1
Form of
Underwriting Agreement
Exhibit 1.1
PROTEIN DESIGN LABS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
______________, 1997
Xxxxxxxxxxx & Co., Inc.
Xxxxxx Brothers
PaineWebber Incorporated
c/o Oppenheimer & Co., Inc.
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
PROTEIN DESIGN LABS, INC., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions contained herein, to sell to you
and the other underwriters named on Schedule I to this Agreement (the
"Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of 2,000,000 shares and Corange International
Limited (the "Selling Securityholder") proposes, subject to the terms and
conditions contained herein, to sell to the Underwriters an aggregate of 750,000
shares (together with the shares to sold by the Company, the "Firm Shares") of
the Company's Common Stock, $.01 par value per share (the "Common Stock"). The
respective amounts of the Firm Shares to be so purchased by the several
Underwriters are set forth opposite their names in Schedules I and II hereto.
The Company also proposes to grant to the Underwriters an option to purchase up
to an additional 412,500 shares of Common Stock (the "Option Shares") for the
purpose of covering over-allotments in connection with the sale of the Firm
Shares. The Firm Shares and the Option Shares are together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES. On the basis of the representations,
warranties and covenants contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company, at
a price of $__________ per share (the "Initial Price"), the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I to this
Agreement, subject to adjustment in accordance with
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Section 11 hereof. The Selling Securityholder agrees to sell to the
Underwriters, and each Underwriter agrees severally and not jointly, to purchase
from the Selling Securityholder, at the Initial Price, the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule II to this
Agreement, subject to adjustment in accordance with Section 11 hereof.
(b) The Company grants to the several Underwriters an option to
purchase all or any part of the Option Shares at the Initial Price. The number
of Option Shares to be purchased by each Underwriter shall be the same
percentage (adjusted by the Representatives to eliminate fractions) of the total
number of Option Shares to be purchased by the Underwriters as such Underwriter
is purchasing of the Firm Shares. Such option may be exercised only to cover
over-allotments in the sales of the Firm Shares by the Underwriters and may be
exercised in whole or in part at any time on or before 12:00 noon, New York City
time, on the business day two days before the Firm Shares Closing Date (as
defined below), and only once thereafter within 30 days after the date of this
Agreement, upon written or telegraphic notice, or verbal or telephonic notice
confirmed by written or telegraphic notice, by the Representatives to the
Company no later than 12:00 noon, New York City time, on the business day two
days before the Firm Shares Closing Date or at least two business days before
the Option Shares Closing Date (as defined below), as the case may be, setting
forth the number of Option Shares to be purchased and the time and date (if
other than the Firm Shares Closing Date) of such purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company and the Selling
Securityholder of the Firm Shares to the Representatives for the respective
accounts of the Underwriters, and payment of the purchase price by either wire
transfer or certified or official bank check or checks payable in same-day funds
drawn to the order of the Company for the shares purchased from the Company and
to the Selling Securityholder (or in the discretion of the Underwriters, to the
Custodian) for the shares purchased from the Selling Securityholder, against
delivery of the respective certificates therefor to the Representatives for the
several accounts of the Underwriters, shall take place at the offices of
Xxxxxxxxxxx & Co., Inc., at Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, at 10:00 a.m., New York City time, (a) on the third full
business day following the first day that the Shares are traded, (b) if this
Agreement is executed and delivered after 4:30 p.m. New York City Time, on the
fourth business day following the date of this Agreement, or (c) at such other
time or date, but not later than the fourth full business day following the
Effective Date (as hereinafter defined), as shall be agreed upon by the Company,
the Selling Securityholder and the Representatives (such time and date of
delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price by
certified or official bank check or checks or wire transfers payable in same day
funds to the order of the Company shall take place at the offices of Xxxxxxxxxxx
& Co., Inc. specified above at the time and on the date (which may be the same
date as, but in no event shall be earlier than, the Firm Shares Closing Date)
specified in the notice referred to in Section l(b) (such time and date of
delivery and payment are called the "Option Shares Closing Date"). The Firm
Shares Closing Date and the Option Shares Closing Date are called, individually,
a "Closing Date" and, together, the "Closing Dates."
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Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described in Section
l(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the Firm
Shares Closing Date (or the Option Shares Closing Date in the case of the Option
Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Company has
prepared in conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the published rules and regulations
thereunder (the "Rules") adopted by the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-20941), including a
preliminary prospectus relating to the Shares, and has filed with the Commission
the Registration Statement (as hereinafter defined) and such amendments thereof
as may have been required to the date of this Agreement. The number of executed
copies requested by you of such Registration Statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore been
delivered by the Company to you. The term "preliminary prospectus" means any
preliminary prospectus (as described in Rule 430 of the Rules), including the
documents incorporated by reference therein, included at any time as a part of
the Registration Statement. The Registration Statement, as amended at the time
and on the date it became effective (the "Effective Date"), including all
documents incorporated by reference therein and all exhibits and information, if
any, deemed to be part of the Registration Statement pursuant to Rule 424(b),
Rule 430A, Rule 434 and Rule 462(b) of the Rules, is called the "Registration
Statement." The term "Prospectus" means the prospectus, including the documents
incorporated by reference therein, in the form first used to confirm sales of
the Shares (whether such prospectus was included in the Registration Statement
at the time of effectiveness or was subsequently filed with the Commission
pursuant to Rule 424(b) of the Rules).
The Company and the Selling Securityholder understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company and the
Selling Securityholder hereby confirm that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each preliminary
prospectus and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Underwriter as follows:
(a) On the Effective Date, the Registration Statement complied, and
on the date of the Prospectus, on the date any post-effective amendment to the
Registration Statement shall become effective, on the date any supplement or
amendment to the Prospectus is filed with the Commission and on each Closing
Date, the Registration Statement and the Prospectus (and any amendment thereof
or supplement thereto) will comply in all material respects with the applicable
provisions of the Securities Act and the Rules and the Securities Exchange Act
of
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1934, as amended (the "Exchange Act") and the rules and regulations of the
Commission thereunder; the Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the other dates referred to above
neither the Registration Statement nor the Prospectus, nor any amendment thereof
or supplement thereto, will contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus as amended or
supplemented complied in all material respects with the applicable provisions of
the Securities Act and the Rules and the Exchange Act and the rules and
regulations of the Commission thereunder and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided,
however, that none of the representations and warranties in this paragraph 4(a)
shall apply to statements in, or omissions from, the Registration Statement or
the Prospectus made in reliance upon, and in conformity with, information herein
or otherwise furnished in writing to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus. With
respect to the preceding sentence, the only information furnished in writing by
the Representatives on behalf of the several Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus is the last paragraph on the cover page, the paragraphs with respect
to stabilization and passive market making on the inside front cover page of the
Prospectus and to paragraphs 1, 2 and 5 under the caption "Underwriting" in the
Prospectus. Notwithstanding the foregoing, if any revised prospectus shall be
provided to the Underwriters by the Company for use in connection with the
offering of the Shares that differs from the prospectus referred to in the
immediately preceding sentence (whether or not such revised prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Rules),
the term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to the Underwriters for such use.
(b) The financial statements of the Company (including all notes and
schedules thereto) included in the Registration Statement and Prospectus present
fairly the financial position, the results of operations, the statements of cash
flows and the statements of stockholders' equity and the other information
purported to be shown therein of the Company at the respective dates and for the
respective periods to which they apply and such financial statements have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved. The summary and selected
financial data included in the Prospectus present fairly the information shown
therein as at the respective dates and for the respective periods specified, and
the summary and selected financial data have been presented on a basis
consistent with the financial statements so set forth in the Prospectus and
other financial information.
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(c) To the knowledge of the Company, Ernst & Young LLP, whose
reports are filed with the Commission as a part of the Registration Statement,
are and, during the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Rules.
(d) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company has no
subsidiary or subsidiaries and does not control, directly or indirectly, any
corporation, partnership or joint venture. The Company is duly qualified as a
foreign corporation in each jurisdiction in which the character or location of
its assets or properties (owned, leased or licensed) or the nature of its
business makes such qualification necessary except for such jurisdictions where
the failure to so qualify would not have a material adverse effect on the assets
or properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company (a "Material Adverse Effect"). The
Company has all requisite corporate power and authority, and all necessary
authorizations, approvals, consents, orders, licenses, certificates and permits
of and from all governmental or regulatory bodies or any other person or entity,
to own, lease and license its assets and properties and conduct its businesses
as now being conducted and as described in the Registration Statement and the
Prospectus except for such authorizations, approvals, consents, orders,
licenses, certificates and permits the failure of which to obtain would not have
a Material Adverse Effect.
(e) To the best of the Company's knowledge, the Company owns, or
possesses adequate and enforceable rights to use, each of the patents listed in
the Registration Statement and each preliminary prospectus under the caption
"Business -- Patents and Proprietary Technology" (the "Patents") and, except as
disclosed in the Registration Statement and the Prospectus, owns or possesses
adequate and enforceable rights to use all trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses,
know-how and other similar rights and proprietary knowledge (collectively with
the Patents, the "Intangibles") necessary for the conduct of its business as
described and as contemplated in the Registration Statement and the Prospectus.
Except as disclosed in the Registration Statement and the Prospectus, to the
best of the Company's knowledge, the Company has not infringed, nor is it
infringing on, nor has it received any notice of, any infringement of or
conflict with asserted rights of others with respect to any Intangibles which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(f) The Company has good and marketable title to each of the items
of personal property which are reflected in the financial statements referred to
in Section 4(b) or are referred to in the Registration Statement and the
Prospectus as being owned by it and valid and enforceable leasehold interests in
each of the items of real and personal property which are referred to in the
Registration Statement and the Prospectus as being leased by it, in each case
free and clear of all liens, encumbrances, claims, security interests and
defects, other than those described in the Registration Statement and the
Prospectus and those which do not and will not have a Material Adverse Effect.
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(g) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, pending or, to the Company's
best knowledge, threatened (and the Company does not know of any basis therefor)
against, or involving the assets, properties or business of, the Company (i)
which is required to be disclosed in the Prospectus or (ii) which is reasonably
likely to have a Material Adverse Effect.
(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the assets or
properties, business, results of operations, prospects or condition (financial
or otherwise), of the Company, whether or not arising from transactions in the
ordinary course of business; (ii) the Company has not sustained any material
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree which would have a Material
Adverse Effect; and (iii) since the date of the latest balance sheet included in
the Registration Statement and the Prospectus, except as reflected therein, the
Company has not (1) issued any securities other than the issuance of securities
pursuant to the exercise of options granted under stock option plans or
agreements existing prior to the date of the latest balance sheet included in
the Registration Statement and Prospectus or incurred any liability or
obligation, direct or contingent, for borrowed money, except such liabilities or
obligations incurred in the ordinary course of business, (2) entered into any
material transaction not in the ordinary course of business or (3) declared or
paid any dividend or made any distribution on any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
otherwise acquire any shares of its capital stock.
(i) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required. Each agreement described in the Registration Statement and the
Prospectus or listed in the Exhibits to the Registration Statement is in full
force and effect and is valid and enforceable by the Company in accordance with
its terms, assuming the due authorization, execution and delivery thereof by
each of the other parties thereto except (i) as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles and (ii) to the extent that rights to indemnity or
contribution thereunder may be limited by Federal and state securities laws or
the public policy underlying such laws.. Neither the Company nor, to the
Company's knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or lapse of time or both
would constitute such a default, in any such case where such default or event
would have a Material Adverse Effect. No default exists, and no event has
occurred which with notice or lapse of time or both would constitute a default,
in the due performance and observance of any term, covenant or condition, by the
Company of any other agreement or instrument to which the Company is a party or
by which it or its properties or business may be bound or affected where such
default or event would have a Material Adverse Effect.
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(j) The Company is not in violation of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a Material Adverse Effect or of any
term or provision of its Certificate of Incorporation or Bylaws.
(k) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company pursuant to
the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or any of its
properties or businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or violate
any provision of the Certificate of Incorporation or Bylaws of the Company,
except for such consents or waivers which have already been obtained and are in
full force and effect and except for applicable requirements under the
Securities Act and state Blue Sky laws.
(l) The Company has authorized, and, at December 31, 1996 had
outstanding, capital stock as set forth in the Registration Statement and
Prospectus under the heading "Capitalization"; there have been no changes in the
outstanding capital stock of the Company since that date except to the extent
that certain outstanding options and warrants set forth in the footnotes thereto
may have been exercised. The certificates evidencing the Shares to be sold by
the Company are in due and proper legal form and have been duly authorized for
issuance by the Company. Except as set forth in the Registration Statement and
any Prospectus, all of the issued and outstanding shares of Common Stock have
been duly authorized and validly issued and are fully paid and nonassessable and
none of them was issued in violation of any preemptive or other similar right.
The Shares to be sold by the Company, when issued and sold pursuant to this
Agreement, will be duly authorized and validly issued and fully paid and
nonassessable. Except as set forth in the Registration Statement and the
Prospectus, there are no preemptive rights or other similar rights to subscribe
for or to purchase, or any restriction upon the voting or transfer of the Shares
to be sold by the Company or any of the Common Stock of the Company pursuant to
the Company's Certificate of Incorporation, Bylaws or other governing documents
or any agreement or other instrument to which the Company is a party or by which
it may be bound. No further approval or authority will be required on behalf of
the Company or pursuant to agreements by which it is bound for the transfer and
sale of the Shares to be sold by the Selling Securityholder. Except as disclosed
in the Registration Statement and the Prospectus, there is no outstanding
option, warrant or other right calling for the issuance of, and there is no
commitment, plan or arrangement to issue, any shares of the Common Stock of the
Company or any security convertible into, or exercisable or exchangeable for
Common Stock of the Company.
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(m) There are no holders of securities of the Company who, by reason
of the filing of the Registration Statement under the Securities Act or the
execution by the Company of this Agreement, have the right, not previously
satisfied or waived, to request or demand that the Company register under the
Securities Act such securities held by them. Each director and executive officer
of the Company, holding in the aggregate ______________ shares of Common Stock
and options to purchase __________________ shares of Common Stock have delivered
to the Representatives his or her enforceable written agreement that he or she
will not, directly or indirectly, for a period of 90 days, after the date of
this Agreement, sell, offer, contract to sell, make a short sale, pledge or
otherwise dispose of any shares of Common Stock (or any securities convertible
into or exchangeable or exercisable for any other rights to purchase or acquire
Common Stock owned by him or her, without the prior written consent of the
Xxxxxxxxxxx & Co., Inc.; and (ii) the Selling Securityholder has delivered to
the Representatives its written agreement that it will not, directly or
indirectly, for a period of 365 days after the date of this Agreement sell,
offer, contract to sell, make a short sale, pledge or otherwise dispose of any
shares of Common Stock (or any securities convertible into or exchangeable or
exercisable for any other rights to purchase or acquire Common Stock) owned by
it, without the prior written consent of the Representatives. The written
agreements referred to in (i) and (ii) hereof are herein collectively referred
to as the "Lock-Up Agreements".
(n) All necessary corporate action has been duly and validly taken
by the Company to authorize the execution, delivery and performance of this
Agreement and the issuance and sale of the Shares by the Company. This Agreement
has been duly and validly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (ii) to the extent that rights
to indemnity or contribution under this Agreement may be limited by Federal and
state securities laws or the public policy underlying such laws.
(o) No labor dispute with the employees of the Company exists or, to
the knowledge of the Company, is threatened; and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its principal
suppliers or contractors which would have a Material Adverse Effect.
(p) No transaction has occurred between or among the Company and any
of its officers or directors or any affiliate or affiliates of any such officer
or director that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(q) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock of the Company.
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(r) The Company has filed all federal, state, local and foreign tax
returns which were required to be filed to the date hereof, or has received
extensions thereof, and such returns are each true, correct and complete in all
material respects, and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are material and have
become due, and there are no tax audits or investigations pending.
(s) The books, records and accounts of the Company accurately and
fairly reflect, in reasonable detail, the transactions in, and dispositions of,
the assets of, and the results of operations of, the Company. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurances 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 accordance 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.
(t) Neither the Company nor any director, officer or employee of the
Company has, in the course of such person's actions for, or on behalf of, the
Company, used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity or made
any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; and neither the Company, nor to the
Company's knowledge, any director, officer, employee, agent or other person
acting on behalf of the Company, has, in the course of his actions for, or on
behalf of, the Company violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977 or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(u) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company (except such
additional steps as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or may be necessary to qualify the Shares for public
offering by the Underwriters under the Securities Act or state securities or
Blue Sky laws has been obtained or made and is in full force and effect.
(v) The Shares have been duly authorized for quotation on the Nasdaq
National Market.
(w) Except for FMR Corp., there are no affiliations with the NASD
among the Company's officers, directors or, any 5% or greater shareholder of the
Company.
(x) (i) The Company is in compliance in all material respects with
all rules, laws and regulation relating to the use, treatment, storage and
disposal of toxic substances and
protection of health or the environment ("Environmental Laws") which are
applicable to its
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business, (ii) the Company has not received any notice from any governmental
authority or third party of an asserted claim under Environmental Laws, (iii)
except with respect to the improvement or expansion of its manufacturing
or laboratory facilities, to the Company's knowledge, no facts currently exist
that will require the Company to make future material capital expenditures to
comply with Environmental Laws, and (iv) no property which is or has been owned,
leased or occupied by the Company has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), or otherwise
designated as a contaminated site under applicable state or local law.
(y) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company Act").
(z) The Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, as of such Closing Date, neither the
Company nor any of its affiliates does business with the government of Cuba or
with any person or affiliate located in Cuba.
5. ADDITIONAL REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE SELLING
SECURITYHOLDER. The Selling Securityholder represents and warrants and covenants
to each Underwriter as follows:
(a) The Selling Securityholder has good and marketable title to the
Shares to be sold by such Selling Securityholder hereunder, free and clear of
all liens, encumbrances, equities, security interests and claims whatsoever,
with full right and authority to deliver the same hereunder, subject, in the
case of each Selling Securityholder, to the rights of Xxxxx Xxxxxx Shareholder
Services, as Custodian (the "Custodian"), and that upon the delivery of and
payment for such Shares hereunder, the several Underwriters will receive good
and marketable title thereto, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever.
(b) Certificates in negotiable form for the Shares to be sold by the
Selling Securityholder have been placed in custody under a Custody Agreement for
delivery under this Agreement with the Custodian; the Selling Securityholder
specifically agrees that the Shares represented by the certificates so held in
custody for the Selling Securityholder are subject to the interests of the
several Underwriters pursuant to the Custody Agreement, that the arrangements
made by the Selling Securityholder for such custody, including the Power of
Attorney provided for in such Custody Agreement, are to that extent irrevocable,
and that the obligations of the Selling Securityholder shall not be terminated
by any act of the Selling Securityholder or by operation of law, the dissolution
or liquidation of the Selling Securityholder or the occurrence of any other
event; if any such dissolution, liquidation or other such event should occur
before the delivery of such Shares, certificates for the Shares shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such dissolution, liquidation or other event had not occurred,
regardless of whether the Custodian shall have received notice of such
dissolution, liquidation or other event.
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(c) The Selling Securityholder has reviewed the Registration
Statement and Prospectus and, although the Selling Securityholder has not
independently verified the accuracy or completeness of all the information
contained therein, nothing has come to the attention of the Selling
Securityholder that would lead the Selling Securityholder to believe that (i) on
the Effective Date, the Registration Statement contained any untrue statement of
a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading;
and, (ii) on the Effective Date the Prospectus contained and, on the Closing
Date contains, any untrue statement of a material fact or omitted or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(d) All information in the Registration Statement or the Prospectus,
or any amendment or supplement thereto, relating to the Selling Securityholder
(including, without limitation, the information relating to the Selling
Securityholder which is set forth in the Prospectus under the caption "Principal
Selling Stockholders") such information being deemed to have been provided to
the Company pursuant to the Registration Rights Agreement, as amended, between
the Company and the Selling Securityholder, and all representations and
warranties of the Selling Securityholder in the Custody Agreement are true and
correct in all respects and do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the information in the light of the circumstances under which
they were made not misleading. The sale of the Shares by the Selling
Securityholder pursuant hereto is not prompted by the Selling Securityholder's
knowledge of any material information concerning the Company which is not set
forth in the Prospectus or the documents incorporated by reference therein.
(e) The Selling Securityholder has full power and authority to enter
into this Agreement and the Custody Agreement and perform the transactions
contemplated hereby and thereby. This Agreement and the Custody Agreement have
been duly authorized, executed and delivered by or on behalf of the Selling
Securityholder and the form of such Custody Agreement has been delivered to you.
(f) The making and performance of this Agreement and the Custody
Agreement and the consummation of the transactions contemplated hereby and
thereby will not result in a breach or violation by the Selling Securityholder
of any of the terms or provisions of, or constitute a default by the Selling
Securityholder under, any indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise, license or other
agreement or instrument to which the Selling Securityholder is a party or by
which the Selling Securityholder or any of its properties is bound, any statute,
or any judgment, decree, order, rule or regulation of any court or governmental
agency or body applicable to the Selling Securityholder or any of its
properties.
(g) The Selling Securityholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
11.
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(h) The Selling Securityholder has no actual knowledge that any
representation or warranty of the Company set forth in Section 4 above is untrue
or inaccurate in any material respect.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement has become
effective shall have been received by the Representatives, and the Prospectus
shall have been timely filed with the Commission in accordance with Section
7(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Representatives.
(c) The representations and warranties of the Company and the
Selling Securityholder contained in this Agreement and in the certificates
delivered pursuant to Section 6(d) hereof shall be true and correct in all
material respects when made and on and as of each Closing Date as if made on
such date and the Company and the Selling Securityholder shall have performed
all covenants and agreements and satisfied all the conditions in all material
respects contained in this Agreement required to be performed or satisfied by
them at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date, from
each of (a) the chief executive officer and the chief financial officer of the
Company and (b) the Managing Director of the Selling Securityholder to the
effect that (i) the signers of each such certificate have examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company or the Selling Securityholder, as
the case may be, in this Agreement are true and correct in all material respects
on and as of such Closing Date with the same effect as if made on such Closing
Date and the Company and the Selling Securityholder, as the case may be, have
performed all covenants and agreements and satisfied all conditions contained in
this Agreement in all material respects required to be performed or satisfied by
them at or prior to such Closing Date, and (ii) no stop order suspending the
effectiveness of the Registration Statement has been issued and to the best of
their knowledge, no proceedings for that purpose have been instituted or are
pending under the Act.
(e) The Representatives shall have received from Ernst & Young LLP,
on the date this Agreement is executed and on each Closing Date, a letter dated
such date, in form and substance satisfactory to the Representatives, to the
effect that they are independent public
12.
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accountants with respect to the Company within the meaning of the Securities Act
and the Rules and that:
(i) in their opinion the audited financial statements and the
related financial statement schedules, if any, included in the Registration
Statement and the Prospectus and covered by their reports therein comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the heading "Summary Financial
Data" and "Selected Financial Data" carrying out certain procedures (but not an
audit in accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company, and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters of the
Company as to transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the Registration Statement
and the Prospectus, nothing came to their attention which caused them to believe
that:
(A) the amounts in "Summary Financial Data" and "Selected
Financial Data" included in the Registration Statement and the Prospectus do not
agree with the corresponding amounts in the audited and unaudited financial
statements from which such amounts were derived; or
(B) with respect to the Company there were, at a specified
date not more than five business days prior to the date of the letter, any
change in the capital stock of the Company (other than from the exercise of
stock options), increase in long-term debt of the Company or decreases in net
current assets of the Company or decreases in the stockholders' equity of the
Company, as compared with the amounts shown on the Company's audited December
31, 1996 balance sheet included in the Registration Statement.
(iii) they have performed certain other procedures as may be
permitted under Generally Acceptable Auditing Standards as a result of which
they determined that certain information of an accounting, financial or
statistical nature (which is limited to accounting, financial or statistical
information derived from the general accounting records of the Company) set
forth in the Registration Statement and the Prospectus and reasonably specified
by the Representatives agrees with the accounting records of the Company.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented as of the date
of the letter.
(f) The Representatives shall have received on each Closing Date
from Xxxx Xxxx Xxxx & Freidenrich, counsel for the Company, an opinion,
addressed to the Representatives and dated such Closing Date, stating in effect
that:
13.
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(i) The Company was duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware. To the best of
such counsel's knowledge, the Company has no subsidiary and does not control,
directly or indirectly, any corporation, partnership, joint venture, association
or other business organization. The Company is duly qualified and in good
standing as a foreign corporation in all United States jurisdictions in which
it is required to qualify as a foreign corporation, except where the failure to
qualify would have a Material Adverse Effect.
(ii) The Company has the corporate power and corporate
authority under its Certificate of Incorporation and the Delaware General
Corporation Law, as amended (the "DGCL"), to own, lease, license and operate its
assets and properties and conduct its business as described in the Prospectus
and to enter into, deliver and perform this Agreement and to issue and sell the
Shares to be sold by the Company.
(iii) The Company has authorized and outstanding capital stock
as of the date of the Capitalization table in the Prospectus as set forth in the
Prospectus under the heading "Capitalization"; the form of certificate
evidencing the Shares complies with the requirements of Section 158 of the DGCL;
all of the outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and, assuming receipt of the consideration
therefor as provided in resolutions of the Company's Board of Directors
authorizing issuance thereof, are fully paid and nonassessable under the DGCL.
Except as set forth in the Registration Statement, there are no preemptive or
other similar rights to subscribe for or to purchase any shares of Common Stock
of the Company pursuant to the Company's Certificate of Incorporation or Bylaws,
or any agreement known to such counsel. The Shares to be sold by the Company,
when issued and sold pursuant to this Agreement, will be validly issued, fully
paid and nonassessable under the DGCL. To such counsel's knowledge, except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of any
shares of Common Stock of the Company or any security convertible into or
exercisable or exchangeable for shares of Common Stock of the Company.
(iv) To such counsel's knowledge, no holders of securities of
the Company have rights, which have not been waived or complied with, to the
registration of shares of Common Stock or other securities, because of the
filing of the Registration Statement by the Company or the offering contemplated
hereby.
(v) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement. This Agreement has been duly and validly authorized, executed
and delivered by the Company and this Agreement constitutes the legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with their respective terms except (A) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable
14.
15
principles and (B) to the extent that rights to indemnity or contribution under
this Agreement may be limited by Federal or state securities laws or the public
policy underlying such laws.
(vi) The execution, delivery and performance as of the date
hereof of this Agreement by the Company do not (i) violate the DGCL or the
Certificate of Incorporation or the Bylaws of the Company or (ii) breach or
constitute a default under any contract or agreement known to such counsel.
(vii) No consent, approval, authorization or order of any
governmental or regulatory body is required for the performance of this
Agreement by the Company as of the date of such opinion, except such as have
been obtained.
(viii) To such counsel's knowledge, no default exists, and
no event has occurred which with notice or lapse of time, or both, would
constitute a default, in the due performance and observance of any term,
covenant or condition by the Company of any contract or agreement included as an
Exhibit to the Registration Statement where the consequences of such default
would have a material and adverse effect on the assets, properties, business,
results of operations, or condition (financial or otherwise) of the Company.
(ix) To such counsel's knowledge, except as disclosed in
the Registration Statement, there is no litigation or governmental or other
proceeding or investigation, before any court or before or by any public body or
board pending or threatened against, or involving the assets, properties or
businesses of, the Company which would have a material adverse effect upon the
assets or properties, business, results of operations, or condition (financial
or otherwise) of the Company.
(x) The Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto (except as to patent
matters and for the financial statements and supporting schedules and other
financial and statistical data included therein or omitted therefrom, as to
which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and the Rules.
(xi) The Registration Statement has become effective under the
Securities Act; and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus has been issued and no proceedings for that purpose have been
instituted or are threatened under the Securities Act; any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424(b) of the Rules
has been made in the manner and within the time period required by such Rule
424(b).
(xii) All contracts and other agreements to which the Company
is a party described in the Registration Statement are fairly described in the
Registration Statement, and to the knowledge of such counsel, there are no
contracts or documents of a character required to be described in the
Registration Statement or to be filed as exhibits to the Registration Statement
or the Prospectus that are not described or referred to therein or so filed.
15.
16
(xiii) The description of the Common Stock of the Company
contained in the Company's Form 8-A filed with the Commission is accurate, and
complete.
(xiv) The statements in the Prospectus and Registration
Statement under the caption "Business - Licensing and Collaborative Agreements"
have been reviewed by such counsel and are accurate in all material respects and
fairly present the information disclosed therein.
(xv) To such counsel's knowledge, the Shares have been
approved for quotation on the Nasdaq National Market System.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of the counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of Delaware or the Federal laws of the United States; provided that
such counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Representatives, and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus (except as specified in the foregoing
opinion), on the basis of the foregoing, no facts have come to the attention of
such counsel which lead such counsel to believe that the Registration Statement
at the time it became effective contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus
as of its date and as of the Closing Date contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Representatives shall have received on each Closing Date
from Xxxxx, Cave LLP, counsel for the Selling Securityholder, an opinion
addressed to the Representatives and dated such Closing Date substantially in
the form attached hereto as Annex A.
(h) The Representatives shall have received on each Closing Date
from Xxxxxxxx and Xxxxxxxx and Crew, patent counsel for the Company, an opinion
addressed to the Representatives and dated such Closing Date, and stating in
effect that:
(i) The statements with respect to patent matters in the
Prospectus and Registration Statement under the captions "Risk Factors -
Uncertainty of Patents and Proprietary
16.
17
Technology; Opposition Proceedings," "Business - Patents, and Proprietary
Technology" have been reviewed by such patent counsel and are accurate in all
material respects and fairly present the information disclosed therein.
(ii) To such patent counsel's knowledge, such patent counsel
believes the statements in the Registration Statement and the Prospectus under
the captions "Risk Factors - Uncertainty of Patents and Proprietary Technology"
and "Business - Patents and Proprietary Technology" do not contain any untrue
statement of material fact, or do not omit to state any material fact which
would be required to be stated in the Registration Statement and the Prospectus
or are necessary to make the statements therein not misleading.
(iii) Except as set forth in the Registration Statement and
the Prospectus, to such patent counsel's knowledge, there is no claim or action
by any person pertaining to, or proceeding, pending or threatened, which
challenges the rights of the Company with respect to the Company's patents or
intellectual property licenses.
(i) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel, and
the Underwriters shall have received from Xxxxxx Godward LLP, counsel for the
Underwriters, an opinion, addressed to the Representatives and dated such
Closing Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Xxxxxx Godward LLP
such documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(j) The Representatives shall have received copies of the Lock-up
Agreements executed by each person described in Section 4(m).
(k) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives, and dated such Closing Date, of
an executive officer of the Selling Securityholder to the effect that the signer
of such certificate has reviewed and understands the provisions of Section
517.075 of the Florida Statutes, and represents that the Selling Securityholder
has complied, and at all times will comply, with all provisions of Section
517.075 and further, that as of such Closing Date, neither the Selling
Securityholder nor any of its affiliates does business with the government of
Cuba or with any person or affiliate located in Cuba.
7. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees with the several Underwriters
as follows:
(i) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of business on
the second business day following the
17.
18
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Securities Act, and shall
promptly advise the Representatives (i) when any amendment to the Registration
Statement shall have become effective, (ii) of any request by the Commission for
any amendment of the Registration Statement or the Prospectus or for any
additional information, (iii) of the prevention or suspension of the use of any
preliminary prospectus or the Prospectus or of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the Prospectus unless
the Company has furnished the Representatives a copy for their review prior to
filing and shall not file any such proposed amendment or supplement to which the
Representatives reasonably and timely object. The Company shall use its best
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Shares
is required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Securities Act or the Rules, the
Company promptly shall prepare and file with the Commission, subject to the
second sentence of paragraph (i) of this Section 7(a), an amendment or
supplement which shall correct such statement or omission or an amendment which
shall effect such compliance.
(iii) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year), an
income statement (which need not be audited) of the Company, covering such 12-
month period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(iv) The Company shall furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each
other Underwriter a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(v) The Company shall cooperate with the Representatives and
their counsel in endeavoring to qualify the Shares for offer and sale in
connection with this offering under the state Blue Sky laws of such
jurisdictions as the Representatives may designate and
18.
19
shall maintain such qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company shall not be
required in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(vi) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives, and to each other
Underwriter who may so request in writing, copies of such financial statements
and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock and to
furnish to the Representatives a copy of each annual or other report it shall be
required to file with the Commission.
(vii) Without the prior written consent of the
Representatives, for a period of 90 days after the date of this Agreement, the
Company shall not issue, sell or register with the Commission, or otherwise
dispose of, directly or indirectly, any equity securities of the Company (or any
securities convertible into or exercisable or exchangeable for equity securities
of the Company), except for the issuance of the Shares pursuant to the
Registration Statement, the issuance of shares pursuant to the Company's
existing stock option plans or purchase rights (as amended or supplemented from
time to time), employee share purchase plan outstanding as of the date hereof,
and in each case, as described in or contemplated by the Prospectus or the
issuance of securities in private transactions to corporate partners at prices
greater than or equal to the then current fair market value of the Common
Stock.
(viii) On or before completion of this offering, the Company
shall make all filings required under applicable securities laws and by Nasdaq
(including any required registration under the Exchange Act).
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses of the
Company incident to the public offering of the Shares and the performance of the
obligations under this Agreement including those relating to: (i) the
preparation, printing, filing and distribution of the Registration Statement,
including all exhibits thereto, each preliminary prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the Prospectus, and
the filing and distribution of this Agreement; (ii) the preparation and delivery
of certificates for the Shares to the Representatives; (iii) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the various jurisdictions referred to in Section 7(a)(v), including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such registration and qualification and the preparation, printing,
distribution and shipment of preliminary and supplementary Blue Sky memoranda;
(iv) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold; (v) the
filing fees of the NASD in connection with its review of the terms of the public
offering and reasonable fees and disbursements of counsel of the Underwriters in
connection with such review; (vi) the furnishing (including costs of shipping
and mailing) to the
19.
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Representatives and to the Underwriters of copies of all reports and information
required by Section 7(a)(vi); (vii) the inclusion of the Shares for quotation on
the Nasdaq National Market; and (viii) all transfer taxes, if any, with respect
to the sale and delivery of the Shares by the Company and the Selling
Securityholder to the Underwriters. Subject to the provisions of Section 10, the
Underwriters agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence, including,
without limitation, the fees and disbursements of counsel for the Underwriters.
Nothing in this Section 7 shall affect existing agreements between the Company
and the Selling Securityholder with respect to reimbursement or allocation of
costs and expenses associated with the offering and sale of the Shares.
8. INDEMNIFICATION.
(a) The Company and the Selling Securityholder, severally and not
jointly, agree to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all losses,
claims, damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other Federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto, or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that such indemnity
shall not inure to the benefit of any Underwriter (or any person controlling
such Underwriter) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such Underwriter if such
untrue statement or omission or alleged untrue statement or omission was made in
such preliminary prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on behalf
of any Underwriter specifically for use therein; provided, further, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter or any person controlling such
Underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, if a copy of the Prospectus (as then amended or
supplemented, if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability. The obligation of each Selling Securityholder
to indemnify the Underwriter (including any controlling person, director
or officer thereof) shall be limited to the net proceeds received by the Selling
Securityholder in
20.
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connection with the sale of its Shares hereby. This indemnity agreement will be
in addition to any liability which the Company and the Selling Securityholder
may otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company, each officer of the Company who
signs the Registration Statement and the Selling Securityholder to the same
extent as the foregoing indemnity from the Company and the Selling
Securityholder to each Underwriter, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which was made in any
preliminary prospectus, the Registration Statement or the Prospectus, or any
amendment thereof or supplement thereto, contained in the last paragraph of the
cover page, in the paragraphs relating to stabilization and passive market
making on the inside front cover page of the Prospectus and the statements
contained in paragraphs 1, 2 and 5 under the caption "Underwriting" in the
Prospectus.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section , notify
each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided
for in Section 8(a) or 8(b) shall be available to any party who shall fail to
give notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise other than under this Section . In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of the defense
of such action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of one counsel shall
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for all similarly situated indemnified parties be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
9. CONTRIBUTION. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 8(a) or
8(b) is due in accordance with its terms but for any reason is held to be
unavailable from the Company or the Selling Securityholder, the Company, the
Selling Securityholder and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received by the Company or the Selling Securityholder
from persons other than the Underwriters, such as persons who control the
Company within the meaning of the Securities Act, officers of the Company who
signed the Registration Statement and directors of the Company, who may also be
liable for contribution) to which the Company, the Selling Securityholder and
one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Securityholder on the one hand and the Underwriters on the other from
the offering of the Shares or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 8 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company and the Selling Securityholder on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Securityholder and the
Underwriters shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting commissions but before deducting
expenses) received by the Company and the Selling Securityholder, as set forth
in the table on the cover page of the Prospectus, bear to (y) the underwriting
commissions received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and the Selling
Securityholder or the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company, the Selling Securityholder or
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Securityholder 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 which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 9, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) the Company and the Selling
Securityholder shall be liable and responsible for any amount in excess of such
underwriting discount; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
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fraudulent misrepresentation. For purposes of this Section 9, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 9. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section ,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section . No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent; provided,
however, that such consent shall not be unreasonably withheld. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to their respective underwriting commitments and not joint.
10. TERMINATION. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company and the Selling Securityholder at any time:
(a) in the absolute discretion of the Representatives at or before
any Closing Date: (i) if on or prior to such date, any domestic or international
event or act or occurrence has materially disrupted, or in the opinion of the
Representatives will materially disrupt, the securities markets; (ii) if there
has occurred any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Representatives,
inadvisable to proceed with the offering; (iii) if there shall be such a
material adverse change in general financial, political or economic conditions
or the effect of international conditions on the financial markets in the United
States is such as to make it, in the judgment of the Representatives,
inadvisable or impracticable to market the Shares; (iv) if trading in the Shares
has been suspended by the Commission or trading generally on the New York Stock
Exchange, Inc. or Nasdaq has been suspended or limited, or minimum or maximum
ranges for prices for securities shall have been imposed, or maximum ranges for
prices for securities have been required, by said exchanges or by order of the
Commission, the NASD or any other governmental or regulatory authority; or (v)
if a banking moratorium has been declared by any state or Federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions,
neither the Company nor the Selling Securityholder shall be under any liability
to any Underwriter, and no Underwriter shall be under any liability to the
Company or the Selling Securityholder, except
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that (y) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part of the
Company and the Selling Securityholder to comply with the terms or to fulfill
any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
and the Selling Securityholder or to the other Underwriters for damages
occasioned by its failure or refusal.
11. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 11 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives, or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
five business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives, the Company and the Selling
Securityholder. If the number of Shares to be purchased on such Closing Date by
such defaulting Underwriter or Underwriters shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, and none of
the nondefaulting Underwriters or the Company shall make arrangements pursuant
to this
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Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company or the Selling
Securityholder and without liability on the part of the Company or the Selling
Securityholder, except in both cases as provided in Sections 7(b), 8, 9 and 10.
The provisions of this Section shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
12. MISCELLANEOUS. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the Selling Securityholder
and of the Underwriters set forth in or made pursuant to this Agreement shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Selling Securityholder or the Company or any of
the officers, directors or controlling persons referred to in Sections 8 and 9
hereof, and shall survive delivery of and payment for the Shares. The provisions
of Sections 7(b), 8, 9 and 10 shall survive the termination or cancellation of
this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company, the Selling Securityholder and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers
of the Company, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Representatives, c/o Oppenheimer & Co., Inc., Xxxxxxxxxxx Xxxxx, Xxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx X. Xxxxxxx, with a
copy to Xxxxxxx X. Xxxxx, Xxxxxx Godward LLP, Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxxxxxxx, XX 0000-0000, (b) if to the Company, to its agent for service as
such agent's address appears on the cover page of the Registration Statement,
with a copy to Xxxxxxx X. Xxxxx, Xxxx Xxxx Xxxx & Freidenrich, 000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, XX 00000, and (c) if to the Selling Securityholder to Corange
International Limited, 00 Xxxxxx Xxxxxx, Xxxxxxxx, XX XX, Xxxxxxx, with a copy
to Xxxxx Xxxx LLP, 000 00xx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000,
Attention: Xxxx X. Xxxxx, Esq.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
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This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
PROTEIN DESIGN LABS, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
The foregoing Underwriting Agreement CORANGE INTERNATIONAL LIMITED
is hereby confirmed and accepted
as of the date first above written.
By:_______________________________
Name:_____________________________
XXXXXXXXXXX & CO., INC. Title:____________________________
XXXXXX BROTHERS
PAINEWEBBER INCORPORATED
As Representatives of the several
Underwriters named in Schedule I.
By: XXXXXXXXXXX & CO., INC.
By:_______________________________
Name:_____________________________
Title:____________________________
26.
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SCHEDULE I
FIRM SHARES TO BE PURCHASED FROM COMPANY
[TO COME]
NAME OF UNDERWRITER Number of Firm
Shares to be Purchased
Total............................................... _____
=====
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SCHEDULE II
FIRM SHARES TO BE PURCHASED
FROM SELLING SECURITYHOLDER
[TO COME]
NAME OF UNDERWRITER NUMBER OF FIRM
SHARES TO BE PURCHASED
29
ANNEX A
FORM OF OPINION OF COUNSEL
FOR SELLING SECURITYHOLDER
(i) the Underwriting Agreement has been duly executed and delivered by or
on behalf of the Selling Securityholder and the Custody Agreement between the
Selling Securityholder and Xxxxx Xxxxxx Shareholder Services, as Custodian, and
the Power of Attorney referred to in such Custody Agreement have been duly
executed and delivered by the Selling Securityholder;
(ii) the Underwriting Agreement, the Custody Agreement and the Power of
Attorney are valid and binding agreements of the Selling Securityholder
enforceable in accordance with their terms except as enforceability may be
limited by general equitable principles, bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and except with
respect to those provisions relating to indemnity or contribution for
liabilities under the Securities Act, as to which no opinion need be expressed,
and the Selling Securityholder has full legal right and authority to enter into
the Underwriting Agreement, the Custody Agreement and the Power of Attorney and
to sell, transfer and deliver in the manner provided in the Underwriting
Agreement the Shares sold by the Selling Securityholder hereunder;
(iii) the transfer and sale by the Selling Securityholder of the Shares to
be sold by the Selling Securityholder as contemplated by the Underwriting
Agreement, the Power of Attorney and the Custody Agreement will not conflict
with, result in a breach of, or constitute a default under any agreement or
instrument known to such counsel to which the Selling Securityholder is a party
or by which the Selling Securityholder or any of its properties may be bound, or
any applicable law or regulation, or so far is known to such counsel, order,
writ, injunction or decree of any jurisdiction, court or governmental
instrumentality body.
(iv) all of the Selling Securityholder's rights in the Shares to be sold
by the Selling Securityholder under the Underwriting Agreement, has been
transferred to the Underwriters who have severally purchased such Shares under
the Underwriting Agreement, free and clear of adverse claims, assuming for the
purpose of this opinion that the Underwriters purchased the same in good faith
without notice of any adverse claims; and
(v) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the transactions
contemplated in the Underwriting Agreement, except such as have been obtained
under the Securities Act and such as may be required under state securities or
blue sky laws in connection with the purchase and distribution of the Shares to
be sold by the Selling Securityholder by the Underwriters and the clearance of
the offering with the NASD.
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Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States upon opinions of local counsel
satisfactory in form and scope to counsel for the Underwriters. Copies of any
opinions so relied upon shall be delivered to the Representatives and to counsel
for the Underwriters and the foregoing opinion shall also state that counsel
knows of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
