EXHIBIT 1.1
5,750,000 SHARES
PENINSULA PHARMACEUTICALS, INC.
COMMON STOCK, PAR VALUE $0.0001 PER SHARE
UNDERWRITING AGREEMENT
_______________, 2005
CREDIT SUISSE FIRST BOSTON LLC
BEAR, XXXXXXX & CO. INC.
FIRST ALBANY CAPITAL INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the Several Underwriters
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Ladies and Gentlemen:
1. Introductory. Peninsula Pharmaceuticals, Inc., a Delaware
corporation ("COMPANY"), proposes to issue and sell 5,750,000 shares ("FIRM
SECURITIES") of its common stock, par value $0.0001 per share ("SECURITIES"),
and also proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 862,500 additional shares ("OPTIONAL
SECURITIES") of its Securities as set forth below. The Firm Securities and the
Optional Securities are herein collectively called the "OFFERED SECURITIES". As
part of the offering contemplated by this Agreement, Credit Suisse First Boston
LLC (the "DESIGNATED UNDERWRITER") has agreed to reserve out of the Firm
Securities purchased by it under this Agreement, up to 287,500 shares, for sale
to the Company's directors, officers, employees and other parties associated
with the Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus
(as defined herein) under the heading "Underwriting" (the "DIRECTED SHARE
PROGRAM"). The Firm Securities to be sold by the Designated Underwriter pursuant
to the Directed Share Program (the "DIRECTED SHARES") will be sold by the
Designated Underwriter pursuant to this Agreement at the public offering price.
Any Directed Shares not subscribed for by the end of the business day on which
this Agreement is executed will be offered to the public by the Underwriters as
set forth in the Prospectus. The Company hereby agrees with the several
Underwriters named in Schedule A hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-111193) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (i)
has been declared effective under the Securities Act of 1933 ("ACT")
and is not proposed to be amended or (ii) is proposed to be amended by
amendment or post-effective amendment. If such registration statement
("INITIAL REGISTRATION STATEMENT") has been declared effective, either
(i) an additional registration statement ("ADDITIONAL REGISTRATION
STATEMENT") relating to the Offered Securities may have been filed with
the Commission pursuant to Rule 462(b) ("RULE 462(B)") under the Act
and, if so filed, has become effective upon filing pursuant to such
Rule and the Offered Securities all have been duly registered under the
Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (ii) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule
462(b) and will become effective upon filing pursuant to such Rule and
upon such filing the Offered Securities will all have been duly
registered under the Act pursuant to the initial registration statement
and such additional registration statement. If the Company does not
propose to amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c) ("RULE 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"EFFECTIVE TIME" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised
the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement,
or the most recent post-effective amendment thereto (if any) filed
prior to the execution and delivery of this Agreement, was declared
effective by the Commission or has become effective upon filing
pursuant to Rule 462(c), or (ii) if the Company has advised the
Representatives that it proposes to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been
filed prior to the execution and delivery of this Agreement but the
Company has advised the Representatives that it proposes to file one,
"EFFECTIVE TIME" with respect to such additional registration statement
means the date and time as of which such registration statement is
filed and becomes effective pursuant to Rule 462(b). "EFFECTIVE DATE"
with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its
Effective Time, including all information contained in the additional
registration statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("RULE 430A(b)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "ADDITIONAL REGISTRATION STATEMENT". The Initial Registration
Statement and the Additional Registration Statement are herein referred
to collectively as the "REGISTRATION STATEMENTS" and individually as a
"REGISTRATION STATEMENT". The form of prospectus relating to the
Offered Securities, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("RULE 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "PROSPECTUS". No document has been or
will be prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("RULES AND REGULATIONS") and did not include 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,
(ii) on the Effective Date of the Additional Registration Statement (if
any), each Registration Statement conformed, or will conform, in all
material respects to the requirements of the Act and the Rules and
Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to
state any material fact required to be stated therein or necessary to
make the statements
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therein not misleading and (iii) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement (if any) is prior to the execution
and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to
Rule 424(b) or (if no such filing is required) at the Effective Date of
the Additional Registration Statement in which the Prospectus is
included, each Registration Statement and the Prospectus will conform,
in all material respects to the requirements of the Act and the Rules
and Regulations, and none of such documents includes, or will include,
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 solely in the case of the Prospectus, not misleading. If
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date
of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act and the Rules and Regulations, none of such
documents will include any untrue statement of a material fact 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 solely in the case of the Prospectus, not
misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter through
the Representatives specifically for use therein, it being understood
and agreed that the only such information is that described as such in
Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and corporate authority to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification except for such
jurisdictions where the failure to so qualify or be in good standing
would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or other), business, properties or
results of operations of the Company (a "MATERIAL ADVERSE EFFECT"). The
only state in which the Company owns or leases property or conducts
business is the State of California.
(d) The Company does not have any subsidiaries (as such term is
defined in Rule 405 under the Act).
(e) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been issued, delivered and paid for in accordance with
this Agreement on each Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock;" and the stockholders
of the Company have no preemptive rights with respect to the Offered
Securities.
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter
for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(g) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act except such rights that have been properly waived
or satisfied prior to the date hereof.
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(h) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market subject to notice of issuance.
(i) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, except (i) such as have been obtained and made under the Act,
(ii) such consents, approvals or filings with the National Association
of Securities Dealers, Inc. (the "NASD") and (iii) such as may be
required under state securities laws.
(j) The execution, delivery and performance of this Agreement, and
the issuance and sale of the Offered Securities will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any of its properties
which individually or in the aggregate would result in a Material
Adverse Effect, or (ii) any agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of
the properties of the Company is subject which individually or in the
aggregate would result in a Material Adverse Effect, or (iii) the
charter or by-laws of the Company, and the Company has full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The Company does not own any real property and, except as
disclosed in the Prospectus, the Company has good and marketable title
to all properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by it;
and except as disclosed in the Prospectus, the Company holds any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to be
made thereof by it.
(m) The Company possesses adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary
to conduct the business now operated by it as described in the
Prospectus except where the lack thereof would not individually or in
the aggregate, have a Material Adverse Effect, and has not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to
the Company, would individually or in the aggregate have a Material
Adverse Effect.
(n) No labor dispute with the employees of the Company exists or,
to the knowledge of the Company, is imminent that might have a Material
Adverse Effect.
(o) The Company owns, possesses or can acquire on reasonable
terms, adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by it as described in
the Prospectus, or presently employed by it, and, except as disclosed
in the Prospectus, has not received any notice of infringement of or
conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the
Company would individually or in the aggregate have a Material Adverse
Effect.
(p) Except as disclosed in the Prospectus, the Company is not in
violation of any statute, any rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS"), does not own or operate any real
property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
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contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(q) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or, to the Company's knowledge,
affecting the Company or any of its properties that, if determined
adversely to the Company, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the
ability of the Company to perform its obligations under this Agreement,
or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings have been
threatened or, to the Company's knowledge, contemplated.
(r) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company as of the dates shown and their results of operations and
cash flows for the periods shown, and such financial statements have
been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis.
(s) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company, and, except as disclosed in or contemplated by the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(t) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(u) The Company has not offered, or caused the Underwriters to
offer, any Offered Securities to any person pursuant to the Directed
Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company or (ii) a trade
journalist or publication to write or publish favorable information
about the Company or its products. The Company will not offer or sell,
or cause the Underwriters to offer or sell, any Securities pursuant to
the Directed Share Program to any person in any jurisdiction other than
the United States of America.
(v) The Company maintains systems of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any difference.
(w) Except as disclosed in the Prospectus, the Company possesses
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
its business, except where the failure to possess such certificates,
authorizations or permits would not, individually or in the aggregate,
have a Material Adverse Effect, including without limitation all such
certificates, authorizations and permits required by the United States
Food and Drug Administration (the "FDA") or any other federal, state or
foreign agencies or bodies engaged in the regulation of pharmaceuticals
or biohazardous materials, and the Company has not received any notice
of proceedings relating to the revocation or modification of
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any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would individually or in the aggregate have a Material Adverse
Effect.
(x) Each Investigational New Drug ("IND") application to the FDA
or similar application to foreign regulatory bodies, and related
documents and information, has been filed, approved and maintained in
compliance in all material respects with applicable statutes, rules,
regulations, standards, guides or order administered or promulgated by
the FDA or other regulatory body, and all pre-clinical and clinical
studies undertaken to support approval of products for
commercialization have been conducted in compliance with all applicable
current Good Laboratory Practices and Good Clinical Practices in all
material respects. No filing or submission to the FDA or any other
regulatory body, that is intended to be the basis for any approval,
contains any material omission or material false information. Except to
the extent disclosed in a Registration Statement and the Prospectus,
the Company has operated and currently is in compliance in all material
respects with all applicable rules, regulations and policies of the FDA
and comparable drug regulatory agencies outside of the United States
except where the failure to be in compliance would not result,
individually or in the aggregate, in a Material Adverse Effect.
(y) The clinical trials conducted by or on behalf of the Company
that are described in the Registration Statements and Prospectus were
and, if still pending, are being, conducted in accordance with
experimental protocols, procedures and controls pursuant to accepted
professional scientific standards; and the descriptions of the results
of the studies, tests and trials contained in the Registration
Statements and Prospectus are accurate and complete in all material
respects and fairly present the data derived from such studies and
tests. Except as described in the Registration Statements or
Prospectus, the Company has no knowledge of any other studies or test,
the results of which call into question the results of the clinical
trials described in the Registration Statements and Prospectus. The
Company has not received any notices or correspondence from the FDA or
any other governmental agency requiring the termination or suspension
of any clinical trials conducted by, or on behalf of, the Company or in
which the Company has participated that are described in the
Registration Statements and Prospectus.
(z) The Company is not aware of any third-party United States or
foreign patents that would limit or prohibit the business now conducted
or proposed to be conducted by the Company as described in the
Prospectus. The Company is not aware of any pending third-party United
States or foreign patent applications that, if issued, would limit or
prohibit the business now conducted or proposed to be conducted by the
Company as described in the Prospectus.
(aa) With respect to each material agreement filed or required to
be filed as an exhibit to the Registration Statement and governing
rights in and to any intellectual property rights licensed to the
Company: (i) such agreement is valid and binding and in full force and
effect; (ii) the Company has not received any notice of termination or
cancellation under such agreement, received any notice of breach or
default under such agreement, or granted to any third party any rights,
adverse or otherwise, under such agreement; and (iii) neither the
Company nor, to the knowledge of the Company, any other party to such
agreement, is in breach or default thereof, and, to the Company's
knowledge, no event has occurred that, with notice or lapse of time or
both, would constitute a breach or default or permit termination,
modification or acceleration under the express terms of such agreement.
(bb) The Company has complied with the currently effective
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 within the time
periods set forth therein and all rules and regulations promulgated
thereunder or in connection therewith.
3. 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
Underwriters, and the Underwriters agree, severally and not jointly, to
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purchase from the Company, at a purchase price of $ per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, through the facilities of The Depository Trust
Company, against payment of the purchase price in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank
acceptable to Credit Suisse First Boston LLC ("CSFB") drawn to the order of the
Company. The closing of the sale of the Firm Securities will take place at the
office of Xxxxxx Godward LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, XX 00000, at 10:00
A.M., New York time, on , or at such other time not later than seven full
business days thereafter as CSFB and the Company determine, such time being
herein referred to as the "FIRST CLOSING DATE". For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the
First Closing Date (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all the Offered Securities sold pursuant to the offering. The certificates for
the Firm Securities so to be delivered will be in definitive form, in such
denominations and registered in such names as CSFB requests and will be made
available for inspection by the Representatives at least 24 hours prior to the
First Closing Date.
In addition, upon written notice from CSFB given to the Company from
time to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFB to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and, to the extent not previously exercised, may be
surrendered and terminated at any time upon notice by CSFB to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFB
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFB drawn to
the order of the Company. Each closing for the sale of Optional Securities shall
take place at the office of Xxxxxx Godward LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx,
XX 00000. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CSFB requests upon reasonable notice prior to such
Optional Closing Date and will be made available for inspection by the
Representatives at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance
with subparagraph (1) (or, if applicable and if consented to by CSFB,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day
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following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Date of the Initial
Registration Statement.
The Company will advise CSFB promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and
an additional registration statement is necessary to register a portion
of the Offered Securities under the Act but the Effective Time thereof
has not occurred as of such execution and delivery, the Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
the Prospectus is printed and distributed to any Underwriter, or will
make such filing at such later date as shall have been consented to by
CSFB.
(b) The Company will advise CSFB promptly of any proposal to amend
or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement,
the Additional Registration Statement (if any) or the Prospectus and
will not effect such amendment or supplementation without CSFB's
consent; and the Company will also advise CSFB promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company will promptly notify CSFB of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CSFB's consent to,
nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Initial
Registration Statement (or, if later, the Effective Date of the
Additional Registration Statement) which will satisfy the provisions of
Section 11(a) of the Act. For the purpose of the preceding sentence,
"AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such
Effective Date, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "AVAILABILITY DATE" means the
90th day after the end of such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (two of which will be signed and will include
all exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be
delivered under the Act in connection with sales by any Underwriter or
dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as CSFB requests. The
Prospectus shall be so furnished on or prior to 3:00 P.M., New York
time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other documents shall be so furnished as
soon as available. The
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Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFB
designates and will continue such qualifications in effect so long as
required for the distribution.
(g) The Company will pay all expenses incident to the performance
of its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under
the laws of such jurisdictions as CSFB designates and the printing of
memoranda relating thereto, for the filing fee incident to the review
by the National Association of Securities Dealers, Inc. ("NASD") of the
Offered Securities, for any travel expenses of the Company's officers
and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of the
Offered Securities, including 50% of the cost of any aircraft chartered
in connection with attending or hosting such meetings, and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters.
(h) For a period of 180 days after the date of the Prospectus, the
Company will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares
of its Securities or securities convertible into or exchangeable or
exercisable for any shares of its Securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFB, except (i) issuances of
Securities pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in each
case outstanding on the date hereof, (ii) grants of stock options to
employees, directors or consultants pursuant to the terms of a plan in
effect on the date hereof and disclosed in the Prospectus, or (iii)
issuances of Securities pursuant to the stock options referred to in
clause (ii) so long as the employee, director or consultant exercising
such stock option prior to the exercise thereof executes and delivers
to the Representatives a lockup letter in form and substance the same
as the lockup letters required to be delivered pursuant to Section 6(j)
of this Agreement.
(i) In connection with the Directed Share Program, the Company
will use its reasonable best efforts to ensure that the Directed Shares
will be restricted to the extent required by the free-riding and
withholding rules of the NASD or the NASD rules from sale, transfer,
assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement.
The Designated Underwriter will notify the Company as to which
Participants will need to be so restricted. The Company will direct the
transfer agent to place stop transfer restrictions upon such securities
for such period of time.
(j) The Company will pay all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Shares
Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the underwriters in connection with the Directed Share
Program. Furthermore, the Company covenants with the Underwriters that
the Company will not offer or sell, or cause the Underwriters to offer
or sell, any Securities pursuant to the Directed Share Program to any
person in any jurisdiction other than the United States of America.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, 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:
9
(a) The Representatives shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if
the Effective Time of the Initial Registration Statement is subsequent
to the execution and delivery of this Agreement, shall be prior to the
filing of the amendment or post-effective amendment to the registration
statement to be filed shortly prior to such Effective Time), of Ernst &
Young LLP confirming that they are independent public accountants
within the meaning of the Act and the applicable published Rules and
Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements audited by them
and included in the Registration Statements comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by the
Public Company Accounting Oversight Board (United States) for
a review of interim financial information as described AU722,
Interim Financial Information, on the unaudited financial
statements included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements
included in the Registation Statements do not comply
as to form in all material respects with the
applicable accounting requirements of the Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company or, at the date of the latest
available balance sheet read by such accountants,
there was any decrease in net current assets or
increase in stockholders' (deficit), as compared with
amounts shown on the latest balance sheet included in
the Prospectus; or
(C) for the period from the closing date of
the latest statement of operations included in the
Prospectus to the closing date of the latest
available statement of operations read by such
accountants there were any decreases, as compared
with the corresponding period of the previous year,
in total amounts of net loss,
except in all cases set forth in clauses (A), (B) and (C)
above for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Company subject to the
internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such
results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, "REGISTRATION STATEMENTS" shall mean the
Initial Registration Statement as proposed to be amended by the
amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but
the Effective Time of the Additional Registration Statement is
subsequent to such execution and delivery, "REGISTRATION STATEMENTS"
shall mean the Initial Registration Statement and the Additional
Registration Statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to
its Effective Time, and (iii) "PROSPECTUS" shall mean the prospectus
included in the Registration Statements.
10
(b) If the Effective Time of the Initial Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York time, on the date of this Agreement or such later date as shall
have been consented to by CSFB. If the Effective Time of the Additional
Registration Statement (if any) is not prior to the execution and
delivery of this Agreement, such Effective Time shall have occurred not
later than 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have
been consented to by CSFB. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a 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 Representatives, shall be contemplated
by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company which, in the judgment of a majority in interest of the
Underwriters including CSFB, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a
majority in interest of the Underwriters including CSFB, be likely to
prejudice materially the success of the proposed issue, sale or
distribution of the Offered Securities, whether in the primary market
or in respect of dealings in the secondary market; (iv) any material
suspension or material limitation of trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market, or any
setting of minimum prices for trading on such exchange; (v) any
suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (vi) any banking moratorium declared
by U.S. Federal or New York authorities; (vii) any major disruption of
settlements of securities or clearance services in the United States;
or (viii) any attack on, outbreak or escalation of hostilities or act
of terrorism involving, the United States, any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of a majority in interest of the Underwriters
including CSFB, the effect of any such attack, outbreak, escalation,
act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx Godward LLP, counsel for the Company, to
the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, has the corporate power and
authority to own its properties and conduct its business as
described in the Prospectus; and, the Company is duly
qualified to do business as a foreign corporation in good
standing in the State of California;
11
(ii) The Offered Securities delivered on such Closing
Date and all other outstanding shares of the Common Stock of
the Company have been duly authorized and validly issued, are
fully paid and nonassessable; and the description of the
Company's common stock contained in the Prospectus under the
heading "Description of Capital Stock" fairly summarizes in
all material respects the information called for under the Act
and the Rules and Regulations thereunder; and the stockholders
of the Company have no preemptive rights with respect to the
Offered Securities;
(iii) Except as set forth in the Prospectus, to such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement,
except for those rights which have been validly waived or
satisfied prior to the date hereof;
(iv) The Company is not and, after giving effect to
the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940;
(v) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance
or sale of the Offered Securities by the Company, except (i)
such as have been obtained and made under the Act, (ii) such
consents, approvals or filings as may be required by or with
the NASD, as to which we express no opinion, and (iii) such as
may be required under state securities laws, as to which we
express no opinion;
(vi) To such counsel's knowledge, there are no legal
or governmental proceedings pending or overtly threatened to
which the Company is a party or to which any of the properties
of the Company is subject that are required to be described in
a Registration Statement or Prospectus and are not so
described;
(vii) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, (A) the
charter or by-laws of the Company, (B) any statute, any rule
or regulation (other than applicable state securities and blue
sky laws, as to which such counsel need not express an
opinion) or, to such counsel's knowledge, order naming the
Company of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties, or (C)
any agreement or instrument filed as an exhibit to any
Registration Statement, and the Company has full corporate
power and corporate authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement;
(viii) The Initial Registration Statement was
declared effective under the Act as of the date and time
specified in such opinion, the Additional Registration
Statement (if any) was filed and became effective under the
Act as of the date and time (if determinable) specified in
such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the
Additional Registration Statement (as the case may be), and,
to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or
any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or overtly
threatened by the Commission, and each Registration Statement
(the "Material Contracts") and the
12
Prospectus (except as to the financial statements and
schedules and other financial data and statistical data
derived therefrom, as to which such counsel need express no
opinion), and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form
in all material respects with the requirements of the Act and
the Rules and Regulations;
(ix) The statements in the Prospectus under the
headings "Management - Employment Arrangements and Change of
Control Agreements," "Management - Employee Benefit Plans,"
"Management - Limitation of Liability and Indemnification,"
"Shares Eligible For Future Sale," and "Description of Capital
Stock" and in the Registration Statements in item 14, to the
extent that they constitute summaries of statutes, legal and
governmental proceedings and contracts and other documents
fairly present in all material respects the matters described
therein; and such counsel does not know of any legal or
governmental proceedings against the Company required to be
described in a Registration Statement or the Prospectus which
are not described as required or of any contracts or documents
with the Company of a character required to be described in a
Registration Statement or the Prospectus or to be filed as
exhibits to a Registration Statement which are not described
and filed as required;
(x) The statements in the Prospectus under the
heading "U.S. Federal Income Tax Consequences to Non-U.S.
Holders" to the extent that they constitute matters of United
States federal income tax or estate tax laws and legal
conclusions with respect thereto, are accurate in all material
respects;
(xi) This Agreement has been duly authorized,
executed and delivered by the Company; and
(xii) To the best of such counsel's knowledge, there
are no: (A) pending or overtly threatened actions, suits,
proceedings, claims or other legal actions or governmental
proceedings against the Company of which the Company is aware
of or has received notice of, relating to patents, trade
secrets, trademarks, service marks, trade names and copyrights
("INTELLECTUAL PROPERTY RIGHTS") owned by or licensed to the
Company, or (B) written claims that the Company infringes or
is otherwise using without authority the Intellectual Property
Rights of a third party or that a third party has a right to
use Intellectual Property Rights claimed by the Company.
In addition to the matters set forth above, counsel rendering
the foregoing opinion shall also include a statement to the
effect that such counsel has participated in conferences with
representatives of the Company and with representatives of the
Company's independent accountants and counsel at which
conferences the contents of the Registration Statement and the
Prospectus and any amendment and supplement thereto and
related matters were discussed and, while, except to the
extent otherwise stated in such opinion, such counsel have not
independently verified and accordingly are not passing upon
and do not assume responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, nothing has come to such counsel's
attention which has caused such counsel to believe that the
Registration Statement or any amendment thereto (except as to
the financial statements and schedules and other financial
data and statistical data derived therefrom as to which such
counsel need express no comment), on the date it became
effective under the Act, contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that the Prospectus or any amendment or
supplement thereto (except as to the financial statements and
schedules and other financial data and statistical data
derived therefrom as to which such counsel need express no
comment), as of its date or as of the date of such opinion,
contained any untrue statement of a material fact or omitted
or omits to state any material fact required to be stated
therein or necessary to make the
13
statements therein, in the light of the circumstances under
which they were made, not misleading.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxx, Xxxxxx & XxXxxxxx, special regulatory
counsel for the Company, to the effect that:
(i) such counsel is familiar with the Federal Food,
Drug and Cosmetic Act (the "FDC ACT") and related governmental
regulatory matters as applied generally to drugs of the nature
under development by the Company and has reviewed the sections
of the Registration Statement and Prospectus under the
captions "Risk Factors - `Clinical trials involve a lengthy
and expensive process with an uncertain outcome, and results
of earlier studies and trials may not be predictive of future
trial results;' `Delays in clinical testing could result in
increased costs to us and delay our ability to generate
revenue;' ` We may be required to suspend or discontinue
clinical trials due to unexpected side effects or other safety
risks that could preclude approval of our product candidates;'
`If we are unable to satisfy regulatory requirements, we may
not be able to commercialize our product candidates;'
`Regulatory approval of our product candidates could be
delayed or denied due to problems with studies conducted
before we in-licensed the product candidates;' `If the FDA
does not approve our contract manufacturers' facilities, we
may be unable to develop or commercialize our product
candidates;' `Even if we receive regulatory approval for our
product candidates, we will be subject to ongoing significant
regulatory obligations and oversight;' and `We rely on third
parties to conduct our clinical trials. If these third parties
do not successfully carry out their contractual duties or meet
expected deadlines, we may not be able to seek or obtain
regulatory approval for or commercialize our product
candidates;" and "Business - Government Regulation and Product
Approval" (collectively, the "REGULATORY DISCLOSURE");
(ii) In such counsel's opinion insofar as the
statements in the Regulatory Disclosure constitute summaries
of legal matters, documents or legal or regulatory proceedings
referred to therein, the Regulatory Disclosure fairly presents
the information called for with respect to such legal matters,
documents or proceedings and fairly summarizes the matters
referred to therein;
(iii) To the knowledge of such counsel, there are no
legal or governmental proceedings relating to the FDC Act, the
Public Health Service Act or any regulations of the FDA
pending or threatened to which the Company is a party, nor is
such counsel aware of any material violations of such acts or
regulations by the Company; and
(iv) As to the Regulatory Disclosure contained in
each Registration Statement and Prospectus, such counsel has
no reason to believe that such Regulatory Disclosure, as of
the effective date of the Registration Statement, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading or that such
sections of the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date,
contained or contains any untrue statement of a material fact
or omitted or omits to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxxxx, Xxxx, Xxxxxxxxx & Xxxxx, LLP, patent
counsel, to the effect that:
(i) Shionogi Seiyaku Kabushiki Kaisha ("Shionogi") is
the assignee of record of the Shionogi patents identified in
such opinion, and, to the best of such counsel's knowledge,
Shionogi is the sole owner of such patents;
14
(ii) Such counsel is not aware of any material
defects in the preparation or prosecution of the applications
for such Shionogi patents that would render such patents
invalid or unenforceable;
(iii) Such counsel is not aware of any error or
dispute with regard to inventorship of any of such Shionogi
patents and patent applications therefor;
(iv) As to the sections of each Registration
Statement and Prospectus under the captions "Risk Factors ---
Risks Related to our Intellectual Property - `It is difficult
and costly to protect our proprietary rights, and we may not
be able to ensure their protection;' and `We may incur
substantial costs as a result of litigation or other
proceedings relating to patent and other intellectual property
rights and we may be unable to protect our rights to, or use,
our technology;'" and "Business - Intellectual Property," as
such sections relate to the prosecution of such Shionogi
patents and applications therefor, such counsel has no reason
to believe that such sections, as of the effective date of the
Registration Statement, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the such sections of the
Prospectus or any amendment or supplement thereto, as of its
issue date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and
(v) The statements in the Prospectus under the
headings "Business - Intellectual Property," to the extent
that they relate to the prosecution of the Shionogi patents
and applications therefor, and to the extent that they
constitute summaries of statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly summarize the matters described therein.
(g) The Representatives shall have received from Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with
respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the
Representative may require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; 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; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) under the Act, prior to the time the Prospectus
was printed and distributed to any Underwriter; and, subsequent to the
date of the most recent financial statements in the Prospectus, there
has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company except as set forth in the Prospectus or as described in
such certificate.
(i) The Representatives shall have received a letter, dated
such Closing Date, of Ernst & Young LLP which meets the requirements of
subsection (a) of this Section, except that the
15
specified date referred to in such subsection will be a date not more
than three days prior to such Closing Date for the purposes of this
subsection.
(j) On or prior to the date of this Agreement, the
Representatives shall have received lockup letters from each of the
executive officers and directors of the Company and holders of at least
99.5% in the aggregate of the Company's Securities on a fully diluted
basis.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFB may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors, officers,
affiliates and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act, from and against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claim, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus if the Company had previously furnished copies thereof to such
Underwriter.
The Company agrees to indemnify and hold harmless the Designated
Underwriter, its partners, members, directors, officers, affiliates and each
person, if any, who controls the Designated Underwriter within the meaning of
either Section 15 of the Act (the "DESIGNATED ENTITIES"), from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (i) caused by any untrue statement or
alleged untrue statement of a material fact contained in any material prepared
by or with the consent of the Company for distribution to Participants in
connection with the Directed Share Program or caused by 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; (ii) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant agreed to purchase; or (iii) related to, arising out of, or
in connection with the Directed Share Program, other than losses, claims,
damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted from the bad faith or gross negligence of
the Designated Entities.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any who
controls the Company within the meaning of Section 15
16
of the Act, from and against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein, and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of the following information
in the Prospectus furnished on behalf of each Underwriter: (i) the concession
and reallowance figures appearing in the fourth paragraph under the caption
"Underwriting;" (ii) the information concerning discretionary sales contained in
the sixth paragraph under the caption "Underwriting;" and (iii) the information
concerning Regulation M contained in the fourteenth paragraph under the caption
"Underwriting."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under subsection (a) or (b) above except to
the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified party and
it 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 in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to the last paragraph in Section 7
(a) hereof in respect of such action or proceeding, then in addition to such
separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for the Designated Underwriter for the
defense of any losses, claims, damages and liabilities arising out of the
Directed Share Program, and all persons, if any, who control the Designated
Underwriter within the meaning of either Section 15 of the Act. 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 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 the indemnification provided for in this Section 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 Underwriters on the other from the offering of the 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 Underwriters on the
17
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 Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. 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 Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. 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), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue 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 in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company, to each officer of the Company
who has signed a Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFB may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
number of shares of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFB and the
Company for the purchase of such Offered Securities by other persons are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to
18
Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section
6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or faxed and confirmed to
the Representatives, c/o CSFB, Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Transactions Advisory Group (fax: (000) 000-0000), or, if sent to the
Company, will be mailed, delivered or faxed and confirmed to it at 0000 Xxxxxx
Xxx Xxxxxxx, Xxxxxxx, XX 00000, Attention: Xxxx X. Xxxxx (fax: (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or faxed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. CSFB will act for the several
Underwriters in connection with this financing, and any action under this
Agreement taken by CSFB will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. 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 LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
[The remainder of this page is intentionally left blank]
19
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
PENINSULA PHARMACEUTICALS, INC.
By:...................................
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON LLC
BEAR, XXXXXXX & CO. INC.
FIRST ALBANY CAPITAL INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
Acting on behalf of themselves and
as the Representatives of the
several Underwriters
By: CREDIT SUISSE FIRST BOSTON LLC
By: ..............................
Name:
Title:
20
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SECURITIES
---------------------------------------------- ---------------
Credit Suisse First Boston LLC...............
Bear, Xxxxxxx & Co. Inc......................
First Albany Capital Inc.....................
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.........
----------------
Total................................. ================
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