Exhibit 1.1
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK
($0.001 Par Value)
UNDERWRITING AGREEMENT
March ___, 1998
UNDERWRITING AGREEMENT
March __, 1998
SBC Warburg Dillon Read Inc.
Bear, Xxxxxxx & Co. Inc.
Vector Securities International, Inc.
as representatives (the "Representatives")
of the several underwriters listed on
Schedule A hereto
c/o SBC Warburg Dillon Read Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Triangle Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of ________________ shares (the "Firm Shares") of
Common Stock, par value $0.001 per share (the "Common Stock"), of the Company.
In addition, solely for the purpose of covering over-allotments, if any, the
Company proposes to sell to the Underwriters, at the Underwriters' option, an
aggregate of up to ______________ additional shares of Common Stock (the
"Additional Shares"). The Additional Shares and the Firm Shares are
collectively referred to herein as the "Shares." The Shares are described in
the Prospectus that is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Act"), with the Securities and Exchange Commission (the "Commission") a
registration statement (the "initial registration statement") on Form S-3,
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act"). All of the Shares
have been duly registered under the Act pursuant to such initial registration
statement or, if an additional registration statement has been, or is proposed
to be, filed pursuant to Rule 462(b) of the Act, all of the Shares have been or
will be, on the date of this Agreement, duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If an additional registration statement has been, or is proposed to
be, filed with the Commission pursuant to Rule 462(b), such additional
registration statement was or will be prepared by the Company in conformity with
the requirements of the Act, has
become or will become, on the date of this Agreement, effective under the Act
and copies thereof have been or will be, prior to or concurrently with filing
with the Commission, delivered by the Company to you. As used in this
Agreement, "Effective Time" means the date and the time as of which the initial
registration statement, or the most recent post-effective amendment thereto, if
any, was declared effective by the Commission or has become effective upon
filing pursuant to Rule 462(c); "Effective Date" means the date of the Effective
Time; the "Initial Registration Statement" means the initial registration
statement as amended as of the Effective Time, including any documents
incorporated by reference therein at such time and including (i) all portions of
any additional registration statement filed pursuant to Rule 462(b) under the
Act which are deemed to be a part of such initial registration statement and
(ii) all information contained in any final prospectus filed with the Commission
pursuant to Rule 424(b) of the Act in accordance with Section 4(c)(ii) hereof
and deemed to be a part of such initial registration statement as of the
Effective Time pursuant to paragraph (b) of Rule 430A of the Act; the "Rule
462(b) Registration Statement" means the additional registration statement, if
any, relating to the Common Stock and filed pursuant to Rule 462(b) under the
Act at the time it becomes effective pursuant to the Act, including (i) the
contents of the Initial Registration Statement incorporated therein by reference
and (ii) all information deemed to be a part of such additional registration
statement pursuant to paragraph (b) of Rule 430A of the Act; and the
"Registration Statements" means the Initial Registration Statement and the Rule
462(b) Registration Statement, if any. "Preliminary Prospectus" means each
prospectus included in the initial registration statement, or amendments
thereof, before it became effective under the Act and any prospectus filed with
the Commission by the Company with your consent pursuant to Rule 424(a) of the
Act, and "Prospectus" means such final prospectus, as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Act or, if no
such filing is required, the form of final prospectus included in the Initial
Registration Statement. Reference made herein to any Preliminary Prospectus or
to the Prospectus shall be deemed to refer to and include any 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 the Prospectus, as the case may
be, and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
document filed under the Exchange Act after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated by reference
in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to a Registration Statement shall be deemed to
include any annual report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in such Registration Statement.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. On the basis of the representations and warranties
and the other terms and conditions herein set forth, the Company agrees to sell
to the respective Underwriters the Firm Shares and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A, at a
purchase price of $_____________ per Share. You may release the Firm Shares for
public sale promptly after this Agreement becomes effective.
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You may, from time to time, increase or decrease the public offering price after
the initial public offering to such extent as you may determine.
In addition, on the basis of the representations and warranties and the
other terms and conditions herein set forth, the Company grants to the several
Underwriters an option to purchase, and the Underwriters shall have the right to
purchase, severally and not jointly, from the Company all or a portion of the
Additional Shares as may be necessary to cover overallotments made in connection
with the offering of the Shares, at the same purchase price per share to be paid
by the several Underwriters to the Company for the Firm Shares. This option may
be exercised at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of Additional Shares as to which the option is
being exercised and the date and time when the Additional Shares are to be
delivered (such date and time being herein referred to as the "additional time
of purchase"); PROVIDED, HOWEVER, that the additional time of purchase shall not
be earlier than the time of purchase (as defined below) nor earlier than the
second business day (*) after the date on which the option shall have been
exercised nor later than the eighth business day after the date on which the
option shall have been exercised. The number of Additional Shares to be
purchased by each Underwriter shall be the number that bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A bears
to the total number of Firm Shares (subject, in each case, to such adjustment as
you may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the Firm
Shares shall be made to the Company, at the Company's election (which shall be
made in writing at least two business days prior to the time of purchase (as
defined below) and the additional time of purchase, as the case may be, by wire
transfer to an account designated by the Company or by certified or official
bank check, in New York Clearing House funds, at the office of SBC Warburg
Dillon Read Inc., in New York City, against delivery of the Firm Shares for the
respective accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 a.m., New York City time, on _____ ___, 1998 (unless another time
shall be agreed to by you and the Company or unless postponed in accordance with
the provisions of Section 8). The time at which such payment and delivery are
actually made is called the "time of purchase." The Firm Shares shall be
delivered in such names and in such denominations as you shall specify on the
second business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. The Additional Shares shall be delivered in such
names and in such denominations as you shall specify on the second business day
preceding the additional time of purchase.
-----------------------
* As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of the Underwriters that:
(a) The Registration Statements and Prospectus, and any further
amendments or supplements thereto, fully comply, or will fully comply, in
all material respects with the provisions of the Act, no part of a
Registration Statement as of its effective date contained or will contain
an untrue statement of a material fact or omitted or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as of its filing
date, will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company makes no warranty
or representation with respect to any statement contained in a Registration
Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on
behalf of any Underwriter through you to the Company expressly for use in
the Registration Statements or the Prospectus; the documents incorporated
by reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act, and do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; no document relating to the offering of the
Shares has been filed, or transmitted for filing, with the Commission,
unless previously delivered to you, and no document has been or will be
prepared, distributed or filed in reliance on Rule 434 under the Act. The
Company and the offering of the Shares meet the eligibility requirements
for the use of Form S-3.
(b) as of the date of this Agreement, the Company's authorized,
issued and outstanding capitalization is as set forth under the column
entitled "Actual" in the section of each Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase and
the additional time of purchase, as the case may be, the Company's
authorized, issued and outstanding capitalization will be as set forth
under the column entitled "As Adjusted" under the section of the
Registration Statements and Prospectus entitled "Capitalization"; all of
the issued and outstanding shares of capital stock of the Company,
including the Common Stock, have been duly authorized and validly issued
and are fully paid and nonassessable and free of any preemptive rights; the
Shares have been duly authorized and, when issued and delivered to and paid
for by the Underwriters as contemplated hereby, will be validly issued,
fully paid and nonassessable and free of any preemptive rights; 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 full power and
authority to own or lease its properties and conduct its business as
described in the Registration Statements and the Prospectus and to execute
and deliver this Agreement and to issue, sell and deliver the Shares as
contemplated hereby; and, except as set forth in the Registration
Statements and the Prospectus, the Company does not own, directly or
indirectly, any
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capital stock or other equity securities of, or ownership interest in, any
corporation, partnership, joint venture or other association or entity;
(c) the Company and each of its subsidiaries (the "Subsidiaries") are
duly qualified or licensed by, and are in good standing in, each
jurisdiction in which they own or lease property or conduct their
respective businesses and in each other jurisdiction where the failure,
individually or in the aggregate, to be so qualified or licensed could have
a material adverse effect on the business, properties, results of
operations, condition (financial or otherwise) and assets of the Company
and its Subsidiaries, taken as a whole (a "Material Adverse Effect"); and
the Company and each of its Subsidiaries are in compliance with all laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions, except where the failure to be in compliance could not have
a Material Adverse Effect;
(d) neither the Company nor any of its Subsidiaries is in violation
of any provision of its respective charter or bylaws or in material breach
of, or in material default under (nor has any event occurred that with
notice, lapse of time or both would constitute a breach of, or default
under), any provision of any license, lease, indenture, mortgage, deed of
trust, bank loan or credit agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or their respective properties is bound or affected, which violation,
breach or default, solely in the case of the Company's Subsidiaries, would
have a Material Adverse Effect, or under any law, regulation or rule or any
decree, judgment or order applicable to the Company or any of its
Subsidiaries; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do not and
will not violate any provision of the charter or bylaws of the Company or
any of its Subsidiaries or conflict with, result in any breach of, or
constitute a default under (or constitute any event that with notice, lapse
of time or both would constitute a breach of, or default under), any
provision of any license, lease, indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or
their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its Subsidiaries;
(e) this Agreement has been duly authorized, executed and delivered
by the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms subject, however, to the
limitations of applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and of laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and
except to the extent that rights to indemnity and contribution hereunder
may be limited by federal or state securities laws or the public policy
underlying such laws;
(f) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statements and will conform to the description thereof
contained in the Prospectus and the
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certificates for the Shares are in due and proper form and the holders of
the Shares will not be subject to personal liability by reason of being
such holders;
(g) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares as contemplated by this Agreement other
than registration of the Shares under the Act and any necessary
qualifications under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters;
(h) except as set forth in the Registration Statements and the
Prospectus under the caption "Description of Capital Stock -- Registration
Rights" and except for rights that have been effectively waived in writing
(complete and accurate copies of which have been provided to the
Underwriters prior to the date of this Agreement), which waivers are in
full force and effect as of the date of this Agreement, no person has the
right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any securities of the Company as a result of
the issuance and sale of the Shares to the Underwriters hereunder, nor does
any person have preemptive rights, rights of first refusal or other rights
to purchase any of the Shares;
(i) Price Waterhouse LLP, whose report on the consolidated financial
statements of the Company and its Subsidiaries is filed with the Commission
as part of the Registration Statements and the Prospectus, are independent
public accountants with respect to the Company as required by the Act;
(j) each of the Company and its Subsidiaries has all licenses,
authorizations, consents and approvals and has made all filings required
under any federal, state, local or foreign law, regulation or rule, and has
obtained all authorizations, consents, licenses and approvals from other
persons, in order to conduct its respective business, except where the
failure to have any such license, authorization, consent or approval, or to
make any such filing or obtain any such authorization, consent or approval
would not have a Material Adverse Effect; and neither the Company nor any
of its Subsidiaries is in violation of, or in default under, any such
license, authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable
to the Company or any of its Subsidiaries, the effect of which could have a
Material Adverse Effect;
(k) all legal or governmental proceedings, contracts or documents of
a character required to be described in the Registration Statements or the
Prospectus or to be filed as an exhibit to the Registration Statements have
been so described or filed as required;
(l) except as disclosed in the Registration Statements and the
Prospectus, there are no actions, suits or proceedings pending or, to the
best knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective properties, at law or in equity, or
before or by any federal, state, local or
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foreign governmental or regulatory commission, board, body, authority or
agency that could result in a judgment, decree or order having a Material
Adverse Effect;
(m) the audited financial statements included in the Registration
Statements and the Prospectus present fairly the financial position of the
Company and its Subsidiaries as of the dates indicated and the consolidated
results of operations and cash flows of the Company and its Subsidiaries
for the periods specified; and such financial statements have been prepared
in conformity with generally accepted accounting principals applied on a
consistent basis during the periods involved;
(n) subsequent to the respective dates as of which information is
given in the Registration Statements and the Prospectus, and except as may
be otherwise stated in the Registration Statements or the Prospectus, there
has not been (i) any material adverse change in the business, properties,
results of operations, condition (financial or otherwise), assets or
prospects of the Company and its Subsidiaries taken as a whole ("Material
Adverse Change"), (ii) any transaction that is, or the Company reasonably
expects could be, material to the Company and its Subsidiaries taken as a
whole, contemplated or entered into by the Company or any of its
Subsidiaries or (iii) any obligation, contingent or otherwise, directly or
indirectly incurred by the Company or any of its Subsidiaries that is, or
the Company reasonably expects could be, material to the Company and its
Subsidiaries taken as a whole;
(o) the Company has obtained the agreement of each of its directors
and officers and certain of its stockholders, optionholders and
warrantholders designated by Xxxxxx & Dodge LLP, counsel to the
Underwriters in a memorandum dated March 9, 1998, not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
shares of Common Stock or other securities of the Company that are
substantially similar to the Common Stock, including but not limited to
securities that are convertible into or exchangeable for, or that represent
the right to receive, Common Stock or any such substantially similar
securities for a period of 90 days after the date of the Prospectus without
the prior written consent of SBC Warburg Dillon Read Inc.;
(p) the Company has filed all federal or state income or franchise
income and franchise tax returns required to be filed and has paid all
taxes shown thereon as due, and there is no tax deficiency that has been or
may reasonably be asserted against the Company; and all known tax
liabilities are adequately provided for on the books of the Company;
(q) the business, operations and facilities of the Company and each
of its Subsidiaries have been and are being conducted in compliance with
all applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational
safety and health, pollution, protection of health or the environment, or
reclamation (including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, gaseous
or liquid in nature) or otherwise relating to remediating real property in
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which the Company has any interest, whether owned or leased, of any
governmental department, commission, board, bureau, agency or
instrumentality of the United States, any state or political subdivision
thereof or any foreign jurisdiction and all applicable judicial or
administrative agency or regulatory decrees, awards, judgments and orders
relating thereto (collectively "Environmental Regulations") except such
failures to comply as would not individually or in the aggregate have a
Material Adverse Effect; and the Company and its Subsidiaries have not
received any notice from a governmental instrumentality or any third party
alleging any violation of any Environmental Regulation or liability
thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing hazardous substances or
damages to natural resources);
(r) the Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(s) except as set forth in the Registration Statements and
Prospectus, the Company and each of its Subsidiaries own or have obtained
valid and enforceable licenses or options for the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights and trade secrets necessary for the conduct of the
Company's and its Subsidiaries' respective businesses as currently
conducted and as the Registration Statements and Prospectus indicate the
Company and each of its Subsidiaries contemplate conducting (collectively,
the "Intellectual Property"); other than as set forth in the Registration
Statements and Prospectus, to the best knowledge of the Company (for each
of the following subsections): (i) there are no third parties who have any
ownership rights to any Intellectual Property that is owned by, or has been
licensed to, the Company or any of its Subsidiaries for the product
indications described in the Registration Statements and Prospectus that
would preclude the Company or any of its Subsidiaries from conducting their
respective businesses as currently conducted and as the Registration
Statements and Prospectus indicate the Company and its Subsidiaries
contemplate conducting, except for the ownership rights of the owners of
the Intellectual Property licensed or optioned by the Company or any of its
Subsidiaries; (ii) there are currently no sales of any products that would
constitute an infringement by third parties of any Intellectual Property
owned, licensed or optioned by the Company or any of its Subsidiaries;
(iii) there is no pending or threatened action, suit, proceeding or claim
by others challenging the rights of the Company or any of its Subsidiaries
in or to any Intellectual Property owned, licensed or optioned by the
Company or any of its Subsidiaries, other than non-material claims; (iv)
there is no pending or threatened action, suit, proceeding or claim by
others challenging the validity or scope of any Intellectual Property
owned, licensed or optioned by the Company or any of its Subsidiaries,
other than non-material claims; and (v) there is no pending or threatened
action, suit, proceeding or claim by others that the Company or any of its
Subsidiaries infringe or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary rights of others, other than
non-material claims;
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(t) as of the date of this Agreement, neither the Company nor any of
its Subsidiaries is required to file any registration, application,
license, request for exemption, permit or other regulatory authorization
with the U.S. Food and Drug Administration (the "FDA"), or any state or
local regulatory body in order to conduct their respective businesses as
described in the Registration Statements and Prospectus;
(u) the human clinical trials, animal studies and other preclinical
tests conducted by or on behalf of the Company and its Subsidiaries that
are described in the Registration Statements and the Prospectus (the
"Company Studies"), were and, if still pending, are being conducted in
accordance with experimental protocols, procedures and controls generally
used by qualified experts in the preclinical or clinical study of new drugs
or diagnostics; the descriptions of the results of such Company Studies
contained in the Registration Statements and Prospectus are accurate and
complete in all material respects, and the Company has no knowledge of any
other trials, studies or tests, the results of which reasonably call into
question the results described or referred to in the Registration
Statements and Prospectus; and, except as disclosed in the Registration
Statements and the Prospectus with respect to DMP 450, neither the Company
nor any Subsidiary has received any notices or correspondence from the FDA
or any other governmental agency requiring the termination, suspension or a
modification which results in a materially adverse change in any Company
Studies;
(v) the Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba; and
(w) the Shares have been approved for quotation on the Nasdaq
National Market.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except for service of process with
respect to the offering and sale of the Shares); promptly to advise you of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and to
use every reasonable effort to obtain the withdrawal of any order of
suspension as soon as possible;
(b) to make available to you in New York City, as soon as practicable
after the Initial Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company
shall have made any amendment or
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supplement thereto after the Effective Date) as the Underwriters may
request for the purposes contemplated by the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when a Registration Statement has become effective
and when any post-effective amendment thereto becomes effective and (ii) if
Rule 430A under the Act is used, when the Prospectus is filed with the
Commission pursuant to Rule 424(b) under the Act, if required under the Act
(which the Company agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any
requests by the Commission for amendments or supplements to the
Registration Statements or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for or the
entry of a stop order suspending the effectiveness of a Registration
Statement and, if the Commission should enter a stop order suspending the
effectiveness of a Registration Statement, to use every reasonable effort
to obtain the lifting or removal of such order as soon as possible; and to
advise you promptly of any proposal to amend or supplement a Registration
Statement or the Prospectus including by filing any documents that would be
incorporated therein by reference and to file no such amendment or
supplement to which you shall object in writing;
(e) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement,
(i) copies of any reports or other communications that the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission, and (iii) such other information as
you may reasonably request regarding the Company or its Subsidiaries,
subject to the provisions of any written agreement that, in the opinion of
outside counsel to the Company, prohibit the Company or its Subsidiaries
from furnishing such information under any circumstances including, without
limitation, an agreement by you to be subject to the provisions of such
written agreement;
(f) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a prospectus relating to
the Shares is required to be delivered under the Act that would require the
making of any change in the Prospectus then being used, or in the
information incorporated therein by reference, so that the Prospectus, as
then supplemented, would not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading
and, during such time, promptly to prepare and furnish, at the Company's
expense, to the Underwriters such amendments or supplements to such
Prospectus as may be necessary to reflect any such change in such
quantities as reasonably requested by the Underwriters, and to furnish to
you a copy of such proposed amendment or supplement before filing any such
amendment or supplement with the Commission;
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(g) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of at least
twelve months beginning after the effective date of the Registration
Statements but ending not later than fifteen months after the effective
date of the Registration Statements (as defined in Rule 158(c) under the
Act), as soon as is reasonably practicable after the termination of such
twelve-month period;
(h) to furnish to you five signed copies of each Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto and documents incorporated by
reference therein) and a sufficient number of additional conformed copies
of the foregoing (without exhibits) for distribution of a copy of each to
the other Underwriters, and to maintain in the Company's files manually
signed copies of such documents for at least five years from the date of
filing;
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company
and its Subsidiaries that have been read by the Company's independent
certified public accountants, as stated in their letter to be furnished
pursuant to Section 6(d) of this Agreement;
(j) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(k) to pay all expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as
set forth under Section 5 hereof and (iii) and (iv) below) in connection
with (i) the preparation and filing of each Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters, and to dealers (including costs of mailing and shipment),
(ii) the issue, sale and delivery of the Shares, (iii) the word processing
and/or printing of this Agreement, any dealer agreement, any Statements of
Information and Powers of Attorney and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (iv) the qualification of the
Shares for offering and sale under state laws and the determination of
their eligibility for investment under state law as aforesaid (including
the legal fees and filing fees and other disbursements of counsel for the
Underwriters in connection therewith) and the printing and furnishing of
copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) the listing of the Shares on the Nasdaq
National Market; (vi) any filing for review of the public offering of the
Shares by the National Association of Securities Dealers, Inc. (the
"NASD"); and (vii) the performance of the Company's other obligations
hereunder;
-11-
(l) to furnish to you, before filing with the Commission subsequent
to the Effective Date and during the period referred to in paragraph (f)
above, a copy of any document proposed to be filed pursuant to Sections 13,
14 or 15(d) of the Exchange Act;
(m) for a period of 90 days after the date hereof, without the prior
written consent of SBC Warburg Dillon Read Inc, not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
any shares of Common Stock or other securities that are substantially
similar to the Common Stock, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right
to receive, shares of Common Stock or any such substantially similar
securities, or permit the registration under the Act of any shares of
Common Stock or any such substantially similar securities, except for (i)
the registration of the Shares and the sales to the Underwriters pursuant
to this Agreement, (ii) the issuance of Common Stock upon the exercise of
outstanding stock options and warrants to the extent disclosed in the
Registration Statements and the Prospectus and (iii) the grant of stock
options pursuant to stock option plans disclosed in the Registration
Statements and Prospectus;
(n) to use its best efforts to cause the Common Stock to be quoted on
the Nasdaq National Market; and
(o) not to take, directly or indirectly, any action designed to cause
or to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the Common Stock to facilitate the sale or
resale of the Shares.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the first two paragraphs of Section 8 hereof, or the default by one or more
of the Underwriters in its or their respective obligations hereunder, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the fees and disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase and at
the additional time of purchase, as the case may be), the performance by the
Company of its obligations hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with
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reproduced copies for each of the other Underwriters and in form reasonably
satisfactory to Xxxxxx & Dodge LLP, counsel for the Underwriters, stating
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease
its properties and conduct its business as described in each
Registration Statement and the Prospectus, execute and deliver this
Agreement and issue, sell and deliver the Shares as contemplated
hereby;
(ii) each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of its respective jurisdiction of incorporation with full corporate
power and authority to own or lease its respective properties and to
conduct its respective business as described in each Registration
Statement and the Prospectus;
(iii) each of the Company and its Subsidiaries is duly
qualified or licensed to do business as a foreign corporation, and is
in good standing, in each state or jurisdiction of the United States
where its failure, individually or in the aggregate, to do so would
have a Material Adverse Effect;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Shares, when issued and delivered to and paid for by
the Underwriters in accordance with this Agreement will be duly
authorized, validly issued, fully paid and nonassessable and free of
any preemptive rights;
(vi) the authorized capital stock of the Company, including
the Shares, conforms as to legal matters in all material respects to
the description thereof contained in each Registration Statement and
the Prospectus;
(vii) based on an officer's certificate to the effect that the
consideration for all outstanding shares was received by the Company
in accordance with the applicable resolutions of the Board of
Directors of the Company, the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, and are,
to such counsel's knowledge, fully paid and nonassessable;
(viii) the certificates for the Shares are in due and proper
form;
(ix) each Registration Statement has become effective under
the Act and, to such counsel's knowledge, no stop order proceedings
suspending the effectiveness of a Registration Statement have been
instituted or threatened or are pending under the Act;
-13-
(x) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or regulation or
the charter or bylaws of the Company or any of its Subsidiaries, or,
to such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company, any of its Subsidiaries or any of their respective property,
or, to such counsel's knowledge, constitute a breach or a default
under (nor constitute any event which, with notice, lapse of time or
both, would constitute a breach or default under) any agreement or
other instrument filed as an exhibit to a Registration Statement and
no consent, approval, authorization or order of or qualification with
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement;
(xi) to such counsel's knowledge, there is no legal or
governmental proceeding pending or threatened to which the Company or
any of its Subsidiaries is or may become a party or to which any of
their respective properties is or may become subject that is required
to be described in a Registration Statement or the Prospectus and is
not so described, or of any statute, regulation, contract or other
document that is required to be described in a Registration Statement
or the Prospectus or to be filed as an exhibit to a Registration
Statement that is not described or filed as required;
(xii) to such counsel's knowledge, there is no action,
proceeding or governmental investigation pending, against the Company,
any of its Subsidiaries or any of their respective officers or
directors, which are required to be described in the Prospectus but
are not so described;
(xiii) to such counsel's knowledge and except as otherwise
described in each Registration Statement and the Prospectus, no person
has the right, contractual or otherwise, to cause the Company to issue
to it, or register pursuant to the Act, any shares of capital stock of
the Company in connection with the sale of the Shares to the
Underwriters, nor does any person have preemptive rights, rights of
first refusal or other rights to purchase any of the Shares;
(xiv) the descriptions of the charter and bylaws of the Company
and of statutes and contracts contained in "Risk Factors --
Anti-takeover Effects of Charter, Bylaws and Delaware Law,"
"Description of Capital Stock" (other than the statements under "--
Transfer Agent and Registrar") and in Item 15 of Part II of the
Registration Statements, to the extent that such statements constitute
a summary of documents referred to therein or matters of law, are
accurate and fairly present the information required to be presented
by the Act.
-14-
In addition, such counsel shall state that such counsel has
participated in conferences with certain officers and other representatives
of the Company, representatives of the independent public accountants of
the Company and representatives of the Underwriters at which the contents
of the Registration Statements, the Prospectus and related matters were
discussed. Such counsel shall state that they have not, however, except
with respect to matters expressly covered in paragraph (xiv) above,
independently checked or verified the accuracy, completeness or fairness of
the information contained in the Registration Statements and the
Prospectus.
Such counsel shall also state that, based upon their participation as
described in the preceding paragraph, (i) they believe that each part of
each Registration Statement and any amendment thereto at the time such part
or amendment became effective and the Prospectus or any amendment or
supplement thereto, as of the date of such Prospectus, amendment or
supplement (except for financial statements and schedules as to which such
counsel need not express any belief), complied as to form in all material
respects with the requirements of the Act; (ii) they believe that the
documents incorporated by reference in the Registration Statements and
Prospectus when they were filed or, if an amendment with respect to any
such document was filed, when such amendment was filed (except for
financial statements and schedules as to which such counsel need not
express any belief) complied as to form in all material respects with the
requirements of the Exchange Act; (iii) such counsel shall confirm that
they have no reason to believe that (except for financial statements and
schedules as to which such counsel need not express any belief) any part of
a Registration Statement or any amendment thereto at the time such part or
amendment became effective or the Prospectus as of its date, or any
amendment or supplement thereto as of its date 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 that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus or any
amendment or supplement thereto, as of the date of such counsel's opinion,
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and (iv) such counsel shall confirm that they have no
reason to believe that any contract or agreement required to be described
in the Registration Statements or filed as an exhibit thereto is not so
described or filed.
The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of King &
Spalding, patent counsel for the Company, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the
case may be, with reproduced
-15-
copies for each of the other Underwriters and in form reasonably
satisfactory to Xxxxxx & Dodge LLP, counsel for the Underwriters, stating
that:
(i) such counsel have conducted searches or are otherwise
familiar with (a) the Company's and its Subsidiaries' licensed and
optioned proposed products as described in the table on page 30 of
the Initial Registration Statement and Prospectus (the "Licensed
Properties"); and (b) all patents and pending patent applications
owned by the Company and its Subsidiaries (the "Owned Properties").
Based on these searches and the counsel's information, to such
counsel's knowledge, all Owned Properties are listed on Schedule A and
except as disclosed in the sections of the Registration Statements and
Prospectus entitled "Risk Factors -- Uncertainty of Patents;
Dependence on Patents, Licenses and Proprietary Rights" and "Business
-- Patents and Proprietary Rights," (a) the Licensed Properties are
not claimed in any United States or foreign patents of record issued
on or before _________________, 1998; (b) the Owned Properties have
been validly assigned to the Company or its Subsidiaries, as the case
may be; (c) the Company or its Subsidiaries, as the case may be, is
listed as the sole holder of record in the records of the United
States Patent and Trademark Office (the "PTO") of the Owned
Properties; and (d) the Company or its Subsidiaries, as the case may
be, has complied with the PTO's duty of candor and disclosure for
each of the Owned Properties;
(ii) such counsel have reviewed the Owned Properties and the
patents and patent applications licensed to the Company or its
Subsidiaries, as the case may be, as described in the Initial
Registration Statement and Prospectus, and, except as described in the
Initial Registration Statement and Prospectus, to such counsel's
knowledge and: (x) with respect to the Licensed Properties (a) such
applications disclose patentable subject matter and have been filed
in a timely manner, (b) there is no prior art that anticipates the
claims to the Licensed Properties under 35 U.S.C. Section 102,
(c) such applications have not been finally abandoned, and (d) such
patents have been lawfully issued, and (y) with respect to the Owned
Properties, such applications have not been finally abandoned;
(iii) to such counsel's knowledge, except as disclosed in the
Initial Registration Statement and Prospectus: (a) there are no third
parties who have rights that would prevent the Company or its
Subsidiaries from using or selling the Licensed Properties as
described in the Initial Registration Statement and Prospectus;
(b) there are currently no sales of any products that would
constitute an infringement by third parties of the Owned Properties
or the patents and patent applications licensed or optioned by the
Company or its Subsidiaries as they pertain to the Licensed
Properties; (c) there is no pending or threatened action, suit
or proceeding in which it is claimed that the current or planned
activities of the Company or its Subsidiaries as described in the
Initial Registration Statement and Prospectus infringe or otherwise
violate any
-16-
intellectual property right of others; (d) there is no pending or
threatened action, suit, proceeding or claim by others challenging
the Company's or its Subsidiaries' rights in or to any of the Owned
Properties or the Licensed Properties; and (e) there is no pending
or threatened action, suit, proceeding or claim by others
challenging the validity of the Owned Properties or the patents or
patent applications as they cover the Licensed Properties or the
scope of any such Owned Properties or patents or patent applications
as they cover the Licensed Properties, or asserting any ownership
interest or lien with respect to such Owned Properties or the patents
or patent applications as they cover the Licensed Properties; and
(iv) the statements in the Initial Registration Statement and
the Prospectus under the captions "Risk Factors -- Uncertainty of
Patents; Dependence on Patents, Licenses and Proprietary Rights" and
"Business -- Patents and Proprietary Rights" (other than the
statements in the last paragraph of each such portion) in each case
insofar as such statements constitute summaries of the legal matters
(including statutes and legal and governmental proceedings) or
contracts or other agreements referred to therein, are accurate in
all material respects.
(c) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Xxxxx X.
Xxxxxx, general counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form reasonably satisfactory to Xxxxxx & Dodge LLP, counsel for the
Underwriters, stating that:
(i) to such counsel's knowledge, except as disclosed in the
Registration Statements and the Prospectus, the Company does not own,
directly or indirectly, any capital stock or other equity securities
of, or ownership interests in, any corporation, partnership, joint
venture or other association or entity;
-17-
(ii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene the charter or bylaws of the Company or any of its
Subsidiaries, or, to such counsel's knowledge, any provision of
applicable law or regulation or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company, its Subsidiaries or any of their respective properties, or,
to such counsel's knowledge, constitute a breach or a default under
(nor constitute any event which, with notice, lapse of time or both,
would constitute a breach or default under) any agreement or other
instrument filed as an exhibit to the Registration Statements;
(iii) to such counsel's knowledge, neither the Company nor any
of its Subsidiaries is in violation of any provision of its charter or
bylaws or in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would constitute a
breach of, or default under), any license, lease, indenture, mortgage,
deed of trust, bank loan or credit agreement or any other agreement or
instrument known to such counsel to which the Company or any of its
Subsidiaries is a party or by which any of their respective properties
may be bound or affected or under any law, regulation or rule or any
decree, judgment or order applicable to the Company or any of its
Subsidiaries and known to such counsel; and
(iv) to such counsel's knowledge, there is no legal or
governmental proceeding pending or threatened to which the Company or
any of its Subsidiaries is or may become a party or to which any of
their respective properties is or may become subject that is required
to be described in a Registration Statement or the Prospectus and is
not so described.
(d) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Xxxxxxxxx & Xxxxxxx, regulatory counsel to the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to Xxxxxx & Dodge LLP,
counsel for the Underwriters, stating that:
(i) the statements in the Initial Registration Statement and
the Prospectus under the captions "Risk Factors -- Uncertainties
Related to Clinical Trials," "Risk Factors -- Extensive Government
Regulations; No Assurance of Regulatory Approval," "Risk Factors --
Uncertainty of Health Care Reform Measures and Third Party
Reimbursement," "Special Note Regarding Forward-Looking Statements,"
"Business - Government Regulation," and "Business -- Health Care
Reform and Third Party Reimbursement" (collectively, the "Regulatory
Disclosure"), insofar as such statements purport to describe or
summarize the federal statutes, rules and regulations relating to
pharmaceuticals under the Federal Food, Drug and Cosmetic Act
(the "FDCA") and legal and governmental procedures or proceedings
related thereto, are
-18-
accurate and complete in all material respects and fairly present the
information purported to be described therein and based upon the
description of the Company's and its Subsidiaries' business contained
under the caption "Business" in the Initial Registration Statement and
the Prospectus, such statements summarize the provisions of the
FDCA that are material to the Company's and its Subsidiaries'
business;
(ii) the Regulatory Disclosure, insofar as such statements
purport to describe or summarize the federal statutes, rules and
regulations relating to pharmaceuticals under Medicare reimbursement
are accurate in all material respects and fairly present the
information purported to be described therein;
(iii) no facts have come to such counsel's attention which
cause such counsel to believe that the statements in the Regulatory
Disclosure sections of the Initial Registration Statement and the
Prospectus contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading, or, as the date hereof, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and
(iv) such counsel has no knowledge of any action, suit or
proceeding pending or threatened by the FDA, without any
independent inquiry, any or other federal regulatory authority with
respect to the Company or any of its Subsidiaries, except in each
case as described in the Prospectus.
(e) You shall have received from Price Waterhouse LLP letters dated,
respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the
form or forms heretofore approved by you.
(f) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Xxxxxx &
Dodge LLP, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, as to the matters referred
to in paragraph (iv), paragraph (v), paragraph (vi) and paragraph (ix) of
Section 6(a).
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which
the contents of the Registration Statements and Prospectus and related
matters were discussed and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in a Registration Statement or the
Prospectus (except as to matters referred to under subparagraph (vi) of
paragraph (a) of this Section 6), on the basis of the foregoing (relying as
to materiality to a large extent upon the opinions of officers and other
representatives of the Company), no facts have come to the attention of
such counsel which lead them to believe that any part of a Registration
Statement or any amendment thereto at the time such part or
-19-
amendment became effective contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus as of its date or any amendment or supplement thereto as of its
date contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (it being understood that such counsel need express no
comment with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statements or
any amendment or Prospectus or any amendment or supplement).
(g) No amendment or supplement to a Registration Statement or the
Prospectus, including documents deemed to be incorporated by reference
therein, shall be filed prior to the time any Rule 462(b) Registration
Statement becomes effective, or, if none, the Initial Registration
Statement, to which you shall have reasonably objected in writing.
(h) The Initial Registration Statement shall become effective, or if
Rule 430A under the Act is used, the Prospectus shall have been filed with
the Commission pursuant to Rule 424(b) under the Act, at or before 5:00
P.M., New York City time, on the date of this Agreement, unless a later
time (but not later than 5:00 P.M., New York City time, on the second full
business day after the date of this Agreement) shall be agreed to by the
Company and you in writing or by telephone, confirmed in writing. The
Company agrees to file any additional registration statement which is
proposed to be filed pursuant to Rule 462(b) with the Commission, in
accordance with the Act, by 10:00 P.M., Eastern Standard Time or Eastern
Daylight Savings Time, whichever is currently in effect, on the date of
this Agreement, and, concurrently with or prior to filing such additional
registration statement, to pay the associated filing fee or give
irrevocable instructions for payment in accordance with Rule 111(b) of the
Act.
(i) Prior to the time of purchase or the additional time of purchase,
as the case may be: (i) no stop order with respect to the effectiveness of
a Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statements and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and (iii) the Prospectus and
all amendments or supplements thereto, or modifications thereof, if any,
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(j) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there has
not been (i) any Material Adverse Change other than as described in the
Registration Statements and the Prospectus, (ii) any transaction that is
material to the Company, entered into
-20-
by the Company or any of its Subsidiaries, other than as described in the
Registration Statements and the Prospectus, or (iii) any obligation,
contingent or otherwise, directly or indirectly, incurred by the Company or
any of its Subsidiaries that is material to the Company other than as
described in the Registration Statements and the Prospectus.
(k) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two of
its executive officers to the effect that the representations and
warranties of the Company set forth in this Agreement are true and correct
as of each such date and the conditions set forth in Section 6(i) and
Section 6(j) have been met.
(l) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and
certain stockholders, optionholders and warrantholders of the Company
designated by Xxxxxx & Dodge LLP, counsel to the Underwriters, in a
memorandum dated March 9, 1998, to the effect that such persons shall
not offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any shares of Common Stock or other securities of the
Company that are substantially similar to the Common Stock, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, shares of Common Stock or any
such substantially similar securities for a period of 90 days after the
date of the Prospectus without the prior written consent of SBC Warburg
Dillon Read Inc.
(m) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statements or the Prospectus as of the time of purchase and
the additional time of purchase, as the case may be, as you reasonably may
request.
(n) The Company shall have performed such of its obligations under
this Agreement as are to be performed by the terms hereof at or before the
time of purchase and at or before the additional time of purchase, as the
case may be.
(o) The Shares shall have been listed on the Nasdaq National Market.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if Rule 430A under the Act is not used, when you shall have
received notification of the effectiveness of the Initial Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in your absolute discretion if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities generally
on the New York Stock Exchange shall have been suspended or minimum prices shall
have been established on the New York Stock Exchange, or if a general banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its
-21-
constitutional processes or there shall have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in your judgment makes it impracticable to
market the Shares.
If you elect to terminate this Agreement as provided in this Section 7, the
Company and each other Underwriter shall be notified promptly by written notice
transmitted by facsimile and confirmed by written notice sent by registered
mail, return receipt requested. If the sale to the Underwriters of the Shares,
as contemplated by this Agreement, is not carried out by the Underwriters for
any reason permitted under this Agreement or if such sale is not carried out
because the Company shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 5 and 9), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9).
8. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares that all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares hereunder unless all of the Firm Shares are purchased
by the Underwriters (or by substituted underwriters selected by you with the
approval of the Company or selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters, in accordance with
the foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary change in the Registration Statements and the Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
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9. INDEMNITY BY THE COMPANY AND THE UNDERWRITERS.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, its directors and officers, and each person that controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (collectively, the "Underwriter indemnified parties") from
and against any and all losses, claims, damages, judgments, liabilities and
expenses (including the reasonable fees and expenses of counsel and other
reasonable expenses in connection with investigating, defending or settling
any such action or claim) as they are incurred (and regardless of whether
the Underwriter indemnified party is a party to the litigation, if any)
which, jointly or severally, any such Underwriter indemnified party may
incur under the Act, the Exchange Act or otherwise arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement or the Prospectus or any Preliminary
Prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, judgments, liabilities or expenses arise out
of or are based upon any such untrue statement or alleged untrue statement
contained in and in conformity with information with respect to any
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Company expressly for use therein with reference to such
Underwriter or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in either such Registration Statements or Prospectus
or necessary to make such information not misleading; PROVIDED, HOWEVER,
that the indemnity agreement with respect to any Preliminary Prospectus or
the Prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale of
the Shares to such person, to the extent and only to the extent that the
delivery of the Prospectus (as so amended or supplemented) would have
eliminated any such loss, claim, damage or liability. This indemnity
agreement will be in addition to any liability the Company otherwise may
have.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted
against any Underwriter indemnified party with respect to which indemnity
may be sought against the Company pursuant to this Section 9, such
Underwriter indemnified party shall promptly notify the Company in writing,
and the Company shall assume the defense thereof, including the employment
of counsel reasonably satisfactory to the Underwriter indemnified party and
payment of all fees and expenses. An Underwriter indemnified party shall
have the right to employ separate counsel in any such action or proceeding
and to assume the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter indemnified party
unless (i) the employment of such counsel has been authorized in writing by
the Company, (ii) the
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Company has failed promptly after receipt of such notice to assume the
defense and employ counsel reasonably satisfactory to the Underwriter
indemnified party or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both one or more
Underwriter indemnified parties and the Company, and such Underwriter
indemnified parties shall have reasonably concluded that there may be one
or more legal defenses available to them that are different from or
additional to those available to the Company (in which case the Company
shall not have the right to assume the defense of such action on behalf of
such Underwriter indemnified parties), in any of which events such fees and
expenses shall be borne by the Company and reimbursed as they are incurred
(it being understood that the Company shall not be liable for the fees and
expenses of more than one separate law firm (in addition to any local
counsel) for all Underwriter indemnified parties in any one action or
series of related transactions in the same jurisdiction). The Company
shall not be liable for any settlement of any such action effected without
the written consent of the Company (which consent shall not be unreasonably
withheld or delayed), but if settled with the written consent of the
Company, or if there is a final judgment with respect thereto, the Company
agrees to indemnify and hold harmless each Underwriter indemnified party
from and against any loss or liability by reason of such settlement or
judgment.
(c) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, its officers who sign a Registration Statement,
and any person that controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act (collectively, the "Company
indemnified parties") from and against any losses, claims, damages,
judgments, liabilities and expenses to the same extent as the foregoing
indemnity from the Company to the Underwriter indemnified parties, but only
with respect to information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company
expressly for use with respect to such Underwriter in a Registration
Statement, any Preliminary Prospectus or the Prospectus. In case any
action shall be brought against any Company indemnified party based on a
Registration Statement, any Preliminary Prospectus or the Prospectus and in
respect of which indemnity may be sought against any Underwriter pursuant
to this Section 9(c), such Underwriter shall have the rights and duties
given to the Company by Section 9(b) (except that if the Company shall have
assumed the defense thereof, such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, provided that the fees and expenses of such separate counsel shall
be at the expense of such Underwriter), and the Company indemnified parties
shall have the rights and duties given to the Underwriter indemnified
parties by Section 9(b).
(d) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless any Underwriter indemnified
party or any Company indemnified party, then the party required to
indemnify such indemnified party under this Section 9, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages, judgments, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the
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Underwriters on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages, judgments, liabilities or expenses, 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 hand shall be
deemed to be in the same proportion as the total proceeds from the offering
of the Shares (net of underwriting discounts and commissions but 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
of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether the untrue
statement 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, or by the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages, judgments, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by
pro rata allocation or by any other method of allocation (even if the
Underwriters were treated as one entity for such purpose) that does not
take account of the equitable considerations referred to in this Section
9(d). Notwithstanding the provisions of this Section 9(d), no Underwriter
indemnified party shall be required to contribute any amount in excess of
the amount by which the total price at which the Shares underwritten by
such Underwriter indemnified party and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter indemnified party otherwise has been required to pay by reason
of such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 9 are
several in proportion to their respective underwriting commitments and are
not joint.
The Company hereby acknowledges and agrees with the Underwriters that
the statements set forth in (i) the last paragraph on the cover page of the
Prospectus, (ii) the paragraphs in boldface type on the inside cover page
of the Prospectus relating to stabilization and passive market making,
(iii) the list of Underwriters under the caption "Underwriting" in the
Prospectus and (iv) the statements relating to the selling concession and
reallowance in the third paragraph below the tables under the caption
"Underwriting" in the Prospectus constitute the only information furnished
to the
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Company in writing by the Underwriters expressly for use in any
Registration Statement, any Preliminary Prospectus or the Prospectus.
(e) The indemnity and contribution agreements contained in this
Section 9 and the representations, warranties and covenants of the Company
contained in this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter
indemnified party or by or on behalf of any Company indemnified party and
shall survive any termination of this Agreement or the issuance and
delivery of the Shares. Subject to the provisions of Section 9(b) and
Section 9(c), the Company and each Underwriter agree promptly to notify the
other of the commencement of any litigation or proceeding against it in
connection with the issuance and sale of the Shares or in connection with a
Registration Statement or the Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
SBC Warburg Dillon Read Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department; Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department; and Vector
Securities International, Inc., 0000 Xxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attn: Syndicate Department; and if to the Company, shall be sufficient
in all respects if delivered or sent to the Company, at the offices of the
Company at Triangle Pharmaceuticals, Inc., 0 Xxxxxxxxxx Xxxxx, 0000 Xxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxx X. Xxxxx.
11. CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED
AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
PARTIES AT INTEREST. The agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Underwriter
indemnified parties and the Company indemnified parties, and their respective
successors, assigns, executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
13. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts, which together shall constitute one and the same agreement among
the parties.
14. MISCELLANEOUS. SBC Warburg Dillon Read Inc., an indirect, wholly
owned subsidiary of Swiss Bank Corporation, is not a bank and is separate from
any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by SBC Warburg Dillon
-26-
Read Inc. are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of SBC Warburg Dillon Read Inc. may have lending
relationships with issuers of securities underwritten or privately placed by SBC
Warburg Dillon Read Inc. To the extent required under the securities laws,
prospectuses and other disclosure documents for securities underwritten or
privately placed by SBC Warburg Dillon Read Inc. will disclose the existence of
any such lending relationships and whether the proceeds of the issue will be
used to repay debts owed to affiliates of SBC Warburg Dillon Read Inc.
On Xxxxxxxx 0, 0000, Xxxxx Bank Corporation announced its intention to
merge with Union Bank of Switzerland. References in this document to Swiss Bank
Corporation include references to its successor entity following completion of
the merger.
References to the parties include references to their successors,
including, without limitation, an entity which assumes the rights and
obligations of the relevant party by operation of the law of the jurisdiction of
incorporation or domicile of such party.
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for such
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Company, and the Underwriters, severally.
Very truly yours,
TRIANGLE PHARMACEUTICALS, INC.
By:
--------------------------------
Title:
-----------------------------
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Accepted and agreed to as of the date first above written, on behalf of
themselves and the other several Underwriters named in Schedule A
SBC WARBURG DILLON READ INC.
BEAR, XXXXXXX & CO. INC.
VECTOR SECURITIES INTERNATIONAL, INC.
By: SBC Warburg Dillon Read Inc.
By:
--------------------------------
Title:
-----------------------------
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SCHEDULE A
Underwriter Number of Firm Shares
----------- ---------------------
SBC Warburg Dillon Read Inc. . . . . . . .
Bear, Xxxxxxx & Co. Inc. . . . . . . . . .
Vector Securities International, Inc. . . .
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