1
[S&S DRAFT
3/25/96]
1,350,000 Shares
ADVANCED MAGNETICS, INC.
Common Stock
UNDERWRITING AGREEMENT
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April , 1996
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PAINEWEBBER INCORPORATED
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXX XXXXXXX INCORPORATED
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Advanced Magnetics, Inc., a Delaware corporation (the "Company"), and
the persons named in Schedule II hereto (collectively, the "Selling
Stockholders", and individually, a "Selling Stockholder"), propose to sell an
aggregate of 1,350,000 shares (the "Firm Shares") of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), of which 1,100,000 shares
are to be issued and sold by the Company and an aggregate of 250,000 shares are
to be sold by the Selling Stockholders, to you as the several underwriters
named in Schedule I hereto (collectively, the "Underwriters"), in connection
with the offering and sale of such shares of Common Stock. The Company has also
agreed to grant to you an option (the "Option") to purchase up to 202,500
additional shares of Common Stock (the "Option Shares") on the terms and for
the purposes set forth in Section 1(b). The Firm Shares and the Option Shares
are hereinafter collectively referred to as the "Shares".
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The initial public offering price per share for the Shares and the
purchase price per share for the Shares to be paid by the several Underwriters
shall be agreed upon by the Company, the Attorneys (as defined below) acting on
behalf of the Selling Stockholders and the Underwriters, and such agreement
shall be set forth in a separate written instrument substantially in the form
of Exhibit A hereto (the "Price Determination Agreement"). The Price
Determination Agreement may take the form of an exchange of any standard form
of written telecommunication among the Company, the Attorneys and the
Underwriters and shall specify such applicable information as is indicated in
Exhibit A hereto. The offering of the Shares will be governed by this
Agreement, as supplemented by the Price Determination Agreement. From and after
the date of the execution and delivery of the Price Determination Agreement,
this Agreement shall be deemed to incorporate, and, unless the context
otherwise indicates, all references contained herein to "this Agreement" and to
the phrase "herein" shall be deemed to include, the Price Determination
Agreement.
Each Selling Stockholder has executed and delivered a Letter of
Transmittal and Custody Agreement (the "Custody Agreement") and a Selling
Stockholder's Irrevocable Power of Attorney (the "Power of Attorney"). Pursuant
to the Custody Agreement, each Selling Stockholder has placed his Shares in
custody with the Company, designated therein as custodian (the "Custodian"),
with authority to include such Shares among the Shares delivered to the
Underwriters on behalf of such Selling Stockholder and to take certain other
actions with respect thereto and hereto. Pursuant to the Power of Attorney,
each Selling Stockholder has appointed the persons designated therein as
attorneys-in-fact (the "Attorneys") with authority to execute and deliver this
Agreement on behalf of such Selling Stockholder and to take certain other
actions with respect thereto and hereto.
The Company and the Selling Stockholders confirm as follows their
respective agreements with the Underwriters.
1. Agreement to Sell and Purchase.
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(a) On the basis of the respective representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions of this Agreement, (i) the Company and
each of the Selling Stockholders, severally and not jointly, agree to sell to
the several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company and the Selling Stockholders, at
the purchase price per share for the Firm Shares to be agreed upon by the
Underwriters, the Company and the Attorneys acting on behalf of the Selling
Stockholders in accordance with Section 1(c) or 1(d) hereof and set forth in
the Price Determination Agreement, the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I, plus such additional number of Firm
Shares which such Underwriter may become obligated to purchase pursuant to
Section 9 hereof. If the
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Company elects to rely on Rule 430A (as hereinafter defined), Schedule I may
be attached to the Price Determination Agreement.
(b) Subject to all the terms and conditions of this Agreement, the
Company grants the Option to the several Underwriters to purchase, severally
and not jointly, up to 202,500 Option Shares from the Company at the same price
per share as the Underwriters shall pay for the Firm Shares. The Option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement (or, if
the Company has elected to rely on Rule 430A, on or before the 30th day after
the date of the Price Determination Agreement), upon written or telegraphic
notice (the "Option Shares Notice") by the Underwriters to the Company no later
than 12:00 noon, New York City time, at least two and no more than five
business days before the date specified for closing in the Option Shares Notice
(the "Option Closing Date"), setting forth the aggregate number of Option
Shares to be purchased and the time and date for such purchase.
On the Option Closing Date, and subject to this Section 1(b), the
Company will issue and sell to the Underwriters the aggregate number of Option
Shares set forth in the Option Shares Notice, and each Underwriter will
purchase such percentage of the Option Shares as is equal to the percentage of
Firm Shares that such Underwriter is purchasing, as adjusted by the
Underwriters in such manner as they deem advisable to avoid fractional shares.
(c) If the Company has elected not to rely on Rule 430A, the initial
public offering price per share for the Firm Shares and the purchase price per
share for the Firm Shares to be paid by the several Underwriters shall be
agreed upon and set forth in the Price Determination Agreement, which shall be
dated the date hereof, and an amendment to the Registration Statement (as
hereinafter defined) containing such per share price information shall be filed
before the Registration Statement becomes effective.
(d) If the Company has elected to rely on Rule 430A, the initial public
offering price per share for the Firm Shares and the purchase price per share
for the Firm Shares to be paid by the several Underwriters shall be agreed upon
and set forth in the Price Determination Agreement. In the event that the Price
Determination Agreement has not been executed by the close of business on the
fourth business day following the date on which the Registration Statement
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Section 7 shall remain in effect.
2. DELIVERY AND PAYMENT. Delivery of certificates for the Firm Shares
shall be made to and for the accounts of the Underwriters at the office of
PaineWebber Incorporated, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
against payment of the purchase price by certified or official bank checks
payable in New Clearing
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House (next-day) funds to the order of the Company and the Attorneys at the
office of PaineWebber Incorporated, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000. Such payment shall be made at 10:00 a.m., New York City time, on the
third business day following the date of this Agreement or, if the Company
has elected to rely on Rule 430A, the third business day after the date on
which the first bona fide offering of the Shares to the public is made by the
Underwriters or at such time on such other date, not later than seven business
days after the date of this Agreement, as may be agreed upon by the Company and
the Underwriters (such date is hereinafter referred to as the "Closing Date").
To the extent the Option is exercised, delivery of certificates for the
Option Shares against payment by the Underwriters (in the manner specified
above) will take place at the offices specified above for the Closing Date at
the time and date (which may be the Closing Date) specified in the Option
Shares Notice.
Certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the Underwriters
shall request at least two business days prior to the Closing Date or the
Option Closing Date, as the case may be, by written notice to the Company. For
the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection
at least 24 hours prior to the Closing Date or the Option Closing Date, as the
case may be.
The cost of original issue tax stamps, if any, in connection with the
issuance and delivery of Firm Shares and, if applicable, Option Shares, by the
Company to the respective Underwriters shall be borne by the Company. The cost
of tax stamps, if any, in connection with the sale of Firm Shares by the
Selling Stockholders to the respective Underwriters shall be borne by the
Selling Stockholders. The Company and the Selling Stockholders will severally
pay and save each Underwriter and any subsequent holder of the Shares harmless
from any and all liabilities with respect to or resulting from any failure or
delay in paying Federal and state stamp and other transfer taxes, if any, which
may be payable or determined to be payable in connection with the original
issuance or sale by such person or entity to such Underwriter of the Firm
Shares and Option Shares sold by such person.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement (Registration No. 333-1775) on Form S-3 relating to
the Shares, including a preliminary prospectus and such amendments to such
registration statement as may have been required to the date of this
Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the
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"Act"), and the rules and regulations (collectively referred to as the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission. The
registration statement contains a form of preliminary prospectus (the
"preliminary prospectus") relating to the Shares. The term "preliminary
prospectus" as used herein means a preliminary prospectus as contemplated by
Rule 430 or Rule 430A ("Rule 430A") of the Rules and Regulations included at
any time as part of the registration statement. Copies of such registration
statement and amendments have been delivered to the Underwriters and copies
of the preliminary prospectus have been delivered to the Underwriters. If
such registration statement has not become effective, a further amendment to
such registration statement, including a form of final prospectus, necessary
to permit such registration statement to become effective will be filed
promptly by the Company with the Commission. If such registration statement
has become effective, a final prospectus containing information permitted to
be omitted at the time of effectiveness by Rule 430A will be filed by the
Company with the Commission in accordance with Rule 424(b) of the Rules and
Regulations promptly after execution and delivery of the Price Determination
Agreement. The term "Registration Statement" means the registration statement
as amended at the time it becomes or became effective (the "Effective Date"),
including financial statements and all exhibits and any information deemed to
be included by Rule 430A. Any registration statement filed pursuant to Rule
462(b) of the Rules and Regulations ("Rule 462(b)") is herein referred to as
the "Rule 462(b) Registration Statement", and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration
Statement. The term "Prospectus" means a prospectus relating to the Shares,
in the form it is first filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations or, if no such filing is required, the form of
final prospectus included in the Registration Statement at the Effective
Date. Any reference herein to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date or the date of such
preliminary prospectus or the Prospectus, as the case may be. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("XXXXX").
(b) On the Effective Date, the date the Prospectus is first filed with
the Commission pursuant to Rule 424(b) (if required), at all times subsequent
thereto up to and including the Closing Date and, if later, the Option
Closing Date and when any Rule 462(b) Registration Statement and any
post-effective amendment to the Registration Statement become effective or
any amendment or supplement to the
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Prospectus is filed with the Commission, (i) the Registration
Statement, the Rule 462(b) Registration Statement and the Prospectus (as
amended or as supplemented if the Company shall have filed with the
Commission any amendment or supplement thereto), including the financial
statements included or incorporated by reference in the Prospectus, did or
will comply with all applicable provisions of the Act, the Exchange Act, the
rules and regulations thereunder (the "Exchange Act Rules and Regulations")
and the Rules and Regulations (ii) each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with the
offering of Shares contemplated hereunder was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T and (iii) will contain all
statements required to be stated therein in accordance with the Act, the
Exchange Act, the Exchange Act Rules and Regulations and the Rules and
Regulations. On the Effective Date and when any Rule 462(b) Registration
Statement and any post-effective amendment to the Registration Statement
become effective, no part of the Registration Statement or any such amendment
did or will contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make
the statements therein not misleading. On the Effective Date, the date the
Prospectus or any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Date and, if later, the Option Closing Date,
the Prospectus did not or will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The foregoing representations and warranties in this Section 3(b)
do not apply to any statements or omissions made in reliance on and in
conformity with information relating to any Underwriter furnished in writing
to the Company by the Underwriters specifically for inclusion in the
Registration Statement or Prospectus or any amendment or supplement thereto.
For all purposes of this Agreement, the statements in the third paragraph set
forth under the heading "Underwriting" in the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company
by the Underwriters specifically for inclusion in the preliminary prospectus,
the Registration Statement or the Prospectus. The Company has not distributed
any offering material in connection with the offering 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.
(c) The documents which are incorporated by reference in the
preliminary prospectus and the Prospectus or from which information is so
incorporated by reference, when they became effective or were filed with the
Commission, as the case may be, complied in all material respects with the
requirements of the Act or the Exchange Act, as applicable, the Exchange Act
Rules and Regulations and the Rules and Regulations; and any documents so
filed and incorporated by reference subsequent to the Effective Date shall,
when they are filed with the Commission,
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conform in all material respects with the requirements of the Act and
the Exchange Act, as applicable, the Exchange Act Rules and Regulations and
the Rules and Regulations.
(d) The Company is, and at the Closing Date will be, a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company has, and at the Closing Date will
have, full power and authority to conduct all the activities conducted by it,
to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company is, and at the Closing Date will be, duly licensed or qualified to do
business and in good standing as a foreign corporation in all jurisdictions
in which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary,
except in any jurisdiction where the failure to be so licensed or qualified
would not have a material and adverse effect on the Company or its business,
properties, business prospects, condition (financial or otherwise) or results
of operations. Except as disclosed in the Registration Statement and except
with respect to purchases and sales of securities included in the Company's
investment portfolio in the ordinary course of business, the Company does not
own, and at the Closing Date will not own, directly or indirectly, any shares
of stock or any other equity or long-term debt securities of any corporation
or have any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the certificate
of incorporation and of the by-laws of the Company and all amendments thereto
have been delivered to the Underwriters and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(e) The outstanding shares of Common Stock, including the Shares sold
by the Selling Stockholders, have been, and the Shares to be issued and sold
by the Company upon such issuance will be, duly authorized, validly issued,
fully paid and nonassessable and will not be subject to any preemptive or
similar right. The description of the Common Stock in the Registration
Statement and the Prospectus is, and at the Closing Date and, if later, the
Option Closing Date, will be, complete and accurate in all respects. Except
as set forth in the Prospectus, the Company does not have outstanding, and at
the Closing Date and, if later, the Option Closing Date, will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock, any shares of
capital stock of any subsidiary or any such warrants, convertible securities
or obligations.
(f) The financial statements and schedules included or incorporated by
reference in the Registration Statement or the Prospectus present fairly the
consolidated financial condition of the Company as of the respective dates
thereof and
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the consolidated results of operations and cash flows of the Company
for the respective periods covered thereby, all in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Prospectus. No
other financial statements or schedules of the Company are required by the
Act, the Exchange Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. To the knowledge of the Company,
Coopers & Xxxxxxx L.L.P. (the "Accountants"), who have reported on such
financial statements and schedules, are independent accountants with respect
to the Company as required by the Act and the Rules and Regulations.
(g) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences, in each case to the full extent required by Section 13(b)(2) of
the Exchange Act.
(h) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing
Date and, if later, the Option Closing Date, except as set forth in or
contemplated by the Registration Statement and the Prospectus, (i) there has
not been and will not have been any material change in the capitalization of
the Company (except upon exercise of outstanding options and warrants with
respect to which the Company will promptly notify the Underwriters), or in
the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company, arising for any reason
whatsoever, (ii) the Company has not incurred nor will it incur any material
liabilities or obligations, direct or contingent, nor has it entered into nor
will it enter into any material transactions other than pursuant to this
Agreement and the transactions referred to herein and (iii) the Company has
not and will not have paid or declared any dividends or other distributions
of any kind on any class of its capital stock.
(i) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as such terms are defined in the Investment Company Act of 1940, as
amended.
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(j) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or to the
Company's knowledge, threatened against or affecting the Company, before or
by any Federal or state court, commission, regulatory body, administrative
agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding might materially and adversely affect
the Company or its business, properties, business prospects, condition
(financial or otherwise) or results of operations.
(k) The Company has, and at the Closing Date will have, (i) all
governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to carry on its business as contemplated in the
Prospectus, (ii) complied in all respects with all laws, regulations and
orders applicable to it or its business and (iii) performed all its
obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement,
lease, contract or other agreement or instrument (collectively, a "contract
or any other agreement") to which it is a party or by which its property is
bound or affected, except to the extent that the failure so to have, comply
or perform would not, individually or in the aggregate, have a material and
adverse effect on the Company or its business, properties, business
prospects, condition (financial or otherwise) or results of operations. To
the best knowledge of the Company, no other party under any contract or other
agreement to which it is a party is in default in any material respect
thereunder. The Company is not, nor at the Closing Date will be, in violation
of any provision of its certificate of incorporation or by-laws.
(l) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for
the consummation by the Company of the transactions on its part contemplated
herein, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state or foreign securities or
Blue Sky laws or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by the Company.
(m) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company and is enforceable against the Company in accordance with the terms
hereof and thereof. The performance of this Agreement and the consummation of
the transactions contemplated hereby and thereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the
assets of the Company pursuant to the terms or provisions of, or result in a
breach or violation of any of the terms or
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provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the certificate of incorporation or
by-laws of the Company, any contract or other agreement to which the Company
is a party or by which the Company or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree, order,
statute, rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company (except state or
foreign securities laws, with respect to which the Company makes no
representation).
(n) The Company has good and marketable title to all properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances or restrictions, except such as are described in
the Prospectus or are not material to the business of the Company. The
Company has valid, subsisting and enforceable leases for the properties
described in the Prospectus as leased by it, with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such properties by the Company.
(o) There is no document or contract 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 which is not described or filed as
required, and the descriptions of such documents or contracts are accurate
and present fairly the information required to be shown. All such contracts
to which the Company is a party have been duly authorized, executed and
delivered by the Company, constitute valid and binding agreements of the
Company and, to the Company's knowledge, the other parties thereto and are
enforceable against the Company and the other parties thereto in accordance
with the terms thereof.
(p) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriters was or will be, when made,
inaccurate, untrue or incorrect in any material respect.
(q) Neither the Company nor, to the best of its knowledge, any of its
directors, officers or controlling persons has taken, directly or indirectly,
any action intended, or which might reasonably be expected, to cause or
result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(r) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement that have not been duly waived.
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(s) The Shares are duly authorized for listing, subject to official
notice of issuance, on the American Stock Exchange.
(t) The Company is not involved in any material labor dispute nor, to
the knowledge of the Company, is any such dispute threatened.
(u) Neither the Company nor, to the Company's knowledge, any employee
or agent of the Company has made any payment of funds of the Company or
received or retained any funds (i) in violation of any law, rule or
regulation that could have a material adverse effect on the Company or its
business, properties, business prospects, condition (financial or otherwise)
or results of operations or (ii) of a character required to be disclosed in
the Prospectus which has not been so disclosed.
(v) The Company owns, or possesses adequate rights to use, or believes
it can acquire on reasonable terms, all patents (or foreign equivalents),
patent rights, licenses, inventions, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks,
trade names and copyrights described or referred to in the Prospectus as
owned or used by it except as disclosed in the Prospectus, or where the
failure of which to own or to possess adequate rights to use would not have a
material adverse effect on its business, properties, business prospects,
condition (financial or otherwise) or results of operations. To the knowledge
of the Company, all such patents, patent rights, licenses, trademarks,
service marks and copyrights are (i) valid and enforceable and (ii) not being
infringed by any third parties which infringement could, whether singly or in
the aggregate, materially and adversely affect the business, properties,
business prospects, condition (financial or otherwise) or results of
operations of the Company, as presently being conducted or as proposed to be
conducted. Except as disclosed in the Prospectus, the Company has not
received any notice of any infringement of or conflict with asserted rights
of others with respect to any patents, patent rights, licenses, inventions,
trade secrets, know-how, proprietary techniques, including processes and
substances, trademarks, service marks, trade names or copyrights which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially adversely affect its business, properties,
business prospects, condition (financial or otherwise) or results of
operations, as presently being conducted or as proposed to be conducted.
(w) To the knowledge of the Company (i) the New Drug Applications
("NDAs") filed with the United States Food and Drug Administration (the
"FDA") with respect to Feridex I.V. and GastroMARK, comply in all material
respects with the rules and regulations of the FDA regarding the filings of
NDAs and all information and data submitted to the FDA as part of such NDAs
were true and accurate when so filed, (ii) the Investigational New Drug
Applications ("INDs") filed
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with the FDA with respect to Combidex comply in all material respects with the
rules and regulations of the FDA regarding the filing of INDs and all
information and data submitted to the FDA as part of such INDs were true and
accurate when so filed.
(x) The Company (i) has not received written notice of violation of any
applicable environmental, health or safety statute, regulation, ordinance or
decree binding upon it with respect to the premises at which the business of
the Company is conducted which it has not corrected; (ii) has been and is in
substantial compliance with all material environmental, health or safety laws
and regulations; and (iii) is not subject, as a present or past party, to any
judgment, order, writ, injunction or decree of any court, governmental
authority, agency or arbitration panel with respect to any environmental,
health or safety matter materially affecting the Company and its business. To
the knowledge of the Company (as defined below), the operations of the
Company at the premises at which it conducts its business substantially meet,
and, if operated at 1995 levels of production would meet, the requirements of
material laws, regulations and ordinances of all governmental authorities
having jurisdiction over such operations pursuant to occupational health and
safety acts and environmental laws and regulations. To the knowledge of the
Company, there has not been, and is not occurring, any "release" of any
"hazardous substance" (as defined below) on any property or interest in
property of the Company which was required to be reported to the National
Response Center pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 USC ss. 9601 et seq. ("CERCLA").
To the knowledge of the Company, the Company has never sent hazardous wastes
generated in connection with the business or operations of the Company to a
site which pursuant to CERCLA or any similar state law (i) has been placed,
or is proposed to be placed, on the "national priorities list" of hazardous
waste sites or (ii) is subject to a claim, an administrative order or other
request to take "removal" or "remedial" action (as defined under CERCLA) or
to pay for any costs relating to such site. To the knowledge of the Company,
the Company has not been and is not in violation of any provision of the
Toxic Substances Control Act or regulations promulgated thereunder materially
affecting the Company and its business. Other than worker's compensation
claims, the Company is not involved as a party in any pending suit and has
not received written notice of any unresolved claims relating to personal
injuries from exposure to hazardous substances relating to its business. To
the knowledge of the Company, the business or operations of the Company have
not caused a release of any hazardous substance which has or may cause damage
or injury to the environment, whether on or off the premises at which the
business of the Company is conducted, which could have a material adverse
effect on the Company or its business. To the knowledge of the Company, the
Company has no Environmental Liability (as defined below) materially
affecting the Company and its business in connection with the operation,
ownership, control or use by the Company of any premises at which the
business of the Company is or has been conducted,
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whether now owned or heretofore sold, transferred, exchanged or
otherwise conveyed including, but not limited to, any claim arising in
connection with the involvement of the Company in any Facility (as defined
below) where it has been alleged that the Company is obligated to remedy or
otherwise alter the status quo of the environmental condition of the property
whether by direct participation or by payment of any moneys. The term
"Facility" means (i) any building, plant, facility, structure, installation,
equipment, pipe or pipeline (including any pipe into a sewer or publicly
owned treatment works), well, pit, pond, lagoon, impoundment, ditch,
landfill, storage container, motor vehicle, rolling stock or aircraft, or
(ii) any site or area where a hazardous substance has been deposited, stored,
disposed, or placed, or otherwise come to be located, and the term
"Environmental Liability" means any liability or obligation arising from the
violation of or required by any federal, state, local or administrative
statute, code, ordinance, rule, regulation, permit, consent, approval,
license, judgment, order, writ, decree, injunction or other authorization,
including the requirement to register underground storage tanks, or relating
to emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or hazardous or toxic materials or wastes into ambient air,
surface water, ground water, publicly owned treatment works, septic system or
land, or otherwise relating to the pollution or protection of health or the
environment. For purposes of this paragraph (x), the terms "release" and
"hazardous substance" shall have the meanings given those terms in CERCLA.
(y) There are no subsidiaries of the Company.
(z) The Commonwealth of Massachusetts and the States of Delaware and
New Jersey are the only jurisdictions in which the nature of the activities
conducted by the Company or the character of the assets owned or leased by it
render it necessary for the Company to be duly licensed or qualified to do
business pursuant to the laws of the such jurisdictions.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
Selling Stockholder, severally and not jointly, represents, warrants and
covenants to each Underwriter that:
(a) Such Selling Stockholder has full power and authority to enter into
this Agreement, the Custody Agreement and the Power of Attorney. All
authorizations and consents necessary for the execution and delivery by such
Selling Stockholder of the Custody Agreement, the Power of Attorney and for
the execution of this Agreement on behalf of such Selling Stockholder, have
been given. Each of the Custody Agreement, the Power of Attorney and this
Agreement has been duly authorized, executed and delivered by or on behalf of
such Selling Stockholder and constitutes a valid and binding agreement of
such Selling Stockholder and is
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enforceable against such Selling Stockholder in accordance with the terms
thereof and hereof.
(b) Such Selling Stockholder now has, and at the time of delivery
thereof hereunder will have, (i) good and marketable title to the Shares to
be sold by such Selling Stockholder hereunder, free and clear of all liens,
encumbrances and claims whatsoever (other than pursuant to the Custody
Agreement and the Power of Attorney), and (ii) full legal right and power,
and all authorizations and approvals required by law, to sell, transfer and
deliver such Shares to the Underwriters hereunder and to make the
representations, warranties and agreements made by such Selling Stockholder
herein. Upon the delivery of and payment for such Shares hereunder, such
Selling Stockholder will deliver good and marketable title thereto, free and
clear of all liens, encumbrances and claims whatsoever.
(c) On the Closing Date or the Option Closing Date, as the case may be,
all stock transfer or other taxes (other than income taxes) which are
required to be paid in connection with the sale and transfer of the Shares to
be sold by such Selling Stockholder to the several Underwriters hereunder
will have been fully paid or provided for by such Selling Stockholder and all
laws imposing such taxes will have been fully complied with.
(d) The performance of this Agreement and the consummation of the
transactions contemplated hereby and thereby will not result in the creation
or imposition of any lien, charge or encumbrance upon any of the assets of
such Selling Stockholder pursuant to the terms or provisions of, or result in
a material breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the acceleration of any obligation
under, if such Selling Stockholder is a corporation or partnership, the
organizational documents of such Selling Stockholder, or, as to all such
Selling Stockholders, any contract or other agreement to which such Selling
Stockholder is a party or by which such Selling Stockholder or any of its
property is bound or affected, or under any ruling, decree, judgment, order,
statute, rule or regulation of any court or other governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder.
(e) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for
the consummation by such Selling Stockholder of the transactions on its part
contemplated herein, in the Custody Agreement and the Power of Attorney,
except such as have been obtained under the Act or the Rules and Regulations
and such as may be required under state or foreign securities or Blue Sky
laws or the by-laws and rules of the NASD in connection with the purchase and
distribution by the Underwriters of the Shares to be sold by such Selling
Stockholder.
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(f) Such Selling Stockholder has no actual knowledge of any material
fact or condition that now exists not set forth in the Registration Statement
or the Prospectus which has adversely affected, or may adversely affect, the
business, properties, business prospects, condition (financial or otherwise)
or results of operations of the Company, and the sale of the Shares proposed
to be sold by such Selling Stockholder is not prompted by any such knowledge.
(g) All information with respect to such Selling Stockholder contained
in the Registration Statement and the Prospectus (as amended or supplemented,
if the Company shall have filed with the Commission any amendment or
supplement thereto) does not and, for the period during which the Prospectus
is required to be delivered, all such information with respect to such
Selling Stockholder furnished in writing by or on behalf of such Selling
Stockholder and contained in the Registration Statement 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 in order to make the
statements therein not misleading.
(h) To the best knowledge of such Selling Stockholder, the
representations and warranties of the Company contained in Section 3 are true
and correct.
(i) Other than as permitted by the Act and the Rules and Regulations,
such Selling Stockholder has not distributed and will not distribute any
preliminary prospectus, the Prospectus or any other offering material in
connection with the offering and sale of the Shares. Such Selling Stockholder
has not taken and will not take, directly or indirectly, any action designed,
or which might reasonably be expected, to cause or result in, under the Act
or otherwise, or which has caused or resulted in, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(j) Certificates in negotiable form for the Shares to be sold hereunder
by the Selling Stockholders have been placed in custody with the Custodian
for the purpose of making delivery of such Shares under this Agreement and
under the Custody Agreement. Such Selling Stockholders agree that the Shares
represented by the certificates held in custody for him or it under the
Custody Agreement are for the benefit of and coupled with and subject to the
interest hereunder of the Custodian, the Attorneys, the Underwriters, each
other Selling Stockholder and the Company, that the arrangements made by such
Selling Stockholders for such custody and the appointment of the Custodian
and the Attorneys by such Selling Stockholders are irrevocable, and that the
obligations of operation of law, whether by the death, disability, incapacity
or liquidation of any Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder should die, become disabled or
incapacitated or be liquidated or if
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any other such event should occur before the completion of the
transactions pursuant to this Agreement, including the delivery of the Shares
hereunder, certificates for the Shares shall be delivered by the Custodian in
accordance with the terms and conditions of this Agreement and actions taken
by the Attorneys and the Custodian pursuant to the Custody Agreement and the
Power of Attorney shall be as valid as if such death, liquidation, incapacity
or other event had not occurred, regardless of whether or not the Custodian
or the Attorneys, or either of them, shall have received notice thereof.
5. AGREEMENTS OF THE COMPANY AND THE SELLING STOCKHOLDERS. The Company
(as to Sections 5(a) through (m)), and the Selling Stockholders (as to Sections
5(j) and 5(n) through (q)) agree, severally and not jointly, with the several
Underwriters as follows:
(a) The Company will not, either prior to the Effective Date or
thereafter during such period as the Prospectus is required by law to be
delivered in connection with sales of the Shares by a Underwriter or dealer,
file any amendment or supplement to the Registration Statement (including any
Rule 462(b) Registration Statement) or the Prospectus, unless a copy thereof
shall first have been submitted to the Underwriters within a reasonable
period of time prior to the filing thereof and the Underwriters shall not
have objected thereto in good faith.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective, and will notify the Underwriters promptly, and
will confirm such advice in writing, (1) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective, (2) of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose or the threat thereof, (4) of the
happening of any event during the period mentioned in the second sentence of
Section 5(e) that in the judgment of the Company makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the
making of any changes in the Registration Statement or the Prospectus in
order to make the statements therein, in light of the circumstances in which
they are made, not misleading and (5) of receipt by the Company or any
representative or attorney of the Company of any other communication from the
Commission relating to the Company, the Registration Statement, any
preliminary prospectus or the Prospectus. If at any time the Commission shall
issue any order suspending the effectiveness of the Registration Statement,
the Company will make every reasonable effort to obtain the withdrawal of
such order at the earliest possible moment. If the Company has omitted any
information from the Registration Statement pursuant to Rule 430A, the
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Company will use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to said Rule 430A and to
notify the Underwriters promptly of all such filings. If the Company elects
to rely on Rule 462(b), the Company shall file a registration statement with
the Commission in compliance with Rule 462(b) no later than the earlier of
(i) 10:00 p.m. Eastern time on the date hereof and (ii) the time
confirmations are sent or given, as specified by Rule 462(b)(2) under
the Rules and Regulations and shall pay the applicable fees in
accordance with Rule 111 under the Rules and Regulations.
(c) The Company will furnish to the Underwriters, without charge, two
signed copies of the Registration Statement and of any post-effective
amendment thereto, including financial statements and schedules, and all
exhibits thereto (including any document filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus). If applicable,
the copies of the Registration Statement and each amendment thereto furnished
to the Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) On the Effective Date, and for so long as the Underwriters are
required to deliver the Prospectus in connection with the sale of the Shares,
the Company will deliver to each of the Underwriters, without charge, as many
copies of the Prospectus or any amendment or supplement thereto as the
Underwriters may reasonably request. If applicable, the Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T. The Company consents to the use of the Prospectus or any amendment or
supplement thereto by the several Underwriters and by all dealers to whom the
Shares may be sold, both in connection with the offering or sale of the
Shares and for any period of time thereafter during which the Prospectus is
required by law to be delivered in connection therewith. If during such
period of time any event shall occur which in the judgment of the Company or
the Underwriters (on advice of counsel) should be set forth in the Prospectus
in order to make any statement therein, in the light of the circumstances
under which it was made, not misleading, or if it is necessary to supplement
or amend the Prospectus to comply with law, the Company will forthwith
prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each of the Underwriters, without
charge, such number of copies of such supplement or amendment to the
Prospectus as the Underwriters may reasonably request. The Company shall not
file any document under the Exchange Act before the termination
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of the offering of the Shares by the Underwriters if such document
would be deemed to be incorporated by reference into the Prospectus and such
document is not approved by the Underwriters after reasonable notice thereof,
which approval will not be unreasonably withheld or delayed.
(f) Prior to any public offering of the Shares, the Company will
cooperate with the Underwriters and counsel to the Underwriters in connection
with the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriters may
request; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general service of process in any
jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the later of the
Effective Date and the effective date of any Rule 462(b) Registration
Statement, the Company will furnish to the Underwriters 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 will furnish to the Underwriters who may so request a copy
of each annual or other report it shall be required to file with the
Commission.
(h) The Company will make generally available to holders of its
securities as soon as may be practicable, but in no event later than the last
day of the fifteenth full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months
commencing after the Effective Date, and satisfying the provisions of Section
11(a) of the Act (including Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay, or
reimburse if paid by the Underwriters, all costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders
under this Agreement, including but not limited to costs and expenses of or
relating to (1) the preparation, printing and filing of the Registration
Statement and exhibits to it, each preliminary prospectus, the Prospectus and
any amendment or supplement to the Registration Statement or the Prospectus,
(2) the preparation and delivery of certificates representing the Shares, (3)
the printing of this Agreement, any Dealer Agreements, any Underwriters'
Questionnaire, the Custody Agreement and the Power of Attorney, (4)
furnishing (including costs of shipping and mailing) such copies of the
Registration Statement, the Prospectus and any preliminary prospectus, and
all amendments and supplements thereto, as may be requested for use in
connection with the offering and
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sale of the Shares by the Underwriters or by dealers to whom Shares may
be sold, (5) the listing of the Shares on the American Stock Exchange, (6)
any filings required to be made by the Underwriters with the NASD, and the
fees, disbursements and other charges of counsel for the Underwriters in
connection therewith, (7) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 5(f), including the fees, disbursements and
other charges of counsel to the Underwriters in connection therewith, and the
preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (8) counsel to the Company and counsel to the Selling Stockholders
and (9) the transfer agent for the Shares.
(j) If this Agreement shall be terminated by the Company or any Selling
Stockholder pursuant to any of the provisions hereof or thereof (otherwise
than pursuant to Section 9 hereof) or if for any reason the Company or such
Selling Stockholder, respectively, shall be unable to perform its obligations
hereunder or thereunder, the Company or such Selling Stockholder, as the case
may be, will reimburse the several Underwriters for all out-of-pocket
expenses (including the fees, disbursements and other charges of counsel to
the Underwriters) reasonably incurred by them in connection herewith.
(k) The Company will not at any time, directly or indirectly, take any
action intended, or which might reasonably be expected, to cause or result
in, or which will constitute, stabilization of the price of the shares of
Common Stock to facilitate the sale or resale of any of the Shares.
(l) The Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds".
(m) The Company will not, and will cause each of its executive
officers, directors and each beneficial owner (known by the Company on the
basis of Forms on Schedule 13-G filed with the Commission) to hold more than
5% of the outstanding shares of Common Stock to enter into agreements with
the Underwriters in the form set forth in Exhibit B to the effect that they
will not, for a period of 90 days after the Effective Date, without the prior
written consent of the Underwriters, (1) offer to sell, sell, contract to
sell or otherwise dispose of any shares of Common Stock or rights to acquire
such shares (other than pursuant to employee stock option plans or in
connection with other employee incentive compensation arrangements and
pursuant to bona fide gifts to persons who agree in writing with the
Underwriters to be bound by the provisions of this Section 5(m)) or (2) enter
into any swap or similar agreement that transfers, in whole or in part, any
of the economic consequences of the ownership of the Common Stock, whether
any such transaction described in clause (1)
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or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of Common Stock by
the Selling Stockholders contemplated hereby or (b) transfers of Common Stock
to the Company. Notwithstanding the foregoing, if such executive officer,
director or beneficial owner is an individual, he or she may transfer Common
Stock either during his or her lifetime or on death by gift, will or
intestacy to his or her immediate family or to a trust the beneficiaries of
which are exclusively such executive officer, director or beneficial owner
and/or a member or members of his or her immediate family; provided, however,
that in any such case it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving and
holding the Common Stock subject to the provisions of the agreement set forth
in Exhibit B, and there shall be no further transfer of such Common Stock
except in accordance therewith.
(n) The Selling Stockholders will not, for a period of 90 days after
the Effective Date, without the prior written consent of the Underwriters,
(1) offer to sell, sell, contract to sell or otherwise dispose of any shares
of Common Stock or rights to acquire such shares, other than pursuant to bona
fide gifts to persons who agree in writing with the Underwriters to be bound
by the provisions of this Section 5(n) or, to the extent applicable, pursuant
to employee stock option plans or in connection with other employee incentive
compensation arrangements or (2) enter into any swap or similar agreement
that transfers, in whole or in part, any of the economic consequences of the
ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, other than (a) the sale of Common
Stock by the Selling Stockholders contemplated hereby or (b) transfers of
Common Stock to the Company. Notwithstanding the foregoing, if a Selling
Stockholder is an individual, he or she may transfer Common Stock either
during his or her lifetime or on death by gift, will or intestacy to his or
her immediate family or to a trust the beneficiaries of which are exclusively
such Selling Stockholder and/or a member or members of his or her immediate
family; provided, however, that in any such case it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the Common Stock subject to the
provisions of the agreement set forth in Exhibit B, and there shall be no
further transfer of such Common Stock except in accordance therewith.
(o) The Selling Stockholders will not, without the prior written
consent of the Underwriters, make any bid for or purchase any shares of
Common Stock during the period during which a Prospectus is required to be
delivered by the Underwriters.
(p) As soon as any Selling Stockholder is advised thereof, such Selling
Stockholder will advise the Underwriters and confirm such advice in writing
(1) of
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receipt by such Selling Stockholder, or by any representative of such
Selling Stockholder, of any communication from the Commission relating to the
Registration Statement, the Prospectus or any preliminary prospectus, or any
notice or order of the Commission relating to the Company or any of the
Selling Stockholders in connection with the transactions contemplated by this
Agreement and (2) of the happening of any event during the period from and
after the Effective Date that in the judgment of such Selling Stockholder
makes any statement made in the Registration Statement or the Prospectus
untrue or that requires the making of any changes in the Registration
Statement or the Prospectus in order to make the statements therein, in light
of the circumstances in which they were made, not misleading.
(q) The Selling Stockholders will deliver to the Underwriters prior to
or on the Effective Date a properly completed and executed United States
Treasury Department Form W-9 (or other applicable form or statement specified
by Treasury Department regulations in lieu thereof).
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In addition to
the execution and delivery of the Price Determination Agreement, the
obligations of each Underwriter hereunder are subject to the following
conditions:
(a) Notification that the Registration Statement has become effective
shall be received by the Underwriters not later than 5:00 p.m., New York City
time, on the date of this Agreement or at such later date and time as shall
be consented to in writing by the Underwriters and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations to have been made prior
to the Closing Date shall have been made.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall be
pending or threatened by the Commission, (ii) no order suspending the
effectiveness of the Registration Statement or the qualification or
registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such
authorities shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iv) after the date hereof, no
amendment or supplement to the Registration Statement or the Prospectus shall
have been filed unless a copy thereof was first submitted to the Underwriters
and the Underwriters did not object thereto in good faith, and the
Underwriters shall have received certificates, dated the Closing Date, the
Option Closing Date and signed by the Chairman of the Board of Directors of
the Company and the Vice President-Finance of the Company (who may, as to
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proceedings threatened or contemplated, rely upon the best of their
information and belief), to the effect of clauses (i), (ii) and (iii).
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company, whether or not arising from transactions in the
ordinary course of business, in each case other than as set forth in or
contemplated by the Registration Statement and the Prospectus and (ii) the
Company shall not have sustained any material loss or interference with its
business or properties from fire, explosion, flood or other casualty, whether
or not covered by insurance, or from any labor dispute or any court or
legislative or other governmental action, order or decree, which is not set
forth in the Registration Statement and the Prospectus, if in the judgment of
the Underwriters any such development makes it impracticable or inadvisable
to consummate the sale and delivery of the Shares by the Underwriters at the
initial public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been any
litigation or other proceeding instituted against the Company or any of its
officers or directors in their capacities as such, before or by any Federal,
state or local court, commission, regulatory body, administrative agency or
other governmental body, domestic or foreign, in which litigation or
proceeding an unfavorable ruling, decision or finding would materially and
adversely affect the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company.
(e) Each of the representations and warranties of the Company and the
Selling Stockholders contained herein shall be true and correct in all
material respects at the Closing Date, as if made at the Closing Date and,
with respect to the Option Shares, at the Option Closing Date, as if made at
the Option Closing Date and all covenants and agreements contained herein to
be performed on the part of the Company and the Selling Stockholders and all
conditions contained herein to be fulfilled or complied with by the Company
and the Selling Stockholders at or prior to the Closing Date and, with
respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled and complied with.
(f) The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters from
Xxxxx, Xxxxxxx & Xxxxxxxxx, counsel to the Company, to the effect set forth
in Exhibit C, and from Xxxxx, Xxxxxxx & Xxxxxxxxx, counsel to the Selling
Stockholders, to the effect set forth in Exhibit D.
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(g) The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date,
satisfactory in form and substance to counsel for the Underwriters from
Xxxxxx & Xxxxxxx, special patent counsel to the Company, to the effect set
forth in Exhibit E-1 and from Xxxxxxxx & Sunstein, special patent counsel to
the Company, to the effect set forth in from Exhibit E-2.
(h) The Underwriters shall have received an opinion, dated the Closing
Date the Option Closing Date, from Shearman & Sterling, counsel to the
Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Underwriters.
(i) Concurrently with the execution and delivery of this Agreement, or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus,
the Accountants shall have furnished to the Underwriters a letter, dated the
date of its delivery, addressed to the Underwriters and in form and substance
satisfactory to the Underwriters, confirming that they are independent
accountants with respect to the Company as required by the Act and the Rules
and Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement or incorporated
by reference therein. At the Closing Date and, as to the Option Shares, the
Option Closing Date, the Accountants shall have furnished to the Underwriters
a letter, dated the date of its delivery, which shall confirm, on the basis
of a review in accordance with the procedures set forth in the letter from
the Accountants, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Closing Date,
the Option Closing Date, as the case may be, which would require any change
in their letter dated the date hereof if it were required to be dated and
delivered at the Closing Date and the Option Closing Date.
(j) Concurrently with the execution and delivery of this Agreement or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus,
and at the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Underwriters an accurate certificate,
dated the date of its delivery, signed by each of the Chairman of the Board
of Directors and the Vice President-Finance of the Company, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement and the Prospectus including any documents filed
under the Exchange Act and deemed to be incorporated by reference into
the Prospectus) and (A) as of the date of such certificate, such
documents are true
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and correct in all material respects and do not omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not untrue or misleading and (B) in the
case of the certificate delivered at the Closing Date, the Option
Closing Date, since the Effective Date or, if the Company elects to
rely on Rule 430A, since the date of the Prospectus, no event has
occurred as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein not untrue or
misleading in any material respect and there has been no document
required to be filed under the Exchange Act and the Exchange Act Rules
and Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not been so
filed.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all material
respects.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the date of such certificate has been
duly, timely and fully performed and each condition herein required to
be complied with by the Company on or prior to the delivery of such
certificate has been duly, timely and fully complied with.
(k) Concurrently with the execution and delivery of this Agreement or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus,
and at the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Underwriters an accurate certificate,
dated the date of its delivery, signed by the Vice President - Regulatory
Affairs or the President of the Company, in form satisfactory to the
Underwriters, to the effect that such officer has reviewed the statements as
to regulatory matters, the state of clinical trials and the state of FDA
filings and review contained in the sections of the Prospectus entitled
"Business -- Products Under Development", and "-- Government Regulation and
Reimbursement", and such statements are accurate and fairly present the
information required to be shown.
(l) Concurrently with the execution and delivery of this Agreement or,
if the Company elects to rely on Rule 430A, on the date of the Prospectus,
and at the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall have been furnished to the Underwriters an accurate
certificate, dated the date of its delivery, signed by the Attorneys on
behalf of each of the Selling Stockholders, in form and substance
satisfactory to the Underwriters, to the effect that the representations and
warranties of each of the Selling Stockholders contained herein are true and
correct in all material respects on and as of the date of such certificate as
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if made on and as of the date of such certificate, and each of the covenants
and conditions required herein to be performed or complied with by the
Selling Stockholders on or prior to the date of such certificate has been
duly, timely and fully performed or complied with.
(m) On or prior to the Closing Date, the Underwriters shall have
received the executed agreements referred to in Section 5(n).
(n) The Shares shall be qualified for sale in such jurisdictions as the
Underwriters may reasonably request, and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing
Date or the Option Closing Date.
(o) Prior to the Closing Date, the Shares shall have been duly
authorized for listing by the American Stock Exchange upon official notice of
issuance.
(p) The Company and the Selling Stockholders shall have furnished to
the Underwriters such certificates, in addition to those specifically
mentioned herein, as the Underwriters may have reasonably requested as to the
accuracy and completeness at the Closing Date and the Option Closing Date of
any statement in the Registration Statement or the Prospectus or any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus, as to the accuracy at the Closing Date, the
Option Closing Date of the representations and warranties of the Company and
the Selling Stockholders herein, as to the performance by the Company and the
Selling Stockholders of its and their respective obligations hereunder, or as
to the fulfillment of the conditions concurrent and precedent to the
obligations hereunder of the Underwriters.
7. INDEMNIFICATION.
---------------
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person, if any, who controls each Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably 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 Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on 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 or supplement to the Registration Statement or the Prospectus or in
any documents filed under
26
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the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements
in it not misleading provided that, without limitation of the Company's
obligations set forth above (except that the indemnities hereunder shall not
be indemnified more than once for the same damages), each Selling
Stockholder, severally and not jointly, shall also so indemnify and hold
harmless (subject to the limitation described in Section 7(e) below) to the
extent, but only to the extent, that such untrue statement or omission or
alleged untrue statement or alleged omission was made in reliance upon and in
conformity with any representation, warranty, covenant or other agreement
made by or on behalf of such Selling Stockholder contained herein or any
information relating to such Selling Stockholder furnished in writing to the
Company by or on behalf of such Selling Stockholder for use in preparation of
the Registration Statement; provided further that the foregoing indemnity
with respect to any untrue statement contained in or omission from a
preliminary prospectus shall not inure to the benefit of any Underwriter (or
any person controlling such Underwriter) from whom the person asserting any
such loss, claim, liability, expense or damage purchased any of the Shares
that are the subject thereof if the Company shall sustain the burden of
proving that such person was not sent or given a copy of the Prospectus (or
the Prospectus as amended or supplemented, in each case exclusive of the
documents from which information is incorporated by reference) at or prior to
the written confirmation of the sale of such Shares to such person and the
untrue statement contained in or omission from such preliminary prospectus
was corrected in the Prospectus (or the Prospectus as amended or
supplemented) if the Company has furnished prior to such confirmation
sufficient copies thereof to such Underwriter; provided further that none of
the Company or the Selling Stockholders will be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by an Underwriter and is based on
an untrue statement or omission or alleged untrue statement or omission made
in reliance on and in conformity with information relating to any Underwriter
furnished in writing to the Company by the Underwriters expressly for
inclusion in the Registration Statement, the preliminary prospectus or the
Prospectus. For all purposes of this Agreement, the statements in the third
paragraph set forth under the heading "Underwriting" in the Prospectus
constitute the only information relating to any Underwriter furnished in
writing to the Company by the Underwriters expressly for inclusion in the
Registration Statement, the preliminary prospectus or the Prospectus. This
indemnity agreement will be in addition to any liability that the Company or
any Selling Stockholder might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, the
Selling Stockholders, each person, if any, who controls the Company or the
Selling Stockholders within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, each director of the Company and each officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company and the Selling Stockholders to each
Underwriter, but only insofar as losses, claims, liabilities, expenses or
27
27
damages arise out of or are based on any untrue statement or omission
or alleged untrue statement or omission made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to the
Company by the Underwriters expressly for use in the Registration Statement,
the preliminary prospectus or the Prospectus. This indemnity will be in
addition to any liability that each Underwriter might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 7 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 7, notify each such
indemnifying party of the commencement of such action, enclosing a copy of
all papers served, but the omission so to notify such indemnifying party will
not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7 unless, and only to the
extent that, such omission results in material prejudice to the indemnifying
party. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party
will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense
of the action, with counsel satisfactory to the indemnified party, and after
notice from the indemnifying party to the indemnified party of its election
to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party
will have the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel will be at the expense of
such indemnified party except to the extent that (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based
on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based on advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of
which cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is understood
that the indemnifying party or parties shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred.
An indemnifying party will not be liable
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for any settlement of any action or claim effected without its written
consent (which consent will not be unreasonably withheld).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but
for any reason is held to be unavailable to an indemnified party, each
indemnifying party will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Company or the Selling Stockholders from persons
other than the Underwriters, such as persons who control the Company or the
Selling Stockholders within the meaning of the Act, officers of the Company
who signed the Registration Statement and directors of the Company, who also
may be liable for contribution) to which such indemnified party may be
subject in such proportion (subject, in the case of the Selling Stockholders,
to the limitation described in Section 7(e) below) as shall be appropriate to
reflect the relative benefits received by the Company, the Selling
Stockholders and the Underwriters. The relative benefits received by the
Company, the Selling Stockholders and the Underwriters shall be deemed to be
in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and each Selling
Stockholder and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the United States Prospectus, bear to the aggregate public offering price of
the Shares. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion (subject, in the case of the Selling
Stockholders, to the limitation described in Section 7(e) below) as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, each Selling
Stockholder and the Underwriters with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action
in respect thereof, as well as any other relevant equitable considerations
with respect to such offering. Such relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholders or the
Underwriters, the failure of any Underwriter to deliver a copy of the
Prospectus at or prior to the written confirmation of the sale of Shares as
described in Section 7(a) above, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be 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 into account the equitable
considerations referred to herein. The Company hereby agrees to pay to each
Underwriter the difference between (i) any amount that would have been due to
such Underwriter by any Selling
29
29
Stockholder pursuant to the contribution provisions of this Section
7(d) without giving effect to the provisions of Section 7(e) below and (ii)
any amount that would be due to such Underwriter by any Selling Stockholder
pursuant to the contribution provisions of this Section 7(d) after giving
effect to the provisions of Section 7(e) below. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 7(d)
shall be deemed to include, for purposes of this Section 7(d), any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts received by it,
and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 7(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 7(d), any person who controls a party to
this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the
Company, subject in each case to the revisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have under this Section 7(d). No party will be
liable for contribution with respect to any action or claim settled without
its written consent (which consent will not be unreasonably withheld).
(e) Notwithstanding the foregoing provisions of this Section 7, in no
event shall the liability of any Selling Stockholder for indemnification or
contribution under this Section 7 exceed the lesser of (x) that percentage of
the total amount of such losses, claims, liabilities, expenses or damages to
be indemnified against or contributed to under this Section 7 which equals
the percentage obtained by dividing the total number of Shares sold by such
Selling Stockholder hereunder by the total number of Shares sold hereunder,
or (y) the proceeds received by such Selling Stockholder from the
Underwriters hereunder.
(f) The indemnity and contribution agreements contained in this Section
7 and the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of
the Underwriters, (ii) acceptance of any of the Shares and payment therefor
or (iii) any termination of this Agreement.
8. TERMINATION. The obligations of the several Underwriters under this
Agreement may be terminated at any time prior to the Closing Date (or, with
respect to the
30
30
Option Shares, on or prior to the Option Closing Date), by notice to
the Company and the Attorneys from the Underwriters, without liability on the
part of any Underwriter to the Company or to any Selling Stockholders, if,
prior to delivery and payment for the Firm Shares (or the Option Shares, as the
case may be), in the sole judgment of the Underwriters, (i) trading in any of
the equity securities of the Company shall have been suspended by the
Commission or the American Stock Exchange, (ii) trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
or maximum prices shall have been generally established on such exchange, or
additional material governmental restrictions, not in force on the date of this
Agreement, shall have been imposed upon trading in securities generally by such
exchange or by order of the Commission or any court or other governmental
authority, (iii) a general banking moratorium shall have been declared by
either Federal or New York State authorities or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any
outbreak or material escalation of hostilities or declaration by the United
States of a national emergency or war or other calamity or crisis shall have
occurred, the effect of any of which is such as to make it, in the sole
judgment of the Underwriters, impracticable to market the Shares on the terms
and in the manner contemplated by the Prospectus.
9. SUBSTITUTION OF UNDERWRITERS. If any one or more of the
Underwriters shall fail or refuse to purchase any of the Firm Shares which it
or they have agreed to purchase hereunder, and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase is not more than one-tenth of the aggregate number of Firm
Shares, the other Underwriters shall be obligated, severally, to purchase the
Firm Shares which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase, in the proportions which the number of Firm Shares
which they have respectively agreed to purchase pursuant to Section 1 bear to
the aggregate number of Firm Shares which all such non-defaulting Underwriters
have so agreed to purchase, or in such other proportions as the Underwriters
may specify; provided that in no event shall the maximum number of Firm Shares
which any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by more than one-ninth of the number of
Firm Shares agreed to be purchased by such Underwriter without the prior
written consent of such Underwriter. If any Underwriter or Underwriters shall
fail or refuse to purchase any Firm Shares and the aggregate number of Firm
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase exceeds one-tenth of the aggregate number of the Firm
Shares and arrangements satisfactory to the Underwriters, the Company and the
Attorneys for the purchase of such Firm Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter, the Company or any Selling Stockholder for
the purchase or sale of any Shares under this Agreement. In any such case,
either the Underwriters or the Company and the Attorneys shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required
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31
changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken
pursuant to this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. MISCELLANEOUS. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, 000
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: President, (b) if to
any Selling Stockholder, at the office of the Company, 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention: Messrs. Xxxxxx Xxxxxxxxx or Xxxxxxx
Xxxxxx, or (c) if to the Underwriters, to the offices of PaineWebber
Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department. Any such notice shall be effective only upon
receipt. Any notice under Section 8 or 9 may be made by telex or telephone, but
if so made shall be subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and the Selling Stockholders and of the
controlling persons, directors and officers referred to in Section 7, 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"
as used in this Agreement shall not include a purchaser of Shares from any of
the several Underwriters.
Any action required or permitted to be taken by the Underwriters under
this Agreement may be taken by them jointly or by PaineWebber Incorporated.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
The Company, the Selling Stockholders and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
ADVANCED MAGNETICS, INC.
By:
-------------------------------
Chairman of the
Board of Directors,
President and Treasurer
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II
ATTACHED HERETO
The Attorneys
By:
-------------------------------
Confirmed as of the date first
above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXX XXXXXXX INCORPORATED
PAINEWEBBER INCORPORATED
By
--------------------------------
Title:
33
SCHEDULE I
UNDERWRITERS
Number of
Firm Shares
Name to be Purchased
---- ---------------
PaineWebber Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
Xxxxxxxxxxx & Co., Inc.
Xxxxxx Xxxxxxx Incorporated
---------
Total 1,350,000
=========
34
SCHEDULE II
SELLING STOCKHOLDERS
Name of Selling Total Number of Firm Shares
Stockholders to be Sold by Selling Stockholders
--------------- ----------------------------------
Xxxxxx Xxxxxxxxx 50,000
Xxxxxxx Xxxxxx Xxxxxxxxx 62,017
Xxx Xxxxxxxxx 24,483
Xxxxx X. Xxxxxx 3,000
Xxxxxx X. Xxxxx 3,000
Xxxxxx Xxxxxxxxx 27,500
Xxxxxx X. Xxxxxx 25,000
Xxxxxx Xxxxxxxxx 15,000
Xxxx Xxxxxxxxx 15,000
Guerbet, S.A. 25,000
-------
Total 250,000
=======
35
EXHIBIT A
ADVANCED MAGNETICS, INC.
------------------------
PRICE DETERMINATION AGREEMENT
-----------------------------
April , 1996
--
PAINEWEBBER INCORPORATED
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXX XXXXXXX INCORPORATED
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement, dated April , 1996 (the
"Underwriting Agreement"), among Advanced Magnetics, Inc., a Delaware
corporation (the "Company"), the persons named in Schedule II thereto (the
"Selling Stockholders"), and PaineWebber Incorporated, Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, Xxxxxxxxxxx & Co., Inc. and Xxxxxx Xxxxxxx
Incorporated (collectively, the "Underwriters"). The Underwriting Agreement
provides for (a) the purchase by the Underwriters from the Company and the
Selling Stockholders, subject to the terms and conditions set forth therein, of
an aggregate of 1,350,000 shares (the "Firm Shares") of the Company's common
stock, par value $.0l per share (the "Common Stock"), and (b) the purchase by
the Underwriters from the Company, pursuant to the option granted by the Company
to the Underwriters, subject to the terms and conditions set forth therein, of
up to an aggregate of 202,500 additional shares of Common Stock (the "Option
Shares"). The Firm Shares and the Option Shares are referred to collectively
herein as the "Shares". This Agreement is the Price Determination Agreement
referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Underwriters as follows:
1. The initial public offering price per share for the Shares shall be
$________.
36
A-2
2. The Purchase price per share for the Shares to be paid by the several
Underwriters shall be $ _______, representing an amount equal to the initial
public offering price set forth above, less $_______ per share.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
The Selling Stockholders represent and warrant to each of the
Underwriters that the representations and warranties of the Selling Stockholders
set forth in Section 4 of the Underwriting Agreement are accurate as though
expressly made at and as of the date hereof.
As contemplated by the Underwriting Agreement, attached as Schedule I is
a complete list of the several Underwriters, which shall be a part of this
Agreement and the Underwriting Agreement.
THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of the
Agreement among the Underwriters, the Company and the Selling Stockholders,
please sign and return to the Company a counterpart hereof, whereupon this
instrument along with all counterparts and together with the Underwriting
Agreement shall be a binding agreement among the Underwriters, the Company and
the Selling Stockholders in accordance with its terms and the terms of the
Underwriting Agreement.
37
A-3
Very truly yours,
ADVANCED MAGNETICS, INC.
By:
------------------------------
Chairman of the
Board of Directors,
President and Treasurer
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II TO THE
UNDERWRITING AGREEMENT
The Attorneys
By:
------------------------------
Confirmed as of the date
first above mentioned:
PAINEWEBBER INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXX XXXXXXX INCORPORATED
PAINEWEBBER INCORPORATED
By:
-------------------------------
Title:
38
EXHIBIT B
Form of Lock-Up Agreement
--------------------------
, 1996
-----------
PAINEWEBBER INCORPORATED
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXXXXXX CO., INC.
XXXXXX XXXXXXX INCORPORATED
c/o PaineWebber Incorporated
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In consideration of the agreement of the several Underwriters, pursuant
to which PaineWebber Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and Xxxxxxxxxxx Co., Inc. (collectively, the "Underwriters") intend
to underwrite a proposed public offering (the "Offering") of Common Stock, par
value $.0l per share (the "Common Stock"), of Advanced Magnetics, Inc., a
Delaware corporation, as contemplated by a registration statement (the
"Registration Statement") with respect to such shares to be filed with the
Securities and Exchange Commission on Form S-3, the undersigned hereby agrees
that the undersigned will not for a period of 90 days after the effective date
of the registration statement, without the prior written consent of PaineWebber
Incorporated, (1) offer to sell, sell, contract to sell or otherwise dispose of
any shares of Common Stock or rights to acquire shares of Common Stock (other
than pursuant to employee stock option plans or in connection with other
employee incentive compensation arrangements)* or (2) enter into any swap or
similar agreement that transfers, in whole or in part, any of the economic
consequences of the ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, other than (a) the sale of
Common Stock by the Selling Stockholders contemplated by the Registration
Statement or (b) transfers of Common Stock to the Company.
Notwithstanding the foregoing, if the undersigned is an individual, he
or she may transfer Common Stock either during his or her lifetime or on death
by gift, will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided, however, that in any such case
it shall be a condition to the transfer that the transferee execute an agreement
stating that the transferee is receiving and holding the Common Stock subject
to
------------------
* Insert if this letter agreement will be signed by an employee or director
of the Company.
39
B-2
the provisions of this Agreement, and there shall be no further transfer of
such Common Stock except in accordance with this Agreement.
Very truly yours,
By:
---------------------------
Print
Name:
-------------------------
40
EXHIBIT C
Form of Opinion of
Counsel to the Company
----------------------
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, is duly licensed or
qualified to do business in the Commonwealth of Massachusetts and the State of
New Jersey, has full corporate power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and the
Prospectus and has all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, except (a) where a failure to have such license,
permit, consent, order, approval or authorization would not have a material
adverse effect on the Company's financial condition or results of operations and
(b) regulatory approvals relating to the Company's products, as to which we have
not been requested to comment.
2. All of the outstanding shares of Common Stock have been, and the
Shares, when paid for by the Underwriters in accordance with the terms of the
Agreement, will be, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar right imposed
by the Certificate of Incorporation or By-laws of the Company or, to our
knowledge, any agreement to which the Company is a party.
3. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, issuance, transfer, sale or delivery of the
Shares by the Company, in connection with the execution, delivery and
performance of the Agreement by the Company or in connection with the taking by
the Company of any action contemplated thereby, except (i) any order of a court
of appropriate jurisdiction required in the context of the [second] undertaking
of the Company contained under the caption "Undertakings" in Part II of the
Registration Statement, and (ii) such as have been obtained under the Act and
the Rules and Regulations and such as may be required by applicable state or
foreign securities or Blue Sky laws and the by-laws and rules of the NASD in
connection with the purchase and distribution by the Underwriters of the Shares
to be sold by the Company.
4. The authorized and outstanding capital stock of the Company as of the
effective date of the Registration Statement is as set forth in the Registration
Statement and the Prospectus. The description of the Common Stock contained in
the Prospectus conforms to the terms thereof contained in the Company's
Certificate of Incorporation.
5. The Registration Statement, any Rule 462(b) Registration Statement
and the Prospectus comply as to form in all material respects with the
requirements of the Act and
41
C-2
the Rules and Regulations, and the documents incorporated by reference
in the Registration Statement and Prospectus complied in all material respects
as to form with the Exchange Act and the Exchange Act Rules and Regulations at
the time they were filed (except that we express no opinion as to financial
statements, schedules and other financial and statistical data contained in the
Registration Statement or the Prospectus or incorporated by reference therein).
6. The Registration Statement has become effective under the Act and, to
the best of our knowledge, no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or is threatened, pending or contemplated.
7. The statements made in the sections of the Registration Statement and
the Prospectus entitled "Description of Capital Stock", to the extent that they
constitute matters of law or legal conclusions, have been reviewed by us and
fairly present the information disclosed therein. We have also reviewed all
contracts, instruments or other documents to which the Company is a party
referred to in the Registration Statement and the Prospectus and such contracts,
instruments or other documents (except contracts, instruments or other documents
referred to under the captions "Business -- Patents and Trade Secrets" and "--
Government Regulation" and except patents, patent applications, trademarks,
trademark applications, Investigational New Drug ("IND") applications, New Drug
applications ("NDA") and other foreign and domestic regulatory filings relating
to the Company's products, as to which we have not been requested to comment)
are fairly summarized or disclosed therein. The Certificate of Incorporation and
By-laws of the Company, as amended, and any material indenture, mortgage, deed
of trust, voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other agreement
or instrument known to us to which the Company is a party or by which it or any
of its properties is bound or affected listed as an exhibit to the Registration
Statement or to the documents incorporated by reference in the Registration
Statement (collectively, the "Material Agreements") have been filed as required
as exhibits thereto with the Commission and, after due inquiry, we do not know
of any contracts, instruments or other documents required to be summarized or
disclosed in the Registration Statement or the Prospectus or filed or required
to be filed under the Exchange Act if upon such filing they would be
incorporated, in whole or in part, by reference therein which have not been so
summarized or disclosed or filed.
8. All descriptions in the Prospectus of statutes, regulations or legal
or governmental proceedings to which the Company is a party (except the
statements contained under the captions "Business -- Patents and Trade Secrets"
and "-- Government Regulation and Reimbursement", and descriptions of
proceedings for regulatory approvals relating to the Company's products, as to
which we have not been requested to comment) are accurate and fairly present the
information required to be shown.
42
C-3
9. The Company has full corporate power and authority to enter into the
Agreement, and the Agreement has been duly authorized, executed and delivered by
the Company.
10. The execution and delivery of the Agreement by the Company, the
consummation by the Company of the transactions therein contemplated and the
compliance by the Company with the terms of the Agreement do not and will not
result in the creation or imposition of any lien, charge or encumbrance upon any
of the assets of the Company pursuant to the terms or provisions of, or result
in a breach or violation of any of the terms or provisions of, or constitute a
default or result in the acceleration of any obligation under, any Material
Agreement or any judgment, ruling, decree, order, statute, rule or regulation of
any court or other governmental agency or body applicable to the business or
properties of the Company (except that we express no opinion as to the
securities or Blue Sky laws of any jurisdiction).
11. Based solely on inquiry of the Company, we know of no actions, suits
or proceedings pending or threatened against the Company or its properties, or
any of its respective officers in their capacities as such, before or by any
federal, state or foreign court, commission, regulatory body, administrative
agency or other governmental body, wherein an unfavorable ruling, decision or
finding might materially adversely affect the Company or its business,
properties, business prospects, condition (financial or otherwise) or results of
operations, except as set forth in or contemplated by the Registration Statement
and the Prospectus.
12. The Company is not an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company", as
such terms are defined in the Investment Company Act of 1940, as amended.
13. The Shares have been duly authorized for listing by the American
Stock Exchange upon official notice of issuance.
We have participated in the preparation of the Registration Statement
and the Prospectus, and from time to time have had discussions with and made
inquiry of directors, officers and employees of the Company, and Coopers &
Xxxxxxx, the independent auditors who examined certain of the financial
statements of the Company included in the Registration Statement and the
Prospectus. Based thereupon, no facts have come to our attention which would
cause us to believe that, as of the Effective Date, the Registration Statement,
or any amendment thereto or any Rule 462(b) Registration Statement as of its
effective date, contained or contains any untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that any Prospectus
or any amendment or supplement thereto, including any documents incorporated by
reference into the Prospectus, as of the date of such Prospectus,
43
C-4
the date of any such amended or supplemented Prospectus, the Closing
Date and the Option 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 in which they
were made, not misleading (except that we express no opinion as to information
relating to patents or as to financial statements, schedules and other financial
or statistical data contained in the Registration Statement or the Prospectus or
incorporated by reference therein). We, however, have not independently verified
and are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness (except as set forth in paragraph (7) above)
of the information contained in the Registration Statement and the Prospectus.
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel reasonably acceptable to
Underwriters' counsel as to matters governed by the laws of jurisdictions other
than the United States and the States of Massachusetts and Delaware, and as to
matters of fact, upon certificates of officers of the Company, the Selling
Stockholders and of government officials; provided that such counsel shall state
that, in such counsel's opinion, such counsel and the Underwriters are justified
in relying on such opinions of other counsel. Copies of all such opinions and
certificates shall be furnished to counsel to the Underwriters on the Closing
Date. Such counsel may state that such counsel is not passing on any matters
relating to patents or trademarks.
44
EXHIBIT D
Form of Opinion of Counsel to the
Selling Stockholders
-------------------
1. Each of the Selling Stockholders (such Selling Stockholders are
referred to in this opinion as the "Selling Stockholders") has full legal power
and authority to enter into the Agreement, the Custody Agreement and the Power
of Attorney and to sell, transfer and to deliver the Shares to be sold by it
pursuant to the Agreement, the Custody Agreement and the Power of Attorney. All
authorizations and consents necessary for the execution and delivery of the
Agreement, the Custody Agreement and the Power of Attorney on behalf of each of
the Selling Stockholders have been given. The delivery of certificates for the
Shares on behalf of the Selling Stockholders pursuant to the terms of the
Agreement and payment therefor by the Underwriters will transfer good and
marketable title to the Shares to the several Underwriters purchasing the
Shares, free and clear of all liens, encumbrances and claims whatsoever,
assuming that the Underwriters have no notice of any adverse claim.
2. Each of the Agreement, the Custody Agreement and the Power of
Attorney has been duly authorized, executed and delivered by or on behalf of
each of the Selling Stockholders. The Custody Agreements and the Powers of
Attorney constitute legal, valid and binding obligations of the respective
Selling Stockholders party thereto, enforceable against such Selling
Stockholders in accordance with their terms, subject to applicable bankruptcy,
insolvency, moratorium or similar laws affecting the rights and remedies of
creditors generally and also to the extent that the availability of the remedy
of specific enforcement or of injunctive relief is subject to the discretion of
the court before which any proceeding therefor may be brought.
3. No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required in
connection with the authorization, transfer, sale or delivery of the Shares by
or on behalf of the Selling Stockholders, in connection with the execution,
delivery and performance of the Agreement, the Custody Agreement and the Power
of Attorney by or on behalf of the Selling Stockholders or in connection with
the taking by or on behalf of the Selling Stockholders of any action
contemplated thereby, except (i) any order of a court of appropriate
jurisdiction required in the context of the [second] undertaking of the Company
contained under the caption "Undertakings" in Part II of the Registration
Statement, and (ii) such as have been obtained under the Act or the Rules and
Regulations and such as may be required by applicable state or foreign
securities or Blue Sky laws and the by-laws and rules of the NASD in connection
with the purchase and distribution by the Underwriters of the Shares to be sold
by the Selling Stockholders.
45
D-2
4. The execution and delivery of the Agreement, the Custody Agreement
and the Power of Attorney by the Selling Stockholders, the consummation by the
Selling Stockholders of the transactions contemplated therein and the compliance
by the Selling Stockholders with the terms thereof do not (a) violate any
statute, judgment, ruling, decree, order, rule or regulation of any court or
other governmental agency or body applicable to any Selling Stockholders (except
that we express no opinion in this paragraph as to the securities or Blue Sky
laws of any jurisdiction) or (b) result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Selling Stockholders
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or constitute a default under or result in
the acceleration of any obligation under, any material agreement or instrument
to which any Selling Stockholder is a party or by which it or any of its
properties is bound or affected and known to us (based solely on inquiry of the
Selling Stockholders).
5. There are no transfer or similar taxes payable under the laws of the
Commonwealth of Massachusetts in connection with the sale and delivery of the
Shares by the Selling Stockholders to the several Underwriters.
In rendering the foregoing opinion, counsel may rely, to the extent they
deem such reliance proper, on the opinions (in form and substance reasonably
satisfactory to Underwriters' counsel) of other counsel that are representing
the Selling Stockholders or reasonably acceptable to Underwriters' counsel as to
matters governed by the laws of jurisdictions other than the United States, the
Commonwealth of Massachusetts and the State of Delaware, and, as to matters of
fact, upon certificates of the Selling Stockholders and of government officials;
provided that such counsel shall state that, in such counsel's opinion, such
counsel and the Underwriters are justified in relying on such opinions of other
counsel. Copies of all such opinions and certificates shall be furnished to
counsel to the Underwriters on the Closing Date. Such counsel may state that
such counsel is not passing on any matters relating to patents or trademarks.
46
EXHIBIT E-1
Form of Opinion
of Xxxxxx & Xxxxxxx
--------------------
1. To the best of our knowledge, the United States patents and
applications referenced in the Registration Statement or Prospectus as being
owned by the Company and listed on Schedule A are assigned to the Company.
2. To the best of our knowledge, except as otherwise described in the
Registration Statement and Prospectus, the Company has not received any notice
challenging the validity or enforceability of any of the United States patents
referenced in the Registration Statement or Prospectus as being owned by the
Company and listed on Schedule A, and we are not aware of any facts which would
form a reasonable basis for any such challenge.
3. To the best of our knowledge, no third party has any rights to the
United States patents or applications referenced in the Registration Statement
or Prospectus as being owned by the Company and listed on Schedule A.
4. To the best of our knowledge, except as otherwise described in the
Registration Statement and Prospectus, no claims have been asserted against the
Company relating to the potential infringement of, or conflict with, any
patents, trademarks, copyrights, trade secrets, or proprietary rights of others.
5. To the best of our knowledge, except as otherwise described in the
Registration Statement and Prospectus, there are no material legal or
governmental proceedings, pending or threatened, with respect to any United
States patent referenced in the Registration Statement or Prospectus as being
owned by the Company and listed on Schedule A.
6. To the best of our knowledge, the statements in Registration
Statement and the Prospectus relating to United States patent matters under the
headings RISK FACTORS, Uncertainty Regarding Patent Rights, BUSINESS, Patents
and Trade Secrets, and other references in the Registration Statement and
Prospectus to United States patent matters, insofar as such statements
constitute a summary of legal matters, documents, or proceedings relating to the
patents and applications listed in Schedule A, are accurate and present fairly
the information purported to be shown.
7. To the best of our knowledge, the statements in the Registration
Statement and the Prospectus relating to United States patent matters under the
headings RISK FACTORS, Uncertainty Regarding Patent Rights, BUSINESS, Patents
and Trade Secrets, and other references in the Registration Statement and
Prospectus to United States patent matters,
47
E-1-2
insofar as such statements relate to the patents and applications listed
in Schedule A, do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
48
EXHIBIT E-2
Form of Opinion
Xxxxxxxx & Sunstein
-------------------
1. The Company has clear title to those patents and patent applications
handled by us;
2. Patents which issued within the United States are entitled to the
presumption of validity under 35 U.S.C. S 282, and we are presently unaware of
any facts which would provide grounds upon which the statutory presumption of
validity of such patents could be rebutted;
3. To the best of our knowledge, there are presently no pending or
threatened legal, governmental or administrative proceedings to which the
Company is a party and which relate to patents or other proprietary rights, or
of which any patent rights of the Company are subject, which, if determined
adversely to the Company, would individually or in the aggregate have a material
adverse effect on the general affairs, financial position, net worth or results
of operations of the Company; and, with regard to the Company's magnetic
particle and colloid products, drug delivery platforms, therapeutic products and
processes as now conducted, which are known to us, no such proceedings have been
threatened or, upon information and belief, are presently contemplated against
the Company by any governmental authorities or others, and, to the best of our
knowledge, no basis for any such proceedings exist; and
4. To the best of our knowledge, the statements in the Prospectus under
the captions "Prospectus Summary -- The Company", "Risk Factors" and "Business"
relating to patents, licenses and technology, are accurate and, insofar as they
constitute a summary of the matters referred to therein, fairly present the
information called for with respect to such matters, and nothing has come to our
attention to lead us to believe that such statements, both at the time of the
effectiveness of the Registration Statement and any Rule 462(b) Registration
Statement and as set forth in the Prospectus, contain any untrue statement of
material fact with respect to licenses, patents or technology owned or used by
the Company, or the manner of its use thereof, or omit to state any material
fact relating to licenses, patents or technology owned or used by the Company,
or the manner of its use thereof, which is required to be stated in the
Registration Statement or the Prospectus or is necessary to make the statements
therein not misleading.
