Exhibit 1.1
[_______________] Shares
Neurocrine Biosciences, Inc.
Common Stock
($0.001 Par Value)
EQUITY UNDERWRITING AGREEMENT
December [__], 2001
Deutsche Banc Alex. Xxxxx Inc.
Credit Suisse First Boston Corporation
As Representatives of the Several Underwriters
c/o Deutsche Banc Alex. Xxxxx Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Neurocrine Biosciences, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell to the several underwriters (the "UNDERWRITERS") named in
Schedule I hereto for whom you are acting as Representatives (the
"REPRESENTATIVES") an aggregate of [__________] shares of the Company's Common
Stock, $0.001 par value (the "FIRM SHARES"). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite
their names in Schedule I hereto. The Company also proposes to sell at the
Underwriters' option an aggregate of up to [__________] additional shares of the
Company's Common Stock (the "OPTION SHARES") as set forth below.
As the Representatives, you have advised the Company (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Shares set forth opposite their
respective names in Schedule I, plus their pro rata portion of the Option Shares
if you elect to exercise the over-allotment option in whole or in part for the
accounts of the several Underwriters. The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
called the "SHARES."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to each of the Underwriters as follows:
(a) A registration statement on Form S-3 (File No. 333-73216) (the "INITIAL
REGISTRATION STATEMENT") in respect of the Shares has been prepared by the
Company in conformity with the requirements of the Security Act of 1933, as
amended (the "ACT"), and the rules and regulations (the "RULES AND
REGULATIONS") of the Securities and Exchange Commission (the "COMMISSION")
thereunder and has been filed with the Commission; the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, and, excluding exhibits thereto but including
all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "RULE 462(B)
REGISTRATION STATEMENT"), filed pursuant to Rule 462(b) under the Act,
which became effective upon filing, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission other than
prospectuses filed pursuant to Rule 424 of the Rules and Regulations, each
in the form heretofore delivered to the Representatives; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement,
if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission; promptly after execution and
delivery of this Agreement, the Company will prepare and file a prospectus
in accordance with the provisions of Rule 430A of the Rules and Regulations
and/or paragraph (b) of Rule 424 Rules and Regulations (the information
included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of
such registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "RULE 430A INFORMATION"; any
prospectus used before such registration statement became effective, and
any prospectus that omitted the Rule 430A Information that was used after
such effectiveness and prior to the execution and delivery of this
Agreement used in connection with the offer and sale of the Shares, is
hereinafter called a "PRELIMINARY PROSPECTUS"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto and including (i) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time
it was declared effective and (ii) the documents incorporated by reference
in the prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became effective, each
as amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective, are hereinafter collectively
called the "REGISTRATION STATEMENT"; such final prospectus used in
connection with the offer and sale of the Shares, in the form first filed
pursuant to Rule 424(b) under the Act and used to confirm sales of the
Shares, is hereinafter called the "PROSPECTUS"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement. Each of the
subsidiaries of the Company as listed in Exhibit 21 to Item 16(a) of the
Registration Statement (collectively, the "SUBSIDIARIES") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement. The Subsidiaries are the only
subsidiaries, direct or indirect, of the Company. The Company and each of
the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification. The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable and are owned by the Company or another Subsidiary free
and clear of all liens, encumbrances and equities and claims; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligations into shares of
capital stock or ownership interests in the Subsidiaries are outstanding.
No Subsidiary is prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any of
such Subsidiary's property or assets to the Company or any other
Subsidiary, except as described in the Registration Statement.
(c) The outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; the
Shares to be issued and sold by the Company have been duly authorized and
reserved for issuance and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive
rights or any other rights to subscribe for securities of the Company exist
with respect to any of the Shares or the issue and sale thereof. Neither
the filing of the Registration Statement nor the offering or sale of the
Shares as contemplated by this Agreement gives rise to any rights, other
than those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock or other securities of the
Company. Except as set forth in the Registration Statement, no securities
of the Company convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of capital stock of the Company and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligations into or exchange
any securities for, shares of capital stock of, or any securities
convertible or exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of, or ownership interests in the
Company are authorized or outstanding.
(d) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct. All of the Shares conform to the
description thereof contained in the Registration Statement. The form of
certificates for the Shares conforms to the corporate law of the
jurisdiction of the Company's incorporation.
(e) The Commission has not issued an order preventing or suspending the use of
any Prospectus or any Preliminary Prospectus relating to the proposed
offering of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus, any Preliminary
Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform to,
the requirements of the Act and the Rules and Regulations. The documents
incorporated, or to be incorporated, by reference in the Prospectus, at the
time filed with the Commission conformed or will conform in all respects to
the requirements of the Securities Exchange Act of 1934, as amended
("EXCHANGE ACT"), or the Act, as applicable, and the rules and regulations
of the Commission thereunder. The Registration Statement and any amendment
thereto do not contain, and will not contain, any untrue statement of a
material fact and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus, any Preliminary Prospectus and any
amendments and supplements thereto do not contain, and will not contain,
any untrue statement of material fact and do not omit, and will not omit,
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein. There is no franchise,
contract or other document of a character required to be described in the
Registration Statement, or to be filed as an exhibit thereto, which is not
described or filed as required.
(f) The consolidated financial statements of the Company and the Subsidiaries,
together with the related notes and schedules, as set forth or incorporated
by reference in the Registration Statement, present fairly the financial
position and the results of operations and cash flows of the Company and
the consolidated Subsidiaries, at the indicated dates and for the indicated
periods. Such financial statements and related notes and schedules have
been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results
for such periods have been made. The summary and selected financial and
statistical data included or incorporated by reference in the Registration
Statement presents fairly the information shown therein and such data has
been compiled on a basis consistent with the financial statements and the
related notes and schedules presented therein and the books and records of
the Company.
(g) Ernst & Young LLP, who have certified certain of the financial statements,
the related notes and schedules, filed with the Commission as part of, or
incorporated by reference in, the Registration Statement, are independent
public accountants as required by the Act and the Rules and Regulations.
(h) There is no action, suit, claim or proceeding pending or, to the knowledge
of the Company, threatened against the Company or any of the Subsidiaries
before any court or administrative agency or otherwise which if determined
adversely to the Company or any of its Subsidiaries might result in any
material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects
of the Company and of the Subsidiaries taken as a whole or prevent the
consummation of the transactions contemplated hereby, except as set forth
in the Registration Statement.
(i) The Company and the Subsidiaries have good and marketable title to all of
the properties and assets reflected in the consolidated financial
statements, the related notes and schedules, hereinabove described or
described in the Registration Statement, subject to no lien, mortgage,
pledge, charge or encumbrance of any kind except those reflected in such
financial statements or described in the Registration Statement or which
are not material in amount. The Company and the Subsidiaries occupy their
leased properties under valid and binding leases conforming in all material
respects to the description thereof set forth in the Registration
Statement.
(j) The Company and the Subsidiaries have filed all Federal, state, local and
foreign tax returns which have been required to be filed and have paid all
taxes indicated by such returns and all assessments received by them or any
of them and any other assessment, fine or penalty levied against them or
any of them to the extent that any of the foregoing have become due. All
tax liabilities have been adequately provided for in the financial
statements of the Company, and the Company does not know of any actual or
proposed additional material tax assessments.
(k) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole, whether
or not occurring in the ordinary course of business, and there has not been
any material transaction entered into or any material transaction that is
probable of being entered into by the Company or the Subsidiaries, other
than transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be amended
or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Company's financial
statements, or the related notes or schedules, which are included or
incorporated in the Registration Statement. Except as described in the
Registration Statement, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(l) Neither the Company nor any of the Subsidiaries is or with the giving of
notice or lapse of time or both, will be, in violation of or in default
under (i) its certificate of incorporation or by-laws, (ii) any agreement,
mortgage, deed of trust, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it, or any of its properties,
is bound and (iii) any law, order, rule or regulation, judgment, order,
writ or decree applicable to the Company or any Subsidiary of any court or
of any government, regulatory body or administrative agency or other
governmental body having jurisdiction and, solely with respect to clauses
(ii) and (iii), which violation or default would have a material adverse
effect on the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company
and the Subsidiaries taken as a whole. The execution and delivery of this
Agreement and the consummation of the transactions herein contemplated and
the fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any agreement, mortgage, deed of trust, lease, contract, indenture or other
instrument or obligation to which the Company or any Subsidiary is a party
or by which the Company or any Subsidiary or any of their respective
properties is bound, or the certificate of incorporation or by-laws of the
Company or any law, order, rule or regulation, judgment, order, writ or
decree applicable to the Company or any Subsidiary of any court or of any
government, regulatory body or administrative agency or other governmental
body having jurisdiction.
(m) The execution and delivery of, and the performance by the Company of its
obligations under, this Agreement have been duly and validly authorized by
all necessary corporate action on the part of the Company, and this
Agreement has been duly executed and delivered by the Company.
(n) Each approval, consent, order, authorization, designation, declaration or
filing by or with any regulatory, administrative or other governmental body
necessary in connection with the execution and delivery by the Company of
this Agreement and the consummation of the transactions herein contemplated
(except such additional steps as may be required by the Commission, the
National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(o) The Company and each of the Subsidiaries hold all material licenses,
certificates and permits from governmental authorities which are necessary
to the conduct of their businesses; the Company and the Subsidiaries each
own or possess the right to use all patents, patent rights, trademarks,
trade names, service marks, service names, copyrights, license rights,
know-how (including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and other
intellectual property rights ("INTELLECTUAL PROPERTY") necessary to carry
on their business as currently conducted and as currently proposed to be
conducted in all material respects; neither the Company nor any of the
Subsidiaries has infringed, and none of the Company nor the Subsidiaries
have received notice of conflict with, any Intellectual Property of any
other person or entity. Each of the Company and the Subsidiaries has taken
all reasonable steps necessary to secure interests in such Intellectual
Property from its contractors. There are no outstanding options, licenses
or agreements of any kind relating to the Intellectual Property of the
Company or the Subsidiaries that are required to be described in the
Prospectus and are not described in all material respects. Neither the
Company nor any Subsidiary is a party to or bound by any options, licenses
or agreements with respect to the Intellectual Property of any other person
or entity that are required to be set forth in the Prospectus and are not
described in all material respects. None of the technology employed by the
Company or any Subsidiary has been obtained or is being used by the Company
or any Subsidiary in violation of any contractual obligation binding on the
Company, any Subsidiary or any of their respective officers, directors or
employees or otherwise in violation of the rights of any persons; Neither
the Company nor any Subsidiary has received any written or oral
communications alleging that the Company or any Subsidiary has violated,
infringe or conflicted with, or, by conducting its business as set forth in
the Prospectus, would violate, infringe or conflict with, any of the
Intellectual Property of any other person or entity. The Company knows of
no infringement by others of Intellectual Property owned by or licensed to
the Company or any Subsidiary.
(p) Neither the Company, nor to the Company's knowledge, any of its affiliates,
has taken or may take, directly or indirectly, any action designed to cause
or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
the shares of Common Stock to facilitate the sale or resale of the Shares.
The Company acknowledges that the Underwriters may engage in passive market
making transactions in the Shares on the Nasdaq National Market in
accordance with Regulation M under the Exchange Act.
(q) Neither the Company nor any Subsidiary is or, after giving effect to the
offering and sale of the Shares contemplated hereunder and the application
of the net proceeds from such sale as described in the Properties, will be
an "investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended (the "1940 ACT"), and the rules
and regulations of the Commission thereunder.
(r) The Company and each of its Subsidiaries maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements, and the related notes and
schedules, 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.
(s) The Company and each of its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses.
All policies of insurance and fidelity or surety bonds insuring the Company
or any of the Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company
and the Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; there are no claims by the Company or
any of the Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Company nor any Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in any material adverse change in
the earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and of the
Subsidiaries taken as a whole, except as described in the Registration
Statement.
(t) The Company and each Subsidiary is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company and each Subsidiary would have any liability;
the Company and each Subsidiary has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "CODE"); and each "pension plan"
for which the Company or any Subsidiary would have any liability that is
intended to be qualified under Section 401(a) of the Code is so qualified
in all material respects and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(u) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or, to the knowledge of the Company, is imminent and
the Company is not aware of any existing or imminent labor disturbance by
the employees of the Company's or the Subsidiaries' principal suppliers,
contractors or customers that could reasonably be expected to result in any
material adverse change in the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects
of the Company and of the Subsidiaries taken as a whole.
(v) To the Company's knowledge, there are no affiliations or associations
between any member of the NASD and any of the Company's officers, directors
or 5% or greater security holders, except as set forth in the Registration
Statement.
(w) Except as set forth in the Registration Statement, the Company (i) does not
have any material lending or other relationship with any bank or lending
affiliate of Deutsche Banc Alex. Xxxxx Inc. or any other Underwriter and
(ii) does not intend to use any proceeds from the sale of the Shares
hereunder to repay any outstanding debt owed to Deutsche Banc Alex. Xxxxx
Inc., any other Underwriter or any affiliate thereof.
(x) There are no transfer taxes or other similar fees or charges under Federal,
state, local or foreign law required to be paid in connection with the
execution and delivery of this Agreement or the issuance by the Company or
sale by the Company of the Shares.
(y) Except as set forth in the Registration Statement, neither the Company nor
any of the Subsidiaries is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"ENVIRONMENTAL LAWS"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate result in any material adverse change in the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and of the Subsidiaries taken as a
whole; and the Company is not aware of any pending investigation which
could reasonably be expected to lead to such a claim.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
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(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters and each Underwriter agrees, severally
and not jointly, to purchase, at a price of $[_____] per share, the number
of Firm Shares set forth opposite the name of each Underwriter in Schedule
I hereof, subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made in Federal
(same day) funds against delivery of certificates therefor to the
Representatives for the several accounts of the Underwriters. Such payment
and delivery are to be made through the facilities of The Depository Trust
Company, New York, New York at 10:00 a.m., New York time, on the [third]
business day after the date of this Agreement or at such other time and
date not later than five business days thereafter as you and the Company
shall agree upon, such time and date being herein referred to as the
"CLOSING DATE." As used herein, "BUSINESS DAY" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are
open for business and are not permitted by law or executive order to be
closed.
(c) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of
this Section 2. The option granted hereby may be exercised in whole or in
part by giving written notice (i) at any time before the Closing Date and
(ii) only once thereafter within 30 days after the date of this Agreement,
by you, as Representatives of the several Underwriters, to the Company
setting forth the number of Option Shares as to which the several
Underwriters are exercising the option and the time and date at which such
certificates are to be delivered. The time and date at which certificates
for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to
the Closing Date (such time and date being herein referred to as the
"OPTION CLOSING DATE"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the
Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to the total number of Firm Shares,
adjusted by you in such manner as to avoid fractional shares. The option
with respect to the Option Shares granted hereunder may be exercised only
to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written
notice of such cancellation to the Company. To the extent, if any, that the
option is exercised, payment for the Option Shares shall be made on the
Option Closing Date in Federal (same day funds) through the facilities of
The Depository Trust Company in New York, New York drawn to the order of
the Company.
3. OFFERING BY THE UNDERWRITERS.
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It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY.
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The Company covenants and agrees with the several Underwriters that:
(a) The Company will (A) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the
Rules and Regulations is followed, to prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a
form approved by the Representatives containing information previously
omitted at the time of effectiveness of the Registration Statement in
reliance on Rule 430A of the Rules and Regulations, (B) not file any
amendment to the Registration Statement or amendment or supplement to the
Prospectus or document incorporated by reference therein of which the
Representatives shall not previously have been advised and furnished with a
copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and
(C) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters.
(b) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have
become effective, (B) of receipt of any comments from the Commission, (C)
of any request of the Commission for amendment of the Registration
Statement or for amendment or supplement to the Prospectus or any
Preliminary Prospectus or for any additional information, and (D) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will cooperate with the Representatives in endeavoring to
qualify the Shares for sale under the securities laws of such jurisdictions
as the Representatives may reasonably have designated in writing and will
make such applications, file such documents, and furnish such information
as may be reasonably required for that purpose, provided the Company shall
not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time
to time, prepare and file such statements, reports and other documents as
are or may be required to continue such qualifications in effect for so
long a period as the Representatives may reasonably request for
distribution of the Shares.
(d) The Company will deliver to, or upon the order of, the Representatives,
from time to time, as many copies of any Preliminary Prospectus as the
Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in
final form, or as thereafter amended or supplemented, as the
Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies of
the exhibits filed therewith that may reasonably be requested), including
documents incorporated by reference therein, and of all amendments thereto,
as the Representatives may reasonably request.
(e) The Company will comply with the Act and the Rules and Regulations, and the
Exchange Act, and the rules and regulations of the Commission thereunder,
so as to permit the completion of the distribution of the Shares as
contemplated in this Agreement and the Prospectus. If during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Underwriters, it becomes
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company promptly will either (i) prepare and file with the
Commission an appropriate amendment to the Registration Statement or
amendment or supplement to the Prospectus or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with
the law.
(f) The Company will make generally available to its security holders, as soon
as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning
statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date
of the Registration Statement, which earnings statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so
made available.
(g) Prior to the Closing Date, the Company will furnish to the Underwriters, as
soon as they have been prepared by or are available to the Company, a copy
of any unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements
appearing or incorporated in the Registration Statement and the Prospectus.
(h) No offering, sale, short sale or other disposition of any shares of Common
Stock of the Company or other securities convertible into or exchangeable
or exercisable for shares of Common Stock or derivative of Common Stock (or
agreement for such) will be made for a period of 90 days after the date of
this Agreement, directly or indirectly, by the Company otherwise than
hereunder or with the prior written consent of Deutsche Banc Alex. Xxxxx
Inc.; provided that the Company may grant options and sell shares pursuant
to its [Stock Option Plan].
(i) The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the Nasdaq National Market.
(j) The Company has caused each officer and director of the Company to furnish
to you, on or prior to the date of this Agreement, a letter or letters, in
form and substance satisfactory to the Underwriters, pursuant to which each
such person shall agree not to offer, sell, sell short or otherwise dispose
of any shares of Common Stock of the Company or other capital stock of the
Company, or any other securities convertible, exchangeable or exercisable
for Common Shares or derivative of Common Shares owned by such person or
request the registration for the offer or sale of any of the foregoing (or
as to which such person has the right to direct the disposition of) for a
period of 90 days after the date of this Agreement, directly or indirectly,
except with the prior written consent of Deutsche Banc Alex. Xxxxx Inc.
("LOCKUP AGREEMENTS").
(k) The Company shall apply the net proceeds of its sale of the Shares as set
forth in the Prospectus.
(l) The Company shall not invest, or otherwise use the proceeds received by the
Company from its sale of the Shares, in such a manner as would require the
Company or any of the Subsidiaries to register as an investment company
under the 1940 Act.
(m) The Company will maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the Common
Stock.
(n) The Company will not take, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be expected
to constitute, the stabilization or manipulation of the price of any
securities of the Company.
5. COSTS AND EXPENSES.
------------------
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, the Underwriters' Invitation
Letter, the Listing Application, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements) incident to securing any
required review by the NASD of the terms of the sale of the Shares; the Listing
Fee of the Nasdaq National Market; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under state securities or Blue Sky laws. Any
transfer taxes imposed on the sale of the Shares to the several Underwriters
will be paid by the Company. The Company shall not, however, be required to pay
for any of the Underwriters expenses (other than those related to qualification
under NASD regulation and state securities or Blue Sky laws) except that, if
this Agreement shall not be consummated because the conditions in Section 6
hereof are not satisfied, or because this Agreement is terminated by the
Representatives pursuant to Section 11 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure, refusal or inability is
due primarily to the default or omission of any Underwriter, the Company shall
reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
---------------------------------------------
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto shall
have become effective and any and all filings required by Rule 424 and Rule
430A of the Act shall have been made within the applicable time period
prescribed by, and in compliance with, the Rules and Regulations, and any
request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and no proceedings for
that purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated or threatened by the Commission and no injunction,
restraining order or order of any nature by a Federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Shares.
The Representatives shall have received on the Closing Date or the Option
Closing Date, as the case may be, the opinions of Xxxxxx & Xxxxxxx, counsel
for the Company, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) to the effect that:
(i) The Company is validly existing as a corporation in good standing
under the laws of the State of Delaware, with corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement; the Company is
duly qualified to transact business in the State of California and the
State of Oregon.
(ii) The Company has authorized capital stock as set forth under the
caption "Capitalization" in the Prospectus; the shares of Common
Stock, including the Option Shares, if any, to be sold by the Company
pursuant to this Agreement have been duly authorized and will be
validly issued, fully paid and non-assessable when issued and paid for
as contemplated by this Agreement; and no preemptive rights of
stockholders exist with respect to any of the Shares or the issue or
sale thereof under the Company's certificate of incorporation or the
Delaware General Corporation Law.
(iii)The Registration Statement has become effective under the Act and, to
the best of the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the Act and no stop order proceedings with respect thereto have been
instituted or are pending or threatened under the Act. Any required
filing of the Prospectus pursuant to Rule 424(b) under the Act has
been made in accordance with Rule 424(b) and 430A under the Act.
(iv) The Registration Statement, the Prospectus and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Act or the Exchange Act as applicable and the
applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements and related
schedules or other financial or statistical data included or
incorporated by reference therein). In passing upon the compliance as
to form of the Registration Statement and the Prospectus, such counsel
may assume that the statements made and incorporated by reference
therein are correct and complete.
(v) The statements under the captions "Description of Capital Stock" and
"Underwriting" in the Prospectus, and under the caption
"Indemnification of Directors and Officers," insofar as such
statements constitute a summary of documents referred to therein or
matters of law, fairly summarize in all material respects the
information called for with respect to such documents and matters.
(vi) The Company has the corporate power and authority to enter into this
Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by the Company pursuant to this
Agreement. (vii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, (a) the certificate of
incorporation or by-laws of the Company, (b) any indenture, mortgage,
deed of trust or other agreement or instrument listed on Exhibit A to
this Agreement; and (c) any Federal or California state statute, rule
or regulation known to such counsel to be applicable to the Company or
its Subsidiaries or the Delaware General Corporation Law]; provided
that such counsel need not express any opinion with respect to clause
(c) of this paragraph
(vii)as to the application of Section 548 of the Federal Bankruptcy Code
and comparable provisions of state law], the antifraud provisions of
Federal or state securities laws, antitrust or trade regulation laws,
the Hatch/Waxman regulations of the U.S. Patent and Trademark Office,
the Federal Food, Drug and Cosmetic Act, the Public Health Service
Act, the Food and Drug Administration Modernization Act, the Orphan
Drug Act or the rules and regulations of the Federal Food and Drug
Administration, or any other Federal or California state laws
pertaining to the regulation of the development, testing, manufacture
or sale of drugs.
(viii) This Agreement has been duly authorized, executed and delivered by
the Company.
(ix) No approval, consent, order, authorization, designation, declaration
or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated (other than as may be required by the NASD or as
required by state securities and Blue Sky laws as to which such
counsel need express no opinion) except such as have been obtained or
made, specifying the same; provided that such counsel need not express
any opinion with respect to this Section 6(b)(ix) as to the
application of Section 548 of the Federal Bankruptcy Code and
comparable provisions of state law], the antifraud provisions of
Federal or state securities laws, the Hatch/Waxman Patent Term
Extension Act and the other patent laws of the United States or the
rules and regulations of the U.S. Patent and Trademark Office, the
Federal Food, Drug and Cosmetic Act, the Public Health Service Act,
the Food and Drug Administration Modernization Act, the Orphan Drug
Act or the rules and regulations of the Federal Food and Drug
Administration, or any other Federal or California state laws
pertaining to the regulation of the development, testing, manufacture
or sale of drugs.
(x) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and
application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
In rendering such opinion Xxxxxx & Xxxxxxx may rely as to matters governed
by the laws of states other than California (other than the Delaware
General Corporation Law) or Federal laws on local counsel in such
jurisdictions, provided that in each case Xxxxxx & Xxxxxxx shall state that
they believe that they and the Underwriters are justified in relying on
such other counsel. In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has come
to the attention of such counsel which leads them to believe that (i) the
Registration Statement or any amendment thereto, at the time it became
effective under the Act (including the information deemed to be a part of
the Registration Statement at the time it became effective pursuant to Rule
430A under the Act) and as of the Closing Date or the Option Closing Date,
as the case may be, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(ii) the Prospectus, or any supplement thereto, on the date it was filed
pursuant to the Rules and Regulations and as of the Closing Date or the
Option Closing Date, as the case may be, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
statistical information therein). With respect to such statement, Xxxxxx &
Xxxxxxx may state that their belief is based upon the procedures set forth
therein, but is without independent check or verification.
(b) The Representatives shall have received on the Closing Date or the Option
Closing Date, as the case may be, the opinions of the general counsel for
the Company, dated the Closing Date or the Option Closing Date, as the case
may be, addressed to the Underwriters (and stating that it may be relied
upon by counsel to the Underwriters) to the effect that such counsel is
familiar with the Federal Food, Drug and Cosmetic Act, the Public Health
Service Act, the Food and Drug Administration Modernization Act, the Orphan
Drug Act or the rules and regulations of the Federal Food and Drug
Administration, or any other Federal or California state laws known to such
counsel pertaining to the regulation of the development, testing,
manufacture or sale of drugs, as applied generally to drugs of the nature
under development and clinical testing by the Company, and to the effect
that:
(i) To such counsel's knowledge, the Company does not own or control,
directly or indirectly, any corporation, association or other entity
other than Neurocrine Biosciences, Canada ("NEUROCRINE CANADA").
(ii) To such counsel's knowledge, the Shares to be issued by the Company on
the Closing Date or the Option Closing Date, as the case may be,
pursuant to the terms of this Agreement, upon issuance and delivery
against payment therefor in accordance with the terms hereof, will not
have been issued in violation of or subject to any co-sale right,
right of first refusal or other similar right.
(iii)The statements set forth in the Prospectus under the headings "Risk
Factors--Risks Related to Our Business--We may not receive regulatory
approvals for our product candidates," "Business--Government
Regulation," insofar as such statements constitute a summary of legal
matters, and the application of those legal matters to the Company,
are accurate in all material respects.
(iv) To such counsel's knowledge, there are no contracts or documents of a
character required to be described in the Registration Statement or
Prospectus (or required to be filed under the Exchange Act, if upon
such filing they would be incorporated by reference therein) or to be
filed as exhibits to the Registration Statement that are not described
and filed as required.
(v) The issuance and sale of the Shares by the Company pursuant to this
Agreement will not result in (i) the violation by the Company of the
Federal Food, Drug and Cosmetic Act, the Public Health Service Act,
the Food and Drug Administration Modernization Act, the Orphan Drug
Act or the rules and regulations of the Federal Food and Drug
Administration, or any other Federal or California state laws known to
such counsel pertaining to the regulation of the development, testing,
manufacture or sale of drugs or (ii) the breach of or a default under
any order, writ or decree of any court or governmental agency having
jurisdiction over the Company or Neurocrine Canada or over any of
their respective properties or operations.
(vi) No consent, approval, authorization or order of, or filing with, any
Federal or California state court or governmental agency or body is
required under the patent laws of the United States or the rules and
regulations of the Federal Food, Drug and Cosmetic Act, the Public
Health Service Act, the Food and Drug Administration Modernization
Act, the Orphan Drug Act or the rules and regulations of the Federal
Food and Drug Administration, or any other Federal or California state
laws pertaining to the regulation of the development, testing,
manufacture or sale of drugs, for the consummation of the issuance and
sale of the Shares by the Company pursuant to this Agreement.
(vii)To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company or Neurocrine
Canada of a character required to be disclosed in the Registration
Statement or the Prospectus by the Act, other than those described
therein, except for such proceedings as, if the subject of an
unfavorable decision, would not individually or in the aggregate
result in a material adverse change in the earnings, business,
management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and of the
Subsidiaries taken as a whole or prevent the consummation of the
transactions contemplated hereby.
(viii) To such counsel's knowledge, except as disclosed in the Prospectus,
the Company is not presently (a) in material violation of its
certificate of incorporation or by-laws or (b) in material breach of
any order, writ or decree of any court or governmental agency or body
having jurisdiction over the Company.
(ix) Except as described in or contemplated by the Prospectus, there are no
outstanding securities of the Company convertible or exchangeable into
or evidencing the right to purchase or subscribe for any shares of
capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating the
Company to issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock.
(x) Except as described in the Prospectus, no holder of any securities of
the Company or any other person has the right, contractual or
otherwise, which has not been satisfied or effectively waived, to
cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, any of the Shares or the right to have
any Common Shares or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of any
shares of Common Stock or other securities of the Company.
In addition to the matters set forth above, such opinion shall also include
a statement to the effect that nothing has come to the attention of such
counsel which leads such counsel to believe that (i) the Registration
Statement or any amendment thereto, at the time it became effective under
the Act (including the information deemed to be a part of the Registration
Statement at the time it became effective pursuant to Rule 430A under the
Act) and as of the Closing Date or the Option Closing Date, as the case may
be, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to
the Rules and Regulations and as of the Closing Date or the Option Closing
Date, as the case may be, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading (except that such counsel need
express no view as to financial statements, schedules and statistical
information therein). With respect to such statement, such counsel may
state that such counsel's belief is based upon the procedures set forth
therein, but is without independent check or verification.
(c) The Representatives shall have received on the Closing Date or the Option
Closing Date, as the case may be, the opinions of Seed Intellectual
Property Law Group PLLC, patent counsel for the Company, dated the Closing
Date or the Option Closing Date, as the case may be, addressed to the
Underwriters, that such counsel is familiar with the Company's technology
as described in the Prospectus and with the manner in which the Company
uses that technology and in the form attached hereto as Exhibit A.
(d) The Representatives shall have received from Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (iii) and (viii) of paragraph (b)
of this Section 6, and that the Company is a duly organized and validly
existing corporation under the laws of the State of Delaware. In rendering
such opinion Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., may rely as to all
matters governed other than by the laws of the State of California, the
Delaware General Corporation Law or Federal laws on the opinions of counsel
referred to in paragraphs (b) and (c) of this Section 6. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads
them to believe that (i) the Registration Statement, or any amendment
thereto, as of the time it became effective under the Act (including the
information deemed to be a part of the Registration Statement at the time
it became effective pursuant to Rule 430A under the Act) and as of the
Closing Date or the Option Closing Date, as the case may be, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (ii) the Prospectus, or any
supplement thereto, on the date it was filed pursuant to the Rules and
Regulations and as of the Closing Date or the Option Closing Date, as the
case may be, contained or contains an untrue statement of a material fact
or omit to state a material fact, necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to
such statement, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., may state that
their belief is based upon the procedures set forth therein, but is without
independent check and verification.
(e) The Representatives shall have received at or prior to the Closing Date
from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., a memorandum or summary, in
form and substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under
the state securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably have designated to the Company.
(f) You shall have received, on each of the date hereof, the Closing Date and,
if applicable, the Option Closing Date, a letter dated the date hereof, the
Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, of Ernst & Young LLP confirming that they
are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that in
their opinion the financial statements, notes and schedules examined by
them and included or incorporated in the Registration Statement comply in
form in all material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations; and containing
such other statements and information as is ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements, the related notes and schedules and certain financial
and statistical information contained in the Registration Statement and
Prospectus.
(g) The Representatives shall have received on the Closing Date and, if
applicable, the Option Closing Date, as the case may be, a certificate or
certificates of the Chief Executive Officer and the Chief Financial Officer
of the Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally represents as
follows:
(i) The Registration Statement has become effective under the Act and no
stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken
or are, to his or her knowledge, contemplated or threatened by the
Commission;
(ii) The representations and warranties of the Company contained in Section
1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(iii)All filings required to have been made pursuant to Rules 424 or 430A
under the Act have been made as and when required by such rules;
(iv) He or she has carefully examined the Registration Statement and the
Prospectus and, in his or her opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and
Prospectus did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, and since the effective date of the Registration
Statement, no event has occurred which should have been set forth in a
supplement to or an amendment of the Prospectus which has not been so
set forth in such supplement or amendment; and
(v) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any material
adverse change or any development involving a prospective material
adverse change in or affecting the business, management, properties,
assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(h) The Company shall have furnished to the Representatives such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved for
designation upon notice of issuance on the Nasdaq National Market.
(j) The Lockup Agreements described in Section 4(j) are in full force and
effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
--------------------------------------------
The obligations of the Company to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
---------------
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, against
any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject
under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under
which they were made or (iii) any act or failure to act, or any
alleged act or failure to act, by any Underwriter in connection
with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability, action or proceeding
arising out of or based upon matters covered by clause (i) or
(ii) above (provided, that the Company shall not be liable under
this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss,
claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by
such Underwriter through its gross negligence or willful
misconduct); provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged
omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information
furnished to the Company by or through the Representatives
specifically for use therein; and
(2) to reimburse each Underwriter and each such controlling person
upon demand for any legal or other out-of-pocket expenses
reasonably incurred by such Underwriter or such controlling
person in connection with investigating or defending any such
loss, claim, damage, liability, action or proceeding or in
responding to a subpoena or governmental inquiry related to the
offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding. In the
event that it is finally judicially determined that the
Underwriters were not entitled to receive payments for legal and
other expenses pursuant to this subparagraph, the Underwriters
will promptly return all sums that had been advanced pursuant
hereto.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages
or liabilities to which the Company or any such director, officer or
controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating or defending
any such loss, claim, damage, liability, action or proceeding; provided,
however, that each Underwriter will be liable in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for
use therein. This indemnity agreement will be in addition to any liability
which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "INDEMNIFIED party") shall
promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing. No indemnification provided for in
Section 8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related
and was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of the provisions of
Section 8(a) or (b). In case any such proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days
of presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them
or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable
period of time after notice of commencement of the action. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable
fees and expenses of more than one separate firm for all such indemnified
parties. Such firm shall be designated in writing by you in the case of
parties indemnified pursuant to Section 8(a) and by the Company in the case
of parties indemnified pursuant to Section 8(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be
sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) 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 from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), 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 proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased
by such Underwriter and (ii) 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 in this Section
8(f) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any Preliminary
Prospectus, the Prospectus or any supplement or amendment thereto, each
party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may
be served upon it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may
join it as an additional defendant in any such proceeding in which such
other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or any person controlling any Underwriter, or
to the Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
-----------------------
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company), you, as Representatives of
the Underwriters, shall use your reasonable efforts to procure within 36 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth
herein, the Shares which the defaulting Underwriter or Underwriters failed to
purchase. If during such 36 hours you, as such Representatives, shall not have
procured such other Underwriters, or any others, to purchase the Shares agreed
to be purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Shares to be purchased on the Closing Date or the Option
Closing date, as the case may be, the other Underwriters shall be obligated,
severally, in proportion to the respective numbers of Shares which they are
obligated to purchase hereunder, to purchase the Shares which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate number
of shares of Shares with respect to which such default shall occur exceeds 10%
of the Shares to be purchased on the Closing Date or the Option Closing Date, as
the case may be, the Company or you as the Representatives of the Underwriters
will have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company except to the
extent provided in Sections 5 and 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date or
Option Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in order that
the required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
10. NOTICES.
-------
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to Deutsche Banc Alex. Xxxxx Inc.,
Xxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000; Attention: Syndicate Manager, with
a copy to Deutsche Banc Alex. Xxxxx Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel; if to the Company, to Neurocrine
Biosciences, Inc., 00000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxxx, XX 00000, Attn:
[_______].
11. TERMINATION.
-----------
This Agreement may be terminated by you by notice to the Company
(a) at any time prior to the Closing Date or any Option Closing Date (if
different from the Closing Date and then only as to Option Shares) if any
of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and its Subsidiaries taken as a whole, whether
or not arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency or
other national or international calamity or crisis or change in economic or
political conditions if the effect of such outbreak, escalation,
declaration, emergency, calamity, crisis or change on the financial markets
of the United States would, in your reasonable judgment, make it
impracticable or inadvisable to market the Shares or to enforce contracts
for the sale of the Shares, or (iii) suspension of trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market or limitation on prices (other than limitations
on hours or numbers of days of trading) for securities on either such
Exchange, (iv) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the Company,
(v) the declaration of a banking moratorium by United States or New York
State authorities, (vi) any downgrading, or placement on any watch list for
possible downgrading, in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Exchange Act); (vii) the suspension
of trading of the Company's common stock by the Nasdaq National Market, the
Commission, or any other governmental authority or, (viii) the taking of
any action by any governmental body or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse
effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
----------
This Agreement has been and is made solely for the benefit of the
Underwriters and the Company and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign merely because of such purchase. 13.
INFORMATION PROVIDED BY UNDERWRITERS.
The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the third, ninth, and tenth paragraphs under the
caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
-------------
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
NEUROCRINE BIOSCIENCES, INC.
By:
-------------------------------------------
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANC ALEX. XXXXX INC.
As Representatives of the several
Underwriters listed on Schedule I
By: Deutsche Banc Alex. Xxxxx Inc.
By:
-----------------------------------------------
Authorized Officer
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm
Underwriter Shares to be Purchased
-------------------------------------- ----------------------
Deutsche Bank Securities Inc.
Credit Suisse First Boston Corporation
----------------
Total
================
SCHEDULE II
SCHEDULE OF OPTION SHARES
Maximum Percentage
Number of Option Shares to of Total Number
Name of Seller be Sold of Option Shares
---------------- -------------------------- ----------------
Total 100%
EXHIBIT A
SCHEDULE OF MATERIAL AGREEMENTS
