the Prospectus,
the Company is not aware of any options, licenses or agreements of any
kind relating to the Intellectual Property of the Company or the
Subsidiaries that are outstanding and which are required to be
described in either of the Registration Statements or the Prospectus,
and, except as described in the Registration Statements and the
Prospectus, neither the Company nor any of the Subsidiaries is a party
to or bound by any options, licenses or agreements with respect to the
Intellectual Property of any other person or entity which are required
to be described in either of the Registration Statements or the
Prospectus; none of the technology employed by the Company and the
Subsidiaries has been obtained or is used or proposed to be used by the
Company or the Subsidiaries in violation of any contractual obligation
binding on the Company or the Subsidiaries or any of their respective
directors or executive officers or, to the Company's knowledge, any
employees of the Company or the Subsidiaries or otherwise in violation
of the valid rights of any persons, other than any violation which
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; except as described in the Registration
Statements and the Prospectus, to the Company's knowledge neither the
Company nor any of the Subsidiaries has violated, infringed or
conflicted with, or, by conducting its business as described in the
Registration Statements and the Prospectus and commercializing the
products under development described therein, would violate, infringe
or conflict with any of the valid Intellectual Property of any other
person or entity other than any such violation, infringement or
conflict which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect;
(dd) the clinical, pre-clinical and other studies and
tests conducted by or on behalf of or sponsored by the Company or any
Subsidiary or in which the Company, any Subsidiary or the products or
product candidates of the Company or any Subsidiary have participated
that are described in either of the Registration Statements or the
Prospectus or the results of which are referred to in either of the
Registration Statements or the Prospectus were and, if still pending,
are being conducted in accordance with accepted standard medical and
scientific research procedures; the descriptions in the Registration
Statements and the Prospectus of the results of such studies and tests
are accurate in all material respects and fairly present the data
derived from such studies and tests, and neither the Company nor any
Subsidiary has knowledge of any other scientifically credible studies
or tests, the results of which are inconsistent with or otherwise call
into question the results described or referred to in the Registration
Statements and the Prospectus; except to the extent disclosed in the
Registration Statements and the Prospectus, the Company and each
Subsidiary has operated and currently is in compliance in all material
respects with all applicable rules, regulations and policies of the
U.S. Food and Drug Administration and comparable drug regulatory
agencies outside of the United States (collectively, the
13
"Regulatory Authorities"); and except to the extent disclosed in the
Registration Statements and the Prospectus, the Company has not
received any notices or other correspondence from the Regulatory
Authorities or any other governmental agency requiring the termination,
suspension or modification, in a manner that would necessitate updated
disclosure in the registration statement, of any clinical or
pre-clinical studies or tests that are described in either of the
Registration Statements or the Prospectus or the results of which are
referred to in either of the Registration Statements or the Prospectus;
and
(ee) as of the date of this Agreement, the Investor is not
an "affiliate" of the Company (as such term is defined in Rule 12b-2
under the Exchange Act).
4. Certain Covenants of the Company. The Company hereby
agrees:
(a) to the extent reasonably necessary to effect the
distribution of the Shares as contemplated by the Prospectus
Supplement, to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; provided that the Company
shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or threat of
any proceeding for such purpose;
(b) to make available to the Underwriters in New York
City, as soon as practicable after the execution and delivery of this
Agreement, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented) as the Underwriters may reasonably request for
the purposes contemplated by the Act; in case any Underwriter is
required to deliver a prospectus after the nine-month period referred
to in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare promptly upon request such amendment
or amendments to the Registration Statements and such prospectuses as
may be necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when any post-effective amendment
to either of the Registration Statements has become effective and (ii)
when the Prospectus is filed with the Commission pursuant to Rule
424(b) under the Act (which the Company agrees to file in a timely
manner under such Rules);
14
(d) to advise you promptly, confirming such advice in
writing (if requested by you), of any request by the Commission for
amendments or supplements to either of the Registration Statements or
the Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop
order suspending the effectiveness of either of the Registration
Statements and, if the Commission should enter a stop order suspending
the effectiveness of either of the Registration Statements, to make
every reasonable effort to obtain the lifting or removal of such order
as soon as possible; to advise you promptly of any proposal to amend or
supplement either of the Registration Statements or the Prospectus and
to file no such amendment or supplement to which you shall object in
writing except as required pursuant to any legal, administrative order
or process;
(e) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(f) to file promptly all reports and any definitive proxy
or information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Shares and
to promptly notify you of such filing;
(g) if, at the time this Agreement is executed and
delivered, it is necessary for a post-effective amendment to either of
the Registration Statements or any Abbreviated Registration Statement
to be declared effective before the offering of the Shares may
commence, the Company will endeavor to cause such post-effective
amendment or Abbreviated Registration Statement to become effective as
soon as possible and will advise you promptly and, if requested by you,
will confirm such advice in writing, when such post-effective amendment
or Abbreviated Registration Statement has become effective;
(h) to make available to you and, upon request, to each
of the other Underwriters for a period of five years from the date of
this Agreement (i) copies of any reports or other communications which
the Company shall send to its stockholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly
and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar forms, as may be designated by the
Commission, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other information as you may
reasonably request regarding the Company or any of the Subsidiaries, in
each case as soon as reasonably practicable after such reports,
communications, documents or information become available (subject, in
the case of information not publicly available, to appropriate
confidentiality undertakings reasonably satisfactory to the
15
Company and the Company's right to withhold information if required by
applicable law);
(i) to advise the Underwriters promptly of the happening
of any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Act which would require the making of any change in the Prospectus then
being used, or in the information incorporated therein by reference, so
that the Prospectus would not include an untrue statement of material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading, and, during such time, to prepare and furnish, at the
Company's expense (for the first nine months after the date of the
Prospectus and thereafter, at the Underwriters' expense), to the
Underwriters promptly such amendments or supplements to such Prospectus
as may be necessary to reflect any such change and to furnish you a
copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
(j) to make generally available to its security holders,
and to deliver to you, as soon as reasonably practicable, but not later
than 16 months after the date of this Agreement, an earnings statement
of the Company (which will satisfy the provisions of Section 11(a) of
the Act) covering a period of 12 months beginning after the later of
(i) the effective date of the Registration Statements (as defined in
Rule 158(c) of the Act) covering the Firm Shares, (ii) the effective
date of the most recent post-effective amendment to either of the
Registration Statements to become effective prior to the date of this
Agreement and (iii) the date of the Company's most recent Annual Report
on Form 10-K filed with the Commission prior to the date of this
Agreement;
(k) to furnish to you five conformed copies of the
Registration Statements, as initially filed with the Commission, and of
all amendments thereto (including all exhibits thereto) and sufficient
additional conformed copies (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(l) to furnish to you as early as reasonably practicable
prior to the time of purchase and the additional time of purchase, as
the case may be, but not later than two business days prior thereto, a
copy of the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(f) hereof;
16
(m) to apply the net proceeds from the sale of the Shares
and the Direct Placement Shares in the manner set forth under the
caption "Use of proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in
connection with (i) the preparation and filing of the Registration
Statements, the Basic Prospectus, each Prepricing Prospectus, the
Prospectus, and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the
registration, issuance, sale and delivery of the Shares, (iii) the
printing of this Agreement, any Agreement Among Underwriters, any
dealer agreements, any Powers of Attorney and any closing documents
(including compilations thereof) and the reproduction and/or printing
and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and
shipment), (iv) determining the need for, and effecting, any required
qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law
as aforesaid (including associated filing fees and the reasonable legal
fees and disbursements of counsel for the Underwriters) and the
printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) compliance
by the company with all requirements of the Nasdaq National Market
("NASDAQ") relating to the issuance of additional shares applicable to
the issuance and sale of the Shares and any registration thereof under
the Exchange Act, (vi) determining the need for, and facilitating, any
required review of the public offering of the Shares by NASD
Regulation, Inc. (including associated filing fees and the reasonable
legal fees and disbursements of counsel for the Underwriters), (vii)
the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offer and
sale of the Shares to prospective investors and your sales forces,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such
consultants, provided that a portion of the costs associated with the
use of a private aircraft will be borne by you at a rate agreed upon by
you and the Company and (viii) the performance of the other obligations
of the Company hereunder;
(o) for so long as the delivery of the Prospectus is
required in connection with the offer or sale of the Shares, to furnish
to you, before filing with the Commission, a copy of any document
proposed to be filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act;
17
(p) to not take, directly or indirectly, any action
designed to or which may constitute or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or the Direct
Placement Shares;
(q) not to sell, offer or agree to sell, contract to
sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or file
or cause to be declared effective a registration statement under the
Act relating to the offer and sale of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common
Stock or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, for a
period of 90 days after the date hereof (the "Lock-up Period"), without
the prior written consent of UBS Warburg LLC, except for (i) the
registration of the Shares and the Direct Placement Shares, the sales
of the Shares to the Underwriters pursuant to this Agreement and the
sale of the Direct Placement Shares to the Investor, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration Statements and the Prospectus, (iii)
the issuance of employee stock options not exercisable during the
Lock-up Period pursuant to stock option plans and the Company's
Employee Stock Purchase Plan described in the Registration Statements
and the Prospectus, (iv) issuances of shares of Common Stock or any
securities convertible into or exercisable for Common Stock in
connection with a strategic licensing arrangement, corporate partnering
transaction or similar collaboration; provided that the recipient of
such shares agrees in writing with or for the benefit of the
Underwriters not to dispose of such shares during the Lock-Up Period or
(v) agreements to issue shares of Common Stock or any securities
convertible into or exercisable for Common stock in connection with an
acquisition, by merger or consolidation with, or by purchase of a
substantial portion of the assets of, or by any other manner, of any
business or corporation, partnership, association or other business
organization or division thereof; provided that any such securities
described in this clause (v) may not be issued during the Lock-Up
Period; and
(r) to comply, in all material respects, with all
requirements of NASDAQ relating to the issuance of additional shares
applicable to the issuance and sale of the Shares and the Direct
Placement Shares.
5. Reimbursement of Underwriters' Expenses. If the
Shares are not delivered for any reason other than as a result of the
occurrence of any event specified in clause (ii) of
18
Section 7 hereof or pursuant to the last paragraph of Section 8 hereof or the
default by one or more of the Underwriters in its or their respective
obligations hereunder, the Company agrees, in addition to paying the amounts
described in Section 4(n) hereof, to reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements
of their counsel incurred in connection with this Agreement and the
transactions contemplated hereby.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (unless previously waived) and at the additional time of purchase, as
the case may be), the performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a) You shall have received, at the time of purchase and
at the additional time of purchase, as the case may be, an opinion of
Ropes & Gray, counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as
the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to Dewey Ballantine
LLP, counsel for the Underwriters, stating that:
(i) the Company is a corporation validly
existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own, lease and
operate its properties and conduct its business as described
in the Registration Statements and the Prospectus, to execute
and deliver this Agreement and to issue, sell and deliver the
Shares as contemplated herein;
(ii) each of the Subsidiaries is a corporation
validly existing and in good standing under the laws of its
jurisdiction of incorporation with the corporate power and
authority to own, lease and operate its properties and conduct
its business as described in the Registration Statements and
the Prospectus;
(iii) the Company is duly qualified to do business
as a foreign corporation and is in good standing in the
Commonwealth of Massachusetts;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
19
(v) the Firm Shares and the Direct Placement
Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters as contemplated
by the Underwriting Agreement (in the case of the Firm Shares)
and issued to and paid for by the Investor as contemplated by
the Prospectus (in the case of the Direct Placement Shares),
will be duly and validly issued and will be fully paid and
non-assessable;
(vi) the Company has authorized and outstanding
shares of capital stock as set forth in the Registration
Statements and the Prospectus under the captions "Description
of Common Stock," "Description of Preferred Stock" and
"Capitalization"; the outstanding shares of capital stock of
the Company (A) have been duly and validly authorized and
issued and are fully paid and non-assessable, and (B) are free
of preemptive rights, resale rights, rights of first refusal
and similar rights under the Delaware General Corporation Law
(the "DGCL") or the charter or bylaws or other organizational
documents of the Company or any contract, commitment or
instrument described in or filed as an exhibit to either of
the Registration Statements; the Shares and the Direct
Placement Shares, when issued, will be free of preemptive or
similar rights under the DGCL or any contract, commitment or
instrument described in or filed as an exhibit to either of
the Registration Statements; the holders of the Shares and the
Direct Placement Shares will not be subject to personal
liability by reason of being such holders; and the
certificates for the Shares and the Direct Placement Shares
are in due and proper form and conform to the requirements of
the DGCL and the NASDAQ National Market;
(vii) all of the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable, are
owned of record by the Company and to our knowledge are not
subject to any perfected security interest or any other
encumbrance or adverse claim; to such counsel's knowledge, no
options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests
in any Subsidiary are outstanding;
(viii) the authorized capital stock of the Company,
including the Shares and the Direct Placement Shares, conforms
as to legal matters in all material respects to the
description thereof contained in the Registration Statements
and the Prospectus;
(ix) the Registration Statements and the
Prospectus (except, in each case, as to the financial
statements, notes thereto, schedules and other financial,
accounting and statistical data contained or referred to
therein, as to which such
20
counsel need express no opinion) as of their respective dates
complied as to form in all material respects with the
requirements of the Act and the published rules and
regulations of the Commission thereunder;
(x) the Registration Statements have become
effective under the Act, and to such counsel's knowledge, no
stop order with respect to the effectiveness thereof has been
issued and no stop order proceedings with respect thereto are
pending or threatened under the Act; and any required filing
with the Commission of the Prospectus and any supplement
thereto pursuant to Rule 424 under the Act has been made
within the time period required by such Rule 424;
(xi) no approval, authorization, consent or order
of or filing with any governmental agency or body or any court
under the laws of The Commonwealth of Massachusetts, the DGCL
or the federal laws of the United States of America is
required in connection with the execution and delivery of this
Agreement and the issuance and sale of the Shares and
consummation of the other transactions contemplated hereby, or
in connection with the issuance and sale of the Direct
Placement Shares, other than those that have been obtained
under the Act, the Exchange Act and the rules of NASDAQ and
other than any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters or any
necessary approval of the Corporate Financing Department of
NASD Regulation, Inc., as to which such qualification and
approval such counsel need express no opinion;
(xii) the execution, delivery and performance of
this Agreement by the Company, and the consummation of the
transactions contemplated hereby and by the Registration
Statements, and the issuance and sale of the Direct Placement
Shares, will not result in, whether with notice, lapse of time
or both, a breach or violation of any of the terms and
provisions of, or constitute a default under (A) any provision
of the charter or bylaws or other organizational documents of
the Company or any of the Subsidiaries, (B) any provision of
any agreement or instrument filed as an exhibit to either of
the Registration Statements and issued to the Company or any
of the Subsidiaries, or to which the Company or any of the
Subsidiaries is a party or by which any of them may be bound
or affected, or to which any of the property or assets of the
Company or any of the Subsidiaries is subject or may be bound
or affected, or (C) any statute, regulation or rule of any
governmental agency or body or any decree, judgment or order
known to such counsel of any court having jurisdiction over
the Company or any Subsidiary or any of their properties,
other than in the case
21
of clause (B), such breaches, violations or defaults as would
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(xiii) to such counsel's knowledge, there are no
contracts or other documents of a character which are required
to be filed as exhibits to either of the Registration
Statements or to be summarized or described in the Prospectus
which have not been so filed, summarized or described;
(xiv) to such counsel's knowledge, there are no
legal or governmental proceedings, pending or threatened, to
which the Company or any of the Subsidiaries is a party or to
which any of their respective property is subject, required to
be described in the Prospectus which is not so described;
(xv) the Incorporated Documents complied as to
form in all material respects, at the time such documents were
filed with the Commission, as subsequently amended or
supplemented, with the requirements of the Exchange Act (other
than the financial statements, notes thereto, schedules and
other financial, accounting and statistical data contained or
referred to therein, as to which such counsel need express no
opinion);
(xvi) the Company is not and, after giving effect
to the offer and sale of the Shares and the Direct Placement
Shares, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are
defined in the Investment Company Act;
(xvii) those statements in the Prospectus under the
caption "Risk Factors -- Provisions in our charter documents
could prevent or frustrate any attempts to replace our current
management by stockholders" and in the Company's Current
Report on Form 8-K dated July 27, 2001 under the caption "Item
2. Acquisition or Disposition of Assets," insofar as such
statements constitute a summary of documents referred to
therein or matters of law, are accurate in all material
respects and present fairly the information required to be
shown; and
(xviii) no person has the right, pursuant to the
terms of any contract, agreement or other instrument described
in or filed as an exhibit to either of the Registration
Statements, to have any securities issued by the Company and
owned by them sold in the offering contemplated by the
Prospectus Supplement, except for such rights as have been
complied with or waived.
In addition, such counsel shall state that such
counsel has participated in conferences with officers and other
representatives of the Company, representatives
22
of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the
Registration Statements and the Prospectus were discussed and, although
such counsel has not independently verified and is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statements or
the Prospectus (except as and to the extent stated in subparagraphs
(vi), (viii) and (xvii) above), such counsel shall advise the
Underwriters that, on the basis of the foregoing no facts have come to
the attention of such counsel which cause them to believe that the
Registration Statements (except as to the financial statements, notes
thereto, and any other financial, accounting or statistical data
contained or referred to therein, as to which such counsel need express
no opinion) at the respective times they became effective under the
Act, but after giving effect to changes incorporated pursuant to Rule
430A under the Securities Act, contained an untrue statement of
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus (except as to the financial statements, notes
thereto, and any other financial, accounting or statistical data
contained or referred to therein, as to which such counsel need express
no opinion) at the date of such Prospectus and as of the date of such
counsel's opinion, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, the opinion of
Pennie & Edmonds LLP, patent counsel to the Company, dated the time of
purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to Dewey Ballantine LLP, counsel for the
Underwriters, stating that:
(i) to such counsel's knowledge, except as
described in the Registration Statements and the Prospectus,
(A) the Company (either directly or through any of the
Subsidiaries) has valid license or option rights or ownership
rights to the patent applications and patents included in the
Intellectual Property referenced in the Registration
Statements and the Prospectus that are being prosecuted or
maintained by such counsel ("Patents"); (B) there is no
infringement or other violation by third parties of any of the
Patents; (C) there is no pending or threatened action, suit
proceeding or claim by governmental authorities or others that
the Company or any of the Subsidiaries
23
infringes or otherwise violates any patent rights of others,
and such counsel is unaware of any facts which would lead it
to conclude that there is a reasonable basis for a claim that
the Company or any of the Subsidiaries infringes or otherwise
violates, or would infringe or otherwise violate upon
commercialization of its development-stage products Oncophage,
QS-21, AG-702/AG-70X, AG-858, ATRA-IV or, solely in the United
States and, absent any third party patent term extension, in
Europe after March 5, 2006, Aroplatin, valid patent rights of
others; (D) there is no pending or threatened action, suit,
proceeding or claim by governmental authorities or others
challenging the rights of the Company or the Subsidiaries in
or to any Patents, and such counsel is unaware of any facts
which would lead it to conclude that there is a reasonable
basis for any such claim; and (E) there is no prior art that
may render all of the claims of any patent applications within
the Patents unpatentable, which has not been disclosed to the
U.S. Patent and Trademark Office, and there is no prior art
that may render all of the claims of any patent within the
Patents invalid;
(ii) to such counsel's knowledge, except as
described in the Registration Statements and the Prospectus,
the patent applications of the Company and the Subsidiaries
prosecuted by such counsel and presently on file disclose
patentable subject matter, and such counsel is not aware of
any inventorship challenges, any interference which has been
declared or provoked, or any other material fact with respect
to such patent applications that (A) would preclude the
issuance of patents with respect to such applications or (B)
would lead such counsel to conclude that such patents, when
issued, would not be valid and enforceable in accordance with
applicable regulations;
(iii) the statements in each Registration
Statement and the Prospectus under the captions "Risk
Factors -- Risks Related to Our Business -- If we fail to
sustain and further build our intellectual property rights,
competitors will be able to take advantage of our research and
development efforts to develop competing products" and "We may
incur substantial costs as a result of litigation or other
proceedings relating to patent and other intellectual property
rights and we may be unable to protect our rights to, or use,
our technology" referencing matters related to the Patents,
insofar as such statements constitute summaries of legal
matters or proceedings referred to therein, or refer to
statements of law or legal conclusions, are in all material
respects accurate and complete statements or summaries of the
matters therein set forth;
(iv) the Company's development-stage product
Oncophage does not infringe, and, upon commercialization of
Oncophage, would not infringe any valid claims of those
patents for which such counsel has undertaken a detailed
review and analysis on behalf of the Company; and
24
(v) nothing has come to such counsel's attention
that causes such counsel to believe that the portions of the
Registration Statements related to the Patents, at the time
such Registration Statement became effective, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
portions of the Prospectus related to the Patents, at the date
of the Prospectus and at all times leading up to and including
the time of purchase and the additional time of purchase, as
the case may be, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading.
(c) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, the opinion of
Ropes & Gray, regulatory counsel for the Company, dated the time of
purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
reasonably satisfactory to Dewey Ballantine LLP, counsel for the
Underwriters, stating that the statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001,
incorporated by reference in the Prospectus and filed with the
Commission on March 28, 2002, under the caption "Our Business --
Regulatory Considerations") insofar as such statements summarize
applicable provisions of the United States federal statues, rules and
regulations administered by the US Food and Drug Administration are in
all material respects accurate summaries of the statutes, rules and
regulations therein set forth.
(d) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, the opinion of
Dewey Ballantine LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, each
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may require.
(e) You shall have received from KPMG LLP a letter dated
on or about the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in
the form heretofore approved Dewey Ballantine LLP, counsel for the
Underwriters.
(f) No amendment or supplement to either of the
Registration Statements or Prospectus, or document which upon filing
with the Commission would be incorporated by reference therein, shall
at any time have been filed to which you have reasonably objected in
writing.
25
(g) The Prospectus Supplement shall have been filed with
the Commission pursuant to Rule 424(b) under the Act at or before 5:30
P.M. New York City time on the second full business day after the date
of this Agreement.
(h) Prior to the time of purchase or the additional time
of purchase, as the case may be, (i) no stop order with respect to the
effectiveness of either of the Registration Statements shall have been
issued under the Act or proceedings initiated under Section 8(d) or
8(e) of the Act; (ii) the Registration Statements and all amendments
thereto, or modifications thereof, if any, shall not contain an 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 (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall not contain an 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, in
the light of the circumstances under which they are made, not
misleading.
(i) Between the time of execution of this Agreement and
the time of purchase or the additional time of purchase, as the case
may be, (i) no Material Adverse Effect, or any development involving a
prospective Material Adverse Effect, shall occur or become known and
(ii) no transaction which is material and adverse to the Company shall
have been entered into by the Company or any of the Subsidiaries.
(j) The Company will, at the time of purchase or
additional time of purchase, as the case may be, deliver to you a
certificate signed by one of the Company's executive officers to the
effect that the representations and warranties of the Company as set
forth in this Agreement are true and correct as of each such date, that
the Company has performed such of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be, and the
conditions set forth in paragraphs (h) and (i) of this Section 6 have
been met.
(k) You shall have received the letters referred to in
Section 3(q).
(l) The issuance and sale of the Direct Placement Shares
shall have been completed on the terms and in the manner contemplated
by the Prospectus.
(m) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Registration Statements and the Prospectus as of the
time of purchase and the additional time of purchase, as the case may
be, as you may reasonably request.
26
(n) Between the time of execution of this Agreement and
the time of purchase or additional time of purchase, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
or announcement have been given or made of (i) any intended or
potential downgrading or (ii) any review or possible change that does
not indicate an improvement, in the rating accorded any debt securities
of or guaranteed by the Company or any Subsidiary by any "nationally
recognized statistical rating organization", as that term is defined in
Rule 436(g)(2) under the Act.
7. Effective Date of Agreement; Termination. This
Agreement shall become effective when the parties hereto have executed and
delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, (i) if, since the time of execution
of this Agreement or the respective dates as of which information is given in
the Registration Statements and the Prospectus, there has been any material
adverse change, financial or otherwise (other than as described in the
Registration Statements and the Prospectus), in the business, operations,
prospects, properties, condition, or results of operation of the Company and the
Subsidiaries taken as a whole, which would, in your judgment or in the judgment
of such group of Underwriters, make it impracticable to market the Shares or
(ii) if, at any time prior to the time of purchase or, with respect to the
purchase of any Additional Shares, the additional time of purchase, as the case
may be, trading in securities on the New York Stock Exchange, the American Stock
Exchange or NASDAQ shall have been suspended or limitations or minimum prices
shall have been established on the New York Stock Exchange, the American Stock
Exchange or NASDAQ, or if a banking moratorium shall have been declared either
by the United States or New York State authorities, or if the United States
shall have declared war in accordance with its constitutional processes or there
shall have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its effect on
the financial markets of the United States as, in your judgment or in the
judgment of such group of Underwriters, to make it impracticable to market the
Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram from such terminating
Underwriter.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(n), 5 and 9 hereof),
27
and the Underwriters shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 9 hereof) or to
one another hereunder.
8. Increase in Underwriters' Commitments. Subject to
Sections 6 and 7, if any Underwriter shall default in its obligation to purchase
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
a reason sufficient to justify the termination of this Agreement under the
provisions of Section 7 hereof) and if the number of Firm Shares which all
Underwriters so defaulting shall have agreed but failed to purchase and pay for
does not exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall purchase and pay for (in addition to the aggregate number of
Firm Shares they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be purchased and paid
for by such non-defaulting Underwriter or Underwriters in such amount or amounts
as you may designate with the consent of each Underwriter so designated or, in
the event no such designation is made, such Shares shall be purchased and paid
for by all non-defaulting Underwriters pro rata in proportion to the aggregate
number of Firm Shares set opposite the names of such non-defaulting Underwriters
in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statements and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall terminate without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this
28
paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and
any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in either of the Registration
Statements (or in either of the Registration Statements as amended by
any post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 9 being deemed to
include the Basic Prospectus, any Prepricing Prospectus, any Prospectus
Supplement or the Prospectus, as any of the foregoing may be amended or
supplemented from time to time), or arises out of or is based upon any
omission or alleged omission to state a material fact required to be
stated in either of the Registration Statements or such Prospectus or
necessary to make the statements made therein not misleading, except
insofar as any such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter
through you to the Company expressly for use with reference to such
Underwriter in such Registration Statements or such Prospectus or
arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to
be stated in such Registration Statements or such Prospectus or
necessary to make such information not misleading, provided however,
that the indemnity agreement contained in this subsection (a) as it may
relate to any untrue statement in or omission from a Prepricing
Prospectus shall not inure to the benefit of any Underwriter (or to the
benefit of any partner, director or officer of any Underwriter or
person controlling such) from whom the person asserting any such loss,
damage, expense, liability or claim purchased the Shares which is the
subject thereof if the Prospectus corrected such alleged untrue
statement or omission and if such Underwriter failed to send or give a
copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Shares to such person, unless the
failure is the result of noncompliance by the Company with Section 4(b)
hereof.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of
which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such Underwriter or such person shall promptly
notify the Company in writing of the institution of such Proceeding and
the
29
Company shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party
and payment of all fees and expenses; provided, however, that the
omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to any Underwriter or any such
person or otherwise, except to the extent materially prejudiced by such
omission. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
of such person unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of
such Proceeding or the Company shall not have, within a reasonable
period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the
right to direct the defense of such Proceeding on behalf of the
indemnified party or parties but the Company may employ counsel to
participate in the defense thereof), in any of which events such fees
and expenses shall be borne by the Company and paid as incurred (it
being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties
to such Proceeding). The Company shall not be liable for any settlement
of any Proceeding effected without the written consent of the Company,
but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have in good faith requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then
the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without the Company's written
consent if (i) such settlement is entered into more than 60 business
days after receipt by the indemnifying party of the aforesaid request,
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers, and
any person who controls the Company
30
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which the Company or
any such person may incur under the Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use with reference to such
Underwriter in the Registration Statements (or in the Registration
Statements as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission (including any omission from the information contained under
the caption "Underwriting" in the Prospectus Supplement related to
actions by such Underwriter who has engaged in gross negligence or
willful misconduct) or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statements or such Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or
otherwise, except to the extent such Underwriter is materially
prejudiced by such omission. The Company or such person shall have the
right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or
of such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to or in conflict
with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of
such Underwriter), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement of
any such
31
Proceeding effected without the written consent of such Underwriter but
if settled with the written consent of such Underwriter, such
Underwriter agrees to indemnify and hold harmless the Company and any
such person from and against any loss or liability by reason of such
settlement. 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 the second sentence of this paragraph, then 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 business days after receipt by
such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified
party.
(c) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subsections (a) and (b) of
this Section 9 in respect of any losses, damages, expenses, liabilities
or claims referred to therein, other than for reasons expressly
contemplated therein (e.g. failure to deliver a final prospectus) or
due to the gross negligence or willful misconduct of the indemnified
party, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of
the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities
or claims, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Company and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged
omission relates to information supplied by the
32
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection
with investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9
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 that does not take account of the equitable considerations
referred to in subsection (c) above. Notwithstanding the provisions of
this Section 9, in no case shall any Underwriter be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained
in this Section 9 and the covenants, warranties and representations of
the Company contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person
(including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls any of the foregoing
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or
the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and against any of the officers or directors
of the Company in connection with the issuance and sale of the Shares,
or in connection with either of the Registration Statements or
Prospectus.
10. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 299 Park Avenue, New York, NY 10171-0026, Attention:
Syndicate Department; and if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at
33
630 Fifth Avenue, Suite 2100, New York, NY 10111, Attention: Garo H. Armen,
President, Chief Executive Officer and Chairman with a copy to Paul M. Kinsella,
Ropes & Gray, One International Place, Boston, Massachusetts 02110.
11. Information Furnished by the Underwriters. The
statements set forth in the last paragraph on the cover page of the Prospectus
Supplement and the statements set forth in the fifth, seventh, eighth, ninth and
tenth paragraphs under the caption "Plan of Distribution -Underwriting" in the
Prospectus constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement ("Claim"), directly or indirectly,
shall be governed by, and construed in accordance with, the laws of the State of
New York. The section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth
below, no Claim may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and County of New
York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such
matters, and you and the Company consent to the jurisdiction of such courts and
personal service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
an Underwriter or any indemnified party. Each Underwriter and the Company (on
its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise) in
any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding thereupon, and may be enforced in any
other courts in the jurisdiction to which the Company is or may be subject, by
suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Company
and, to the extent provided in Section 9 hereof, the controlling persons,
directors and officers referred to in such section, and their respective
successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
34
15. Counterparts. This Agreement may be signed by the
parties in one or more counterparts which together shall constitute one
and the same agreement among the parties.
16. Successors and Assigns. This Agreement shall be
binding upon the Underwriters and the Company and their successors and
assigns and any successor or assign of any substantial portion of the Company's
and any of the Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly
owned subsidiary of UBS AG, is not a bank and is separate from any affiliated
bank, including any U.S. branch or agency of UBS Warburg LLC. Because UBS
Warburg LLC is a separately incorporated entity, it is solely responsible for
its own contractual obligations and commitments, including obligations with
respect to sales and purchases of securities. Securities sold, offered or
recommended by UBS Warburg LLC are not deposits, are not insured by the Federal
Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are
not otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
UBS Warburg LLC represents and warrants that it has the
authority to act on behalf of the other several Underwriters in connection with
this Agreement, and agrees to notify the Company promptly after the distribution
of the Shares has been completed.
18. Entire Agreement. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
35
If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the several Underwriters.
Very truly yours,
ANTIGENICS INC.
By: /s/ Garo H. Armen
-----------------------------------
Name: Garo H. Armen
Title: Chairman and Chief Executive
Officer
Accepted and agreed to as of the date first above written:
UBS WARBURG LLC
MORGAN KEEGAN & COMPANY, INC.
NEEDHAM & COMPANY, INC.
RYAN, BECK & CO. LLC
As the Representatives of the several Underwriters
By: UBS WARBURG LLC
By: /s/ Sage Kelly
----------------------------------------
Name: Sage Kelly
Title: Director
By: /s/ Kevin J. Sheridan
----------------------------------------
Name: Kevin J. Sheridan
Title: Associate Director
SCHEDULE A
UNDERWRITER NUMBER OF FIRM SHARES
- ----------- ---------------------
UBS Warburg LLC........................................ 2,070,000
Morgan Keegan & Company, Inc........................... 621,000
Needham & Company, Inc................................. 379,500
Ryan, Beck & Co. LLC................................... 379,500
---------
Total.............................................. 3,450,000
=========
SCHEDULE B
Subsidiaries other than Significant Subsidiaries
Name Jurisdiction of Incorporation
---- -----------------------------
Triplex Pharmaceuticals Corporation Delaware
API Holding Company Delaware
VacTex, Inc. Delaware
SCHEDULE C
Directors and Officers Executing the Lock-Up Agreement
1. Garo H. Armen, Ph.D.
2. Pramod K. Srivastava, Ph.D.
3. Gamil G. de Chadarevian
4. Elma Hawkins, Ph.D
5. Russell H. Herndon Ph.D.
6. Neal Gordon, Ph.D
7. Frank V. Atlee III
8. Noubar Afeyan, Ph.D.
9. Tom Dechaene
10. Sanford Litvack
11. Martin Taylor
EXHIBIT A
Antigenics Inc.
Common Stock
($0.01 Par Value)
____________, 2003
UBS Warburg LLC
Morgan Keegan & Company, Inc.
Needham & Company, Inc.
Ryan, Beck & Co. LLC
As the Representatives of the several Underwriters
c/o UBS Warburg LLC
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by and between Antigenics Inc. (the "Company") and you, as the
Representatives of the several Underwriters, with respect to the public offering
(the "Offering") of common stock of the Company (the "Common Stock").
Capitalized terms set forth herein and not otherwise defined shall have the
meanings set forth in the Underwriting Agreement.
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that from the date hereof through and including the 90th day
after the date of the final prospectus supplement relating to the Offering, the
undersigned will not, directly or indirectly, without the prior written consent
of UBS Warburg LLC, (i) sell, offer to sell, contract to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of, or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission promulgated
thereunder with respect to, any Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase
Common Stock, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or warrants or other rights to purchase Common Stock, whether
any such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the sale of any Common Stock to the Underwriters pursuant
to the Underwriting Agreement, (b) bona fide gifts, or distributions (including
if the stockholder is a limited liability company, to its members) without
consideration, provided the recipient or recipients thereof agree in writing to
be bound by the terms of this Lock-Up Letter Agreement, (c) dispositions to any
trust for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing to be
bound by the terms of this Lock-Up Letter Agreement, or (d) transfers which
occur by operation of law, such as the rules of intestate succession or statutes
governing the effects of a merger, provided the transferee or transferees
thereof agree in writing to be bound by the terms of this Lock-Up Letter
Agreement, or (e) the exercise of any options (including a cashless exercise,
but not including a cashless exercise that involves a related sale of
securities), conversion of convertible securities outstanding as of the date
hereof (but not the disposition of the securities into which such convertible
securities convert). For purposes of this paragraph, "immediate family" shall
mean the undersigned and the spouse, any lineal descendant, father, mother,
brother or sister of the undersigned.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of any registration statement relating to the Offering. The
undersigned further agrees that, from the date hereof through and including the
90th day after the date of the final prospectus supplement relating to the
Offering, the undersigned will not, directly or indirectly, without the prior
written consent of UBS Warburg LLC, make any demand for, or exercise any right
with respect to, the registration of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock.
This Lock-Up Letter Agreement shall be terminated and the
undersigned shall be released from the undersigned's obligations hereunder (i)
upon the date the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) upon the date the Company publicly announces
that it is not proceeding with the Offering or (iii) upon the date the
Underwriting Agreement is terminated, for any reason, prior to the time of
purchase (as defined in Section 2 of the Underwriting Agreement).
Yours very truly,
_________________
Name: