Aderis Pharmaceuticals, Inc.
5,500,000 Shares
Common Stock
($0.001 par value)
UNDERWRITING AGREEMENT
April __, 2002
UNDERWRITING AGREEMENT
April __, 2002
UBS Warburg LLC
CIBC Word Markets Corp.
RBC Dain Rauscher Inc.
Gerard Klauer Mattison & Co., Inc.
As Representatives of the several Underwriters
c/o UBS Warburg LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
Aderis Pharmaceuticals, 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 5,500,000 shares of Common Stock,
$0.001 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 825,000 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.
The Company hereby acknowledges that in connection with the proposed
offering of the Shares, it has requested UBS Warburg LLC ("UBS Warburg") to
administer a directed share program (the "Directed Share Program") under which
up to 275,000 Firm Shares, or 5% of the Firm Shares, to be purchased by you (the
"Reserved Shares") shall be reserved for sale by you at the initial public
offering price to the Company's officers, directors, employees and consultants
and others having a relationship with the Company (the "Directed Share
Participants") as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. ("NASD")
and all other applicable laws, rules and regulations. The number of Shares
available for sale to the general public will be reduced to the extent that
Directed Share Participants purchase Reserved Shares. You may offer any Reserved
Shares not purchased by Directed Share Participants to the general public on the
same basis as the other Shares being issued and sold hereunder. The Company has
supplied UBS Warburg with the names, addresses and telephone numbers of the
individuals or other
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entities which the Company has designated to be participants in the Directed
Share Program. It is understood that any number of those designated to
participate in the Directed Share Program may decline to do so.
The Company has 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-1 (File No. 333-76612)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act, and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the "Registration Statement," and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the "Prospectus." Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the copy of the Registration Statement,
Preliminary Prospectus or Prospectus filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
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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 $____ 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 effective date of the Registration Statement 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 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
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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 on behalf of the several Underwriters at any time and from time
to 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 additional
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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 April __, 2002 (unless another time shall be agreed to by you and
the Company or unless postponed in accordance with the provisions of Section 8
hereof). 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.
Deliveries of the documents described in Section 6 below with respect
to the purchase of the Shares shall be made at the offices Latham & Watkins, 885
Third Avenue,
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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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New York, New York at 9:00 A.M., New York City time, on the date of the closing
of the purchase of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
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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 any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act; and when the Registration
Statement becomes effective, the Registration Statement and the Prospectus
will conform in all material respects with the provisions of the Act, and
the Registration Statement 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 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
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representation or warranty with respect to any statement contained in the
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 the 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 other than the Registration
Statement, the Preliminary Prospectus, 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
Registration Statement and 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 Registration Statement
and the Prospectus entitled "Capitalization" (subject to the issuance of
Additional Shares at any additional time of purchase); 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
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requisite corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus;
(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 could
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 (as
hereinafter defined) taken as a whole (a "Material Adverse Effect"). The
Company has no subsidiaries (as defined in the Act) other than as listed in
Schedule B annexed hereto (the "Subsidiaries"); none of the subsidiaries is
a "significant subsidiary" as defined in Rule 405 under the Act; except as
described in the Registration Statement and the Prospectus, the Company
owns 100% of the outstanding capital stock of the Subsidiaries; except for
the Subsidiaries or as described in the Registration Statement 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
charter and bylaws or other organizational documents 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 Statement 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 could
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;
(e) 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 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
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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 could 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, does 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 could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; (f) this Agreement has been
duly authorized, executed and delivered by the Company and is a legal,
valid and binding agreement of the Company;
(g) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus;
(h) the Shares have been duly and validly authorized by the Company
and, when issued and delivered by the Company against payment therefor as
provided herein, will be validly issued, fully paid and non-assessable;
(i) 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 Subsidiaries in connection with the issuance and sale
of the Shares or the consummation by the Company of the other transactions
contemplated hereby, other than registration of the offer and sale of the
Shares under the Act, which has been or will be 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;
(j) except as set forth in the Registration Statement 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
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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, 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 Statement or the sale of the 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 Statement or the
offering contemplated thereby whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares as
contemplated thereby or otherwise, except for such rights as have been
complied with or waived;
(k) Arthur Andersen LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the Commission
as part of the Registration Statement and the Prospectus, are independent
public accountants as required by the Act;
(l) 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 Statement and the Prospectus, other than such Permits
and Approvals the failure of which to obtain could not, individually or in
the aggregate, 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 and the Subsidiaries the effect of which could, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect;
(m) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required;
(n) except as disclosed in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or, to the knowledge of the Company, threatened to
which the Company or any of the
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Subsidiaries or 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, could reasonably be expected to result in a judgment, decree or
order having a Material Adverse Effect or prevent consummation of the
transactions contemplated hereby;
(o) the financial statements, together with the related schedules and
notes, included in the Registration Statement and the Prospectus present
fairly 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; any pro forma financial statements or data included in the
Registration Statement 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 Statement and
the Prospectus are accurately presented 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 the Registration Statement and the Prospectus
that are not included as required;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a prospective
material adverse change, in the business, operations, properties, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material to
the Company and the Subsidiaries taken as a whole, (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 any material change in the outstanding
indebtedness of the Company or any of the Subsidiaries 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
Statement and the Prospectus;
(q) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A
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hereto, of each of its officers and directors and each holder of the
Company's Common Stock or any
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security convertible into or exercisable or exchangeable for Common Stock,
or any warrant or other right to purchase Common Stock or any such
security; the Company will not release or purport to release any person
from any Lock-Up Agreement without the prior written consent of UBS
Warburg;
(r) the Company is not and, after giving effect to the offering and
sale of the 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");
(s) 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;
(t) 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 Securities Exchange Act of 1934, as amended
(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;
(u) immediately after the issuance and sale of the Shares to the
Underwriters, no shares of preferred stock of the Company shall be issued
and outstanding, and no holder of any shares of capital stock, securities
convertible into or exchangeable or exercisable for capital stock or
options, warrants or other rights to purchase capital stock or any other
securities of the Company shall have any existing or future right to
acquire any shares of preferred stock of the Company;
(v) the Company maintains 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;
(w) 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 Statement
and the Prospectus or other than any losses or interferences which could
not,
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individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect;
(x) the Company and each of the Subsidiaries have good title to all
real and personal property owned by them as described in the Registration
Statement and the Prospectus, free and clear of all liens, encumbrances and
defects except such as are described in the Registration Statement and the
Prospectus or such as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; except as
described in the Registration Statement 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 do not materially 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;
(y) 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, 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 could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect;
(z) 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;
(aa) 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;
(bb) other than as set forth in the Registration Statement and the
Prospectus, or as would not individually or in the aggregate have a
Material Adverse Effect, the
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Company and the Subsidiaries own, possess, license or have other rights to
use, all patents, trademarks, servicemarks, trade names, copyrights, trade
secrets, information, proprietary rights and processes ("Intellectual
Property") necessary for their business as described in the Registration
Statement 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 Prospectus as being under
development, without any conflict with or infringement of the rights of
others, and the Company and the Subsidiaries have taken all reasonable
steps necessary to secure interests in such Intellectual Property; except
as described in the Registration Statement 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 the Registration
Statement and the Prospectus, and, except as described in the Registration
Statement and the Prospectus, neither the Company nor either 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 the Registration Statement and 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 rights of any persons, other than any violation which would not
individually or in the aggregate have a Material Adverse Effect; except as
described in the Registration Statement and the Prospectus, to the
Company's knowledge neither the Company nor either of the Subsidiaries has
violated, infringed or conflicted with, or, by conducting its business as
described the Registration Statement and the Prospectus and commercializing
the products under development described therein, would violate, infringe
or conflict with any of the Intellectual Property of any other person or
entity other than any such violation, infringement or conflict which would
not individually or in the aggregate have a Material Adverse Effect;
(cc) 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 its products or product candidates
have participated that are described in the Prospectus or the results of
which are referred to in the Prospectus were and, if still pending, are
being conducted in accordance with standard medical and scientific research
procedures; the descriptions in the Prospectus of the results of such
studies and tests are accurate and complete in all material respects and
fairly present the data derived from such studies and tests (in the case of
each study and test performed by outside third parties, with reference to
the information regarding such
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studies and tests provided to the Company by such third parties), and the
Company and each Subsidiary has no knowledge of any other studies or tests
the results of which are inconsistent with or otherwise call into question
the results described or referred to in the Prospectus; except to the
extent disclosed in the Registration Statement 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 "Regulatory
Authorities"); and except to the extent disclosed in the Registration
Statement 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
of any clinical or pre-clinical studies or tests that are described in the
Prospectus or the results of which are referred to in the Prospectus;
(dd) neither the Company nor any of the Subsidiaries has sent or
received any notice of termination of any of the contracts or agreements
referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination has been threatened by the Company or
any of the Subsidiaries or any other party to any such contract or
agreement; and
(ee) the Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to influence unlawfully (i) a customer or supplier of the
Company or any of the Subsidiaries to alter the customer's or supplier's
level or type of business with the Company or any of the Subsidiaries or
(ii) a trade journalist or publication to write or publish favorable
information about the Company or any of the Subsidiaries or any of their
respect products or services.
In addition, any certificate signed by any officer of the Company and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Shares shall be deemed to be a representation and warranty by
the Company, as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
--------------------------------
(a) 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
12
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 Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many copies
of the Prospectus (or of the Prospectus as amended or supplemented if the
Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may
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 Statement 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 the Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if
Rule 430A under the Act is used, 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);
(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 the Registration Statement 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 the Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement, 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 the Registration Statement or Prospectus and to file no such
amendment or supplement to which you shall object in writing;
(e) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(f) to furnish 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
13
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 publicly
available;
(g) 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 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, 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;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of twelve
months beginning after the effective date of the Registration Statement (as
defined in Rule 158(c) of the Act) and ending not later than 15 months
thereafter;
(i) to furnish to you three conformed copies of the Registration
Statement, 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;
(j) 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(d) hereof;
(k) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of proceeds" in the Prospectus;
(l) to pay all costs, expenses, fees and taxes in connection with (i)
the preparation and filing of the Registration Statement, each Preliminary
Prospectus, the
14
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, issue,
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) the 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)
any listing of the Shares on any securities exchange or qualification of
the Shares for quotation on the Nasdaq National Market ("Nasdaq") and any
registration thereof under the Exchange Act, (vi) 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 the
Representatives' 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, and the cost of any aircraft
chartered in connection with the road show and (viii) the performance of
the other obligations of the Company hereunder;
(m) 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 a
reasonable period of time 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 and to not make any filing to which you shall reasonably
object;
(n) 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;
(o) not to sell, offer or agree to sell, contract to sell,
hypothecate, pledge, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any such
15
securities 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 180 days after the date hereof (the "Lock-up
Period"), without the prior written consent of UBS Warburg, except for (i)
the registration of the Shares and the sales to the Underwriters pursuant
to this Agreement, (ii) issuances of Common Stock upon the exercise of
options or warrants disclosed as outstanding in the Registration Statement
and the Prospectus, (iii) the issuance of employee stock options not
exercisable during the Lock-up Period pursuant to stock option plans
described in the Registration Statement and the Prospectus and (iv)
issuances of Common Stock as partial or full payment for businesses
directly or indirectly acquired or to be acquired by the Company, provided
that the Company shall have conditioned such issuances of Common Stock upon
agreement of the recipients to the restrictions of this paragraph;
(p) subject to Section 4(m) hereof, 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; and
(q) to use its best efforts to cause the Common Stock to be listed for
quotation on the Nasdaq National Market.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
---------------------------------------
delivered for any reason other than the termination of this Agreement 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(l) hereof, to
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of their counsel.
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:
16
(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 Latham &
Watkins, 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 in good standing under the laws
of the State of Delaware, with full corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus, to execute
and deliver this Agreement and to issue, sell and deliver the Shares
as herein contemplated;
(ii) the Subsidiary is a corporation in good standing under the
laws of its jurisdiction of incorporation;
(iii) the Company is duly qualified to do business as a foreign
corporation and is in good standing in _______________, except where
the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Firm Shares have been duly authorized and, when issued
(in the case of the Firm Shares) and delivered to and paid for by the
Underwriters, will be 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 Statement and the Prospectus
under the heading "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 the Registration Statement or otherwise known to such
counsel; the Firm 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 the Registration
Statement or otherwise known to such counsel; the holders of the
Shares will not be subject to personal liability by reason of being
such holders; and the certificates for the
17
Shares are in due and proper form and conform to the requirements of
the DGCL and, Nasdaq;
(vii) the capital stock of the Company, including the Shares,
conforms in all material respects to the description thereof contained
under the heading "Description of Capital Stock" in the Registration
Statement and Prospectus;
(viii) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act;
(ix) the Registration Statement has 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 of the Prospectus and any supplement thereto pursuant
to Rule 424 under the Act has been made in the manner and within the
time period required by such Rule 424;
(x) no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency 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 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;
(xi) the execution, delivery and performance of this Agreement by
the Company, including the consummation of the transactions
contemplated hereby and by the Registration Statement, do not
constitute, and will not result in, a Default Event pursuant to (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 the Registration
Statement or otherwise known to such counsel 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
18
is subject or may be bound or affected, (C) any federal, state, local
or foreign law, regulation or rule or (D) any decree, judgment or
order known by such counsel to be applicable to the Company or any of
the Subsidiaries other than, in the case of clause (B) such Default
Events as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(xii) to such counsel's knowledge, (A) neither the Company nor
any of the Subsidiaries is in violation of its charter or bylaws or
other organizational documents and (B) no Default Event exists under
any license, permit, franchise, authorization, indenture, mortgage,
deed of trust, note, 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 or was a
party or by which it or its properties may be bound or affected, other
than such Default Events as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect ,
and (C) neither the Company nor any of the Subsidiaries is in
violation of any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company or any
of the Subsidiaries;
(xiii) to such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are
required to be filed as exhibits to the Registration Statement or to
be summarized or described in the Prospectus which have not been so
filed, summarized or described;
(xiv) the Company is not and, after giving effect to the offer
and sale of the 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;
(xv) those statements in the Registration Statement and the
Prospectus under the headings "Risk Factors," "Business," "Description
of Capital Stock" and "Shares Eligible for Future Sale" that are
statements of law or legal conclusions, are accurate in all material
respects; and
(xvi) no person has the right, pursuant to the terms of any
contract, agreement or other instrument described in or filed as an
exhibit to the Registration Statement or otherwise known to such
counsel to have any securities issued by the Company and owned by them
registered pursuant to the Act, included in the Registration Statement
or sold in the offering contemplated thereby, whether as a result of
the filing or effectiveness of the
19
Registration Statement or the transactions contemplated by this
Agreement or otherwise, 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 of the independent public accountants of the
Company and representatives of the Underwriters at which the contents of
the Registration Statement and Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus (except as and to the extent stated in
subparagraphs (vi), (vii) and (xv) above), on the basis of the foregoing
nothing has come to the attention of such counsel that causes them to
believe that the Registration Statement or any amendment thereto at the
time such Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus or any supplement thereto at the
date of such Prospectus or such supplement, and at all times up to and
including the time of purchase or 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 (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and other
financial or statistical data included in the Registration Statement or
Prospectus).
(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 Sterne,
Kessler, Goldstein & Fox P.L.L.C., 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) such counsel (A) represents the Company in certain matters
relating to intellectual property ("IP"), including patents, (B) is
generally familiar with the technology for which patents have been
sought by or licensed to the Company for use in its business and the
manner of such use, and (C) has read the IP portions of the
Registration Statement and Prospectus;
(ii) to such counsel's knowledge, the statements in the
Registration Statement and the Prospectus regarding IP are true,
correct and complete statements or summaries;
20
(iii) such counsel has reviewed the Company's patents and patent
applications filed in the US and foreign counterparts thereto, and the
patents filed in the US licensed to the Company (collectively, the
Patents), which Patents are described in the IP portions of the
Registration Statement and Prospectus;
(iv) to such counsel's knowledge, except as described in the
Prospectus, (A) According to the records of such counsel, and subject
to the following sentence, the Company (either directly or through the
Subsidiary) has valid license rights, or is listed in the records of
the appropriate Patent Office(s) as the owner of record of, the
Patents that the Company represents that it owns. For inventions that
are the subject of Patents the Company represents that it owns, the
Company has obtained an assignment of all right, title and interest
from all named inventors, or has the legal right to obtain such
assignment and is in the process of doing so, or has obtained all
right, title and interest from predecessor companies; (B) During the
course of such counsel's work for the Company, such counsel has not
become aware of any infringement or other violation by third parties
of any Company Patent; (C) During the course of such counsel's work
for the Company, such counsel has not become aware that the Company is
infringing or otherwise violating any patents of others; nor has such
counsel become aware of any patent rights of third parties which would
be infringed or could reasonably be expected to materially affect the
ability of the Company upon commercialization of the Company's
products described as under development in the Registration Statement
and the Prospectus; (D) such counsel is not aware of any pending or
threatened action, suit, proceeding or claim by governmental
authorities or others that the Company infringes or otherwise violates
any patents of others, and such counsel is unaware of any facts which
would form a reasonable basis for any such claim; (E) such counsel is
not aware of any pending or threatened action, suit, proceeding or
claim by governmental authorities or others challenging the rights of
the Company in or to, or challenging the scope of, any Patent of the
Company referred to in the Prospectus, and such counsel is unaware of
any facts which would form a reasonable basis for any such claim; and
(F) such counsel is not aware of prior art or other facts that may
render any patent held by the Company invalid or unenforceable, except
for the following: such counsel has recently become aware of prior art
that may affect the validity of claim 1 of a Company Patent. It is
such counsel's opinion that, even if claim 1 were found to be invalid,
the patent includes valid claims that read on the Company's
development product. Such counsel has become aware of prior art that
may provide a defense to infringement in France of certain claims of
an issued Company French patent;
21
(v) In such counsel's opinion, the patent applications of the
Company and the Subsidiary 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 the patent applications of the
Company presently on file 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, except as
follows. Such counsel is aware of a pending application assigned to a
third party that has claims that overlap with one or more claims of a
Company's patent and pending application directed to a new method of
use which is preclinical development. The third party application has
been brought to the attention of the US Patent & Trademark Office. It
is such counsel's opinion that the Company would prevail in any
inventorship challenge or interference based upon the third party
application;
(vi) such counsel has no reason to believe that the statements in
the Registration Statement and the Prospectus referring to IP matters,
insofar as such statements constitute summaries of legal matters,
contracts, agreements, documents or proceedings referred to therein,
or to statements of law or legal conclusions, contain any untrue
statement of a material fact or omit to state any material fact known
to such counsel necessary to make such statement not misleading; and
(vii) nothing has come to such counsel's attention that causes
such counsel to believe that such above described portions of the
Registration Statement, at the time such Registration Statement became
effective, contained an untrue statement of a material fact or omitted
to state a material fact known to such counsel required to be stated
therein or necessary to make the statements therein not misleading, or
that such above described portions of the Prospectus and 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 material fact or omitted to state
a material fact known to such counsel 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 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,
22
the Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may require.
(d) You shall have received from Arthur Andersen LLP letters dated,
respectively, 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
forms heretofore approved Dewey Ballantine LLP, counsel for the
Underwriters.
(e) No amendment or supplement to the Registration Statement 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 objected in writing.
(f) The Registration Statement shall have become effective not later
than 5:30 PM New York City time on the date of this Agreement and, if Rule
430A under the Act is used, the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:30 PM New
York City time on the second full business day after the date of this
Agreement.
(g) 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
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement 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.
(h) 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 and adverse change or any development involving a prospective
material and adverse change (other than as specifically described in the
Registration Statement and Prospectus), in the business, properties,
condition (financial or otherwise) or results of operations of the Company
and the Subsidiaries, taken as a whole, 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.
23
(i) 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 two 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 (g) and (h) of this
Section 6 have been met.
(j) You shall have received the letters referred to in Section 3(q).
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement 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.
(l) The Shares shall have been approved for listing for quotation on
the Nasdaq National Market, subject only to notice of issuance at or prior
to the time of purchase or the additional time of purchase, as the case may
be.
(m) 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 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 (i) if Rule 430A under the Act is not used, when you shall
have received notification of the effectiveness of the Registration Statement,
or (ii) if Rule 430A under the Act is used, 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
Statement and Prospectus, there has been any material adverse change, financial
or otherwise (other than as specifically described in the Registration Statement
and Prospectus), in the operations, business, condition or prospects 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, (ii) there shall have
24
occurred any downgrading, or any notice shall have been given of (a) any
intended or potential downgrading or (b) any review or possible change that does
not indicate an improvement, in the rating accorded any 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 or (iii) 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(1), 5 and 9 hereof), 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
25
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 Statement and 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
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 (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus (the term
26
Prospectus for the purpose of this Section 9 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or 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 Statement 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 Statement or such
Prospectus or necessary to make such information not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company in Section 3 of this
Agreement or the failure by the Company to perform when and as required any
agreement or covenant contained herein, (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual materials
provided by the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos, films, tape
recordings, used in connection with the marketing of the Shares or (iv) the
Directed Share Program, provided that the Company shall not be responsible under
this clause (iv) for any loss, damage, expense, liability, or claim that is
finally judicially determined to have resulted from the bad faith or gross
negligence of the Underwriters in conducting the Directed Share Program.
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 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. 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 have charge of the defense of 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
27
behalf of the indemnified party or parties), 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 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 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 Statement (or in the Registration Statement 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 or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading.
28
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.
The Company or such person shall have the right to employ their or its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the Company or 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 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.
29
(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, 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 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.
30
(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 the Registration Statement 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 85 Main
Street, Hopkinton, Massachusetts 01748, Attention: Peter G. Savas, Chief
Executive Officer and President.
11. Information Furnished by the Underwriters. The statements set
-----------------------------------------
forth in the last paragraph on the cover page of the Prospectus and the
statements set forth in the fifth, sixth, tenth and eleventh paragraphs under
the caption "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
31
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.
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.
32
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,
ADERIS PHARMACEUTICALS, INC.
By: _____________________________________
Name:
Title:
Accepted and agreed to as of the date
first above written:
UBS WARBURG LLC
CIBC WORLD MARKETS CORP.
RBC DAIN RAUSCHER INC.
GERARD KLAUER MATTISON & CO., INC.
As Representatives of the several Underwriters
By: UBS WARBURG LLC
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
33
SCHEDULE A
Underwriter Number of Firm Shares
- ----------- ---------------------
UBS Warburg LLC.......................................
CIBC World Markets Corp...............................
RBC Dain Rauscher Inc.................................
Gerard Klauer Mattison & Co., Inc. ...................
---------------------
Total
=====================
1
SCHEDULE B
Subsidiaries
------------
Name Jurisdiction of Incorporation
---- -----------------------------
Renalogics, Inc. Georgia
1
EXHIBIT A
1