EXHIBIT 1.1
4,500,000 Shares
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
February 4, 2005
UNDERWRITING AGREEMENT
February 4, 2005
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Northfield Laboratories Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the underwriters named in Schedule A
annexed hereto (the "Underwriters"), for whom you are acting as representative,
an aggregate of 4,500,000 shares (the "Firm Shares") of Common Stock, $.01 par
value (the "Common Stock"), of the Company. In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the Underwriters
the option to purchase from the Company up to an additional 675,000 shares of
Common Stock (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the "Shares." The
Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (File No. 333-121622) on
December 23, 2004, including a prospectus appearing therein (the "Base
Prospectus"), relating to the Shares, which incorporates by reference documents
which the Company has filed in accordance with the provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
(collectively, the "Exchange Act"). The Company has furnished to you, for use by
the Underwriters and by dealers, copies of one or more preliminary prospectuses
filed with the Commission and the documents incorporated by reference therein
(each thereof, including the documents incorporated therein by reference, being
herein called a "Preliminary Prospectus") relating to the Shares. Except where
the context otherwise requires, the registration statement, as amended, which
has been filed with the Commission including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act and also
including any registration statement filed pursuant to Rule 462(b) under the
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Act, is herein called the "Registration Statement," and the prospectus
supplement, including all documents incorporated therein by reference, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) (the "Prospectus Supplement"), together
with the Base Prospectus as amended or supplemented on or prior to the date on
which the Prospectus Supplement was first filed pursuant to Rule 424(b) under
the Act, is herein called the "Prospectus." As used herein, "business day" shall
mean a day on which the New York Stock Exchange is open for trading.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
respective number of Firm Shares (subject to such adjustment as you may
determine to avoid fractional shares) which bears the same proportion to the
number of Firm Shares to be sold by the Company as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule A attached hereto,
subject to adjustment in accordance with Section 8 hereof, in each case at a
purchase price of $14.10 per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions
of the Firm Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the Firm
Shares upon the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters
the option to purchase, and upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company, ratably
in accordance with the number of Firm Shares to be purchased by each of them,
all or a portion of the Additional Shares as may be necessary to cover
over-allotments made in connection with the offering of the Firm Shares, at the
same purchase price per share to be paid by the Underwriters to the Company for
the Firm Shares. This option may be exercised by UBS ("UBS") on behalf of the
several Underwriters at any time and from time to time on or before the
thirtieth day following the date hereof, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised, and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as the "additional
time of purchase"); provided, however, that the additional time of purchase
shall not be earlier than the time of purchase (as defined below) nor earlier
than the second business day after the date on which the option shall have been
exercised nor later than the tenth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be sold to
each Underwriter shall be the number which bears the same proportion to the
aggregate num-
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ber of Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company (DTC) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on February 9, 2005 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 9:00 A.M., New
York City time, on the date of the closing of the purchase of the Firm Shares or
the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective under the
Act; no stop order of the Commission preventing or suspending the use of any
Preliminary Prospectus or the effectiveness of the Registration Statement has
been issued and no proceedings for such purpose have been instituted or, to
the Company's knowledge after due inquiry, are contemplated by the
Commission; the Base Prospectus, each Preliminary Prospectus and the
Prospectus Supplement, each at the time of filing thereof, complied in all
material respects to the requirements of the Act and each of the Base
Prospectus, the last Preliminary Prospectus distributed in connection with
the offering of the Shares and the Prospectus Supplement did not, as of its
date, and does not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; the Registration Statement complied when it became effective,
complies and will comply, at the time
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of purchase and any additional time of purchase, in all material respects
with the requirements of the Act and the Prospectus will comply, as of its
date and at the time of purchase and any additional times of purchase, in all
material respects with the requirements of the Act and any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement have been and will be so described or filed; the
conditions to the use of Form S-3 under the Act with respect to the
Registration Statement have been satisfied; the Registration Statement did
not when it became effective, does not and will not, at the time of purchase
and any additional time of purchase, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and the Prospectus
will not, as of its date and at the time of purchase and any additional time
of purchase, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the Base
Prospectus, the Preliminary Prospectus, the Prospectus Supplement, the
Registration Statement or the Prospectus in reliance upon and in conformity
with information concerning an Underwriter and furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in
the Base Prospectus, the Preliminary Prospectus, the Prospectus Supplement,
the Registration Statement or the Prospectus; the documents incorporated by
reference in the Base Prospectus, the Preliminary Prospectus, the Prospectus
Supplement, the Registration Statement and the Prospectus, at the time they
became effective or were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act and did not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and the Company
has not distributed and will not distribute any offering material in
connection with the offering or sale of the Shares other than the
Registration Statement, the Base Prospectus, the Preliminary Prospectus, the
Prospectus Supplement and the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized
and outstanding capitalization as set forth in the section of the Prospectus
entitled "Capitalization" and, as of the time of purchase and the additional
time of purchase, as the case may be, the Company shall have an authorized
and outstanding capitalization as set forth in the section of the Prospectus
entitled "Capitalization" (subject, in each case, to the issuance of shares
of Common Stock upon exercise of outstanding stock options and warrants
disclosed in the Prospectus and the grant of options and restricted shares
under the Company's existing equity incentive plans and subject, in the case
of the additional time of purchase, to the prior issuance of the Firm
Shares); all of the issued and outstanding shares of capital stock, including
the Common Stock, of the Company have been duly authorized and validly issued
and are fully paid and non-
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assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right,
resale right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a material adverse
effect on the business, properties, financial condition, results of operation
or prospects of the Company taken as a whole (a "Material Adverse Effect");
(e) the Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of statutory
and contractual preemptive rights, resale rights, rights of first refusal and
similar rights;
(f) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and the certificates for the Shares
are in due and proper form and the holders of the Shares will not be subject
to personal liability by reason of being such holders;
(g) this Agreement has been duly authorized, executed and delivered
by the Company;
(h) the Company is not in breach or violation of or in default under
(nor has any event occurred which with notice, lapse of time or both would
result in any breach of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) its respective charter or by-laws, or any indenture,
mortgage, deed of trust, bank loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company is a party or by which any of it or any of
its properties may be bound or affected, and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and the
consummation of the
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transactions contemplated hereby will not conflict with, result in any breach
or violation of or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach of or
constitute a default under) (A) the charter or by-laws of the Company, or (B)
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or (C) any license, lease, contract or other
agreement or instrument to which the Company is a party or by which it or any
of its properties may be bound or affected, or (D) any federal, state, local
or foreign law, regulation or rule or (E) any decree, judgment or order
applicable to the Company, except in the case of (B), (C), (D) and (E) for
breaches, violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect;
(i) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required to be obtained or made by the
Company in connection with the issuance and sale of the Shares or the
consummation by the Company of the transactions contemplated hereby other
than registration of the Shares under the Act, which has been or will be
effected, and any necessary qualification or notification under the
securities or blue sky laws of the various jurisdictions in which the Shares
are being offered by the Underwriters or under the rules and regulations of
the NASD;
(j) except as set forth in the Registration Statement and the
Prospectus, (i) no person has the right, contractual or otherwise, to cause
the Company to issue or sell to it any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first refusal or
other rights to purchase any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter or as a financial advisor to the
Company in connection with the offer and sale of the Shares, in the case of
each of the foregoing clauses (i), (ii) and (iii), whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise; except for persons who have
expressly waived such right, no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of
Common Stock or shares of any other capital stock or other equity interests
of the Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether as a
result of the filing or effectiveness of the Registration Statement or the
sale of the Shares as contemplated thereby or otherwise;
(k) the Company has all necessary licenses, certificates,
certifications, clearances (including, without limitation, clearance from the
U.S. Food and Drug Administration (the "FDA")) to proceed with a Phase III
trial with PolyHeme(R), the
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Company's oxygen-carrying blood substitute, subject to obtaining
institutional review board approval at the trial sites participating in the
Company's clinical trials and compliance with the FDA's public notice and
other requirements for conducting clinical trials pursuant to a waiver of
informed consent), authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations, consents
and approvals from other persons, in order to conduct its business; the
Company is not in violation of, or in default under, and has not received
notice relating to revocation or modification of, or penalization under, any
such license, authorization, consent or approval or any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company, including without limitation, all FDA and
applicable foreign regulatory agency approvals necessary for marketing the
products that it currently markets, except where such violation, default,
revocation or modification would not, individually or in the aggregate, have
a Material Adverse Effect;
(l) all legal or governmental proceedings, affiliate transactions,
off-balance sheet transactions, contracts, licenses, agreements, leases or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed as required;
(m) except as disclosed in the Registration Statement or Prospectus,
there are no actions, suits, claims, investigations or proceedings pending or
threatened or, to the Company's knowledge after due inquiry, contemplated to
which the Company or any of its respective directors or officers is a party
or of which any of its respective properties is subject at law or in equity,
before or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, except any such action, suit,
claim, investigation or proceeding which, if adversely decided, would result
in a judgment, decree or order having, individually or in the aggregate, a
Material Adverse Effect or preventing consummation of the transactions
contemplated hereby;
(n) KPMG LLP, whose report on the financial statements of the
Company is filed with the Commission as part of the Registration Statement
and the Prospectus, are independent registered public accountants as required
by the Act;
(o) the audited financial statements included in the Registration
Statement and the Prospectus, together with the related notes and schedules,
present fairly the financial position of the Company as of the dates
indicated and the results of operations and cash flows of the Company for the
periods specified and have been prepared in compliance with the requirements
of the Act and in conformity with generally accepted accounting principles
applied on a consistent basis during the
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periods involved; any pro forma financial statements or data included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the requirements of Regulation S-X of the Act and the
assumptions used in the preparation of such pro forma financial statements
and data are reasonable, the pro forma adjustments used therein are
appropriate to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements and data; the other
financial and statistical data set forth in the Registration Statement and
the Prospectus are accurately presented and prepared on a basis consistent
with the financial statements and books and records of the Company; there are
no financial statements (historical or pro forma) that are required to be
included in the Registration Statement and the Prospectus that are not
included as required; and; the Company does not have any material liabilities
or obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Registration Statement and the Prospectus;
and all disclosures contained in the Registration Statement or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the Exchange
Act and Item 10 of Regulation S-K under the Act, to the extent applicable;
(p) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) any material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management, financial
condition or results of operations of the Company taken as a whole, (ii) any
transaction which is material to the Company taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company, which is material to the Company taken
as a whole, (iv) any change in the capital stock or outstanding indebtedness
of the Company (other than pursuant to the exercise of outstanding stock
options and warrants disclosed in the Prospectus and the grant of stock
options and restricted shares under the Company's existing equity incentive
plans and other than, in the case of the additional time of purchase, to the
prior issuance of the Firm Shares) or (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company;
(q) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A hereto,
of each of its directors and officers;
(r) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
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(s) the Company has good and marketable title to all property (real
and personal) described the Registration Statement and in the Prospectus as
being owned by each of them, free and clear of all liens, claims, security
interests or other encumbrances; all the property described in the
Registration Statement and the Prospectus as being held under lease by the
Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases;
(t) the Company owns, or has obtained valid and enforceable licenses
for, or other rights to use, the inventions, patent applications, patents,
trademarks (both registered and unregistered), tradenames, copyrights, trade
secrets and other proprietary information (collectively, "Intellectual
Property") described in the Registration Statement and the Prospectus as
being owned or licensed by them or which are necessary for the conduct of its
respective businesses, except where the failure to own, license or have such
rights would not, individually or in the aggregate, have a Material Adverse
Effect; (i) to the Company's knowledge, there are no rights of third parties
to any such Intellectual Property, except for the ownership rights of the
owners of the Intellectual Property which is licensed to the Company; (ii) to
the Company's knowledge, there is no infringement by third parties of any
Intellectual Property; (iii) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company's rights in or to any Intellectual Property, and the Company is
unaware of any facts which could form a reasonable basis for any such claim;
(iv) there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the validity or scope of any
Intellectual Property, and the Company is unaware of any facts which could
form a reasonable basis for any such claim; (v) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any facts which could form a reasonable basis for
any such claim; (vi) to the Company's knowledge, there is no patent or
published patent application that contains claims that interfere with the
issued or pending claims of any of the Intellectual Property; and (vii) there
is no prior art of which the Company is aware that may render any U.S. patent
application owned by the Company of the Intellectual Property unpatentable
that has not been disclosed to the U.S. Patent and Trademark Office;
(u) the Company is not engaged in any unfair labor practice; except
for matters which would not, individually or in the aggregate, have a
Material Adverse Effect, (i) there is (A) no unfair labor practice complaint
pending or, to the Company's knowledge after due inquiry, threatened against
the Company before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining
agreements is pending or threatened, (B) no strike, labor
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dispute, slowdown or stoppage pending or, to the Company's knowledge after
due inquiry, threatened against the Company and (C) no union representation
dispute currently existing concerning the employees of the Company, and (ii)
to the Company's knowledge after due inquiry, (A) no union organizing
activities are currently taking place concerning the employees of the Company
and (B) there has been no violation of any federal, state, local or foreign
law relating to discrimination in the hiring, promotion or pay of employees,
any applicable wage or hour laws or any provision of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder concerning the employees of the Company;
(v) the Company and its properties, assets and operations are in
compliance with, and hold all permits, authorizations and approvals required
under, Environmental Laws (as defined below), except to the extent that
failure to so comply or to hold such permits, authorizations or approvals
would not, individually or in the aggregate, have a Material Adverse Effect;
there are no past, present or, to the Company's knowledge after due inquiry,
reasonably anticipated future events, conditions, circumstances, activities,
practices, actions, omissions or plans that could reasonably be expected to
give rise to any material costs or liabilities to the Company under, or to
interfere with or prevent compliance by the Company with, Environmental Laws;
except as would not, individually or in the aggregate, have a Material
Adverse Effect, the Company (i) is not the subject of any investigation, (ii)
has not received any notice or claim, (iii) is not a party to or affected by
any pending or, to the Company's knowledge, threatened action, suit or
proceeding, (iv) is not bound by any judgment, decree or order, (v) has not
arranged for the disposal of any Hazardous Material at, or transported any
Hazardous Material to, any site for which the Company is or may be liable,
(vi) is not bound by any lien, or any lien is not reasonably expected to be
recorded on the property, (vii) does not own or lease any property that
contains or includes any asbestos, polychlorinated biphenyls, or any
underground storage tanks, piping, or sumps (or other underground structures
which contain Hazardous Materials, and (viii) has not entered into any
agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials (as defined below) (as
used herein, "Environmental Law" means any federal, state, local or foreign
law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or
common law, relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including, but not
limited to, those relating to the distribution, processing, generation,
treatment, storage, disposal, transportation, other handling or release or
threatened release of Hazardous Materials, and "Hazardous Materials" means
any material (including, without limitation, pollutants, contaminants,
hazardous or toxic substances or wastes, asbestos, mold or fungi) that is
regulated by or may give rise to liability
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under any Environmental Law); the Company has provided you copies of all
environmental studies, investigations, reports or assessments concerning the
Company, or any currently or previously owned or leased properties within
their possession or control;
(w) in the ordinary course of its business, the Company conducts a
periodic review of the effect of the Environmental Laws on its business,
operations and properties, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital
or operating expenditures required for cleanup, closure of properties or
compliance with the Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential liabilities
to third parties);
(x) all tax returns required to be filed by the Company have been
filed, and all taxes and other assessments of a similar nature (whether
imposed directly or through withholding) including any interest, additions to
tax or penalties applicable thereto due or claimed to be due from such
entities have been paid, other than those being contested in good faith and
for which adequate reserves have been provided;
(y) the Company maintains insurance covering its properties,
operations, personnel and businesses as the Company deems adequate and as
previously disclosed to the Underwriters; such insurance insures against such
losses and risks to an extent which is adequate in accordance with customary
industry practice to protect the Company and its businesses; all such
insurance is fully in force on the date hereof and will be fully in force at
the time of purchase and any additional time of purchase;
(z) the Company has not sustained, since the date of the latest
audited financial statements included in the Registration Statement or the
Prospectus, or incorporated by reference therein, as the case may be, any
material loss or interference with its business from fire, explosion, flood,
terrorist act 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 in or contemplated by the Registration Statement and the
Prospectus Supplement; and, since the date set forth in the section entitled
"Capitalization" in the Prospectus Supplement, there has not been any change
in the capital stock (except for stock options and restricted shares granted
or issued by the Company under the Company's existing equity incentive plans
since such date) or long-term debt of the Company or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the business, general affairs, management, financial
position, stockholders' equity, results of operations or prospects of the
Company, otherwise than as set forth or contemplated by the Registration
Statement and the Prospectus;
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(aa) the Company has not sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or
agreements referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been
threatened by the Company or, to the Company's knowledge, any other party to
any such contract or agreement;
(bb) 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;
(cc) the Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by others
within the Company and such disclosure controls and procedures are effective
to perform the functions for which they were established; the Company's
auditors and the Audit Committee of the Board of Directors have been advised
of: (i) any significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether or
not material, that involves management or other employees who have a role in
the Company's internal controls; any material weaknesses in internal controls
have been identified for the Company's auditors; and since the date of the
most recent evaluation of such disclosure controls and procedures, there have
been no significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material weaknesses.
(dd) the Company has provided you true, correct, and complete copies
of all documentation pertaining to any extension of credit in the form of a
personal loan made, directly or indirectly, by the Company to any director or
executive officer of the Company, or to any family member or affiliate of any
director or executive officer of the Company; and since July 30, 2002, the
Company has not, directly or indirectly, including through any Subsidiary:
(i) extended credit, arranged to extend credit, or renewed any extension of
credit, in the form of a personal loan, to or for any director or executive
officer of the Company, or to or for any family member or affiliate of any
-13-
director or executive officer of the Company; or (ii) made any material
modification, including any renewal thereof, to any term of any personal loan
to any director or executive officer of the Company, or any family member or
affiliate of any director or executive officer, which loan was outstanding on
July 30, 2002.
(ee) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources to the extent required;
(ff) neither the Company nor, to the Company's knowledge after due
inquiry, any employee or agent of the Company has made any payment of funds
of the Company or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Registration Statement or the
Prospectus;
(gg) neither the Company nor any of its respective directors,
officers, affiliates or controlling persons has taken, directly or
indirectly, any action designed, or which has constituted or might reasonably
be expected to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(hh) to the Company's knowledge after due inquiry, there are no
affiliations or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement and the Prospectus;
(ii) the Company and any of the officers and directors of the
Company, in their capacities as such, are in compliance in all material
respects with the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and
the applicable rules and regulations promulgated thereunder;
(jj) the FDA has not, and no applicable foreign regulatory agency
has commenced, or, to the knowledge of the Company, threatened to initiate,
any action to withdraw its approval of any product of the Company, except as
disclosed in the Registration Statement and the Prospectus;
(kk) to the knowledge of the Company, all of the manufacturing
facilities and operations of its suppliers of products sold in the United
States are in compliance with applicable FDA regulations, including current
Good Manufacturing Practices, and meet sanitation standards set by the
Federal Food, Drug and Cosmetic Act of 1938, as amended;
-14-
(ll) the clinical, pre-clinical and other studies and tests
conducted by or on behalf of or sponsored by the Company were and, if still
pending, are being conducted in accordance with all statutes, laws, rules and
regulations, as applicable (including, without limitation, those administered
by the FDA or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by the
FDA). The descriptions of the results of such studies and tests are accurate
and complete in all material respects and fairly present the published data
derived from such studies and tests, and the Company has no knowledge of
other studies or tests the results of which are inconsistent with or
otherwise call into question the results described or referred to in the
Registration Statement and the Prospectus, except as described in the
Registration Statement and the Prospectus. The Company has not received any
notices or other correspondence from the FDA or any other foreign, federal,
state or local governmental or regulatory authority performing functions
similar to those performed by the FDA with respect to any ongoing clinical or
pre-clinical studies or tests requiring the termination, suspension or
material modification of such studies or tests, except as described in the
Registration Statement and the Prospectus;
(mm) The Company has not failed to file with the applicable
regulatory authorities (including, without limitation, the FDA or any
foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA) any material
required filing, declaration, listing, registration, report or submission;
all such filings, declarations, listings, registrations, reports or
submissions were in material compliance with applicable laws when filed and,
except as referred to or described in the Base Prospectus or the Prospectus
Supplement, no deficiencies have been asserted by any applicable regulatory
authority (including, without limitation, the FDA or any foreign, federal,
state or local governmental or regulatory authority performing functions
similar to those performed by the FDA) with respect to any such filings,
declarations, listings, registrations, reports or submissions;
(nn) all existing minute books of the Company, including all
existing records of all meetings and actions of the Board of Directors
(including, Audit, Compensation and Nominating and Corporate Governance
Committees) and stockholders of the Company through the date of the latest
meeting and action (collectively, the "Corporate Records") have been made
available to the Managing Underwriters and counsel for the Managing
Underwriters. All such Corporate Records are complete and accurately reflect,
in all material respects, all transactions referred to in such Corporate
Records. There are no material transactions, agreements or other actions of
the Company that are not properly approved and/or recorded in the Corporate
Records;
-15-
(oo) no forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in
the Registration Statement and the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith;
and
(pp) the Shares are duly listed and admitted and authorized for
trading, subject to official notice of issuance, on the NASDAQ.
In addition, any certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Company as to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as you
may designate and to maintain such qualifications in effect so long as you
may request for the distribution of the Shares; provided that the Company
shall not be required to qualify as a foreign corporation or to consent to
the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares);
and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon
as practicable after the Registration Statement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or supplemented
if the Company shall have made any amendments or supplements thereto after
the effective date of the Registration Statement) as the Underwriters may
request for the purposes contemplated by the Act; in case any Underwriter
is required to deliver a prospectus after the nine-month period referred
to in Section 10(a)(3) of the Act in connection with the sale of the
Shares, the Company will prepare, at its expense, promptly upon request
such amendment or amendments to the Registration Statement and the
Prospectus as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or any post-effective amendment
thereto to be declared effective before the offering of the Shares may
commence, the Company will use best efforts to cause the Registration
Statement or such post-effective amendment to become effective as soon as
possible and the Company will advise you promptly and, if
-16-
requested by you, will confirm such advice in writing, (i) when the
Registration Statement and any such post-effective amendment thereto has
become effective, and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under the
Act (which the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for, or
the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use best
efforts to obtain the lifting or removal of such order as soon as
possible; to advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, including by filing any
documents that would be incorporated therein by reference, and to provide
you and Underwriters' counsel copies of any such documents for review and
comment a reasonable amount of time prior to any proposed filing and to
file no such amendment or supplement to which you shall object in writing;
(e) subject to Section 4(d) hereof, to file promptly all reports and
any definitive proxy or information statement required to be filed by the
Company with the Commission in order to comply with the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Shares; to provide you with a copy of such reports and statements and
other documents to be filed by the Company pursuant to Section 13, 14 or
15(d) of the Exchange Act during such period a reasonable amount of time
prior to any proposed filing, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of any
event within the time during which a prospectus relating to the Shares is
required to be delivered under the Act which could require the making of
any change in the Prospectus then being used so that the Prospectus would
not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during
such time, subject to Section 4(d) hereof, to prepare and furnish, at the
Company's expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such
change;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Sec-
-17-
tion 11(a) of the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined in Rule
158(c) of the Act) as soon as is reasonably practicable after the
termination of such twelve-month period;
(i) to furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flow of the Company
for such fiscal year, accompanied by a copy of the certificate or report
thereon of nationally recognized independent registered public
accountants);
(j) to furnish to you four copies of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference
therein) and sufficient copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(k) to furnish to you promptly and, upon request, to each of the
other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its stockholders, (ii) copies of all annual,
quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission, (iii) copies of documents or reports filed with any national
securities exchange on which any class of securities of the Company is
listed, and (iv) such other information as you may reasonably request
regarding the Company, in each case as soon as reasonably practicable
after such reports, communications, documents or information become
available;
(l) to furnish to you as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim and monthly financial statements, if any, of the Company
which have been read by the Company's independent registered public
accountants, as stated in their letter to be furnished pursuant to Section
6(d) hereof;
(m) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters and to dealers (including costs of mailing and shipment),
(ii) the registration, issue, sale and delivery of the Shares including
any stock or transfer taxes and stamp or similar duties payable upon the
sale,
-18-
issuance or delivery of the Shares to the Underwriters, (iii) the
producing, word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Powers of
Attorney and any closing documents (including compilations thereof) and
the reproduction and/or printing and furnishing of copies of each thereof
to the Underwriters and (except closing documents) to dealers (including
costs of mailing and shipment), (iv) the qualification of the Shares for
offering and sale under state or foreign laws and the determination of
their eligibility for investment under state or foreign law as aforesaid
(including the reasonable legal fees and filing fees and other
disbursements of counsel for the Underwriters in connection with such
matters) and the printing and furnishing of copies of any blue sky surveys
or legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of the
Shares for quotation on the National Association of Securities Dealers
Automated Quotation National Market System ("NASDAQ") and any registration
thereof under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the reasonable legal fees
and filing fees and other disbursements of counsel to the Underwriters in
connection with such matters, (vii) the fees and disbursements of any
transfer agent or registrar for the Shares, (viii) the costs and expenses
of the Company relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the Shares to
prospective investors and the Underwriters' sales forces, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged by the
Company in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the
road show, and (ix) the performance of the Company's other obligations
hereunder;
(o) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of
or agree to dispose of, directly or indirectly, nor enter into any swap or
other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of, any Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or file or
cause to be declared effective a registration statement under the Act
relating to the offer and sale of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock or other
rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock for a period of 90 days
after the date hereof (the "Lock-Up Period"), without the prior written
consent of UBS, except for (i) the registration of the Shares and the
sales to the Underwriters pursuant to this Agreement, (ii) issuances of
Common Stock upon the exercise of options or warrants disclosed as
outstanding in the Registration Statement and the Prospectus, and (iii)
the issuance of employee stock options not exercisable during the Lock-Up
Period pursuant to stock option plans described in the Registration
Statement and the
-19-
Prospectus; provided, however, that if (x) during the period that begins
on the date that is 15 calendar days plus 3 business days before the last
day of the Lock-up Period and ends on the last day of the Lock-up Period,
the Company issues a earnings release or material news or a material event
relating to the Company occurs, or (y) prior to the expiration of the
Lock-up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-up
Period, the restrictions set forth in this Section 4(o) shall continue to
apply until the expiration of the date that is 15 calendar days plus three
(3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
(p) to use best efforts to cause the Common Stock to be listed for
quotation on the NASDAQ; and
(q) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
5. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 8 hereof or as a result of the default by one
or more of the Underwriters in its or their respective obligations hereunder,
the Company shall, in addition to paying the amounts described in Section 4(n)
hereof, reimburse the Underwriters for all of their reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of their counsel. If
the Shares are delivered or this Agreement is terminated pursuant to the fifth
paragraph of Section 8 or as a result of the default by one or more of the
Underwriters, the Company shall be obligated to pay the amounts described in
Section 4(n) hereof, but shall have no obligation to pay or reimburse any other
fees or expenses of the Underwriters or their counsel.
6. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form and substance reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, stating that:
-20-
(i) the Company is a corporation validly existing and in good
standing under the laws of the State of Delaware, with full
corporate power to own, lease and operate its properties and conduct
its business as described in the Registration Statement and the
Prospectus, to execute and deliver this Agreement and to issue, sell
and deliver the Shares as contemplated herein;
(ii) the Company is duly qualified to do business as a foreign
corporation in the State of Illinois. To such counsel's knowledge,
the State of Illinois is the only state within the United States in
which the Company owns any material property or conducts any
material business and in which the failure to be qualified as a
foreign corporation would have a Material Adverse Effect;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Shares have been duly authorized and, when issued to
the Underwriters in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable;
(v) the Company has an authorized and outstanding
capitalization as set forth in the section entitled "Capitalization"
in the Prospectus Supplement as of the date set forth therein (and
not including any stock options or restricted shares granted or
issued by the Company under the Company's existing equity incentive
plans since such date); subject to compliance with applicable
federal and state securities laws (as to which such counsel
expresses no opinion), all of the outstanding shares of capital
stock of the Company as of immediately prior to the Closing are duly
authorized, validly issued and, to such counsel's knowledge, fully
paid and nonassessable, and are free of statutory preemptive rights
and preemptive rights under the Company's Certificate of
Incorporation and Bylaws and, to such counsel's knowledge,
contractual preemptive rights, resale rights and rights of first
refusal; the Shares are free of statutory preemptive rights and, to
such counsel's knowledge, contractual preemptive rights, resale
rights and rights of first refusal; the certificates for the Shares
are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders;
(vi) the capital stock of the Company, including the Shares,
conforms to the description thereof contained under the heading
"Description of the Securities We May Offer" in the Base Prospectus;
(vii) each of the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial data con-
-21-
tained therein, as to which such counsel need express no opinion),
as of its date, complied as to form in all material respects with
the requirements of the Act; and the conditions to the use of Form
S-3 have been satisfied; the documents incorporated by reference in
the Registration Statement and the Prospectus, at the time they
became effective or were filed with the Commission, complied as to
form in all material respects with the requirements of the Act or
the Exchange Act (except as to the financial statements and
schedules and other financial data contained therein, as to which
such counsel need express no opinion);
(viii) the Registration Statement was declared effective under
the Act at 12:00 p.m. Washington, D.C. time on January 5, 2005. The
Prospectus Supplement was filed by the Company with the Commission
pursuant to Rule 424(b) under the Act on February 4, 2005. To such
counsel's knowledge, no stop order proceedings with respect thereto
are pending or threatened under the Act and any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424 under
the Act has been made in the manner and within the time period
required by such Rule 424;
(ix) no approval, authorization, consent or order of or filing
with any federal, state or local governmental authority of the
United States of America, or the States of Delaware, Illinois or New
York is required in connection with the issuance and sale of the
Shares and consummation by the Company of the transactions
contemplated hereby other than registration of the Shares under the
Act (except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters);
(x) the execution and delivery of this Agreement by the
Company, and the consummation by the Company of the transactions
contemplated hereby to be consummated on the Closing Date, do not
violate (a) the Company's Certificate of Incorporation or Bylaws,
(b) any statute, law, rule or regulation or (c) any judgment, decree
or order of any court or any other agency of government known to
such counsel that is applicable to the Company or its property. The
execution and delivery of this Agreement by the Company, and the
consummation by the Company of the transactions hereunder to the
consummated on the Closing Date, do not and will not conflict with,
result in any breach or violation of or constitute a default under
(nor constitute any event which with notice, lapse of time or both
would result in any breach of or constitute a default under) any
indenture, mortgage, deed of trust, bank loan or credit agreement,
other evidence of indebtedness, any license, lease, contract or
other agreement or instrument included as an exhibit to the
-22-
Registration Statement or as an exhibit to any other registration
statement or report filed by the Company with the Commission;
(xi) to such counsel's knowledge, the Company is not in breach
or violation of or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach
of, or constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a part
of such indebtedness under) its Certificate of Incorporation or
Bylaws, or any indenture, mortgage, deed of trust, bank loan or
credit agreement, other evidence of indebtedness, any license,
lease, contract or other agreement or instrument to which the
Company is a party or by which it or any of its properties may be
bound or affected which is included as an exhibit to the
Registration Statement or as an exhibit to any other registration
statement or report filed by the Company with the Commission, or
law, regulation or rule of the United States of America or the
States of Delaware, Illinois or New York or any decree, judgment or
order applicable to the Company;
(xii) to such counsel's knowledge, there are no affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character which are required to
be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement which have not
been so described or filed;
(xiii) to such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or
contemplated to which the Company or any of its respective directors
or officers is a party or to which any of its respective properties
is subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency which are required to be described in the
Registration Statement or the Prospectus but are not so described;
(xiv) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or an entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act;
(xv) the information in the Registration Statement and the
Prospectus under the headings "Description of the Securities We May
Offer" and "Underwriting," and the information under the heading
"Legal Proceedings" in the Company's Form 10-K for the fiscal year
ended May 31, 2004 as filed with the Commission, which is
incorporated by reference into the Registration Statement and the
Prospectus, insofar as such statements constitute a summary
-23-
of documents or matters of law, and those statements in the
Registration Statement and the Prospectus that are descriptions of
contracts, agreements or other legal documents or of legal
proceedings, or refer to statements of law or legal conclusions, are
accurate in all material respects and present fairly the information
required to be shown; and
(xvi) no person, except for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., ▇▇ ▇▇▇▇▇
Securities Corporation and ▇▇ ▇▇▇▇▇ & Co., LLC, has the right,
pursuant to the terms of any contract, agreement or other instrument
described in or filed as an exhibit to the Registration Statement or
otherwise known to such counsel, to cause the Company to register
under the Act any shares of Common Stock or shares of any other
capital stock or other equity interest of the Company, or to include
any such shares or interest in the Registration Statement or the
offering contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent registered public accountants of the
Company and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus were discussed and, although such
counsel is not passing upon and does not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (except as and to the extent stated in subparagraphs
(vi), (viii) and (xvii) above), on the basis of the foregoing nothing has come
to the attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such Registration
Statement or amendment became effective contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date it was filed by the Company
with the Commission, and at the time of purchase or the additional time of
purchase, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and schedules and other
financial data included in the Registration Statement or the Prospectus).
(b) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, regulatory counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced cop-
-24-
ies for each of the other Underwriters and in substantially the form
attached as Exhibit B hereto.
(c) The Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, an opinion of McDonnell,
Boehnen, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Ltd., special counsel to the Company with
respect to patents and proprietary rights, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced copies for each of the other Underwriters and
in form and substance reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, stating that:
(i) To such counsel's knowledge, the statements under the
caption "Business--Patents and Proprietary Rights," in the Company's
Form 10-K for the fiscal year ended May 31, 2004 as filed with the
Commission which is incorporated by reference into the Registration
Statement and the Prospectus, and the statements in the Registration
Statement and the Prospectus under the caption "Risks Related to Our
Intellectual Property" are accurate and complete statements or
summaries of the matters therein set forth. Nothing has come to such
counsel's attention that causes them to believe that the
above-described portions of the Registration Statement at the time
such Registration Statement became effective contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto, at the date of such Prospectus or such supplement and at
the time of purchase or the additional time of purchase, as the case
may be, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading;
(ii) To such counsel's knowledge, (a) there are no legal or
governmental proceedings pending relating to patent rights, trade
secrets, trademarks, service marks or other proprietary information
or materials of the Company, and (b) 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 Company's patents, trade secrets,
trademarks, service marks or other proprietary information or
materials, 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 have not been so
described or filed required;
-25-
(iv) To such counsel's knowledge, (a) the Company is not
infringing or otherwise violating any patents, trade secrets,
trademarks, service marks or other proprietary information or
materials of others, and (b) there are no infringements by others of
any of the Company's patents, trade secrets, trademarks, service
marks or other proprietary information or materials which in such
counsel's judgment could affect materially the use thereof by the
Company;
(v) Such counsel has no knowledge of any facts which would
preclude the Company from having valid license rights or clear title
to the patents referenced in the Registration Statement and the
Prospectus. Such counsel has no knowledge that the Company lacks or
will be unable to obtain any rights or licenses to use all patents
and other material intangible property and assets necessary to
conduct the business now conducted or proposed to be conducted by
the Company as described in the Registration Statement and the
Prospectus, except as described in the Registration Statement and
the Prospectus. Counsel is unaware of any facts which form a basis
for a finding of unenforceability or invalidity of any of the
Company's patents and other material property and assets; and
(vi) Such counsel is not aware of any material fact with
respect to the patent applications of the Company presently on file
that (a) would preclude the issuance of patents with respect to such
applications, or (b) would lead such counsel to conclude that such
patents, when issued, would not be valid and enforceable in
accordance with applicable regulations.
(d) You shall have received from KPMG LLP letters dated,
respectively, the date of this Agreement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
forms heretofore approved by UBS.
(e) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion of
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, dated the time
of purchase or the additional time of purchase, as the case may be, as to
the matters referred to in subparagraphs (iii), (iv), (vi) (with respect
to the Shares only), (vii), (viii) and the last subparagraph of paragraph
(a) of this Section 6.
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus, including documents deemed to be incorporated
by reference therein, shall have been filed to which you object in
writing.
-26-
(g) The Registration Statement shall continue to be effective on the
second full business day after the date of this Agreement.
(h) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued under
the Act or proceedings initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) the Prospectus and all amendments or
supplements thereto shall not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective
material adverse change in the business, properties, management, financial
condition or results of operations of the Company taken as a whole shall
occur or become known.
(j) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer to the form attached as
Exhibit C hereto.
(k) You shall have received signed Lock-up Agreements referred to in
Section 3(q) hereof.
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and,
if applicable, the additional time of purchase, as you may reasonably
request.
(m) The Shares shall have been approved for quotation on NASDAQ,
subject only to notice of issuance at or prior to the time of purchase or
the additional time of purchase, as the case may be.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS or any group of
Underwriters (which may include UBS) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (x) since the execution of this
Agreement or the earlier respective dates as of which information
-27-
is given in the Registration Statement and the Prospectus, there has been any
material adverse change or any development involving a prospective material
adverse change in the business, properties, management, financial condition or
results of operation of the Company taken as a whole, which would, in UBS'
judgment or in the judgment of such group of Underwriters, make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
on the terms and in the manner contemplated in the Registration Statement and
the Prospectus, or (y) since the execution of this Agreement, there shall have
occurred: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ; (ii) a suspension or material limitation in trading in the Company's
securities listed for quotation on the NASDAQ; (iii) a general moratorium on
commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a
declaration by the United States of a national emergency or war; or (v) any
other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS' judgment or in the judgment of such
group of Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company
shall be unable to comply with any of the terms of this Agreement, the Company
shall not be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters
shall be under no obligation or liability to the Company under this Agreement
(except to the extent provided in Section 7 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and
7 hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as
-28-
hereinafter provided. Such Shares shall be taken up and paid for by such
non-defaulting Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set forth opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted Underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 8 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither (a) the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the purchase
of all the Firm Shares which the defaulting Underwriter or Underwriters agreed
to purchase hereunder nor (b) the Company and the non-defaulting Underwriters
shall not have agreed in writing to amend this Agreement to reduce the number of
Firm Shares so as to exclude the Shares agreed to be purchased by the defaulting
Underwriter or Underwriters, this Agreement shall terminate without further act
or deed and without any liability on the part of the Company to any
non-defaulting Underwriter and without any liability on the part of any
non-defaulting Underwriter to the Company. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any
-29-
loss, damage, expense, liability or claim (including the reasonable cost
of investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or
in the Registration Statement as amended by any post-effective amendment
thereof by the Company) or in a Prospectus (the term Prospectus for the
purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented
by the Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or
necessary to make such information not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company in Section 3
hereof or the failure by the Company to perform when and as required any
agreement or covenant contained herein, or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any audio or
visual materials provided by the Company or based upon written information
furnished by or on behalf of the Company including, without limitation,
slides, videos, films or tape recordings used by or with the permission of
the Company in connection with the marketing of the Shares.
If any action, suit or proceeding (each, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraph, such Underwriter
or such person shall promptly notify the Company in writing of the institution
of such Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that the omission
to so notify the Company shall not relieve the Company from any liability which
the Company may have to any Underwriter or any such person or otherwise, except
to the extent the Company shall not have otherwise learned of such Proceeding
and such failure results in the forfeiture by the Company of substantial rights
or defenses. Such Underwriter or such person shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or of such person unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the
-30-
Company shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties, but the Company may employ counsel and
participate in the defense thereof provided the fees and expenses of such
counsel are at the expense of the party engaging such counsel), in any of which
events such fees and expenses shall be borne by the Company and paid as incurred
(it being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any Proceeding (including any
consent to the entry of any judgment) effected without its written consent but
if settled with the written consent of the Company, the Company agrees to
indemnify and hold harmless any Underwriter and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such Proceeding and does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of
the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which,
jointly or severally, the Company or any such person may incur under the
Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained
in and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter
-31-
through you to the Company expressly for use in the Registration Statement
(or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or
is based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such person
in respect of which indemnity may be sought against any Underwriter pursuant to
the foregoing paragraph, the Company or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or otherwise,
except to the extent that such Underwriter shall not have otherwise learned of
such Proceeding and such failure results in the forfeiture by such Underwriter
of substantial rights or defenses. The Company or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such
Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in conflict
with those available to such Underwriter (in which case such Underwriter shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but such Underwriter may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Underwriter), in any of which events such fees
and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the expenses
of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). No
Underwriter shall be liable for any settlement of any such Proceeding (including
any consent to the entry of any judgment) effected without the written consent
of such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the afore-
-32-
said request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 or insufficient to hold an indemnified party harmless in respect
of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other hand from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such losses, damages, expenses, liabilities or claims,
as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on
the other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and the
total underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative
fault of the Company on the one hand and of the Underwriters on the other
shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a
result of the losses, damages, expenses, liabilities and claims referred
to in this subsection shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any
-33-
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter and distributed to the
public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such
untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and not
joint.
(e) The indemnity and contribution agreements contained in this
Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter,
its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, or
by or on behalf of the Company, its directors or officers or any person
who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and shall survive any termination of this
Agreement or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors, as the case may be, in connection with
the issuance and sale of the Shares, or in connection with the
Registration Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page of the Prospectus, the statements set forth
in the two sentences immediately preceding the caption "Underwriting -
Over-allotment Option" in the Prospectus, the statements set forth in the first
paragraph and the last sentence of the third paragraph under the caption
"Underwriting - Commissions and Discounts" in the Prospectus and the statements
set forth under the caption "Underwriting - Price Stabilization, Short
Positions, Passive Market Making" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at Northfield
-34-
Laboratories Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company hereby consents to personal jurisdiction, service and venue
in any court in which any Claim arising out of or in any way relating to this
Agreement is brought by any third party against an Underwriter or any
indemnified party. Each Underwriter and the Company (on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. Each Underwriter and the Company agrees
that a final judgment not subject to appeal in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding thereupon
and may be enforced in any other courts to the jurisdiction of which such
Underwriter or the Company is or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters and the Company and to the
extent provided in Section 9 hereof the controlling persons, directors and
officers referred to in such section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
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17. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is
not a bank and is separate from any affiliated bank, including any U.S. branch
or agency of UBS AG. Because UBS is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
-36-
If the foregoing correctly sets forth the understanding among the
Company and the Underwriters, please so indicate in the space provided below for
the purpose, whereupon this agreement and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
NORTHFIELD LABORATORIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
-----------------------------------
Title: Chief Executive Officer
Accepted and agreed to as of the date first above written, on behalf of itself
and the other several Underwriters named in Schedule A
UBS SECURITIES LLC
By: UBS SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Managing Director
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Director
-1-
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC 2,025,000
▇▇ ▇▇▇▇▇ & CO. 1,800,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CORP. 675,000
-----------
Total................. 4,500,000
===========
EXHIBIT A
Company
Common Stock
($.01 Par Value)
[Date]
UBS Securities LLC
As Representative of the several Underwriters
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Northfield Laboratories Inc. (the "Company")
and you, as Representative of the several Underwriters named therein, with
respect to the public offering (the "Offering") of Common Stock, par value $.01
per share, of the Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the date of the final
prospectus relating to the Offering the undersigned will not, without the prior
written consent of UBS, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, except for the exercise of any stock option by the undersigned (provided
that the restrictions imposed by this Lock-Up Letter Agreement shall apply to
the shares acquired upon exercise of such stock option), (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock,
whether any such transaction is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise, or (iii) publicly announce an
intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the registration of or sale to the
Underwriters of any Common Stock pursuant to the Offering and the Underwriting
Agreement, (b) bona fide gifts, provided the recipient thereof agrees in writing
with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement
and confirm that he, she or it has been in compliance with the terms of this
Lock-Up Letter Agreement since the date hereof or (c) dispositions to any trust
for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Letter Agreement and
confirms that it has been in compliance with the terms of this Lock-Up Letter
Agreement since the date hereof.
If (a) during the period that begins on the date that is 15 calendar
days plus three (3) business days before the last day of the 90-day restricted
period described in the foregoing paragraph (the "Lock-up Period") and ends on
the last day of the Lock-up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (b) prior to
the expiration of the Lock-up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-up Period, the restrictions imposed by this letter shall continue to apply
until the expiration of the date that is 15 calendar days plus three (3)
business days after the date on which the issuance of the earnings release or
the material news or material event occurs.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period of 90 days after the date of the final
prospectus relating to the Offering, the undersigned will not, without the prior
written consent of UBS, make any demand for, or exercise any right with respect
to, the registration of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants or
other rights to purchase Common Stock.
If (i) the Company notifies you in writing that it does not intend
to proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
_________________________
Name:
EXHIBIT B
FORM OF OPINION OF COUNSEL OF ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
[▇▇▇▇▇ & ▇▇▇▇▇▇▇ Letterhead]
[date]
Via E-mail and United Parcel Service
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is furnished to you pursuant to Section 6(b) of the
Underwriting Agreement dated February 4, 2005 (the "Underwriting Agreement")
between you and Northfield Laboratories Inc. (the "Company"), relating to the
sale by the Company and purchase by you as the Underwriters of up to 5,175,000
shares of the company's Common Stock, $0.01 par value per share (the "Shares").
This firm has acted as special regulatory counsel to the Company
only with respect to the U.S. Food and Drug Administration ("FDA") area only. In
such capacity, we have reviewed certain information under the following captions
in the Company's final Prospectus dated February 4, 2005 (together with any
document incorporated therein by reference, the "Prospectus"), forming a part of
the Company's Registration Statement on Form S-3, as amended (Registration No.
333-121622):
- "Prospectus Supplement Summary - `Business Overview' and `Trial
Design and Clinical Endpoints'"
- "Risk Factors - `We are required to complete our current clinical
trial before we may sell PolyHeme commercially and we may be
required to conduct additional clinical trials in the future',
`Completion of our piv-
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
February __, 2005
Page 2
otal Phase III clinical trial is dependent on the number of clinical
trial sites participating in the trial and the rate at which we are
able to enroll patients in the trial', `Safety data from our pivotal
Phase III clinical trial will be reviewed by an independent
committee, which could recommend that the trial be halted or
modified', `Our activities will continue to be subject to extensive
government regulation' and `Failure to increase manufacturing
capacity may impair PolyHeme's market acceptance and prevent us from
achieving profitability'"
- "Business - Government Regulation - United States" (from the
Company's Annual Report on Form 10-K for the year ended May 31,
2004).
We have not been retained or engaged by the Company to perform, nor have we
performed, any review of any other information in the Prospectus. Additionally,
we have not been retained or engaged to provide advice in respect of United
States securities laws or the rules or regulations of the Commission thereunder
(the "Rules"), nor have we been retained or engaged by the Company to provide
advice as to whether any information or any statement, opinion or other writing
is required under the United States securities laws or the Rules to be filed
with or submitted to, or incorporated into any document that will be filed with
or submitted to, the Commission, and the matters addressed herein should not be
construed as such advice. Terms used herein that are defined in the Underwriting
Agreement shall have the respective meanings set forth in the Underwriting
Agreement, unless otherwise defined herein.
For purposes of our opinion, we have examined copies of the
following (the "Documents"):
1. An executed copy of the Underwriting Agreement.
2. The information contained in the Prospectus under the captions
"Prospectus Supplement Summary - `Business Overview' and `Trial
Design and Clinical Endpoints'", "Risk Factors - `We are required to
complete our current clinical trial before we may sell PolyHeme
commercially and we may be required to conduct additional clinical
trials in the future', `Completion of our pivotal Phase III clinical
trial is dependent on the number of clinical trial sites
participating in the
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
February __, 2005
Page 3
trial and the rate at which we are able to enroll patients in the
trial', `Safety data from our pivotal Phase III clinical trial will
be reviewed by an independent committee, which could recommend that
the trial be halted or modified', `Our activities will continue to
be subject to extensive government regulation' and `Failure to
increase manufacturing capacity may impair PolyHeme's market
acceptance and prevent us from achieving profitability'" and
"Business - Government Regulation - United States" (from the
Company's Annual Report on Form 10-K for the year ended May 31,
2004).
3. A certificate dated as of February __, 2005 of certain officers of
the Company as to certain facts relating to the Company.
In our examination of the Underwriting Agreement and the other
Documents, we have assumed the genuineness of all signatures, the legal capacity
of all natural persons, the accuracy and completeness of all of the Documents,
the authenticity of all originals of the Documents and the conformity to
authentic originals of all of the Documents submitted to us as copies (including
telecopies). Further, for purposes of the Opinion, we have not independently
verified, nor do we take any responsibility for nor are we addressing in any
way, any statements of fact, any statements concerning state or foreign national
law, any legal conclusions or any statements of belief attributable to the
Company or whether or not the Company is in compliance with applicable
provisions of the Federal Food, Drug, and Cosmetic Act, as amended (the "FDC
Act"), the Public Health Service Act (the "PHS Act"), and the regulations
promulgated thereunder. Our opinion is given in the context of the foregoing.
This letter is based as to matters of law solely regarding the FDC
Act, the PHS Act, and the regulations promulgated thereunder, and we express no
view as to any other laws, statutes, regulations or ordinances, including
without limitation any foreign, federal or state licensing, securities,
antitrust, unfair competition, tax laws or regulations.
Nothing herein shall be construed to cause us to be considered
"experts" within the meaning of Section 11 of the Securities Act of 1933, as
amended.
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
February __, 2005
Page 4
Based upon, subject to and limited by the foregoing, we are of the
opinion that the statements in the Prospectus under the captions "Prospectus
Supplement Summary - `Business Overview' and `Trial Design and Clinical
Endpoints'", ""Risk Factors - `We are required to complete our current clinical
trial before we may sell PolyHeme commercially and we may be required to conduct
additional clinical trials in the future', `Completion of our pivotal Phase III
clinical trial is dependent on the number of clinical trial sites participating
in the trial and the rate at which we are able to enroll patients in the trial',
`Safety data from our pivotal Phase III clinical trial will be reviewed by an
independent committee, which could recommend that the trial be halted or
modified', `Our activities will continue to be subject to extensive government
regulation' and `Failure to increase manufacturing capacity may impair
PolyHeme's market acceptance and prevent us from achieving profitability'" and
"Business - Government Regulation - United States" (from the Company's Annual
Report on Form 10-K for the year ended May 31, 2004), insofar as such statements
purport to summarize applicable provisions of the FDC Act, the PHS Act, and the
regulations promulgated thereunder, are accurate summaries in all material
respects of the provisions purported to be summarized under such captions in the
Prospectus. Further, to our knowledge, based on the business of the Company as
described in the Prospectus, there is no provision of the FDC Act, the PHS Act,
and the regulations promulgated thereunder that would be material to an investor
that is not summarized in the Prospectus under the captions "Prospectus
Supplement Summary - `Business Overview' and `Trial Design and Clinical
Endpoints'", ""Risk Factors - `We are required to complete our current clinical
trial before we may sell PolyHeme commercially and we may be required to conduct
additional clinical trials in the future', `Completion of our pivotal Phase III
clinical trial is dependent on the number of clinical trial sites participating
in the trial and the rate at which we are able to enroll patients in the trial',
`Safety data from our pivotal Phase III clinical trial will be reviewed by an
independent committee, which could recommend that the trial be halted or
modified', `Our activities will continue to be subject to extensive government
regulation' and `Failure to increase manufacturing capacity may impair
PolyHeme's market acceptance and prevent us from achieving profitability'" and
"Business - Government Regulation - United States" (from the Company's Annual
Report on Form 10-K for the year ended May 31, 2004).
* * * * *
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
February __, 2005
Page 5
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this letter. This letter has been
prepared solely for your use in connection with the Underwriting Agreement, and
it should not be quoted in whole or in part or otherwise be referred to, nor be
filed with or furnished to any governmental agency or other person or entity,
without the prior written consent of this firm.
Very truly yours,
_________________________
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
UBS Securities LLC
▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp.
c/o UBS Securities LLC
February __, 2005
Page 6
EXHIBIT C
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (g) and (h) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.