EXHIBIT 1.1
BioCryst Pharmaceuticals, Inc.
2,000,000 shares of Common Stock, par value of $.01
Underwriting Agreement
New York, New York
, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
As Representatives of
the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
BioCryst Pharmaceuticals, Inc., a corporation organized under
the laws of Delaware (the "Company"), proposes to sell to the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, 2,000,000 shares of Common
Stock, par value of $.01 (the "Common Stock") of the Company (said shares to be
issued and sold by the Company being hereinafter called the "Underwritten
Securities"). The Company also proposes to grant to the Underwriters an option
to purchase up to 300,000 additional shares of Common Stock to cover
over-allotments (the "Option Securities"; the Option Securities, together with
the Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the
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Exchange Act after the Effective Date of the Registration Statement, or the
issue date of any Preliminary Prospectus or the Prospectus, as the case may be,
deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission a
registration statement (file number 333-87669) on Form S-3, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will
next file with the Commission one of the following: either (1) prior to
the Effective Date of such registration statement, a further amendment
to such registration statement (including the form of final prospectus)
or (2) after the Effective Date of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b). In the case of
clause (2), the Company has included in such registration statement, as
amended at the Effective Date, all information (other than Rule 430A
Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed,
such amendment and form of final prospectus, or such final prospectus,
shall contain all Rule 430A Information, together with all other such
required information and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only
such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Prospectus (and any supplement thereto) will, comply in
all material respects with the applicable requirements of the Act, the
Exchange Act and the respective rules thereunder; on the
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Effective Date and at the Execution Time, the Registra tion Statement
did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date and any settlement date, the Prospectus
(together with any supplement thereto) will not include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representations or warranties as to
the information contained in or omitted from the Registration
Statement, or the Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction which requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a material adverse effect on the condition
(financial or otherwise), profits, earnings, prospects, business or
properties of the Company (a "Material Adverse Effect");
(d) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in
all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock have been duly and
validly authorized and issued and are fully paid and nonassessable; the
Securities have been duly and validly authorized, and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities are
duly listed, and admitted and authorized for trading, subject to
official notice of issuance, on the Nasdaq National Market; the
certificates for the Securities comply with
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the requirements of Delaware law; the holders of outstanding shares of
capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities and, except as set forth in the
Prospectus, 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 ownership interests in the Company are outstanding.
(e) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation
of the Company enforceable in accordance with its terms.
(g) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(i) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
material breach or violation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, (i)
the charter or by-laws of the Company, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a party
or bound or to which its or their property is subject, or (iii) any
statute, law, rule,
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regulation, judgment, order or decree applicable to the Company of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
any of its properties.
(j) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement,
except for such rights as have been effectively waived.
(k) The historical financial statements and schedules of the
Company included in the Prospectus and the Registration Statement
present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Prospectus Summary -- Summary Financial Data" and "Selected Financial
Data" in the Prospectus and Registration Statement fairly present, on
the basis stated in the Prospectus and the Registration Statement, the
information included therein.
(l) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or the
consummation of any of the transactions contemplated hereby or (ii)
could reasonably be expected to have a Material Adverse Effect, whether
or not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(m) The Company owns or leases all such properties as are
reasonably necessary to the conduct of its operations as presently
conducted.
(n) The Company is not in violation or default of (i) any
provision of its charter or bylaws, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property
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is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, as applicable, except in the
case of clauses (ii) or (iii), any such violation or default which
would not, singly or in the aggregate, result in a Material Adverse
Effect.
(o) Ernst & Young LLP, who have audited certain financial
statements of the Company and delivered their report with respect to
the audited consolidated financial statements and schedules included in
the Prospectus, are independent public accountants with respect to the
Company within the meaning of the Act and the applicable published
rules and regulations thereunder.
(p) There are no transfer taxes or other similar fees or
charges under federal law or the laws of any state, or any political
subdivision thereof, 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 Securities.
(q) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto)) and has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(r) To the Company's knowledge, no labor problem or dispute
with the employees of the Company exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers,
contractors or customers, that could reasonably be expected to have a
Material Adverse Effect, whether or not arising from transactions in
the ordinary course of business, except
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as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(s) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
adequate in accordance with customary industry standards in the
businesses in which it is engaged; all policies of insurance insuring
the Company's businesses, assets, employees, officers and directors are
in full force and effect; the Company is in compliance with the terms
of such policies and instruments in all material respects; and there
are no claims by the Company under any such policy or instrument as to
which any insurance company is denying liability or defending under a
reservation of rights clause; the Company has not been refused any
insurance coverage sought or applied for; and the Company has no reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(t) The Company possess all licenses, certificates, permits
and other authorizations issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct its businesses, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(u) 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 authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and
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(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(v) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(w) The Company is (i) in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received and is in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct its businesses and (iii) has not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement
thereto). The Company has not been named as a "potentially responsible
party" under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.
(x) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws,
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the condition (financial
or
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otherwise), prospects, earnings, business or properties of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(y) The Company has fulfilled its obligations, if any, under
the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations. The Company has not
incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary
course) or to any such plan under Title IV of ERISA.
(z) The Company has implemented a comprehensive, detailed
program to analyze and address the risk that the computer hardware and
software used by them may be unable to recognize and properly execute
date-sensitive functions involving certain dates prior to and any dates
after December 31, 1999 (the "Year 2000 Problem"), and reasonably
believes that such risk will be remedied on a timely basis without
material expense and will not have a Material Adverse Effect; and the
Company believes, that each supplier, vendor or customer used by the
Company has remedied or will remedy on a timely basis the Year 2000
Problem, except to the extent that a failure to remedy by any such
supplier, vendor or customer would not have a Material Adverse Effect.
The Company is in substantial compliance with the Commission's Release
No. 33-3558.
(aa) The Company owns, possess, licenses or has other rights
to use, on reasonable terms, all patents, patent applications, trade
and service marks, trade and service ▇▇▇▇ registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other intellectual property (collectively, the "Intellectual
Property") reasonably necessary for the conduct of the Company's
business as now conducted or as proposed in the Prospectus to be
conducted. Except as set forth in the Prospectus under the caption
"Business-- Patents and Proprietary Information," and except where no
Material Adverse Effect (a) there are no rights of third parties to any
such Intellectual Property; (b) there is
10
no material infringement by third parties of any such Intellectual
Property; (c) 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 such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for
any such claim; (d) there is no pending or threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (e) 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 other
fact which would form a reasonable basis for any such claim; (f) to the
best of the Company's knowledge there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may
dominate any Intellectual Property described in the Prospectus as being
owned by or licensed to the Company or that interferes with the issued
or pending claims of any such Intellectual Property; and (g) to the
best of the Company's knowledge there is no prior art of which the
Company is aware that may render any U.S. patent held by the Company
invalid or any U.S. patent application held by the Company unpatentable
which has not been disclosed to the U.S. Patent and Trademark Office.
(bb) The statements contained in the Prospectus under the
captions "Risk Factors -- We may fail to adequately protect or enforce
our intellectual property rights or secure rights to third party
patents" and "Business -- Patents and Proprietary Information," insofar
as such statements summarize legal matters, agreements, documents, or
proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings.
(cc) The Company has such permits, licenses, franchises,
authorizations and clearances ("Permits") of governmental or regulatory
authorities, including, without limitation, the Food and Drug
Administration (the "FDA") of the U.S. Department of Health and Human
Services and/or any committee thereof, as are reasonably necessary to
own, lease and operate its properties and to conduct its business in
the manner described in the Prospectus, subject to such qualifications
as may be set forth in the Prospectus, except where such failure to
receive such Permits would not, individually or in the
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aggregate, be reasonably expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto); subject to such qualifications as may be set
forth in the Prospectus, the Company has fulfilled and performed all
its material obligations with respect to the Permits, and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any Permit, subject in each
case to such qualification as may be set forth in the Prospectus.
Except as described in the Prospectus, none of the Permits contains any
restriction that is materially burdensome to the Company.
(dd) Except to the extent disclosed in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
the clinical, pre- clinical and other studies and tests conducted by or
on behalf of or sponsored by the Company or in which the Company or the
Company's products under development have participated that are
described in the Prospectus or the results of which are referred to in
the Prospectus were and, if still pending, are being conducted in
accordance with standard medical and scientific research procedures.
The descriptions of the results of such studies and tests are accurate
and complete in all material respects and fairly present the data
derived from such studies and tests, and the Company has no knowledge
of any other studies or tests the results of which are inconsistent
with or otherwise call into question the results described or referred
to in the Prospectus. Except to the extent disclosed in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), the Company has operated and currently is in
compliance in all material respects with all applicable FDA rules,
regulations and policies. Except to the extent disclosed in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), the Company has not received any notices or other
correspondence from the FDA or any other governmental agency requiring
the termination, suspension or modification of any clinical or
pre-clinical studies or tests that are described in the Prospectus or
the results of which are referred to in the Prospectus.
(ee) The Company has not received nor is it aware of any
communication (written or oral) relating to the termination or
modification or threatened termination or modification of any of the
agreements described or referred to in the prospectus under the
captions "Risk
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Factors -- We are highly dependent on The ▇.▇. ▇▇▇▇▇▇▇ Pharmaceutical
Research Institute and Ortho-▇▇▇▇▇▇ for substantially all of our
revenue," "The success of our drug development programs depends solely
upon third parties for many of the critical steps in the process" and
"Business -- Collaborative Relationships," nor is it aware of any
communication (written or oral) relating to any determination or
threatened determination not to renew or extend any agreement described
or referred to under such captions at the end of the current term of
any such agreement.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$_________________ per share, the amount of the Underwritten Securities set
forth opposite such Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 300,000 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten Securities. Said option
may be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities
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(if the option provided for in Section 2(b) hereof shall have been exercised on
or before the third Business Day prior to the Closing Date) shall be made at
10:00 AM, New York City time, on_______________ , 1999, or at such time on such
later date not more than three Business Days after the foregoing date as the
Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to an account specified by the Company. Delivery of
the Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives on
the date specified by the Representatives (which shall be within three Business
Days after exercise of said option) for the respective accounts of the several
Representatives, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of
14
the Securities, the Company will not file any amendment of the
Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of the
Prospectus is otherwise required under Rule 424(b), the Company will
cause the Prospectus, properly completed, and any supplement thereto to
be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective,(2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission,(3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective,(4) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Prospectus or for any additional information,(5) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if, in the
reasonable discretion of the Company, it shall be necessary to amend
the Registration
15
Statement or supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company promptly
will (1) notify the Representatives of such event, (2) prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 5, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer, sell, contract to sell, pledge, or
otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic
16
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement
with 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 Exchange Act, any other shares
of Common Stock or any securities convertible into, or exercisable, or
exchangeable for, shares of Common Stock; or publicly announce an
intention to effect any such transaction, for a period of 90 days after
the date of the Underwriting Agreement, PROVIDED, HOWEVER, that the
Company may issue and sell Common Stock pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time and the Company may issue
Common Stock issuable upon the conversion of securities or the exercise
of warrants outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
17
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused ▇▇▇▇▇▇▇,
Phleger & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed
to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which
requires such qualifi cation;
(ii) the authorized capital stock of the Company under
the heading "Actual" under the caption "Capitalization" is as
set forth in the Prospectus; the statements set forth under
the caption "Description of Capital Stock" in the Prospectus,
insofar as such statements purport to summarize certain
provisions of the capital stock of the Company, provide a fair
summary of such provisions; the shares of Common Stock of the
Company outstanding prior to the issuance of the Securities
have been duly authorized and validly issued and, to such
counsel's knowledge, are fully paid and nonassessable; the
Securities have been duly authorized, and, when issued and
delivered to the Underwriters against payment therefor in
accordance with the terms of this Agreement, will be fully
paid and nonassessable; the Securities have been approved for
quotation on the Nasdaq National Market, upon issuance as
contemplated by this Agreement; the form of certificate for
the Securities conforms in all material respects to the
requirements of the Delaware General Corporation Law; to such
counsel's knowledge, the holders of outstanding shares of
capital stock of the Company
18
are not entitled to preemptive or other rights to subscribe
for the Securities except for such rights as have been
effectively waived; and, to such counsel's knowledge, except
as described in 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 a similar
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;
(iii) to the knowledge of such counsel (A) there are no
legal or governmental proceedings pending or threatened
against the Company, or to which the Company or any of its
properties are subject, which are required to be disclosed in
the Registration Statement or Prospectus (or any amendment or
supplement thereto) that are not so described and (B) there
are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the
Registration Statement or Prospectus (or any amendment or
supplement thereto) or to be filed as an exhibit to the
Registration Statement that are not so described or filed, as
the case may be; and the statements included or incorporated
by reference in the prospectus under the headings "Risk
Factors -- If we or our collaborative partners do not obtain
and maintain governmental approvals for our products under
development, we or our collaborative partners will not be able
to sell these potential products, which would significantly
harm our business," " -- We may fail to adequately protect or
enforce our intellectual property rights or secure rights to
third party patents," fairly summarize the matters therein
described.
(iv) the Registration Statement and all post-effective
amendments, if any, have become effective under the Act; any
required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in accordance
with Rule 424(b); to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement has been issued and no
19
proceedings for that purpose are pending before or
contemplated by the Commission;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as defined in the Investment Company
Act of 1940, as amended;
(vii) no consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory
body, administrative agency or other governmental body, agency
or official is required on the part of the Company (except (A)
as have been obtained under the Act or (B) such as may be
required under state securities or Blue Sky laws governing the
purchase and distribution of the Securities, as to which such
counsel expresses no opinion) for the valid issuance and sale
of the Securities to the Underwriters as contemplated by this
Agreement;
(viii) neither the offer, sale or delivery of the
Securities, the execution, delivery or performance by the
Company of this Agreement, compliance by the Company with the
provisions of this Agreement, nor the consummation by the
Company of the transactions herein contemplated (A) violates
the charter or by-laws of the Company, or (B) constitutes a
breach of, or a default under, any agreement, indenture,
lease, or other instrument to which the Company is a party or
any of its properties is bound or (C) will result in any
violation of any existing law or regulation (other than
applicable state securities and blue sky laws, as to which
such counsel need express no opinion), or any ruling,
judgment, injunction, order or decree known to us and
applicable to the Company or any of its or their properties;
and
(ix) To such counsel's knowledge and except as disclosed
in the Prospectus, no holders of securities of the Company
have the right to have any Common Stock or other securities of
the Company included in the Registration Statement (except for
such rights as have been effectively waived).
20
In addition, such counsel shall state:
Such counsel participated in conferences with certain officers
and other representatives of the Company, its independent public
accountants, the Underwriters and the Underwriters' counsel at which
the contents of the Registration Statement, the Prospectus and related
matters were discussed. Such counsel is not, however, passing upon, and
does not assume any responsibility for, and has not independently
checked or verified, the accuracy, completeness or fairness of the
information contained in the Registration Statement and the Prospectus.
Such counsel shall state, however, that based upon their
participation as described in the preceding paragraph, (i) they are of
the opinion that the Registration Statement and Prospectus (other than
the consolidated financial statements, including the notes and
schedules thereto, and the other financial and statistical data
included in the Registration Statement and Prospectus, as to which they
express no opinion), at the time the Registration Statement became
effective, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations
thereunder, (ii) they confirm that they have no reason to believe that
the Registration Statement (other than the consolidated financial
statements including notes and schedules and other financial
statistical information included in the Registration Statement, as to
which they express no belief), at the time the Registration Statement
became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) they
confirm that they have no reason to believe the Prospectus (other than
the consolidated financial statements included the notes and schedules
thereto, and the other financial and statistical data included in the
Prospectus, as to which they express no belief), on the date such
opinion is delivered, contains any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Delaware or the
21
federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cravath,
Swaine & ▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require,
and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects
on and as of the Closing Date with the same effect as if made
on the Closing Date and the Company has complied with all the
agree ments and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's
knowledge, threat ened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there has
been no Material Adverse Effect, whether or not arising from
transactions in
22
the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement
thereto).
(e) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective
applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review in accordance with Statement on
Auditing Standards No. 71 of the unaudited interim financial
information of the Company for the six-month period ended June 30,
1999, and as at June 30, 1999, stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related rules and regulations adopted by
the Commission;
(ii) on the basis of a reading of the latest unau dited
financial statements made available by the Company; their
limited review, in accordance with standards established under
Statement on Auditing Standards No. 71, of the unaudited
interim financial information for the six-month period ended
June 30, 1999 and as at June 30, 1999; carrying out certain
specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and of the
Company; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of
the Company as to transactions and events subsequent to
December 31, 1998, nothing came to their attention which
caused them to believe that:
23
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement
and the Prospectus do not comply as to form in all
material respects with applicable accounting
requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to
financial statements included or incorporated by
reference in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to June 30,
1999, there were any changes, at a specified date not
more than five days prior to the date of the letter, in
the accumulated deficit or capital stock of the Company
or decreases in the stockholders' equity of the Company
or decreases in working capital of the Company as
compared with the amounts shown on the June 30, 1999,
consolidated balance sheet included or incorporated by
reference in the Registration Statement and the
Prospectus, or for the period from June 30, 1999, to
such specified date there were any decreases, as
compared with the corresponding period in the preceding
quarter in revenues or Interest Income of the Company,
except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not
deemed necessary by the Representatives; or
(3) the information included or incorporated by
reference in the Registration Statement and Prospectus
in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial
Information) is not in conformity with the applicable
disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited
24
to accounting, financial or statistical information derived
from the general accounting records of the Company) set forth
in the Registration Statement and the Prospectus and in
Exhibit 12 to the Registration Statement, including the
information set forth under the captions "Summary -- Summary
Financial Data" and "Selected Financial Data" in the
Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of the Company's Annual
Report on Form 10-K, incorporated by reference in the
Registration Statement and the Prospectus, and the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports
on Form 10-Q, incorporated by reference in the Registration
Statement and the Prospectus, agrees with the accounting
records of the Company, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
The Company shall have received from Ernst & Young LLP a
report or reports with respect to a review of unaudited interim financial
information of the Company for the two quarters ending June 30, 1999, in
accordance with Statement on Accounting Standards No. 71.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of
any supplement thereto), there shall not have been (i) any change
specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company, whether or
not arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
25
(g) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(h) The Securities shall have been approved for trading on the
Nasdaq National Market, and satisfactory evidence of such actions shall
have been provided to the Representatives.
(i) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from the individuals listed on SCHEDULE II hereto, addressed to
the Representatives.
(j) You shall have received on the Closing Date an opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, R.L.L.P., patent counsel for the
Company, dated the Closing Date and addressed to you, that:
(i) to the knowledge of such counsel after reasonable
inquiry, the Company owns or has obtained licenses for all
applications relating to the Intellectual Property described
in the Prospectus as being owned or used by or licensed to the
Company;
(ii) to the best knowledge of such counsel after
reasonable inquiry (A) except as described in the Prospectus,
there are no rights of third parties to any Intellectual
Property described in the Prospectus as being owned by or
licensed to the Company or that is necessary for the conduct
of its business; (B) there is no infringement by third parties
of any such Intellectual Property; (C) there is no pending or
threatened action, suit, proceeding or claim by others
challenging the rights of the Company in or to such
Intellectual Property, and such counsel is unaware of any
facts which would form a reasonable basis for any such claim;
(D) there is no pending or threatened action, suit, proceeding
or claim by others challenging the validity or scope of such
Intellectual Property, and such counsel is unaware of any
facts which would form a reasonable basis for any such claim;
(E) there is no pending or threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade
26
secret or other proprietary right of others, and such counsel
is unaware of any facts which would form a reasonable basis
for any such claim; (F) there is no patent or patent
application which contains claims that dominate or may
dominate any Intellectual Property described in the Prospectus
as being owned or used by or licensed to the Company or that
is necessary for the conduct of its business or that
interferes with the issued or pending claims of any such
Intellectual Property; and (G) there is no prior art that may
render any patent held by the Company invalid or any patent
application held by the Company unpatentable which has not
been disclosed to the U.S. Patent and Trademark Office; and
(iii) the statements in: (A) the Prospectus under the
captions "Risk Factors -- Uncertainty of Protection of Patents
and Proprietary Rights", "Business -- Patents and Proprietary
Information" and other references therein to patent and
licensing matters, and (B) the Annual Report of the Company on
Form 10-K for the fiscal year ended December 31, 1998 under
the caption "Business -- Patents and Proprietary Information,"
and other references therein to patent and licensing matters,
insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, are
accurate and fairly present the information purported to be
shown.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obliga tions of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & ▇▇▇▇▇, counsel for the
Underwriters, at Worldwide Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, on
the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated
27
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. on demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon 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, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; 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 any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein 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 inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
28
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in the last paragraph of the cover page regarding delivery of the
Securities, and, under the heading "Underwriting", (i) the eighth, ninth and
tenth paragraphs, related to stabilization, syndicate covering transactions and
penalty bids and (ii) the sentences related to concessions and reallowances and
the Pro spectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Preliminary Prospectus
or the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemni fying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indem nified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses
29
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the indemnifying
party. An indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute 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
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Relative fault
30
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the Company
on the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were determined by
pro rata allocation or any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), 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. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter shall have the same
rights to contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; PROVIDED, HOWEVER, that in the event that the aggre gate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agree ment will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date
31
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading in
securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or National Market, (ii) a banking moratorium shall
have been declared either by federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel
(fax no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
▇▇▇▇▇▇ ▇▇▇▇,
32
BioCryst Pharmaceuticals, Inc. Chief Financial Officer (fax no. (▇▇▇) ▇▇▇-▇▇▇▇
and confirmed to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇▇ ▇▇▇▇.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be gov erned by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are
for convenience only and shall not affect the construction
hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City or Birmingham, Alabama.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
33
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
If the foregoing is in accordance with your under
standing of our agreement, please sign and return to us the
34
enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
Very truly yours,
BioCryst Pharmaceuticals, Inc.
By:
--------------------------------
Name:
---------------------------
Title:
---------------------------
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By:
---------------------------
Name:
----------------------
Title:
----------------------
For themselves and the other
several Underwriters, if any,
named in Schedule I to the
foregoing Agreement.
35
SCHEDULE I
UNDERWRITERS Number of Underwritten
Securities to be
PURCHASED
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . .
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ . . . . . . . . . .
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.. . .
------------------------------------- ----------
--------------------------------------
Total . . . . . . . . .
36
SCHEDULE II
1. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Development Corporation
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
3. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
4. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
5. ▇▇▇▇▇ ▇. ▇▇▇
6. ▇▇▇▇▇▇ ▇. ▇▇▇▇
7. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
8. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
9. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
10. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ III.
11. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
12. ▇▇▇▇ ▇. ▇▇▇▇▇
EXHIBIT A
Form of Lock-up Letter
BIOCRYST PHARMACEUTICALS, INC.
PUBLIC OFFERING OF COMMON STOCK
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between BIOCRYST
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), and each of you
as representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $0.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company) directly or
indirectly, including the filing (or participation in the filing of) a
registration statement with the Securities and Exchange 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
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of ninety (90) days after
the date of this Agreement, other than (i) as a bona fide gift or gifts,
provided the donee or donees thereof agree to be bound by this agreement,
(ii) as a distribution to limited partners or shareholders of the undersigned,
provided that the distributees thereof agree in writing to be bound by the terms
of this agreement or (iii) with the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇.
2
Furthermore, the undersigned hereby agrees and consents to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of any shares of capital stock held by the undersigned except in
compliance with this agreement.
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement)
or in the event that the Registration Statement shall not have been declared
effective on or before December 31, 1999 the agreement set forth above shall
likewise be terminated.
Yours very truly,
Very truly yours,
------------------------------
(signature)
Name:
------------------------------
Address:
---------------------------
---------------------------
3
Accepted as of the date first set forth above:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc.
As Representatives of the Several Underwriters
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By:
-----------------------------
(authorized signatory)
The Company requests that this Lock-Up Agreement be completed and delivered to
Company counsel, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Esq.
