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NEXSTAR PHARMACEUTICALS, INC.
6 1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
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PURCHASE AGREEMENT
July 28, 0000
XXX Xxxxxxx Inc.
Xxxxxxxxxxx & Co., Inc.
c/o SBC Warburg Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
NeXstar Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$75,000,000 principal amount (the "Firm Securities") of the 6 1/4% Convertible
Subordinated Debentures Due 2004 (the "Debentures"), convertible into Common
Stock ("Stock") of the Company and, at the election of the Purchasers, up to an
aggregate of $5,000,000 principal amount of additional Debentures (the
"Optional Securities") as provided in Section 2 hereof. The Firm Securities and
the Optional Securities, if any, are herein collectively called the
"Securities".
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) A preliminary offering memorandum, dated July 17, 1997 (the
"Preliminary Offering Memorandum") and an offering memorandum, dated
July 28, 1997 (the "Offering Memorandum", have been prepared in
connection with the offering of the Securities and shares of the Stock
issuable upon conversion thereof. Any reference to the Preliminary
Offering Memorandum or the Offering Memorandum shall be deemed to
refer to and include the Company's most recent Annual Report on Form
10-K and all subsequent documents filed with the United States
Securities and Exchange Commission (the "Commission") pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities Exchange
Act of 1934, as amended (the "Exchange Act"), on or prior to the date
of the Preliminary Offering Memorandum or the Offering Memorandum, as
the case may be, and any reference to the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, as amended
or supplemented, as of any specified date, shall be deemed to include
(i) any
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documents filed with the Commission pursuant to Section 13(a), 13(c)
or 15(d) of the Exchange Act after the date of the Preliminary
Offering Memorandum or the Offering Memorandum, as the case may be,
and prior to such specified date and (ii) any Additional Issuer
Information (as defined in Section 5(f)) furnished by the Company
prior to the completion of the distribution of the Securities; and all
documents filed under the Exchange Act and so deemed to be included in
the Preliminary Offering Memorandum or the Offering Memorandum, as the
case may be, or any amendment or supplement thereto are hereinafter
called the "Exchange Act Reports". The Exchange Act Reports, when
they were or are filed with the Commission, conformed or will conform
in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder. The
Preliminary Offering Memorandum or the Offering Memorandum and any
amendments or supplements thereto and the Exchange Act Reports did not
and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a Purchaser through
SBC Warburg Inc. ("SBC Warburg") expressly for use therein.
(b) The Company and each of its subsidiaries (other than any
subsidiary which has no operations and de minimis assets (a "Shelf
Subsidiary")) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to carry on
its business as it is currently being conducted and to own, lease and
operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the business, condition (financial or otherwise), stockholders'
equity, properties, business prospects or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect").
(c) All of the outstanding shares of capital stock of, or other
ownership interest in, each of the Company's subsidiaries (other than
any Shelf Subsidiary), except for any director qualifying shares or
similar nominal holdings required by foreign laws, have been duly
authorized and validly issued and are fully paid and non-assessable,
and are owned by the Company, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
(d) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement and authenticated and
delivered by the Trustee in accordance with the indenture to be dated
as of July 31, 1997, (the "Indenture") between the Company and IBJ
Xxxxxxxx Bank & Trust Company, as Trustee (the "Trustee"), will have
been duly executed, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture under which they are to be issued; the
Indenture has been duly authorized and, when executed and delivered by
the Company (and assuming due authorization, execution and delivery by
the Trustee), the Indenture will constitute a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Securities and the
Indenture will conform in all material respects to the descriptions
thereof in the Offering Memorandum and will be in substantially the
form previously delivered to you.
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(e) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
the shares of Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for
issuance out of the Company's authorized and unissued shares of Common
Stock and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture will be duly and validly issued,
fully paid and non-assessable and will conform to the description of
the Stock contained in the Offering Memorandum.
(f) The Registration Rights Agreement between the Company and
the Purchasers to be dated as of July 31, 1997 (the "Registration
Rights Agreement") has been duly authorized, and, when executed and
delivered by the Company (assuming due authorization, execution and
delivery by the Purchasers), will constitute a valid and legally
binding agreement of the Company enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
Registration Rights Agreement will conform in all material respects to
the description thereof in the Offering Memorandum.
(g) The authorized capital stock of the Company, including the
Stock, conforms as to legal matters to the description thereof
contained in the Offering Memorandum.
(h) Neither the Company nor any of its subsidiaries (other than
any Shelf Subsidiary) is (i) in violation of its respective charter or
by-laws, (ii) is in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any other agreement, indenture or
instrument to which it is a party or by which it is bound or to which
any of its properties or assets is subject which default could result
in a Material Adverse Effect or (iii) is in violation in any respect
of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject, which default or
violation could result in a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has failed to obtain a license,
permit, certificate, franchise or other governmental authorization
necessary to the ownership of its property or to the conduct of its
business as presently conducted where such failure could have a
Material Adverse Effect.
(i) The execution, delivery and performance of this Agreement,
the Indenture, the Registration Rights Agreement and the Securities,
compliance by the Company with all provisions hereof and thereof and
the consummation of the transactions contemplated hereby and the
issuance and delivery of the Securities will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of its
subsidiaries, or any agreement, indenture or other instrument to which
it or any of its subsidiaries is a party or by which it or any of its
subsidiaries or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company, any of its subsidiaries or their
respective property, in any case which is reasonably likely to have a
Material Adverse Effect; and, except as required pursuant to the
Registration Rights Agreement, no consent, approval, authorization or
order of or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the Indenture, the Registration
Rights Agreement and the Securities by the Company and the
consummation of the transactions contemplated hereby and thereby,
except such consents, approvals, authorizations, orders, registrations
or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
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Securities by the Purchasers, and such consents, approvals,
authorizations, orders, registrations and qualifications as may be
required under the Act and the United States Trust Indenture Act of
1939 (the "Trust Indenture Act").
(j) Except as otherwise set forth in the Offering Memorandum,
there are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any of their respective property is the subject which, if determined
adversely to the Company or its subsidiaries, might have a Material
Adverse Effect, and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated.
(k) Except as otherwise set forth in the Offering Memorandum,
the Company is conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is
conducting business which are material to the conduct of the business,
including, without limitation, the applicable laws, rules and
regulations of the United States Food and Drug Administration
(collectively the "FDA Regulations"); neither the Company nor any of
its subsidiaries has violated any foreign, federal, state or local law
or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws,
nor any provisions of the Employee Retirement Income Security Act or
the rules and regulations promulgated thereunder, which in each case
might result in any Material Adverse Effect.
(l) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any
applicable FDA Regulations and any applicable Environmental Laws, as
are necessary to own, lease and operate its respective properties and
to conduct its business in the manner described in the Offering
Memorandum except for such permits the absence of which would not have
a Material Adverse Effect; the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations with
respect to such permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other impairment of the rights of the holder
of any such permit which revocation, termination or other impairment
would result in a Material Adverse Effect; and, except as described in
the Offering Memorandum, such permits contain no restrictions, which
do not generally apply to companies holding such permits, that are
materially burdensome to the Company or any of its subsidiaries.
(m) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect.
(n) Except as otherwise set forth in the Offering Memorandum, or
such as are not material to the business condition (financial or
otherwise), stockholders' equity, properties, business prospects or
results of operations of the Company and its subsidiaries, taken as a
whole, the Company and each of its subsidiaries has good and
marketable title, free and clear of all liens, claims, encumbrances
and restrictions except liens for taxes not yet due
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and payable, to all property and assets described in the Offering
Memorandum as being owned by it. All leases to which the Company or
any of its subsidiaries is a party are valid and binding and no
default has occurred or is continuing thereunder which might result in
any Material Adverse Effect, and the Company and its subsidiaries
enjoy peaceful and undisturbed possession under all such leases to
which any of them is a party as lessee with such exceptions as do not
materially interfere with the use made by the Company or such
subsidiary.
(o) The Company and its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is reasonable for
the conduct or their respective businesses and the value of their
respective properties and as is customary for companies engaged in
similar businesses in similar industries and similar geographic areas.
(p) Ernst & Young LLP are independent public accountants with
respect to the Company as required by the Exchange Act.
(q) The financial statements, together with related schedules
and notes forming part of or incorporated by reference in the Offering
Memorandum (and any amendment or supplement thereto), present fairly
the consolidated financial position, results of operations and cash
flows of the Company and its subsidiaries on the basis stated in the
Offering Memorandum at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data set forth in or incorporated by
reference in the Offering Memorandum (and any amendment or supplement
thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the
books and records of the Company.
(r) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(s) Neither the Company nor its subsidiaries have sustained,
since the date of the latest audited financial statements included in
the Offering Memorandum, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum, and, since such date, there
has not been any material change in the capital stock or payment or
declaration of dividends on its capital stock or long-term debt of the
Company or its subsidiaries (other than repayment by the Company on
July 1, 1997 of $5,000,000 of its long term debt from The Bank of
Boston) or any material adverse change, or, to the Company's
knowledge, any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity, business prospects or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Offering Memorandum.
(t) Except as otherwise described in the Offering Memorandum,
the Company and its subsidiaries own or possess adequate rights to use
all material trademarks, trade names, patent rights, mask works,
copyrights, licenses, approvals and governmental authorizations to
conduct their businesses as described in the Offering Memorandum, and,
except as otherwise set forth in the Offering Memorandum, the Company
has no knowledge of any
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infringement by it or its subsidiaries of valid trademark or trade
name rights, patent rights, mask works, copyrights, licenses, trade
secrets or other similar rights of others, and there is no claim that
has been made against the Company or its subsidiaries regarding
trademark, trade name, patent, mask work, copyright, license, trade
secret or other infringement which could have a Material Adverse
Effect.
(u) There are no contracts or other documents which are required
to be described in or filed as exhibits to the Exchange Act Reports
which have not been so described or filed as required.
(v) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which is required to be described in the Exchange Act Reports which is
not so described.
(w) No labor disturbance by the employees of the Company or any
of its subsidiaries exists or, to the knowledge of the Company, is
imminent which might be expected to have a Material Adverse Effect.
(x) With the exception of its 401(k) plans and non-retirement
related health and benefit plans which are not material in amount, the
Company has in effect no plans or arrangements in any manner subject
to or governed by the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations
thereunder.
(y) Neither the Company nor any of its subsidiaries, nor to the
Company's knowledge, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of
its subsidiaries, has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating
to political activity, made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(z) This Agreement has been duly authorized, executed and
delivered by the Company.
(aa) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of capital stock of, or ownership interest in, the Company
or any subsidiary thereof except as otherwise disclosed in the
Offering Memorandum.
(bb) The Company and its subsidiaries taken as whole 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 authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with general accepted accounting
principles; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(cc) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
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assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided.
(dd) The Company has no subsidiaries that qualify as a
"Significant Subsidiary" under Regulation S-X promulgated under the
Exchange Act. Except for NeXstar Farmaceutica, S.A., Spain, and
NeXstar Pharmaceuticals Italia, S.r.l., there are no other
subsidiaries of the Company that are material to the business and
business prospects of the Company and its subsidiaries taken as a
whole.
(ee) When the Securities are issued and delivered pursuant to
this Agreement, the Securities will not be of the same class (within
the meaning of Rule 144A under the Act) as securities which are listed
on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system.
(ff) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale
of the Securities) will violate or result in a violation of Section 7
of the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System.
(gg) Prior to the date hereof, neither the Company nor any of
its affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities.
(hh) The statements set forth in the Offering Memorandum under
the captions "Description of Debentures" and "Description of Capital
Stock", insofar as they purport to constitute a summary of the terms
of the Securities and the Stock, and under the captions "Certain
United States Federal Income Tax Consequences", "Risk Factors",
"Business" and "Plan of Distribution", insofar as they purport to
describe the provisions of the laws, legal proceedings and documents
referred to therein, are accurate, complete and fair.
(ii) Subject to compliance by the Purchasers with the
representations and agreements contained in Section 3 hereof, neither
the Company nor any person acting on its behalf has offered or sold
the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Act or, with
respect to Securities sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Act), by means of any
directed selling efforts within the meaning of Rule 902 under the Act
and the Company, any affiliate of the Company and any person acting on
its or their behalf has complied with and will implement the "offering
restriction" within the meaning of such Rule 902; and
(jj) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to
any person any Securities, or any securities of the same or a similar
class as the Securities, other than Securities offered or sold to the
Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Act) of any Securities or any substantially similar security issued by
the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to the
Company by SBC Warburg), is made under restrictions and other
circumstances reasonably designed not to affect the status of the
offer and sale of the Securities in the United States and to U.S.
persons contemplated by this
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Agreement as transactions exempt from the registration provisions of
the Securities Act (the foregoing will not prevent offers and sales
made pursuant to a shelf registration statement in accordance with the
Registration Rights Agreement).
2. (a) Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Purchasers, and each of the
Purchasers agrees, severally and not jointly, to purchase from the Company, at
a purchase price of 97.00% of the principal amount thereof, plus accrued
interest, if any, from July 31, 1997 to the Time of Delivery hereunder, the
principal amount of Firm Securities set forth opposite the name of such
Purchaser in Schedule I hereto.
(b) In the event and to the extent that the Purchasers shall
exercise the election to purchase Optional Securities, as provided below, the
Company agrees to issue and sell, subject to the terms and conditions herein
set forth, to each of the Purchasers, and each of the Purchasers agrees,
severally, and not jointly, to purchase from the Company at a purchase price of
97.00% of the principal amount thereof, plus accrued interest, if any, from
July 31, 1997 to the Time of Delivery hereunder that number of Optional
Securities as to which such election shall have been exercised determined by
multiplying such number of Optional Securities by a fraction, the numerator of
which is the maximum number of Optional Securities which such Purchaser is
entitled to purchase as set forth opposite the name of such Purchaser in
Schedule I hereto and the denominator of which is the maximum number of
Optional Securities which all of the Purchasers are entitled to purchase
hereunder (the foregoing will not prevent offers and sales made pursuant to an
exchange offer or shelf registration statement in accordance with the
Registration Rights Agreement).
(c) The Company hereby grants to each of the Purchasers the
right to purchase at their election up to the principal amount of Optional
Securities set forth opposite the name of such Purchaser in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of
covering over-allotments in the sale of the Firm Securities. Any such election
to purchase Optional Securities may be exercised by written notice from SBC
Warburg to the Company given within a period of 30 calendar days after the date
of this Agreement, setting forth the aggregate principal amount of Optional
Securities to be purchased and the date on which such aggregate principal
amount of Optional Securities is to be delivered, as determined by SBC
Warburg, but in no event earlier than the First Time of Delivery and, unless
SBC Warburg and the Company otherwise agree in writing, no earlier than two or
later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Securities,
the several Purchasers propose to offer the Securities for sale upon the terms
and conditions set forth in this Agreement and the Offering Memorandum and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons
who it reasonably believes are "qualified institutional buyers"
("QIBs") within the meaning of Rule 144A under the Act in transactions
meeting the requirements of Rule 144A, or (ii) upon the terms and
conditions set forth in Annex I to this Agreement;
(b) It is an "accredited investor" within the meaning of Rule
501 under the Act; and
(c) It will not offer or sell the Securities by any form of
general solicitation or general advertising, including but not limited
to the methods described in Rule 502(c) under the Act.
4. (a) The Firm Securities and Optional Securities to be purchased
by each Purchaser hereunder will be in the form of one or more definitive
global Securities which will be deposited by or on behalf of the Company with
the Depository Trust Company ("DTC") or its designated custodian.
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The Company will deliver the Securities to SBC Warburg, for the account of each
Purchaser, against payment by or on behalf of such Purchaser of the purchase
price therefor by wire transfer of immediately available funds to a bank
account designated by the Company, by causing DTC to credit the Securities to
the account of SBC Warburg at DTC. The Company will cause the certificates
representing the global Securities to be made available to SBC Warburg for
checking at the office of DTC or its designated custodian (the "Designated
Office") at least twenty-four hours prior to (a) with respect to the Firm
Securities, 9:30 a.m., New York City time on July 31, 1997 (the "First Time of
Delivery") and (b) with respect to the Optional Securities, (if not the First
Time of Delivery) the date specified (the "Second Time of Delivery") in the
written notice given by you of the Purchasers' election to Purchase the
Optional Securities or such other time and date as you and the Company may
agree upon in writing. Each of the First Time of Delivery and the Second Time
of Delivery is herein called the "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(j) hereof, will be delivered at such time and
date at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Closing Location"), and the Securities will be delivered at
the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 1:00 p.m., New York City time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section
4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Memorandum in a form approved by
you; to make no amendment or any supplement to the Offering Memorandum
which shall be disapproved by you promptly after reasonable notice
thereof; and to furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering
Memorandum and each amendment or supplement thereto with the
independent accountants' report(s) in the Offering Memorandum, and any
amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and
additional copies thereof in such quantities as you may from time to
time reasonably request, and if, at any time prior to the expiration
of nine months after the date of the Offering Memorandum, any event
shall have occurred as a result of which the Offering Memorandum as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Offering Memorandum is delivered, not
misleading, or, if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Offering
Memorandum, to notify you and upon your request to prepare and furnish
without charge to each Purchaser and to any dealer in
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securities as many copies as you may from time to time reasonably
request of an amended Offering Memorandum or a supplement to the
Offering Memorandum which will correct such statement or omission or
effect such compliance;
(d) During the period beginning from the date hereof and
continuing until the date 90 days after the Time of Delivery, not to
sell, contract to sell or otherwise dispose of, any shares of Stock
of the Company or any securities that are convertible into or
exchangeable for shares of Stock (other than (i) pursuant to employee
stock option or employee stock purchase plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities or
upon exercise of warrants outstanding as of, the date of this
Agreement, (ii) as contemplated by the Registration Rights Agreement
or (iii) in connection with an acquisition by the Company of an
enterprise, product, intellectual property right or a licence for any
of the foregoing, where the shares of Stock or other securities of the
Company so disposed of have an aggregate fair market value at the time
of disposition of $25,000,000 or less), without the prior written
consent of SBC Warburg;
(e) Not to be or become, at any time prior to the expiration of
two years after the Time of Delivery, an open-end investment company,
unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act and so long as any of the Securities (or
Stock issued upon conversion thereof) are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, for the benefit of
holders from time to time of Securities, to furnish at its expense,
upon request, to holders of Securities and prospective purchasers of
securities information (the "Additional Issuer Information")
satisfying the requirements of subsection (d)(4)(i) of Rule 144A under
the Act;
(g) To use its best efforts to cause the Securities to be
eligible for the PORTAL trading system of the National Association of
Securities Dealers, Inc.;
(h) To file with the Commission, not later than 15 days after
the Time of Delivery, five copies of a notice on Form D under the Act
(one of which will be manually signed by a person duly authorized by
the Company); to otherwise comply with the requirements of Rule 503
under the Act; and to furnish promptly to you evidence of each such
required timely filing (including a copy thereof);
(i) To furnish to the holders of the Securities (x) as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, (y) as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date
of the Offering Memorandum), upon request, consolidated summary
financial information of the Company and its subsidiaries for such
quarter in reasonable detail, for which purpose a copy of the
Company's Quarterly Report on Form 10-Q shall be adequate;
(j) During a period of five years from the date of the Offering
Memorandum, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders of the
Company, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed
by the Company with the Commission or any securities exchange on which
the Securities or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and
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financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries
are consolidated in reports furnished to its stockholders generally or
to the Commission);
(k) During the period of two years after the Time of Delivery,
the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities which constitute "restricted securities" under Rule 144
that have been reacquired by any of them;
(l) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the caption "Use of Proceeds";
(m) To reserve and keep available at all times, free of
preemptive rights, shares of Stock for the purpose of enabling the
Company to satisfy any obligations to issue shares of its Stock upon
conversion of the Securities;
(n) To use its best efforts to list, subject to notice of
issuance, the shares of Stock issuable upon conversion of the
Securities on the National Association of Securities Dealers Automated
Quotations National Market ("NASDAQ") ; and
(o) Pursuant to the Registration Rights Agreement, to file and
to use its best efforts to cause to be declared effective by the
Commission on or prior to 90 days from the First Time of Delivery a
registration statement on Form S-1 or Form S-3, if the use of said
form is then available, to cover resales of Transfer Restricted
Securities (as defined in the Registration Rights Agreement).
6. The Company covenants and agrees with the several Purchasers that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and the shares of Stock issuable
upon conversion of the Securities and all other expenses in connection with the
preparation, printing and filing of the Preliminary Offering Memorandum and the
Offering Memorandum and any amendments and supplements thereto and the mailing
and delivering of copies thereof to the Purchasers and dealers; (ii) the cost
of printing or producing any Agreement among Purchasers, this Agreement, the
Indenture, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities and the shares of Stock issuable upon conversion of the Securities
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Purchasers in
connection with such qualification up to a maximum of $5,000; (iv) the cost of
preparing the Securities; (v) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (vi) any cost incurred in
connection with the designation of the Securities for trading in PORTAL and the
listing on NASDAQ of the shares of Stock issuable upon conversion of the
Securities; and (vii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Purchasers will pay all of their own
costs and expenses, including the fees of their counsel, and transfer taxes on
resale of any of the Securities by them.
7. The obligations of the Purchasers hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are,
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at and as of the Time of Delivery, true and correct, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) Xxxxxxxx & Xxxxxxxx, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated the Time of Delivery,
with respect to the incorporation of the Company, the validity of the
Indenture, the Securities and the Registration Rights Agreement, the
Offering Memorandum, as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(b) Xxxxxxx Xxxx & Xxxxxxxxx, counsel for the Company, shall
have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and
authority required to carry on its business as described in the
Offering Memorandum and to own, lease and operate its
properties;
(ii) The Company is duly qualified and is in good
standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
Material Adverse Effect;
(iii) The Company has authorized capitalization as set
forth in the Offering Memorandum, and all the outstanding shares
of Common Stock have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any preemptive
or similar rights;
(iv) The shares initially issuable upon conversion of
the Securities have been duly authorized and reserved for
issuance and when issued and delivered upon conversion in
accordance with the provisions of the Securities, will have been
validly issued and will be fully paid and non-assessable, and the
issuance of such shares is not subject to any preemptive or
similar rights;
(v) After due inquiry, such counsel does not know of
any legal or governmental proceeding pending or threatened to
which the Company is a party or to which any of its property is
subject which is required to be described in the Exchange Act
Reports and is not so described, or of any contract or other
document which is required to be described in, or is required to
be filed as an exhibit to, the Exchange Act Reports which is not
described or filed as required;
(vi) The Company is not an "investment company" or a
company "controlled" by an investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(vii) This Agreement has been duly authorized, executed
and delivered by the Company;
(viii) The Securities have been duly authorized, executed,
issued and delivered, and constitute valid and legally binding
obligations of the Company entitled to the
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benefits provided by the Indenture and are enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles;
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and constitutes
a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject (a) to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles
and (b) to the extent rights to indemnity and contribution
thereunder may be limited by federal or state securities laws or
the policies underlying such laws; and the Registration Rights
Agreement conforms in all material respects to the summary
thereof in the Offering Memorandum;
(x) The Indenture has been duly authorized, executed
and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles;
(xi) The Company is not in violation of its charter or
by-laws and the issuance and sale of the Securities by the
Company to the Purchasers pursuant to this Agreement and the
compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and
this Agreement and the consummation by the Company of the
transactions herein and therein contemplated will not conflict
with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company;
(xii) The authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained in the Offering Memorandum;
(xiii) Except as required pursuant to the Registration
Rights Agreement and assuming due compliance by the Purchasers
with Section 3 of the Agreement, no consent, approval,
authorization or order of or filing or registration with, any
court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement, and the Securities
by the Company and the consummation of the transactions
contemplated by this Agreement and thereby, except such consents,
approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Securities by the Purchasers, and such consents, approvals,
authorizations, orders, registrations and qualifications as may
be required under the Act and the Trust Indenture Act;
(xiv) The statements set forth in the Offering Memorandum
under the captions "Description of Debentures" and "Description
of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Securities and the Stock, and under
the caption "Certain United States Federal Income Tax
Consequences", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate,
complete and fair;
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(xv) The Exchange Act Reports (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion), when they were filed with the
Commission, complied as to form in all material respects with the
requirements of the Exchange Act, and the rules and regulations
of the Commission thereunder; and such counsel has no reason to
believe that any of such documents, when they were so filed,
contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading;
(xvi) No registration of the Securities under the Act,
and no qualification of an indenture under the United States
Trust Indenture Act of 1939 with respect thereto, is required for
the offer, sale and initial resale of the Securities by the
Purchasers in the manner contemplated by this Agreement; and
(xvii) Such counsel have no reason to believe that the
Offering Memorandum and any further amendments or supplements
thereto made by the Company prior to the Time of Delivery (other
than the financial statements and other financial data contained
therein, as to which such counsel need express no opinion)
contained as of its date or contains as of the Time of Delivery
an untrue statement of a material fact or omitted or omits, as
the case may be, to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) You shall have received an opinion satisfactory to you,
dated the date hereof, of Xxxx Xxxxxxx, Vice President and General
Counsel of the Company, to the effect that:
(i) To the best of such counsel's knowledge, except as
otherwise disclosed in the Offering Memorandum, the Company owns
or possesses sufficient licenses or other rights to use all
necessary trademarks, trade names, trade secrets, patents,
proprietary rights technology and inventions (collectively, the
"Proprietary Rights") to conduct the business now being or
proposed to be conducted by the Company as described in the
Offering Memorandum;
(ii) To the best of such counsel's knowledge, except as
otherwise disclosed in the Offering Memorandum, there are no
legal or governmental proceedings relating to any Proprietary
Rights owned or used by the Company pending against the Company
or any third party; there are no legal or governmental
proceedings relating to a third party's Proprietary Rights
pending against the Company; and no such proceedings are
threatened or contemplated by governmental authorities or others;
(iii) Such counsel does not know of any contracts or
other documents relating to the Proprietary Rights of the Company
of a character required to be described in or to be filed as an
exhibit to the Exchange Act Reports that are not filed or
described as required;
(iv) To the best of such counsel's knowledge, except as
otherwise disclosed in the Offering Memorandum, the Company is
not infringing or otherwise violating any valid Proprietary
Rights of others and there are no infringements by others of any
Proprietary Rights owned or used by the Company which, in the
judgment of such counsel, could have a Material Adverse Effect;
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(v) As to each United States patent and patent
application listed in Exhibit 1 thereto, there is an assignment
by each of the named inventors to the Company. The assignments
by the named inventors have been submitted to the United States
Patent and Trademark Office ("USPTO") and those assignments have
been recorded in the USPTO's title records;
(vi) The Company's United States patent applications
listed on Exhibit 1 thereto have been prepared and filed in the
USPTO in a form and with accompanying papers that are acceptable
to the USPTO for the purposes of according each such application
a filing date and serial number, and of placing each such
application in condition for eventual examination on the merits
as to patentability. For each such U.S. application an Official
Filing Receipt has been received from the USPTO. As to each of
such application, such counsel is not aware of any material
defect of form in preparation or filing;
(vii) As to each of the Company's foreign patents and
patent applications based on the United States patents or
applications listed on Exhibit 1 thereto, the applications have
either (a) been submitted to patent firms in the respective
foreign countries with instructions to file the applications in
the patent offices of those countries naming the Company as the
owner of record, or (b) as to certain Patent Cooperation Treaty
applications, been submitted directly to the relevant patent
office of those countries naming the Company as the owner of
record. In each such application, written confirmation has been
received that the application has, in fact, been accepted for
filing by such patent offices. There is no assurance that the
patent offices of the respective countries will not reject the
claims of the foreign patent applications as being unpatentable,
or that any claims will be allowed without amendment, nor is
there any assurance that those patent offices will ultimately
conclude that the foreign patent applications meet all
requirements for patentability;
(viii) To the best of such counsel's knowledge, after due
inquiry, the Company has not violated any FDA Regulation, any
Environmental Laws, or any federal or state law relating to
discrimination in the hiring, promotion or pay of employees or
any applicable federal or state wages and hours laws, or any
provisions of the Employee Retirement Income Security Act or the
rules and regulations promulgated thereunder, which in any case
might result in a Material Adverse Effect;
(ix) The Company and each of the Significant
Subsidiaries has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable
FDA Regulations or Environmental Laws, as are necessary to own,
lease and operate its properties and to conduct its business in
the manner described in the Offering Memorandum; to the best of
such counsel's knowledge, after due inquiry, the Company has
fulfilled and performed all of its material obligations with
respect to such permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment
of the rights of the holder of any such permit, subject in each
case to such qualification as may be set forth in Offering
Memorandum; and, except as described in the Offering Memorandum,
such permits contain no restrictions that are materially
burdensome of to the Company;
(x) To the best of such counsel's knowledge, after due
inquiry, except as otherwise set forth in the Offering Memorandum
or such as are not material to the business, condition (financial
or otherwise), stockholders' equity, properties, business
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prospects or results of operations of the Company and its
subsidiaries, taken as a whole, the Company has good and
marketable title, free and clear of all liens, claims,
encumbrances and restrictions except liens for taxes not yet due
and payable, to all property and assets described in the Offering
Memorandum as being owned by it;
(xi) The statements in the Offering Memorandum related
to the Company's Proprietary Rights insofar as such statements
constitute summaries of matters of law, are accurate and complete
statements or summaries of such matters of law set forth therein;
(xii) To the best of such counsel's knowledge, after due
inquiry, all leases to which the Company is a party are valid and
binding and no default has occurred or is continuing thereunder
which might result in a Material Adverse Effect;
(xiii) To the best of such counsel's knowledge after due
inquiry, the Company is not in default in the performance of any
obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument to which the Company is
a party or by which it is bound or to which any of its properties
or assets is subject which default could result in a Material
Adverse Effect; and
(xiv) The issuance and sale of the Securities by the
Company to the Purchasers pursuant to this Agreement and the
compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement and
this Agreement and the consummation by the Company of the
transactions herein and therein contemplated will not conflict
with or constitute a breach of any of the terms or provisions of,
or a default under any agreement, indenture or other instrument
to which the Company is a party or by which the Company or its
properties are bound, or violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable
to the Company or its properties in any case which is reasonably
likely to have a Material Adverse Effect.
(d) On the date of the Offering Memorandum prior to the
execution of this Agreement and also at the Time of Delivery, Ernst &
Young LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex II hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Offering Memorandum any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Memorandum, and (ii)
since the respective dates as of which information is given in the
Offering Memorandum there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries (other than repayment by the Company on July 1, 1997 of
$5,000,000 of its long term debt to The Bank of Boston) or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Offering
Memorandum, the effect of which, in any such case described in Clause
(i) or (ii), is in the judgment of SBC Warburg so material and adverse
as to make it impracticable or inadvisable to proceed with the
offering
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or the delivery of the Securities on the terms and in the manner
contemplated in this Agreement and in the Offering Memorandum;
(f) On or after the date hereof, there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the NASDAQ; (ii) a suspension or
material limitation in trading in the Company's securities on NASDAQ;
(iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if
the effect of any such event specified in this Clause (iv) in the
judgment of SBC Warburg makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities on the
terms and in the manner contemplated in the Offering Memorandum;
(g) The Securities have been designated for trading on PORTAL;
(h) The shares of Stock issuable upon conversion of the
Securities shall have been duly listed, subject to notice of issuance,
on NASDAQ;
(i) Each of the officers, directors and/or stockholders of the
Company specified in Schedule II hereto shall have provided a lock-up
letter to the same effect as the limitation on the Company's ability
to sell shares of Stock set forth in paragraph 5(d) hereof; and
(j) The Company shall have furnished or caused to be furnished
to you at the Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery,
as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to
the matters set forth in subsection (e) of this Section and as to such
other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Offering Memorandum or the Offering Memorandum or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by any Purchaser through SBC Warburg expressly for use
therein.
(b) Each Purchaser will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum or the Offering Memorandum, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact or necessary to
make the statements therein not misleading, in each case to
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the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Offering Memorandum or the Offering Memorandum or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Purchaser through SBC Warburg expressly for
use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Purchasers on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Purchasers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Memorandum. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the
Purchasers on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or
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prevent such statement or omission. The Company and the Purchasers agree that
it would not be just and equitable if contribution pursuant to this subsection
(d) were determined by pro rata allocation (even if the Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the
Securities sold by it and distributed to investors were offered to investors
exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The Purchasers' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Purchaser within the meaning of the Act; and the obligations of
the Purchasers under this Section 8 shall be in addition to any liability which
the respective Purchasers may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Purchaser shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein. If within thirty-six hours after
such default by any Purchaser you do not arrange for the purchase of such
Securities then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to
you to purchase such Securities, on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Offering Memorandum, or in any other documents or arrangements, and the Company
agrees to prepare promptly any amendments to the Offering Memorandum which in
your opinion may thereby be made necessary. The term "Purchaser" as used in
this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement
with respect to such Securities; and
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Purchaser or Purchasers by you and the Company
as provided in subsection (a) above, some or all of such Securities remain
unpurchased, then the Company shall have the right to require each
non-defaulting Purchaser to purchase the principal amount of Securities which
such Purchaser agreed to purchase hereunder and, in addition, to require each
non-defaulting Purchaser to purchase its pro rata share (based on the principal
amount of Securities which such Purchaser agreed to purchase hereunder) of the
Securities of such defaulting Purchaser or Purchasers for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Purchaser from liability for its default.
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10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Purchasers, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Purchaser or any controlling person of any Purchaser, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Purchaser
except as provided in Sections 6 and 8 hereof; but, if for any other reason,
the Securities are not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making
preparations for the purchase, sale and delivery of the Securities, but the
Company shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or
given by SBC Warburg.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you in care of SBC Warburg, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Legal Department; and if to the Company shall
be delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Offering Memorandum, Attention: Secretary.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one
and the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us 5 (five) counterparts hereof, and upon the acceptance hereof
by you, on behalf of each of the Purchasers, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Purchasers and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Purchasers is pursuant to the authority set forth in a form of
Agreement among Purchasers, the form of which shall be submitted to the Company
for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
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NeXstar Pharmaceuticals, Inc.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
Accepted as of the date hereof:
SBC Warburg Inc.
Xxxxxxxxxxx & Co., Inc.
By: SBC Warburg Inc.
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: SBC Warburg-Managing
Director
On behalf of each of the Purchasers
By: /s/ XXXXX X. XXXX
-----------------
Name: Xxxxx X. Xxxx
Title: Associate Director
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SCHEDULE I
MAXIMUM AMOUNT
PRINCIPAL AMOUNT OF OPTIONAL
OF FIRM SECURITIES SECURITIES TO BE
TO BE PURCHASED PURCHASED
SBC Warburg Inc............................. $45,000,000 $3,000,000
Xxxxxxxxxxx & Co., Inc...................... $30,000,000 $2,000,000
Total.............................. $75,000,000 $5,000,000
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ANNEX I
(1) The Securities have not been and will not be registered under the
Act and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S
under the Act or pursuant to an exemption from the registration requirements of
the Act. Each Purchaser represents that it has offered and sold the
Securities, and will offer and sell the Securities (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of
the commencement of the offering and the Time of Delivery, only in accordance
with Rule 903 of Regulation S, Rule 144A or pursuant to Paragraph 2 of this
Annex I under the Act. Accordingly, each Purchaser agrees that neither it, its
affiliates nor any persons acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and it
and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Purchaser agrees that, at or prior to
confirmation of sale of Securities (other than a sale pursuant to Rule 144A) or
pursuant to Paragraph 2 of this Annex I, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Securities from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and the closing
date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
Each Purchaser further agrees that it has not entered and will not
enter into any contractual arrangement with respect to the distribution or
delivery of the Securities except with its affiliates or with the prior written
consent of the Company.
(2) Notwithstanding the foregoing, Securities in registered form may
be offered, sold and delivered by the Purchasers in the United States and to
U.S. persons pursuant to Section 3 of this Agreement without delivery of the
written statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Xxx 0000 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with
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the applicable laws thereof, and that it will take at its own expense whatever
action is required to permit its purchase and resale of the Securities in such
jurisdictions. Each Purchaser understands that no action has been taken to
permit a public offering in any jurisdiction outside the United States where
action would be required for such purpose. Each Purchaser agrees not to cause
any advertisement of the Securities to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Securities, except in any such case with SBC Warburg's express written
consent and then only at its own risk and expense.
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ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the
applicable published rules and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and
financial statement schedules audited by us and included in the
Offering Memorandum comply as to form in all material respects with
the applicable requirements of the Exchange Act and the related
published rules and regulations;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included
in the Offering Memorandum agrees with the corresponding amounts
(after restatements where applicable) in the audited consolidated
financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Offering Memorandum, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Memorandum are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Offering Memorandum;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Memorandum do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Offering Memorandum;
(C) the unaudited financial statements which were not
included in the Offering Memorandum but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and balance
sheet items included in the Offering Memorandum and referred to
in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Offering Memorandum;
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(D) any unaudited pro forma consolidated condensed
financial statements included in the Offering Memorandum do not
comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Memorandum) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Purchasers, or any
increases in any items specified by the Purchasers, in each case
as compared with amounts shown in the latest balance sheet
included in the Offering Memorandum except in each case for
changes, increases or decreases which the Offering Memorandum
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Memorandum to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Purchasers, or any increases in any items specified by the
Purchasers, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Purchasers, except in each case for
decreases or increases which the Offering Memorandum discloses
have occurred or may occur or which are described in such letter;
and
(v) In addition to the examination referred to in their
report(s) included in the Offering Memorandum and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Purchasers, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Offering
Memorandum, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
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SCHEDULE II
Lock Up Letters
Xxxxxxx X. Xxxxxxx
Xxxxxxxx Xxxx
Warburg, Xxxxxx Capital Partners, X.X.
Xxxxxxx, Xxxxxx Investors, L.P.
