2,782,609 Shares of Common Stock
Pharmacyclics, Inc.
(a Delaware corporation)
Common Stock
Underwriting Agreement
April 1, 2004
Pacific Growth Equities, LLC
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Pharmacyclics, Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to you as the Underwriter (the "UNDERWRITER") an aggregate of
2,782,609 shares of Common Stock, $0.0001 par value per share (the "COMMON
STOCK"), of the Company (the "FIRM SHARES"). In addition, solely for the purpose
of covering over-allotments, the Company proposes to grant to the Underwriter
the option to purchase from the Company up to an additional 417,391 shares of
Common Stock (the "OPTION SHARES"). The Firm Shares and the Option Shares (to
the extent the aforementioned option is exercised) are herein collectively
referred to as the "OFFERED SECURITIES."
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Underwriter as set forth below in this
Section.
(a) A registration statement on Form S-3 (No. 333-112632)
relating to the Offered Securities, including a form of prospectus (the "INITIAL
REGISTRATION STATEMENT"), has been filed with the Securities and Exchange
Commission (the "COMMISSION") and has been declared effective under the
Securities Act of 1933, as amended (collectively, the "ACT"), and is not, as of
the date hereof, proposed to be amended. For purposes of this Underwriting
Agreement, "EFFECTIVE TIME" with respect to the initial registration statement
means the date and time that the initial registration statement was declared
effective by the Commission. "EFFECTIVE DATE" with respect to the initial
registration statement means the date of the Effective Time thereof. The initial
registration statement, at its Effective Time, including all material
incorporated by reference therein, is hereinafter referred to as the
"REGISTRATION STATEMENT." After the execution of this Underwriting Agreement and
within the time required by Rule 424(b) under the Act ("RULE 424(b)"), the
Company will file with the Commission pursuant to Rule 424(b) a prospectus
supplement relating to the Offered Securities (the "PROSPECTUS SUPPLEMENT"),
together with the related prospectus dated February 18, 2004 (the "BASE
PROSPECTUS"). The Prospectus Supplement and the Base Prospectus will be in the
form furnished to the Underwriter prior to the date hereof, or, to the extent
not completed at the time of execution of this Underwriting Agreement, shall
contain only such specific additional information and other changes as the
Company has advised the Underwriter. The Prospectus
Supplement and the Base Prospectus, each in the form furnished to the
Underwriter in accordance with the foregoing sentence for use in connection with
the offering of the Offered Securities, including all material incorporated by
reference therein, are hereinafter referred to, collectively, as the
"PROSPECTUS." No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act. References herein to amendments or
supplements to the Registration Statement or the Prospectus shall mean and
include any document filed with the Commission on or after the date of this
Underwriting Agreement that are incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus pursuant to the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
(b) On the Effective Date of the Registration Statement, the
Registration Statement complied in all material respects with the requirements
of the Act and the rules and regulations of the Commission (the "RULES AND
REGULATIONS") and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading. On the date of this Underwriting
Agreement, the Registration Statement and the Base Prospectus comply, and at the
time of filing of the Prospectus Supplement pursuant to Rule 424(b), the
Registration Statement and the Prospectus will comply, in all material respects
with the requirements of the Act and the Rules and Regulations, and none of such
documents contains, or will contain, any untrue statement of a material fact or
omits, or will omit, to state any 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 representations or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with information furnished herein or in writing to the Company by or
on behalf of the Underwriter for inclusion in the Registration Statement or the
Prospectus.
(c) The Company has been duly formed and is a validly existing
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized, with full power and authority (corporate and other) to
own, lease and operate, as the case may be, its properties and conduct its
business as described in the Prospectus; and is duly qualified to do business as
a foreign corporation in good standing in California, which is the only
jurisdiction in which the conduct of its business requires such qualification,
except where the failure to be so qualified or be in good standing might not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the financial condition, business, properties, or results of
operations of the Company ("MATERIAL ADVERSE EFFECT"). The Company has not
received a written notification that any proceeding has been instituted in any
such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification, and to the Company's
knowledge, no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification. The Company is in possession of and operating in
material compliance with all authorizations, licenses, certificates, consents,
orders and permits from state, federal and other regulatory authorities that are
material to the conduct of its business, all of which are valid and in full
force and effect. The Company is not (A) in violation of its charter or bylaws,
(B) in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture, note or other evidence
of indebtedness, or in any lease, contract, indenture, mortgage, deed of trust,
loan agreement, joint venture or other
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agreement or instrument to which the Company is a party or by which it or its
properties may be bound, or (C), to its knowledge, in violation of any law,
order, rule, regulation, writ, injunction, judgment or decree of any court,
government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its properties, except, in the case of
clauses (B) and (C), where such breaches, defaults or violations might not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company does not own or control, directly or indirectly, any
corporation, association or other entity.
(d) The Company has all requisite corporate power and authority
to enter into this Underwriting Agreement and perform the transactions
contemplated hereby. This Underwriting Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement on
the part of the Company, enforceable in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. The performance of this Underwriting Agreement and
the consummation of the transactions herein contemplated will not result in (A)
any violation of the charter or bylaws of the Company or (B) a breach or
violation of any of the terms and provisions or constitute a default under (i)
any bond, debenture, note or other evidence of indebtedness, or under any lease,
including without limitation any sale and leaseback arrangement, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company is a party or by which it or any of
its properties may be bound or (ii) any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or its
properties, except in the case of clauses (B)(i) and (B)(ii), such defaults or
violations which might not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. No consent, approval, authorization or
order of or qualification with any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over the Company or over its
properties is required for the execution and delivery of this Underwriting
Agreement and the consummation by the Company of the transactions herein
contemplated, except such consents (i) that will be obtained prior to the
Closing and (ii) as may be required under the Act, the Exchange Act (if
applicable), the Rules and Regulations, or under state or other securities or
blue sky laws, all of which requirements will be satisfied in all material
respects at or prior to the Closing.
(e) Except as disclosed in the Registration Statement or the
Prospectus, there are no actions, suits, claims, investigations or proceedings
pending or, to the Company's knowledge, threatened to which the Company or, to
the Company's knowledge, any of its directors or officers is a party or of which
any of its properties is subject at law or in equity, or before or by any
federal, state, local or foreign governmental or regulatory commission, board,
body, authority or agency which, if adversely decided, would be reasonably
likely to result in a judgment, decree or order having a Material Adverse Effect
or prevent consummation of the transactions contemplated hereby. There are no
agreements, contracts, leases or documents of the Company of a character
required to be described or referred to in the Registration Statement or the
Prospectus by the Act, the Exchange Act or the Rules and Regulations which have
not been accurately described in all material respects in the Registration
Statement or the Prospectus.
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(f) All outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
have not been issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities. The authorized and
outstanding capital stock of the Company as set forth in the Prospectus conforms
in all material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly state
the substance of the instruments defining the capitalization of the Company).
The Offered Securities have been duly authorized for issuance and sale to the
Underwriter pursuant to this Underwriting Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the terms
of this Underwriting Agreement, will be duly and validly issued and fully paid
and nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest. No preemptive right, co-sale
right, registration right, right of first refusal or other similar right of
stockholders exists with respect to any of the Offered Securities or the
issuance and sale thereof, other than those that have been expressly waived
prior to the date hereof, those that will have been expressly waived prior to
the Closing Date, those that will automatically expire upon or will not apply to
the consummation of the transactions contemplated on the Closing Date. No
further approval or authorization of any stockholder, the Board of Directors of
the Company or others is required for the issuance and sale or transfer of the
Offered Securities, except as may be required under state or other securities or
blue sky laws. Except as disclosed in the Prospectus and the financial
statements of the Company, and the related notes thereto, included or
incorporated by reference in the Prospectus, the Company does not have
outstanding any options to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its capital
stock or any such options, rights, registration rights, convertible securities
or obligations. The description of the Company's stock option plans, employee
stock purchase plans or similar arrangements, and the options or other rights
granted and exercised thereunder, set forth in the Prospectus accurately and
fairly presents, in all material respects, the information required to be shown
with respect to such plans, arrangements, options and rights.
(g) The Company meets the eligibility requirements for the use of
Commission Form S-3. When filed with the Commission, all of the Company's
Exchange Act reports conformed, to the extent applicable, in all material
respects to the requirements of the Exchange Act and the Rules and Regulations.
(h) PricewaterhouseCoopers LLP, whose report on the financial
statements of the Company is filed with the Commission and is incorporated by
reference in the Registration Statement and the Prospectus, are independent
public accountants as required by the Act and the Rules and Regulations. Except
as described in the Registration Statement and as preapproved in accordance with
the requirements set forth in Section 10A of the Exchange Act, to the Company's
knowledge, PricewaterhouseCoopers LLP has not engaged in any "prohibited
activities" (as defined in Section 10A of the Exchange Act) on behalf of the
Company.
(i) The financial statements of the Company, together with the
related schedules and notes, included in the Registration Statement and the
Prospectus: (i) present fairly, in all material respects, the financial position
of the Company as of the dates indicated and the results of operations and cash
flows of the Company for the periods specified; (ii) have been prepared in
compliance with requirements of the Act and the Rules and Regulations and in
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conformity with generally accepted accounting principles in the United States
applied on a consistent basis during the periods presented and the schedules
included in the Registration Statement present fairly, in all material respects,
the information required to be stated therein (provided, however, that the
statements that are unaudited are subject to normal year-end adjustments and do
not contain certain footnotes required by generally accepted accounting
principles); (iii) comply with the antifraud provisions of the Federal
securities laws; and (iv) describe accurately, in all material respects, the
controlling principles used to form the basis for their presentation. There are
no financial statements (historical or pro forma) and/or related schedules and
notes that are required to be included in the Registration Statement and the
Prospectus that are not included as required by the Act, the Exchange Act and/or
the Rules and Regulations.
(j) Subsequent to the dates as of which information is given in
the Prospectus, there has not been (i) any change, development or event that
might reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, (ii) any transaction that is material to the Company,
(iii) any obligation, direct or contingent, that is material to the Company,
incurred by the Company, (iv) any change in the capital stock or outstanding
indebtedness of the Company that is material to the Company, (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company, or (vi) any loss or damage (whether or not insured) to the property of
the Company which has been sustained or will have been sustained which might
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(k) Except as set forth in the Registration Statement or the
Prospectus: (i) the Company has good and marketable title to all properties and
assets described in the Registration Statement and Prospectus as owned by it,
free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, other than such as might not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; (ii) the agreements
to which the Company is a party described in the Registration Statement and the
Prospectus are valid agreements, enforceable by the Company, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles and, to the
Company's knowledge, the other contracting party or parties thereto are not in
material breach or material default under any of such agreements; and (iii) the
Company has valid and enforceable leases, including without limitation any
leases that are the subject of any sale and leaseback arrangement, for all
properties described in the Registration Statement and the Prospectus as leased
by it, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. Except as set forth in the Registration Statement and the
Prospectus, the Company owns or leases all such properties as are necessary to
its operations as now conducted or as proposed to be conducted.
(l) The Company has timely filed all Federal, state and foreign
income and franchise tax returns required to be filed by the Company on or prior
to the date hereof, and has paid all taxes shown thereon as due, and there is no
tax deficiency that has been or, to the Company's knowledge, might be asserted
against the Company that might reasonably be
5
expected to have a Material Adverse Effect. All tax liabilities are adequately
provided for on the books of the Company.
(m) The Company has established and maintains a system of
internal accounting controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(n) Except as described in the Prospectus, the Company's Board of
Directors has validly appointed an Audit Committee whose composition satisfies
the requirements of Rule 4350(d)(2) of the Rules of the National Association of
Securities Dealers, Inc. (the "NASD RULES") and the Board of Directors and/or
the Audit Committee has adopted a charter that satisfies the requirements of
Rule 4350(d)(1) of the NASD Rules. The Audit Committee has reviewed the adequacy
of its charter within the past 12 months.
(o) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 under the Exchange Act).
Since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses. The Company is in compliance in all material respects with all
provisions currently in effect and applicable to the Company of the
Xxxxxxxx-Xxxxx Act of 2002, and all rules and regulations promulgated thereunder
or implementing the provisions thereof.
(p) The Company maintains insurance with insurers of recognized
financial responsibility of the types and in the amounts generally deemed
adequate for its business and consistent with insurance coverage maintained by
similar companies in similar businesses, including, but not limited to,
insurance covering the acts and omissions of directors and officers, real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect; 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
might not reasonably be expected to have a Material Adverse Effect.
(q) The Company has not sustained since the date of the latest
financial statements included in the Prospectus any losses or interferences with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Registration
Statement and the Prospectus or other than any losses or interferences which
might not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
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(r) No labor dispute with employees of the Company exists or, to
the Company's knowledge, is imminent which might reasonably be expected to have
a Material Adverse Effect. No collective bargaining agreement exists with any of
the Company's employees and, to the Company's knowledge, no such agreement is
imminent.
(s) Except as disclosed in the Registration Statement and the
Prospectus, the Company owns or possesses adequate rights to use all patents,
patent rights, inventions, trade secrets, know-how, trademarks, service marks,
trade names, copyrights and other information (collectively, "INTELLECTUAL
PROPERTY") that are necessary to conduct its business as described in the
Registration Statement and the Prospectus, except where any failure to own, or
possess rights to use, such Intellectual Property, individually or in the
aggregate, might not reasonably be expected to have a Material Adverse Effect.
The Company has not received any notice of, and has no knowledge of, (i) any
infringement of or conflict with asserted rights of the Company by others with
respect to any Intellectual Property or (ii) any infringement of or conflict
with asserted rights of others by the Company with respect to any Intellectual
Property which, in either case, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, might reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. To the
Company's knowledge, none of the patent rights owned or licensed by the Company
is unenforceable or invalid, except such unenforceability or invalidity which,
individually or in the aggregate, might not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. The Company has
duly and properly filed or caused to be filed with the U.S. Patent and Trademark
Office (the "PTO") and appropriate foreign and international patent authorities
all patent applications described or referred to in the Prospectus, and has
complied with the PTO's duty of candor and disclosure for each of the Company's
U.S. patent applications. The Company has no knowledge of any facts that would
preclude it from having clear title to its patent applications referenced in the
Prospectus. The Company has not licensed any patent rights to third parties.
(t) The Common Stock is registered pursuant to Section 12(g) of
the Exchange Act and is listed on the Nasdaq National Market, and the Company
has taken no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq National Market. Except as described in the
Registration Statement and the Prospectus, the Company has not received any
notification that the Commission or the National Association of Securities
Dealers, Inc. (the "NASD") is contemplating terminating such registration or
listing.
(u) Pursuant to the "safe harbor" provided to bona fide research
and development companies under Rule 3a-8 of the Investment Company Act of 1940,
as amended (the "INVESTMENT COMPANY ACT"), the Company is not and, after giving
effect to the offering sand sale of the Shares, will not be an "investment
company," as such term is defined in the Investment Company Act;
(v) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date (as defined in Section 2 below) and (ii)
completion of the distribution of the Offered Securities, will not distribute,
any offering materials in connection with the offering and sale of the Offered
Securities other than the Registration Statement, the Prospectus or other
materials, if any, permitted by the Act and the Rules and Regulations.
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(w) Neither the Company nor, to its knowledge, any of its
affiliates has 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 the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Offered
Securities. The Company acknowledges that the Underwriter may engage in passive
market making transactions in the Offered Securities on the Nasdaq National
Market in accordance with Regulation M under the Exchange Act.
(x) The Company is in compliance in all material respects with
all currently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"), except where a failure to so comply might not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; to the Company's knowledge, no unwaivable "reportable event" (as defined
in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA)
for which the Company would have any liability; the Company has not incurred and
does not expect to incur any material liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "CODE"); and each
"pension plan" for which the Company would have any liability that is intended
to be qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(y) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in material compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("ENVIRONMENTAL LAWS")
which are applicable to its business, (ii) the Company has received no notice
from any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the Registration
Statement and Prospectus, (iii), to the Company's knowledge, the Company is not
currently required to make future material capital expenditures to comply with
Environmental Laws and (iv), to the Company's knowledge, no property that is
owned, leased or occupied by the Company has been designated a Superfund site
pursuant to the Comprehensive Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a
contaminated site under applicable state or local law.
(z) The Company has caused each executive officer and director
listed on Schedule I hereto to furnish to the Underwriter, on or prior to the
date of this Underwriting Agreement, a letter or letters, in form and substance
satisfactory to the Underwriter (the "LOCK-UP AGREEMENTS"), pursuant to which
such person shall agree not to, directly or indirectly, for a period commencing
on the date of this Underwriting Agreement and ending on the close of business
on the sixtieth (60th) day after the date of the Prospectus Supplement (the
"LOCK-UP PERIOD"), offer to sell, pledge, contract to sell, grant any option to
purchase, grant a security interest in, hypothecate or otherwise sell or dispose
of (collectively, a "DISPOSITION") any shares of Common Stock (including without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by such person in accordance with the Rules and Regulations and shares of Common
Stock that may be issued upon the exercise of a stock option or warrant) or
8
any securities convertible into, derivative of or exchangeable or exercisable
for Common Stock (collectively, "SECURITIES"), owned directly by such person or
as to which such person has the power of disposition, in any such case whether
owned as of the date of such letter or acquired thereafter, except for such
Dispositions that are expressly permitted by the Lock-Up Agreements. The
foregoing restriction has been expressly agreed to preclude the holder of the
Securities from engaging in any hedging or other transaction, as more fully
described in the Lock-up Agreements. Furthermore, such person has also agreed
and consented to the entry of stop transfer instructions with the Company's
transfer agent against the transfer of the Securities held by such person except
in compliance with this restriction. The Company has provided to counsel for the
Underwriter true, accurate and complete copies of all of the Lock-up Agreements
currently in effect or effected hereby. The Company hereby represents and
warrants that it will not release, prior to the expiration of the Lock-up
Period, any of its officers or directors from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Pacific
Growth Equities, LLC.
(aa) There are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees
of indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.
(bb) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's officers,
directors or 5% or greater security holders, except as set forth in the
Registration Statement or the Prospectus.
(cc) The Company has not sold or issued any shares of Common
Stock during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Act, other than shares issued in a public offering pursuant to a valid and
effective registration statement filed with the Commission or shares issued
pursuant to employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options, rights or
warrants.
(dd) To the Company's knowledge, after reasonable inquiry, the
clinical and pre-clinical studies conducted by or on behalf of the Company 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 material
compliance with all applicable U.S. Food and Drug Administration (the "FDA")
laws and regulations. The descriptions in the Prospectus 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 "large well-controlled" studies or tests the aggregate
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, to the Company's
knowledge, the Company is operating in compliance, in all material respects,
with all applicable rules and regulations of the FDA; and, except to the extent
disclosed in the Registration Statement and the Prospectus, the Company has not
received any written notices from the FDA or any other governmental agency
requiring the termination, suspension or material modification of any
9
clinical or pre-clinical studies that are described in the Prospectus or the
results of which are referred to in the Prospectus.
The Company acknowledges that the Underwriter and, for purposes of the
opinions to be delivered to the Underwriter pursuant to Section 6 of this
Underwriting Agreement, counsel for the Company and counsel for the Underwriter
will rely upon the accuracy and truth of the foregoing representations, and the
Company hereby consents to such reliance.
2. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company agrees to sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, at a
purchase price of $12.3825 per share, the Firm Shares.
The Company will deliver the Firm Shares to the Underwriter against
payment of the purchase price in cash by wire transfer of immediately available
funds to an account or accounts of the Company, which accounts have been
designated by the Company in writing at least one day prior to the Closing at
the office of Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000, at 7:00 A.M., Pacific Standard Time, on April 7, 2004, or at
such other time not later than seven full business days thereafter as the
Underwriter and the Company may mutually agree, such time being herein referred
to as the "CLOSING DATE." The certificates for the Firm Shares so to be
delivered will be in definitive form, in such denominations and registered in
such names as the Underwriter requests and (i) will be made available for
checking and packaging at the above office of Xxxxxx & Xxxxxxx LLP, at least 24
hours prior to the Closing Date or (ii) delivered through the facilities of the
Depositary Trust Company (DTC) for the account of the Underwriter.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriter to purchase the Option Shares at the
price per share as set forth in the first paragraph of this Section 2. The
option granted hereby may be exercised in whole or in part by giving written
notice (i) at any time before the Closing Date and (ii) only once thereafter
within 30 days after the date of this Underwriting Agreement, by the
Underwriter, to the Company setting forth the number of Option Shares to be
purchased and the time and date at which such certificates are to be delivered
in the same manner as the Firm Shares certificates. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Underwriter, but shall not be earlier than three nor later than 10 full business
days after the exercise of such option, nor in any event prior to the Closing
Date (such time and date being herein referred to as the "OPTION CLOSING DATE").
If the date of notice of exercise of the option is three or more business days
before the Closing Date, the notice of exercise shall set the Option Closing
Date as the Closing Date. The option with respect to the Option Shares granted
hereunder may be exercised only to cover over-allotments in the sale of the Firm
Shares by the Underwriter. The Underwriter may cancel such option at any time
prior to its expiration by giving written notice of such cancellation to the
Company. To the extent, if any, that the option is exercised, payment for the
Option Shares will be made on the Option Closing Date in immediately available
funds by wire transfer to the order of the Company for the Option Shares to be
sold by it against delivery of certificates therefor at the offices of Xxxxxx &
Xxxxxxx LLP, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx in the same manner
as the delivery of the Firm Shares.
10
3. Offering by Underwriter. It is understood that the Underwriter
proposes to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
4. Certain Agreements of the Company. The Company agrees with the
Underwriter:
(a) (i) to furnish such information as may be required and
otherwise to cooperate in qualifying the Offered Securities for offering and
sale under the securities or blue sky laws of such states as the Underwriter may
designate and to maintain such qualifications in effect so long as required for
the distribution of the Offered Securities; provided that the Company shall not
be required to qualify as a foreign corporation or to consent to the service of
the process under the laws of any such jurisdiction (except service of process
with respect to the offering and sale of the Offered Securities); and (ii) to
promptly advise the Underwriter of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Offered
Securities for sale in any jurisdiction or the initiation or threat of any
proceeding for such purpose;
(b) to make available to the Underwriter, as soon as practicable
after the execution and delivery of this Underwriting Agreement, and thereafter
from time to time to furnish to the Underwriter, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriter may reasonably request for the
purposes contemplated by the Act; in case the Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Offered Securities, the Company will
prepare promptly upon request such amendment or amendments to the Registration
Statement and such prospectuses as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the Act; without limiting the generality
of the foregoing and notwithstanding anything herein to the contrary, the
Company shall deliver to the Underwriter a true, correct and complete electronic
copy of (i) the Base Prospectus prior to or concurrently with the execution
hereof and (ii) the final Prospectus Supplement no later than 11:59 p.m.,
Pacific Standard Time, on the date hereof;
(c) to advise the Underwriter promptly, confirming such advice in
writing (if requested by the Underwriter), (i) when any post-effective amendment
to the Registration Statement becomes effective and (ii) when the Prospectus is
filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner under such Rule);
(d) to advise the Underwriter promptly, confirming such advice in
writing (if requested by the Underwriter), of any request by the Commission for
amendments or supplements to the Registration Statement or the Prospectus or for
additional information with respect thereto, or notice of institution of
proceedings for, or the entry of a stop order suspending the effectiveness of
the Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to make every
commercially reasonable effort to obtain the lifting or removal of such order as
soon as possible; to advise the Underwriter promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and, for so long as the
delivery of the Prospectus is required in connection with the
11
offer or sale of the Offered Securities, to file no such amendment or supplement
to which the Underwriter shall object in writing;
(e) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) of the Act;
(f) (i) to the extent not publicly filed, to furnish to the
Underwriter for a period of one (1) year from the date of this Underwriting
Agreement copies of any reports or other communications which the Company shall
send to its stockholders and (ii) such other information publicly disclosed by
the Company as the Underwriter may reasonably request in writing regarding the
Company, in each case as soon as reasonably practicable after such reports,
communications, documents or information become available, or are requested in
writing by the Underwriter;
(g) to advise the Underwriter promptly of the happening of any
event known to the Company within the time during which a Prospectus relating to
the Offered Securities is required to be delivered under the Act which would
require the making of any change in the Prospectus then being used, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriter
promptly such amendments or supplements to such Prospectus as may be necessary
to reflect any such change and to furnish the Underwriter a copy of such
proposed amendments or supplements before filing any such amendment or
supplement with the Commission;
(h) to furnish the Underwriter five (5) conformed copies of the
initial registration statement and of all amendments thereto (including all
exhibits thereto);
(i) to apply the net proceeds from the sale of the Offered
Securities in the manner set forth under the caption "Use of Proceeds" in the
Prospectus;
(j) to pay all costs, expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, each preliminary
prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriter (including
costs of mailing and shipment), (ii) the registration, issuance, sale and
delivery of the Offered Securities, (iii) the printing of this Underwriting
Agreement, any Powers of Attorney and any closing documents (including
compilations thereof) and the reproduction and/or printing and furnishing of
copies of each thereof to the Underwriter (including costs of mailing and
shipment), (iv) the qualification of the Offered Securities for offering and
sale under state laws and the determination of their eligibility for investment
under state laws as aforesaid (including associated filing fees and the
reasonable legal fees and disbursements of counsel for the Underwriter) and the
printing and furnishing of copies of any blue sky surveys to the Underwriter,
(v) any listing of the Offered Securities on any securities exchange or
qualification of the Offered Securities for quotation on the Nasdaq National
Market and any registration thereof under the Exchange Act, (vi) review, if any,
of the public offering of the Offered Securities by the NASD (including
associated filing fees and the reasonable legal fees and disbursements of
counsel for the Underwriter), (vii) the costs and expenses of the
12
Company relating to presentations or meeting undertaken in connection with the
marketing of the offer and sale of the Offered Securities to prospective
investors and the Underwriter's sales force, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers of
the Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show and (viii) the performance of the other
obligations of the Company hereunder; provided, however, that except as
otherwise set forth in this Underwriting Agreement, the Underwriter shall pay
its own costs and expenses, including the costs and expenses of counsel for the
Underwriter;
(k) for so long as the delivery of the Prospectus is required in
connection with the offer or sale of the Offered Securities, to furnish to the
Underwriter a reasonable period of time before filing with the Commission a copy
of any document proposed to be filed pursuant to Section 13, 14 or 15(d) of the
Exchange Act and to not make any filing to which the Underwriter reasonably
objects;
(l) to not take, directly or indirectly, any action designed to
or which may constitute or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Offered Securities;
(m) not to, for a period commencing on the date of this
Underwriting Agreement and ending on the close of business on the sixtieth
(60th) day after the date of the Prospectus Supplement, without the prior
written consent of Pacific Growth Equities, LLC, effect the Disposition of,
directly or indirectly, any Securities other than the sale of the Offered
Securities hereunder; provided that nothing in this Underwriting Agreement shall
prevent the Company's issuance of (i) equity securities under the Company's
currently authorized equity incentive plans, including its employee stock
purchase plan, or upon exercise of outstanding equity awards, (ii) securities
issued or sold in connection with any corporate strategic development or similar
transaction or (iii) any merger or acquisition transaction approved by the
Company's board of directors;
(n) to file timely all reports and any definitive proxy or
information statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act and the Rules and Regulations subsequent
to the date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Offered Securities, and
to promptly notify the Underwriter of such filing;
(o) if, at the time this Underwriting Agreement is executed and
delivered, it is necessary for a post-effective amendment to the Registration
Statement or an additional registration statement to be declared effective
before the offering of the Offered Securities may commence, the Company will
endeavor to cause such post-effective amendment or additional registration
statement to become effective as soon as possible and will advise the
Underwriter promptly and, if requested by the Underwriter, will confirm such
advice in writing, when such post-effective amendment or additional registration
statement has become effective; and
13
(p) to use all commercially reasonable efforts to maintain the
quotation of the Offered Securities on the Nasdaq National Market and to file
with the Nasdaq National Market all documents and notices required by the Nasdaq
National Market of companies that have securities traded in the over-the-counter
market and quotations for which are reported by the Nasdaq National Market.
5. Reimbursement of Underwriter's Expenses. If the Offered
Securities are not delivered for any reason other than the termination of this
Underwriting Agreement pursuant to the second paragraph of Section 7 hereof or
the default by the Underwriter in its obligations hereunder, the Company agrees,
in addition to paying the amounts described in Section 4(j) hereof, to reimburse
the Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of its counsel.
6. Conditions of the Obligations of the Underwriter. The obligations
of the Underwriter to purchase and pay for the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date are subject to the
accuracy of the representations and warranties on the part of the Company herein
as of the Closing Date or the Option Closing Date, as the case may be, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Underwriter shall have received, on the Closing Date and
the Option Closing Date, as the case may be, a comfort letter dated as of the
Closing Date or the Option Closing Date, as the case may be, addressed to the
Underwriter, in form and substance satisfactory to the Underwriter, from
PricewaterhouseCoopers LLP confirming that they are independent public
accountants within the meaning of the Act and the related published Rules and
Regulations, and containing such other statements and information as are
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial and statistical
information contained in or incorporated by reference in the Registration
Statements and the Prospectus.
(b) The Registration Statement shall have become effective under
the Act prior to the date of this Underwriting Agreement. The Prospectus shall
have been filed with the Commission in accordance with the Rules and Regulations
and Section 4(c) of this Underwriting Agreement. Prior to the Closing Date or
the Option Closing Date, as the case may be, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Company or the Underwriter, shall be contemplated by the Commission.
(c) Between the time of execution of this Underwriting Agreement
and the Closing Date or the Option Closing Date, as the case may be, (i) no
change, development or event shall have occurred or become known to the Company,
that might be reasonably expected to result in a Material Adverse Effect (other
than as specifically described in the Registration Statement and Prospectus) and
(ii) no transaction which is material to the Company shall have been entered
into by the Company, except as required or permitted by this Underwriting
Agreement.
14
(d) The Underwriter shall have received, on the Closing Date and
the Option Closing Date, as the case may be, an opinion of Xxxxxx & Xxxxxxx LLP,
counsel for the Company, addressed to the Underwriter, dated as of the Closing
Date or the Option Closing Date, as the case may be, and in form reasonably
satisfactory to Howard, Rice, Nemerovski, Canady, Xxxx & Rabkin, A Professional
Corporation, counsel for the Underwriter, which opinion shall be in
substantially the form attached hereto as Annex A.
(1) The Underwriter shall have received, on the Closing
Date and the Option Closing Date, as the case may be, the opinion of Xxxxx X.
Xxxxxxxxxxx, Esq., patent counsel for the Company, dated as of the Closing Date
or the Option Closing Date, as the case may be, addressed to the Underwriter and
in form reasonably satisfactory to Howard, Rice, Nemerovski, Canady, Xxxx &
Rabkin, A Professional Corporation, counsel for the Underwriter, which opinion
shall be in substantially the form attached hereto as Annex B.
(e) The Underwriter shall have received, on the Closing Date and
the Option Closing Date, as the case may be, the opinion of Howard, Rice,
Nemerovski, Canady, Xxxx & Xxxxxx, A Professional Corporation, counsel for the
Underwriter, dated as of the Closing Date or the Option Closing Date, as the
case may be, with respect to the issuance and sale of the Offered Securities by
the Company, the Registration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Underwriter may require,
and the Company shall have furnished to such counsel such documents as they may
have requested for the purpose of enabling them to pass upon such matters.
(f) The Underwriter shall have received, on the Closing Date and
the Option Closing Date, as the case may be, a certificate of the President and
Chief Executive Officer and Vice President, Finance and Administration and Chief
Financial Officer and Secretary of the Company, dated as of the Closing Date or
the Option Closing Date, as the case may be, in which such officers, to their
knowledge after reasonable investigation, shall state that: the representations
and warranties of the Company in this Underwriting Agreement are true and
correct in all material respects (if not qualified by materiality or by a
reference to a Material Adverse Effect) and in all respects (if qualified by
materiality or by reference to a Material Adverse Effect); the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date or Option
Closing Date; no stop order suspending the effectiveness of the Registration
Statement has been issued by the Commission and no proceedings for that purpose
have been instituted or are contemplated by the Commission; and, subsequent to
the respective date of the Company's most recent financial statements in the
Prospectus, there has been no Material Adverse Effect, nor any change,
development or event that might be reasonably likely to result in a Material
Adverse Effect, except as set forth in or contemplated by the Prospectus.
(g) The Company shall have obtained and delivered to the
Underwriter the Lock-up Agreements referred to in Section 1(z) hereof.
(h) The Company shall have furnished to the Underwriter a
schedule, in form reasonably satisfactory to the Underwriter, and attached
hereto as Schedule II, of its U.S. Patents, U.S. Applications, Non-U.S. Patents
and Non-U.S. Applications.
15
(i) The Company shall have furnished to the Underwriter such
further certificates and documents as the Underwriter shall reasonably request
(including certificates of officers of the Company), as to the accuracy and
completeness of the representations and warranties of the Company herein, as to
the performance by the Company of its obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriter
hereunder.
(j) At the Closing Date or the Option Closing Date, as the case
may be, the Offered Securities shall be eligible to be traded on the Nasdaq
National Market, subject to official notice of issuance, if applicable.
7. Effective Date of Underwriting Agreement; Termination. This
Underwriting Agreement shall become effective when the parties hereto have
executed and delivered this Underwriting Agreement.
The obligations of the Underwriter hereunder shall be subject to
termination in the absolute discretion of Pacific Growth Equities, LLC if (x)
since the time of execution of this Underwriting Agreement or the earlier
respective dates as of which information is given in the Registration Statement
or Prospectus, there has been any material adverse change, or any development
reasonably likely to result in a material adverse change, in the business,
operations, properties, condition (financial or other), business, properties, or
results of operations of the Company which would, in the judgment of Pacific
Growth Equities, LLC, make it impracticable or inadvisable to proceed with the
offering or delivery of the Offered Securities on the terms and in the manner
contemplated by the Prospectus or (y) at any time prior to the Closing Date or
the Option Closing Date, as the case may be, (i) trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been generally suspended or material limitations or minimum
prices shall have been established on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market, (ii) a general moratorium on
commercial banking activities shall have been declared by either the Federal or
New York State authorities or there shall have occurred a material disruption in
commercial banking or securities settlement or clearance services in the United
States, or (iii) there is an outbreak or escalation of hostilities or acts of
terrorism involving the United States or the declaration by the United States of
a national emergency or war or an occurrence of any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event in the judgment of Pacific Growth
Equities, LLC makes it impracticable or inadvisable to proceed with the offering
or the delivery of the Offered Securities on the terms and in the manner
contemplated by the Prospectus.
If the Underwriter elects to terminate this Underwriting Agreement as
provided in this Section 7, the Company shall be notified promptly by the
Underwriter.
If the sale to the Underwriter of the Offered Securities, as
contemplated by this Underwriting Agreement, is not carried out by the
Underwriter for any reason permitted under this Underwriting Agreement or if
such sale is not carried out because the Company shall be unable to comply with
any of the terms of this Underwriting Agreement, the Company shall not be under
any obligation or liability under this Underwriting Agreement (except to the
extent provided in Sections 4(j), 5 and 8 hereof), and the Underwriter shall be
under no obligation or
16
liability to the Company under this Underwriting Agreement (except to the extent
provided in Section 8 hereof).
8. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the
Underwriter, its partners, directors and officers, and any person who controls
such Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including but
not limited to reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) which, jointly or
severally, such Underwriter or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact required to be stated in such
Registration Statement, the Prospectus, any amendment or supplement thereto or
any related preliminary prospectus, or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, except
insofar as any such loss, damage, expense, liability or claim arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact contained in and in conformity with information furnished by or on behalf
of the Underwriter to the Company expressly for use with reference to such
Underwriter in such Registration Statement, such Prospectus, or any amendment or
supplement thereto or any related preliminary prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement, such Prospectus, or any amendment or supplement thereto or any
related preliminary prospectus or necessary to make such information not
misleading. In addition, the foregoing indemnity agreement with respect to any
Prospectus shall not inure to the benefit of any Underwriter who failed to
deliver a Prospectus (or any amendment or supplement thereto) (if required by
law to have so delivered it) to the person asserting any losses, claims,
damages, liabilities and judgments caused by any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus, or caused by
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged misstatement or omission was cured in such
Prospectus (as amended or supplemented); provided, however, that the limitation
to the Company's indemnification obligation which is contained in this sentence
shall not apply in situations where the Company failed to timely fulfill its
obligations under Section 4(b) hereof.
(b) The Underwriter agrees to indemnify, defend and hold harmless
the Company, its directors and officers, and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including but not limited to
reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement
17
of any claim or litigation) which the Company or any such person may incur under
the Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished by or on behalf of the Underwriter to the
Company expressly for use with reference to such Underwriter in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arises out of or is based upon any omission
or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement, such Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or
necessary to make such information not misleading.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action in respect of which
indemnity could be sought under this Section 8, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party in writing of the
commencement thereof, but the failure to notify the indemnifying party will not
relieve the indemnifying party from any liability which it may have to any
indemnified party, except to the extent (but only to the extent) such
indemnifying party is prejudiced thereby. In case any such action is brought
against any indemnified party and the indemnified party notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party for separate
counsel retained by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation. Notwithstanding the foregoing, the
indemnified party shall have the right to employ one separate counsel, and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel, if (i) the use of the 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 available to it and/or the other indemnified parties which are
inconsistent with 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. Any such separate counsel for any Underwriter, its
affiliates, directors and officers and any control persons of such Underwriter
shall be designated in writing by Pacific Growth Equities, LLC, and any such
separate counsel for the Company, its directors, its officers who signed the
Registration Statement and any control persons of the Company shall be
designated in writing by the Company. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on
18
any claims that are the subject matter of such action and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(d) If for any reason the indemnification provided for in this
Section 8 is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter on the other from
the offering of the Offered Securities 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
Underwriter on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other shall be deemed to be in the
same respective proportions as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as reflected
on the cover page of the Prospectus Supplement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriter 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 into account the equitable considerations
referred to above. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), the Underwriter shall not be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Offered Securities purchased by the Underwriter. 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.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have; and the
obligations of the Underwriter under this Section shall be in addition to any
liability which the Underwriter may otherwise have.
(f) The indemnity and contribution agreements contained in this
Section 8 and the covenants, warranties and representations of the Company
contained in this Underwriting Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of the Underwriter, its
partners, directors or officers or any person (including each partner, officer
or director of such person) who controls such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of
the Company, its directors or officers or any person who controls any of the
foregoing within the meaning of Section 15 of the Act, Section 20 of the
Exchange Act, and shall survive the termination of this Underwriting
19
Agreement or the issuance and delivery of the Offered Securities. The Company
and the Underwriter agree promptly to notify each other of the commencing of any
action in respect of indemnity against it and against any of the officers or
directors of the Company in connection with the issuance and sale of the Offered
Securities, or in connection with the Registration Statement or Prospectus.
9. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to the
Underwriter shall be mailed, hand-delivered, sent via electronic mail (and
confirmed by letter) or facsimile (and confirmed by letter) to the Underwriter
c/o Pacific Growth Equities, LLC, Xxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx,
Xxxxxxxxxx, 00000, facsimile number (000) 000-0000, Attention: Xxxxxx Xxxxxxxxx,
Director of Compliance, with a copy to Xxxxxx X. Xxxxxxxxxx, Esq., Three
Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile
number (000) 000-0000; if sent to the Company, such notice shall be mailed,
hand-delivered, sent via electronic mail (and confirmed by letter) or facsimile
(and confirmed by letter) to 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, facsimile number, (000) 000-0000, electronic mail address,
xxxxxxx@xxxx.xxx, Attention: Xxxxxxx X. Xxxxxx, M.D., President and Chief
Executive Officer, with a copy to Xxxx Xxxxxxxxx Esq., Xxxxxx & Xxxxxxx LLP, 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, facsimile number (650)
463-2600.
10. Information Furnished by the Underwriter. The statements set
forth in the last paragraph of the cover of the Prospectus Supplement and in the
third, ninth, eleventh, twelfth and thirteenth paragraphs under the caption
"Underwriting" in the Prospectus Supplement constitute the only information
furnished by or on behalf of the Underwriter as such information is referred to
in Sections 3 and 8 hereof.
11. Parties at Interest. This Underwriting Agreement has been and is
made solely for the benefit of the Underwriter, the Company and, to the extent
provided in Section 8 hereof, the controlling persons, directors and officers
referred to in such Section, and their respective successors, assigns, heirs,
personal representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from the Underwriter) shall acquire or have any right under or by
virtue of this Underwriting Agreement.
12. Applicable Law. This Underwriting Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to principles of conflicts of laws.
13. Successors and Assigns. This Underwriting Agreement shall be
binding upon the Underwriter and the Company and their successors and assigns
and any successor assign of any substantial portion of the Company's or any of
the Underwriter's business and/or assets.
14. Entire Agreement. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
20
15. Amendments. This Agreement may only be amended or modified in
writing, signed by all of the parties hereto, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit.
16. Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
17. Counterparts. This Underwriting Agreement may be signed by the
parties in one or more counterparts which together shall constitute one and the
same agreement among the parties.
21
If the foregoing correctly sets forth the understanding between the
Company and the Underwriter, please so indicate in the space provided below for
the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement between the Company and the Underwriter.
Very truly yours,
PHARMACYCLICS, INC.
By:_________________________________________
Name: Xxxxxxx X. Xxxxxx, M.D.
Title: President and Chief Executive Officer
Accepted and agreed to as of the date
first above written:
PACIFIC GROWTH EQUITIES, LLC
By:_____________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Managing Director
[SIGNATURE PAGE TO PCYC U/A MARCH 2004]
SCHEDULE I
Schedule of Lock-Up Agreements
Xxxxxxx X. Xxxxxx, M.D.
Xxxxxxx X. Xxxxxxx
Xxxx Xxx
Xxxx Xxxxxx, Ph.D.
See-Xxxx Xxxx, M.D.
Xxxxxx X. Xxxxxxxxx, M.D.
Miles X. Xxxxxxxx
Xxxxxxx X. Xxxx, M.D.
Xxxxxxx X. Xxxx, Ph.D.
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxxx
ANNEX A
ANNEX A-1
OPINION OF COMPANY COUNSEL
ANNEX A-2
FORM OF NEGATIVE ASSURANCES LETTER OF COMPANY COUNSEL
ANNEX B
OPINION OF PATENT COUNSEL
