Exhibit 1.1
3,000,000 SHARES (1)
ONYX PHARMACEUTICALS, INC.
COMMON STOCK, PAR VALUE $0.001 PER SHARE
UNDERWRITING AGREEMENT
October ___, 2000
U.S. BANCORP XXXXX XXXXXXX INC.
CIBC WORLD MARKETS CORP.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Onyx Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares")
of Common Stock, $0.001 par value per share (the "Common Stock"), of the
Company. The Firm Shares consist of 3,000,000 authorized but unissued shares of
Common Stock to be issued and sold by the Company. The Company has also granted
to the several Underwriters an option to purchase up to 450,000 additional
shares of Common Stock on the terms and for the purposes set forth in Section 3
hereof (the "Option Shares"). The Firm Shares and any Option Shares purchased
pursuant to this Underwriting Agreement (the "Agreement") are herein
collectively called the "Securities."
The Company hereby confirms its agreement with respect to the
sale of the Securities to the several Underwriters, for whom you are acting as
Representatives (the "Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration
statement on Form S-3 (File No. 333-46366) with respect to the Securities,
including a preliminary form of prospectus, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations
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(1) Plus an option to purchase 450,000 additional shares to cover
over-allotments.
("Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission; one or more
amendments to such registration statement have also been so prepared and have
been, or will be, so filed; and, if the Company has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of the offering
registered under the Act, the Company will prepare and file with the Commission
a registration statement with respect to such increase pursuant to Rule 462(b).
Copies of such registration statement(s) and amendments and each related
preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the
Rules and Regulations, the Company has prepared and will promptly file an
amendment to the registration statement and an amended prospectus (including a
term sheet meeting the requirements of Rule 434 of the Rules and Regulations).
If the Company has elected to rely upon Rule 430A of the Rules and Regulations,
it will prepare and file a prospectus (or a term sheet meeting the requirements
of Rule 434) pursuant to Rule 424(b) that discloses the information previously
omitted from the prospectus in reliance upon Rule 430A. Such registration
statement as amended at the time it is or was declared effective by the
Commission, and, in the event of any amendment thereto after the effective date
and prior to the First Closing Date (as hereinafter defined), such registration
statement as so amended (but only from and after the effectiveness of such
amendment), including a registration statement (if any) filed pursuant to Rule
462(b) of the Rules and Regulations increasing the size of the offering
registered under the Act and information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rules 430A(b)
and 434(d) of the Rules and Regulations, together with and including all
documents and exhibits incorporated therein by reference, is hereinafter called
the "Registration Statement." The prospectus included in the Registration
Statement at the time it is or was declared effective by the Commission is
hereinafter called the "Prospectus," except that if any prospectus (including
any term sheet meeting the requirements of Rule 434 of the Rules and Regulations
provided by the Company for use with a prospectus subject to completion within
the meaning of Rule 434 in order to meet the requirements of Section 10(a) of
the Rules and Regulations) filed by the Company with the Commission pursuant to
Rule 424(b) (and Rule 434, if applicable) of the Rules and Regulations or any
other such prospectus provided to the Underwriters by the Company for use in
connection with the offering of the Securities (whether or not required to be
filed by the Company with the Commission pursuant to Rule 424(b) of the Rules
and Regulations) differs from the prospectus on file at the time the
Registration Statement is or was declared effective by the Commission, the term
"Prospectus" shall refer to such differing prospectus (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations) from and after the
time such prospectus is filed with the Commission or transmitted to the
Commission for filing pursuant to such Rule 424(b) (and Rule 434, if applicable)
or from and after the time it is first provided to the Underwriters by the
Company for such use. The term "Preliminary Prospectus" as used herein means any
preliminary prospectus included in the Registration Statement prior to the time
it becomes or became effective under the Act and any prospectus subject to
completion as described in Rule 430A or 434 of the Rules and Regulations.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and
agrees with, the several Underwriters as follows:
(i) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and
each Preliminary Prospectus, at the time of filing thereof,
did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
except that the foregoing shall not apply to statements in or
omissions from any Preliminary Prospectus in reliance upon,
and in conformity with, written information furnished to the
Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
(ii) As of the time the Registration Statement (or
any post-effective amendment thereto, including a registration
statement (if any) filed pursuant to Rule 462(b) of the Rules
and Regulations increasing the size of the offering registered
under the Act) is or was declared effective by the Commission,
upon the filing or first delivery to the Underwriters of the
Prospectus (or any supplement to the Prospectus (including any
term sheet meeting the requirements of Rule 434 of the Rules
and Regulations)) and at the First Closing Date and Second
Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material
respects to the requirements of the Act and the Rules and
Regulations, (B) the Registration Statement (as so amended)
did not or will not include an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (C) the Prospectus (as so supplemented) did
not or will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading;
except that the foregoing shall not apply to statements in or
omissions from any such document in reliance upon, and in
conformity with, written information furnished to the Company
by you, or by any Underwriter through you, specifically for
use in the preparation thereof. If the Registration Statement
has been declared effective by the Commission, no stop order
suspending the effectiveness of the Registration Statement has
been issued, and no proceeding for that purpose has been
initiated or, to the Company's knowledge, threatened by the
Commission.
(iii) The financial statements of the Company,
together with the notes thereto, set forth in the Registration
Statement and Prospectus (including, and without limiting the
generality of the reference to the Registration Statement and
Prospectus, those financial statements incorporated therein by
reference) comply
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in all material respects with the requirements of the Act and
fairly present the financial condition of the Company as of
the dates indicated and the results of operations and changes
in cash flows for the periods therein specified, in conformity
with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise
stated therein); and the supporting schedules included in the
Registration Statement present fairly the information required
to be stated therein. No other financial statements or
schedules are required to be included in the Registration
Statement or Prospectus. Ernst & Young LLP, which has
expressed its opinion with respect to the audited consolidated
financial statements filed as a part of the Registration
Statement and included in the Registration Statement and
Prospectus, are independent public accountants as required by
the Act and the Rules and Regulations.
(iv) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation. The Company has
full corporate power and authority to own its properties and
conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is
duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which it owns or leases real
property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify
would have a material adverse effect upon its general affairs,
condition (financial or otherwise), business, key personnel,
properties, net worth or results of operations (a "Material
Adverse Effect").
(v) Except as contemplated by or referred to in the
Prospectus, subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered
into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to
its capital stock; and there has not been any change in the
capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants),
or any material change in the short-term or long-term debt, or
any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock (other than in the
ordinary course of business pursuant to the Company's equity
incentive plans disclosed in the Prospectus and Registration
Statement) of the Company, or any change, or any development
involving a prospective change, which is reasonably likely to
have a Material Adverse Effect.
(vi) Except as set forth in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the
Company is a party before or by any court or governmental
agency, authority or body, or any arbitrator, which is
reasonably
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likely to have a Material Adverse Effect. There are
no outstanding orders, judgments or decrees of any court,
governmental agency, instrumentality or other tribunal
enjoining the Company from or requiring the Company to refrain
from taking any action, or to which the Company or its
properties, assets or business is bound or subject.
(vii) The documents incorporated by reference into
the Prospectus pursuant to Item 12 of Form S-3 under the Act,
at the time they were filed with the Commission, complied in
all material respects with the requirements of the Act or the
Securities Exchange Act of 1934, as amended ("Exchange Act"),
as the case may be, and the Rules and Regulations of the Act
and the Exchange Act. No documents incorporated by reference
in the Registration Statement, when filed, contained any
untrue statement of material fact or omitted to state a
material fact required to be stated therein, or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(viii) This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a
valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally and subject
to general principles of equity. The execution, delivery and
performance of this Agreement by the Company and the
consummation by the Company of the transactions herein
contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under,
any statute, any agreement or instrument to which the Company
is a party or by which it is bound or to which any of its
property is subject, the Company's charter or by-laws, or any
order, rule, regulation or decree of any court or governmental
agency or body having jurisdiction over the Company or any of
its properties; no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body
is required for the execution, delivery and performance of
this Agreement by the Company or for the consummation by the
Company of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such
as have been obtained or may be required under state
securities or blue sky laws or in connection with the review
of the offering by the National Association of Securities
Dealers, Inc. (the "NASD"); and the Company has full power and
authority to enter into this Agreement and to authorize, issue
and sell the Securities as contemplated by this Agreement and
to perform the transactions contemplated hereby.
(ix) All of the issued and outstanding shares of
capital stock of the Company, including the outstanding shares
of Common Stock, are duly authorized and validly issued, fully
paid and nonassessable, have been issued in
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compliance with all federal and state securities laws, were
not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase securities, and
the holders thereof are not subject to personal liability by
reason of being such holders; the Securities which may be sold
hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms
hereof, will have been validly issued and will be fully paid
and nonassessable, and the holders thereof will not be subject
to personal liability by reason of being such holders; and the
capital stock of the Company, including the Common Stock,
conforms to the description thereof in the Registration
Statement and Prospectus. There are no preemptive rights or
other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company's charter, by-laws or any
agreement or other instrument to which the Company is a party
or by which the Company is bound. Neither the filing of the
Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any
rights for or relating to the registration of any shares of
Common Stock or other securities of the Company, which have
not been waived. No transaction has occurred between or among
the Company and any of its officers, directors or five percent
stockholders or any affiliate or affiliates of any such
officer, director or five percent stockholders that is
required to be described in and is not described in or
incorporated by reference into the Registration Statement and
Prospectus. Except as described in the Registration Statement
and the Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase
or acquire from the Company any shares of the capital stock of
the Company. The Company has an authorized and, as of June 30,
2000, outstanding capitalization as set forth in Prospectus
under the heading "Capitalization."
(x) The Company holds, and is operating in compliance
in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory
body required for the conduct of its business as currently
conducted and as proposed to be conducted as described in the
Registration Statement and Prospectus (including those
required by the U.S. Food and Drug Administration ("FDA"), the
California Department of Health Services and Radiologicals and
any federal, state or foreign agencies or bodies engaged in
the regulation of pharmaceuticals or biological or
biohazardous substances) and all such franchises, grants,
authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and
effect; and the Company is in compliance in all material
respects with all applicable federal, state, local and foreign
laws, regulations, judgments, orders and decrees, including
without limitation those relating to the development, testing,
manufacturing, sale and distribution of pharmaceuticals or
other products regulated by the FDA or similar state or
foreign government agencies, and relating to the use,
treatment, storage and disposal of toxic substances and the
protection of health or the environment; and the Company has
not received any
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notice of proceedings relating to the revocation or
modification of any such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and
orders, which singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a
Material Adverse Effect; and the Company has not received any
notice from any governmental authority or third party alleging
a breach or violation under any such federal, state, local or
foreign laws, restrictions, judgments, orders or decrees.
(xi) In the ordinary course of its business, insofar
as is reasonably practicable and necessary under the
circumstances of the Company's business and operations, the
Company reviews or considers the effect of all applicable
federal, state, local and foreign laws, regulations, orders
and decrees relating to the use, treatment, storage and
disposal of toxic substances and the protection of health and
the environment on the business operations and properties of
the Company, in the course of which the Company identifies and
evaluates, or would identify or evaluate, any associated costs
and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, or compliance
with such laws, regulations, orders and decrees, or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties). The Company reasonably believes that such associated
costs and liabilities would not, singly or in the aggregate,
have a Material Adverse Effect, and, to the Company's
knowledge, no facts currently exist that will require the
Company to make future material capital expenditures to comply
with such laws, rules or regulations. No property which is or
has been owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive
Environment Response, Compensation of Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or
otherwise designated as a contaminated site under applicable
state or local law. The Company has not been named as a
"potentially responsible party" under CERCLA.
(xii) The Company is not and, after giving effect to
the offering and sale of the Securities and the application of
proceeds thereof as described in the Prospectus, will not be
an "investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act").
(xiii) The Company, and to the best of the Company's
knowledge, any other person associated with or acting on
behalf of the Company including, without limitation, any
director, officer, agent or employee of the Company has not,
directly or indirectly, while acting on behalf of the Company
(A) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to
political activity; (B) made any unlawful payment to foreign
or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds;
(C) violated any provision of the
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Foreign Corrupt Practices Act of 1977, as amended; or (D) made
any other unlawful payment.
(xiv) The Company has good and marketable title to
all property described in the Registration Statement and
Prospectus as being owned by it, in each case free and clear
of all liens, claims, security interests or other encumbrances
except such as are described in the Registration Statement and
the Prospectus; the property held under lease by the Company
is held by it under valid, subsisting and enforceable leases
with only such exceptions with respect to any particular lease
as do not interfere in any material respect with the conduct
of the business of the Company.
(xv) The Company owns or possesses or has adequate
licenses to use all patents and patent applications (including
those listed on Exhibit A hereto) and all trademarks, service
marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade
secrets, know-how and other rights, patentable or unpatentable
(such patents referred to herein as the "Patents" and all of
such intellectual property referred to collectively as the
"Intellectual Property") necessary for the conduct of the
business of the Company as currently carried on and as
proposed on the date hereof to be carried on, as described in
the Registration Statement and Prospectus; except as stated in
the Registration Statement and Prospectus, the Company is not
obligated to pay a royalty, grant a license or otherwise pay
any consideration to any third party in connection with or
relative to the Intellectual Property, nor does any name which
the Company uses or any other aspect of the business of the
Company as conducted on the date hereof involve or give rise
to any infringement of, or license or similar fee for, any
patent, patent application, trademark, service xxxx,
tradename, trademark registration, service xxxx registration,
copyright, license, invention, trade secret, know-how or other
similar right of others and the Company has not received any
notice alleging any such infringement. The Company has duly
and properly filed or caused to be filed with the U.S. Patent
and Trademark Office (the "PTO") and applicable foreign and
international patent authorities, as the case may be, all
patent applications listed on or filed in respect of issued
patents listed on Exhibit A (including those patent
applications in respect of which patents have been issued)
(the "Patent Applications"); in connection with the filing of
the Patent Applications, the Company conducted reasonable
investigations of the published literature and patent
references relating to the inventions claimed in such
applications; to the best of the Company's knowledge, it has
complied with the PTO's duty of candor and disclosure for the
Patent Applications and has made no misrepresentation in the
Patent Applications; and the Company has no knowledge of any
facts which would preclude it from having clear title to the
Patent Applications.
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(xvi) The Company is not in violation of, or in
breach of or otherwise in default in respect of, any of the
terms or provisions of its charter or bylaws or any similar
governing instrument. The Company is not in violation of, or
in breach of or otherwise in default in respect of, and no
event has occurred that, with a lapse of time of giving of
notice, or both, would constitute a default in respect of, the
performance of any material obligation, agreement or condition
contained in any bond, indebenture, note, loan agreement or
any other material contract, lease or other instrument to
which the Company is subject or by which it may be bound, or
to which any of its properties or assets are subject. To the
best of the Company's knowledge, no party other than the
Company is in breach of or otherwise in default in respect of,
and no event has occurred that, with the lapse of time or the
giving of notice, or both, would constitute a default under or
in respect of, the performance by such other party of any
material obligation, agreement or condition contained in any
bond, debenture, indenture, loan agreement or any other
material contract, lease or instrument to which the Company is
a party. Each such material contract or other instrument to
which the Company is a party, has been duly and validly
executed by the Company, and to the knowledge of the Company,
by the other parties thereto, and is in full force and effect,
and all necessary consents under such contracts or other
instruments to the disclosure in the Prospectus with respect
thereto have been obtained.
(xvii) The Company has filed all federal, state,
local and foreign income and franchise tax returns required to
be filed and is not in default in the payment of any taxes
which were payable pursuant to said returns or any assessments
with respect thereto, other than any which the Company is
contesting in good faith.
(xviii) No material labor dispute with the employees
of the Company exists, except as described in or contemplated
by the Prospectus, or, to the knowledge of the Company, is
threatened.
(xix) The Company has not distributed and will not
distribute any prospectus or other offering material in
connection with the offering and sale of the Securities other
than any Preliminary Prospectus or the Prospectus or other
materials permitted by the Act to be distributed by the
Company.
(xx) The Common Stock, including the Securities, is
registered pursuant to Section 12(g) of the Exchange Act. The
issued and outstanding shares of Common Stock are included for
quotation on the NASDAQ National Market; and all necessary
filings have been made and all filing fees have been paid to
effect the listing of the Securities on the NASDAQ National
Market and the Securities have been duly authorized for
quotation on the NASDAQ National Market.
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(xxi) The Company does not own or control any capital
stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other
entity.
(xxii) The books, records and accounts of the Company
accurately and fairly reflect the transactions in, and
disposition of, the assets of, and the results of operations
of, the Company, and the Company maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(xxiii) Other than as contemplated by this Agreement,
the Company has not incurred any liability for any finder's or
broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(xxiv) The Company is insured by insurers of
recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses
in which it is engaged or proposes to engage after giving
effect to the transactions described in the Prospectus; the
Company is in compliance with the terms of such policies and
instruments in all material respects; the Company has no
reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not
have a Material Adverse Effect.
(xxv) The statements in the Registration Statement
and Prospectus, insofar as they are descriptions of or
references to contracts, agreements or other documents, are
accurate in all material respects and present or summarize
fairly, in all material respects, the information required to
be disclosed under the Act or the Regulations, and there are
no contracts, agreements or other documents, instruments or
transactions of any character required by the Act or the Rules
and Regulations to be described or referred to in the
Registration Statement or Prospectus, or to be filed as
exhibits to the Registration Statement, that have not been so
described, referred to or filed, as required.
(xxvi) There are no affiliations with the NASD among
the Company's officers, directors or, to the best of the
knowledge of the Company, any five
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percent or greater stockholder of the Company, except as set
forth in the Registration Statement or otherwise disclosed in
writing to the Representatives.
(xxvii) The Company is not presently doing business
with the government of Cuba or with any person or affiliate
located in Cuba.
(xxviii) Each officer and director of the Company,
and each five percent stockholder (based on filings made with
the Commission) of the Company, described in the Prospectus as
having executed and delivered a lockup agreement, has executed
an agreement in substantially the form attached hereto as
EXHIBIT B. The identity of the officers, directors and five
percent stockholders of the Company, as set forth in the
Prospectus, is true, correct and complete, and the Company has
provided to the Representatives true, correct and complete
copies of all such agreements, all of which have been duly and
validly delivered by such person or entity.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) 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 issue and sell 3,000,000 Firm Shares to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the Firm Shares. The purchase price for each Firm
Share shall be $________________ per share. The obligation of each Underwriter
to the Company shall be to purchase from the Company that number of Firm Shares
(to be adjusted by the Representatives to avoid fractional shares) which
represents the same proportion of the number of Firm Shares to be sold by the
Company pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto represents to the
total number of Firm Shares to be purchased by all Underwriters pursuant to this
Agreement. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraph (c) of this Section 3 and in
Section 8 hereof, the agreement of each Underwriter is to purchase only the
respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you for
the accounts of the several Underwriters against payment of the purchase price
therefor by same day funds payable to the order of the Company, as appropriate,
at the offices of U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities are
priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m. Eastern time, the fourth) full business day following the date hereof, or
at such other time and date as you and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, such time and date of
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delivery being herein referred to as the "First Closing Date." If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives. Certificates representing the Firm Shares, in
definitive form and in such denominations and registered in such names as you
may request upon at least two business days' prior notice to the Company, will
be made available for checking and packaging not later than 10:30 a.m., Central
time, on the business day next preceding the First Closing Date at the offices
of U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable.
(b) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants to the several Underwriters an option to
purchase all or any portion of the Option Shares at the same purchase price as
the Firm Shares, for use solely in covering any over-allotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the effective date of this Agreement upon notice (confirmed in writing) by
the Representatives to the Company and to the Attorneys-in-Fact setting forth
the aggregate number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the certificates for
the Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being herein
referred to as the "Second Closing" and "Second Closing Date", respectively;
provided, however, that the Second Closing Date shall not be earlier than the
First Closing Date nor earlier than the second business day after the date on
which the option shall have been exercised. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by the
Representatives in such manner as the Representatives deem advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for
the accounts of the several Underwriters against payment of the purchase price
therefor by same day funds payable to the order of the Company, at the offices
of U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable at
9:00 a.m., Central time, on the Second Closing Date. If the Representatives so
elect, delivery of the Option Shares may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives. Certificates representing the Option Shares in definitive form
and in such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day next
preceding the Second Closing Date at the office of U.S. Bancorp Xxxxx Xxxxxxx,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
12
(c) It is understood that you, individually and not as
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment to the Company, on behalf of any Underwriter for the Securities to
be purchased by such Underwriter. Any such payment by you shall not relieve any
such Underwriter of any of its obligations hereunder. Nothing herein contained
shall constitute any of the Underwriters an unincorporated association or
partner with the Company.
4. COVENANTS.
(a) The Company covenants and agrees with the several
Underwriters as follows:
(i) If the Registration Statement has not
already been declared effective by the Commission, the Company
will use its best efforts to cause the Registration Statement
and any post-effective amendments thereto to become effective
as promptly as possible; the Company will notify you promptly
of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has
become effective or any supplement to the Prospectus
(including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) has been filed and of any request
by the Commission for any amendment or supplement to the
Registration Statement or Prospectus or additional
information; if the Company has elected to rely on Rule 430A
of the Rules and Regulations, the Company will prepare and
file a Prospectus (or term sheet within the meaning of Rule
434 of the Rules and Regulations) containing the information
omitted therefrom pursuant to Rule 430A of the Rules and
Regulations with the Commission within the time period
required by, and otherwise in accordance with the provisions
of, Rules 424(b), 430A and 434, if applicable, of the Rules
and Regulations; if the Company has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of
the offering registered under the Act, the Company will
prepare and file a registration statement with respect to such
increase with the Commission within the time period required
by, and otherwise in accordance with the provisions of, Rule
462(b); the Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to
the Registration Statement or Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and
Regulations) that, in your opinion, may be necessary or
advisable in connection with the distribution of the
Securities by the Underwriters; and the Company will not file
any amendment or supplement to the Registration Statement or
Prospectus (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations) to which you shall
reasonably object by notice to the Company after having been
furnished a copy a reasonable time prior to the filing.
13
(ii) The Company will advise you, promptly after it
shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension
of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and the Company will promptly
use its best efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such a stop order should be
issued.
(iii) Within the time during which a prospectus
(including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) relating to the Securities is
required to be delivered under the Act, the Company will
comply as far as it is able with all requirements imposed upon
it by the Act, as now and hereafter amended, and by the Rules
and Regulations, as from time to time in force, so far as
necessary to permit the continuance of sales of or dealings in
the Securities as contemplated by the provisions hereof and
the Prospectus. If during such period any event occurs as a
result of which the Prospectus would include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such
period it is necessary to amend the Registration Statement or
supplement the Prospectus to comply with the Act, the Company
will promptly notify you and will amend the Registration
Statement or supplement the Prospectus (at the expense of the
Company) so as to correct such statement or omission or effect
such compliance.
(iv) The Company will use its best efforts to qualify
the Securities for sale under the securities laws of such
jurisdictions as you reasonably designate and to continue such
qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall
not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to service
of process in any state.
(v) The Company will furnish to the Underwriters
copies of the Registration Statement (one of which will be
signed and will include all exhibits), each Preliminary
Prospectus, the Prospectus, and all amendments and supplements
(including any term sheet within the meaning of Rule 434 of
the Rules and Regulations) to such documents, in each case as
soon as available and in such quantities as you may from time
to time reasonably request.
(vi) During a period of two years commencing with the
date hereof, the Company will furnish to the Representatives,
and to each Underwriter who may so request in writing, copies
of all periodic and special reports furnished to the
stockholders of the Company and all information, documents and
reports filed
14
with the Commission, the National Association of Securities
Dealers, Inc., or any securities exchange.
(vii) The Company will make generally available to
its security holders as soon as practicable, but in any event
not later than 15 months after the end of the Company's
current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period beginning after the
effective date of the Registration Statement that shall
satisfy the provisions of Section 11(a) of the Act and Rule
158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is
prevented from becoming effective under the provisions of
Section 9(a) hereof or is terminated, will pay or cause to be
paid, upon receipt of a reasonably detailed accounting, (A)
all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the
delivery to the Underwriters of the Securities, (B) all
expenses and fees (including, without limitation, fees and
expenses of the Company's accountants and counsel but, except
as otherwise provided below, not including fees of the
Underwriters' counsel) in connection with the preparation,
printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all
amendments, schedules, and exhibits thereto), the Securities,
each Preliminary Prospectus, the Prospectus, and any amendment
thereof or supplement thereto, and the printing, delivery, and
shipping of this Agreement and other underwriting documents,
including Blue Sky Memoranda, (C) all filing fees and fees and
disbursements of the Underwriters' counsel incurred in
connection with the qualification of the Securities for
offering and sale by the Underwriters or by dealers under the
securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with
Section 4(d) hereof, (D) the fees and expenses of any transfer
agent or registrar, (E) the filing fees and fees and expenses
of the Underwriters' counsel incident to any required review
by the NASD of the terms of the sale of the Securities, (F)
fees, if any, applicable to the listing of the Securities on
NASDAQ National Market, (G) all costs and expenses incurred in
connection with attendance at any meetings with prospective
investors in the Securities (other than shall have been
specifically approved by the Representatives to be paid for by
the Underwriters) and (H) all other costs and expenses
incident to the performance of its obligations hereunder that
are not otherwise specifically provided for herein. If the
sale of the Securities provided for herein is not consummated
by reason of action by the Company pursuant to Section 9(a)
hereof which prevents this Agreement from becoming effective,
or by reason of any failure, refusal or inability on the part
of the Company to perform any agreement on its part to be
performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company
is not fulfilled, upon receipt of a reasonably detailed
accounting, the Company will reimburse the several
Underwriters for all out-of-
15
pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations
hereunder. The Company shall not in any event be liable to any
of the Underwriters for loss of anticipated profits from the
transactions covered by this Agreement.
(ix) The Company will apply the net proceeds from the
sale of the Securities to be sold by it hereunder for the
purposes set forth in the Prospectus and will file such
reports with the Commission with respect to the sale of the
Securities and the application of the proceeds therefrom as
may be required in accordance with Rule 463 of the Rules and
Regulations.
(x) The Company will not, without your prior written
consent, offer for sale, sell, contract to sell, grant any
option for the sale of or otherwise issue or dispose of any
Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or
acquire, Common Stock, except to the Underwriters pursuant to
this Agreement, for a period of 90 days after the commencement
of the public offering of the Securities by the Underwriters,
except for the issuance of stock and options in the ordinary
course of the business of the Company consistent with past
practices, pursuant to equity incentive plans of the Company
for employees and consultants, described in the Prospectus and
Registration Statement.
(xi) Except as otherwise described in the Prospectus
under the caption "Underwriting", the Company either has
caused to be delivered to you or will cause to be delivered to
you prior to the effective date of the Registration Statement
a letter from each of the Company's directors and officers and
holders of 5% or greater of the Company's Common Stock prior
to the offering stating that such person agrees that he or she
will not, without your prior written consent, offer for sale,
sell, contract to sell or otherwise dispose of any shares of
Common Stock or rights to purchase Common Stock for a period
of 90 days after commencement of the public offering of the
Securities by the Underwriters.
(xii) The Company has not taken and will not take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale
of the Securities, and has not effected any sales of Common
Stock which are required to be disclosed in response to Item
701 of Regulations S-K under the Act which have not been so
disclosed in the Registration Statement other than those
described under the Company's Exchange Act filings.
16
(xiii) Except as contemplated by this Agreement, the
Company will not incur any liability for any finder's or
broker's fee or agent's commission in connection with the
execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(xiv) The Company will inform the Florida Department
of Banking and Finance at any time prior to the consummation
of the distribution of the Securities by the Underwriters if
it commences engaging in business with the government of Cuba
or with any person or affiliate located in Cuba. Such
information will be provided within 90 days after the
commencement thereof or after a change occurs with respect to
previously reported information.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
obligations of the several Underwriters hereunder are subject to the
accuracy, as of the date hereof and at each of the First Closing Date and the
Second Closing Date (as if made at such Closing Date), of and compliance with
all representations, warranties and agreements of the Company contained
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m., Central time, on the date of this Agreement, or such later
time and date as you, as Representatives of the several Underwriters, shall
approve and all filings required by Rules 424, 430A and 434 of the Rules and
Regulations shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement or any amendment thereof shall have
been issued; no proceedings for the issuance of such an order shall have been
initiated or threatened; and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company shall not have incurred any material
liabilities or obligations, direct or contingent, or entered into any material
transactions, or declared or paid any dividends or made any distribution of any
kind with respect to its capital stock; and there shall not have been any change
in the capital stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of outstanding
options or warrants), or any material change in the short-term or long-term debt
of the Company, or any issuance of options, warrants,
17
convertible securities or other rights to purchase the capital stock of the
Company, or any occurrence, event or change which is reasonably likely to have a
Material Adverse Effect, or any development involving or which is reasonably
likely to have a prospective Material Adverse Effect, whether or not arising in
the ordinary course of business, that in your judgment, makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, the opinion of Xxxxxx
Godward LLP, counsel for the Company, dated such Closing Date and addressed to
you, and to the effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under the
laws of the State of Delaware. The Company has full corporate
power and authority to own its properties and conduct its
business as currently being carried on and as described in the
Registration Statement and Prospectus, and to the best of such
counsel's knowledge, the Company is duly qualified to do
business as a foreign corporation and is in good standing in
each jurisdiction in which it owns or leases property or in
which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have a
Material Adverse Effect.
(ii) The capital stock of the Company conforms as to
legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock."
All of the issued and outstanding shares of the capital stock
of the Company have been duly authorized and validly issued
and are fully paid and nonassessable; and all such shares
described in the last sentence of the second paragraph under
the sub-heading "Liquidity and Capital Resources" under the
heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Prospectus, were
issued in accordance with all applicable federal and state
securities laws . The Company has the authorized and
outstanding capitalization as set forth in the Prospectus
under the heading "Capitalization" and none of the outstanding
shares of capital stock of the Company were issued in
violation of any preemptive or similar right pursuant to the
Company's charter, by-laws or any agreement or other
instrument known to such counsel to which the Company is a
party or by which the Company is bound. The Securities to be
issued and sold by the Company hereunder have been duly
authorized and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable, and
none of the Securities will be issued in violation of any
preemptive or similar right pursuant to the Company's charter,
by-laws or any agreement or other instrument known to such
counsel to which the Company is a party or by which the
Company is bound . Except as otherwise stated in the
Registration Statement and Prospectus, there are no preemptive
rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer
18
of, any shares of Common Stock pursuant to the Company's
charter, by-laws or any agreement or other instrument known to
such counsel to which the Company is a party or by which the
Company is bound. To the best of such counsel's knowledge,
neither the filing of the Registration Statement nor the
offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities
of the Company, except those rights which have been waived.
(iii) To the best of such counsel's knowledge, except
as described in the Registration Statement and Prospectus, as
of August 31,2000 there were no, and except as described in
the Registration Statement and Prospectus or issued by the
Company since August 31,2000 in the ordinary course of its
business pursuant to equity compensation plans of the Company
described in the Prospectus, there are no, options, warrants,
agreements, contracts or other rights in existence to purchase
or acquire from the Company any shares of the capital stock of
the Company.
(iv) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or overtly
threatened by the Commission.
(v) The descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental
proceedings, contracts and other documents fairly present in
all material respects the information required to be shown,
except in the case of descriptions of FDA regulations
applicable to the Company and the patent prosecutions
undertaken by the Company, in which case, to the best of such
counsel's knowledge; and such counsel does not know of any
statutes or legal or governmental proceedings required to be
described in the Prospectus that are not described as
required, or of any contracts or documents of a character
required to be described in the Registration Statement or
Prospectus or included as exhibits to the Registration
Statement that are not described or included as required.
(vi) The Company has all requisite corporate power
and authority to enter into, deliver and perform this
Agreement, and issue and sell the Securities, and this
Agreement has been duly authorized, executed and delivered by
the Company; the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions herein contemplated will not conflict with
or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute,
rule or regulation, or any material indenture, mortgage, deed
of trust, lease or other agreement or instrument known to such
counsel, to which the Company is a party or by which it is
bound or to which any of its property is subject, the
Company's charter or by-laws, or any order or decree known to
such counsel of any court or
19
governmental agency or body having jurisdiction over the
Company or any of its respective properties; and no consent,
approval, authorization or order of, or filing with, any court
or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company or
for the consummation by the Company of the transactions
contemplated hereby, including the issuance or sale of the
Securities by the Company, except such as may have been
obtained and such as may be required under state securities or
blue sky laws or in connection with the review and clearance
of the offering with the NASD.
(vii) To the best of such counsel's knowledge, the
Company is not in violation of its charter or bylaws.
(viii) To the best of such counsel's knowledge, there
is no litigation or governmental or other proceeding or
investigation, before any court or before or by any public
body or board pending or overtly threatened against, or
involving the assets, properties or businesses of, the Company
which could, if pursued or decided against the Company have a
Material Adverse Effect.
(ix) The statements in the Prospectus under the
captions "Description of Capital Stock," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" and "Business -
Collaborations," insofar as such statements constitute a
summary of documents referred to therein or matters of law,
fairly summarize and accurately present the information called
for with respect to such documents and matters. To the
knowledge of such counsel, accurate copies of all contracts
and other documents required to be filed as exhibits to the
Registration Statement have been so filed with the Commission.
(x) The Securities have been approved for listing
on the Nasdaq National Market.
(xi) The Company is not an "investment company" or an
entity controlled by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(xii) The Registration Statement, all preliminary
prospectuses and the Prospectus, and any amendment thereof or
supplement thereto (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations, but
excepting the financial statements and schedules and other
financial and statistical data included therein, as to which
such counsel expresses no opinion), comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations.
20
In addition, such counsel shall state that in the course of
the preparation of the Registration Statement and the Prospectus, such counsel
has participated in conferences with officers and other representatives of the
Company, representatives of the independent accountants of the Company,
representatives of the Underwriters and representatives of counsel for the
Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and, although such counsel does
not pass upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of any statement contained in the Registration
Statement or the Prospectus and such counsel has made no independent check or
verification thereof, based in part upon the foregoing, no facts have come to
such counsel's attention that have led such counsel to believe that the
Registration Statement (except as to the financial statements and notes thereto
and other financial and statistical data derived therefrom as to which such
counsel need not express any opinion or belief), as of the date of effectiveness
contained an untrue statement of material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or that the Prospectus (except as to the financial
statements and the notes thereto and other financial and statistical data
included therein or derived therefrom as to which such counsel need not express
any opinion or belief), as of its date or as of the date of such opinion,
contained or contains an untrue statement of material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Notwithstanding anything herein to the contrary, it is understood and agreed
that other counsel to the Company are rendering opinions with respect to (i) the
sections of the Prospectus entitled "Risk Factors-Risks Related to Our
Business-We may not be able to protect our intellectual property or operate
our business without infringing intellectual property rights of others" and
"Business-Patents and Proprietary Rights" and (ii) the sections of the
Prospectus entitled "Risk Factors Risks Related to Our Business-We are subject
to extensive governmental regulation and may not be able to obtain regulatory
approvals," and "Business-Government Regulation," and no opinions are expressed
herein with respect to such sections or matters.
In rendering any such opinion, such counsel may state that
such counsel (i) expresses no opinion as to the laws of any jurisdiction other
than the laws of the State of California, the Delaware General Corporation Law
and the federal laws of the United States and (ii) has assumed, without
independent verification, that the laws of the State of Minnesota are identical
in all respects to the laws of the State of California, noting that the laws of
the State of Minnesota are likely to differ from the laws of the State of
California with respect to the matters covered by such counsel's opinion, that
even if such laws were the same as the laws of the State of California, judicial
interpretations thereto in Minnesota may differ from judicial interpretations by
California courts and that such differences may be material.
In rendering such opinion such counsel may rely (i) as to
matters of law other than California, Delaware and federal law, upon the opinion
or opinions of local counsel provided that the extent of such reliance is
specified in such opinion and that such counsel shall state that although such
counsel is not admitted to practice law in such jurisdiction, it has no reason
to believe that they and you are not entitled to rely on such opinion and (ii)
as to matters of fact, to
21
the extent such counsel deems reasonable upon certificates of public officials,
transfer agents and officers of the Company, provided that the extent of such
reliance is specified in such opinion.
(e) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, the opinion of Xxxxxxx X.
Xxxxxx, Esquire dated such Closing Date and addressed to you, collectively to
the effect that:
(i) Such counsel represents the Company in certain
matters relating to intellectual property, including patents,
and is familiar with the technology used by the Company in its
business and the manner of its use and has read the portions
of the Registration Statement and the Prospectus entitled
"Business - Patents and Proprietary Rights" and "Risk Factors
-- We may not be able to protect our intellectual property or
operate our business without infringing intellectual property
rights of others" (collectively, the "Patent Language").
(ii) The Patent Language contains accurate
descriptions of the Company's Patents, Patent Applications and
patents licensed to the Company and the statements in the
Patent Language therein insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings
and fairly summarize in all material respects the matters
referred to therein.
(iii) Such counsel has reviewed the Patent
Applications filed by the Company in the United States and
outside the United States and in the opinion of such counsel,
the Patent Applications have been properly prepared and filed
on behalf of the Company, and in the case of those Patent
Applications in respect of which patents have not yet been
issued, are being diligently pursued by the Company; the
inventions described in the Patent Applications are assigned
or licensed to the Company; to the best of such counsel's
knowledge, except as set forth in the Prospectus, no other
entity or individual has any right or claim in any Company
inventions or in any Patent Applications made by the Company,
or any patent issued or to be issued therefrom, and in such
counsel's opinion each of the Patent Applications (inclusive
of all Patents issued pursuant thereto to date) discloses
patentable subject matter; to such counsel's knowledge, except
as described in the Prospectus, there are no legal or
governmental proceedings pending (other than those related to
prosecution by the Company of Patent Applications) relating to
the Company, the claimed inventions of the Company's Patents
or the Company's Intellectual Property and no such proceedings
are threatened by governmental authorities or others.
(iv) Such counsel has reviewed the Patents and Patent
Applications filed by the Company in the United States and
outside of the United States, and in each case the Company is
the sole assignee of record with the PTO or the
22
comparable foreign patent agency in respect of such Patents
and Patent Applications and, to the knowledge of such counsel,
there exist no liens or encumbrances on such Patents or Patent
Applications.
(v) To the best of such counsel's knowledge, the
Company has complied with the PTO duty of candor and
disclosure for each of the Company's Patents, and such counsel
has no knowledge that the Company lacks or will be unable to
obtain any rights or licenses to use all Intellectual Property
necessary for the conduct of its business as now proposed to
be conducted by the Company as described in the Prospectus.
(vi) Except as disclosed in the Prospectus, such
counsel is not aware of any valid basis for a finding of
unenforceability or invalidity of any Company Intellectual
Property, and, except as disclosed in the Prospectus, to the
best of such counsel's knowledge, the Company has not received
any notice of infringement of or conflict with rights or
claims of others with respect to any Intellectual Property
owned or used by the Company, which in either such case,
singularly or in the aggregate, if subject to a decision
unfavorable to the Company, would have a Material Adverse
Effect.
(vii) Except as may be disclosed in the Prospectus,
such counsel has no knowledge of any patent rights of others
which are or would be infringed by specific products or
processes referred to in the Prospectus, which infringement,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse
Effect.
In addition, such counsel shall state that in the course of
his employment and in connection with or in anticipation of the preparation of
the Registration Statement and the Prospectus, such counsel has participated in
conferences with officers and other representatives of the Company, at which the
Company's Patents and Patent Applications and information contained in or
comprising the Patent Language in the Prospectus were discussed and, although
such counsel has not verified the accuracy, completeness or fairness of any
statement contained in the Registration Statement or the Prospectus, on the
basis of such conferences and representations of the Company, its officers and
other representatives, no facts have come to such counsel's attention and such
counsel is aware of no facts that have led such counsel to believe that the
information contained in or comprising the Patent Language in the Registration
Statement, as of the date of effectiveness, contained an untrue statement of
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(f) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, the opinion of The Iota Pi
Law Firm dated such Closing Date and addressed to you, collectively to the
effect that:
23
(i) Such counsel represents the Company in certain
specific matters relating to intellectual property, including
patents, and is familiar with the technology used by the
Company in its business and the manner of its use and has read
the portions of the Registration Statement and the Prospectus
entitled "Business - Patents and Proprietary Rights" and "Risk
Factors -- We may not be able to protect our intellectual
property or operate our business without infringing
intellectual property rights of others" (collectively, the
"Patent Language").
(ii) As to matters specifically related to the
Company's Patent Applications related to CI 1042, formerly
known as ONYX-015 (including all patents issued in respect
thereof), and to the patent applications filed by General
Hospital Corporation in the United States and Europe referred
to in the Prospectus (collectively, the "General Hospital
Application"), the statements in the Patent Language are
accurate and complete statements or summaries of the matters
therein set forth.
(iii) The General Hospital Application is no more
pertinent against the claims in the Company's Patent
Applications related to CI 1042, formerly known as ONYX-015
(including all patents issued in respect thereof), than a
research paper previously published in the scientific
literature. The previously published paper was cited by the
Company in its own Patent Applications and considered by the
PTO prior to its allowance of the claims in the Company's
Patent Applications and the corresponding issued patents.
(iv) All of the current claims included in or made
under the General Hospital Application that would have an
impact on the Company's Patents or Patent Applications related
to CI 1042, formerly known as ONYX-015, the Company's p53
program, or the exploitation of either or products based
thereon, should be found unpatentable as based upon the prior
art.
(g) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, the opinion of Xxxxx,
Xxxxxx & XxXxxxxx, P.C., special regulatory counsel for the Company, dated such
Closing Date and addressed to you, to the effect that:
(i) such counsel is familiar with the products under
development and clinical testing by the Company as described
in the Prospectus and with no further investigation, and has
read the portions of the Registration Statement and Prospectus
entitled "Business Government Regulation" and "Risk Factors --
We are subject to extensive governmental regulation, which can
be costly, time consuming and subject us to anticipated
delays; even if we obtain regulatory approvals for some of our
products, those products may still face regulatory
difficulties" and - "if testing of a particular product does
not yield successful results, then we will be unable to
commercialize that product" (collectively the
24
"Regulatory Language"), and in such counsel's opinion, insofar
as the Regulatory Language constitutes a description of the
United States Food Drug and Cosmetic Act and FDA regulations
or other requirements, the Regulatory Language is accurate and
complete in all material respects and fairly presents such
matters;
(ii) such counsel (A) has no reason to believe that
the Regulatory Language contained in the Registration
Statement and the Prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (B) has no reason to
believe that the Regulatory Language contained in the
Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading; and
(iii) although such counsel has not conducted any
independent review, the Company's business, as currently
conducted and as described in the Registration Statement and
Prospectus, does not violate the FFDC Act or any FDA rule or
regulation and, to the best of such counsel's knowledge, there
are no FDA or judicial administrative proceedings pending or
threatened against the Company.
(h) On each Closing Date, there shall have been furnished to
you, as Representatives of the several Underwriters, such opinion or opinions
from Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, counsel for the several
Underwriters, dated such Closing Date and addressed to you, with respect to the
formation of the Company, the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(i) You, as Representatives of the several Underwriters, shall
have received from Ernst & Young LLP, a letter or letters dated, respectively,
the date hereof and each such Closing Date, and addressed to you, in form and
substance satisfactory to the Representatives, to the effect that:
(i) they are independent auditors with
respect to the Company within the meaning of the Act and
are in compliance with the applicable requirements relating
to the qualifications of accountants under the applicable
rules and regulations thereunder adopted by the Commission;
(ii) in their opinion, the financial statements
audited by them and incorporated by reference in the
Registration Statement and the Prospectus (including those
incorporated therein by reference) comply in form and in
all material respects with the applicable accounting
requirements of the Act and the related published rules
and regulations;
25
(iii) on the basis of a reading of the latest
available interim unaudited financial statements of the
Company, carrying out certain specified procedures
(which do not constitute an audit made in accordance
with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (iii), a reading of
the minute books of the stockholders, the board of directors
and any committees thereof of the Company, and inquiries of
certain officials of the Company who have responsibility for
financial and accounting matters, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements of the Company
included in the Registration Statement and the
Prospectus do not comply in form and in all material
respects with the applicable accounting requirements
of the Act and the related published rules and
regulations thereunder adopted by the Commission or
are not in conformity with generally accepted
accounting principles applied on a basis
substantially consistent with that of the audited
financial statements incorporated by reference in the
Registration Statement and the Prospectus; and
(B) at a specific date not more than five business
days prior to the date of such letter, (1) there were
any changes in the capital stock or long-term debt of
the Company or any decreases in net current assets or
stockholders' equity of the Company, in each case
compared with amounts shown on the June 30,, 2000
unaudited balance sheet included in the
Registration Statement and the Prospectus, or (2) for
the period from July 1,, 2000 to such specified date
there were any decreases as compared with the period
from July 1, 1999 to the date one year before such
specified date, in sales or net revenues, or any
increases as compared with such period in net loss or
total per share amounts of net loss of the Company,
except, in all instances set forth in clauses (1)
and (2) above, for changes, decreases and increases
set forth in such letter;
(iv) they have carried out certain specified
procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information
that are derived from the general accounting records of
the Company and are included in the Registration
Statement and the Prospectus under the captions
"Prospectus Summary-Summary Financial Information,"
"Capitalization," "Selected Financial Data," and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in the
Prospectus, and have compared such amounts, percentages
and financial information with such records of the Company
and with information derived from such records and have
found them to be in agreement, excluding any questions of
legal interpretation; and
26
(v) they have performed the procedures specified by
the American Institute of Certified Public Accountants for
a review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements
incorporated by reference in the Registration Statement.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that: (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deems such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in
this paragraph (h) with respect to either letter referred to above shall include
any amendment or supplement thereto at the date of such letter.
(j) On each Closing Date, there shall have been furnished to
you, as Representatives of the Underwriters, a certificate, dated such Closing
Date and addressed to you, signed by the chief executive officer and by the
controller of the Company, to the effect that:
(i) The representations and warranties of the Company
in this Agreement are true and correct, in all material
respects, as if made at and as of such Closing Date, and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statement or any amendment
thereof or the qualification of the Securities for offering or
sale has been issued, and no proceeding for that purpose has
been instituted or, to the best of their knowledge, is
contemplated by the Commission or any state or regulatory
body; and
(iii) The signers of said certificate have carefully
examined the Registration Statement and the Prospectus, and
any amendments thereof or supplements thereto (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations), and (A) such documents contain all statements
and information required to be included therein, the
Registration Statement, or any amendment thereof, does 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, and
the Prospectus, as amended or supplemented, does not include
any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, (B) since the
27
effective date of the Registration Statement, there has
occurred no event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, (C)
subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, the
Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business,
or declared or paid any dividends or made any distribution of
any kind with respect to its capital stock, and except as
disclosed in the Prospectus, there has not been any change in
the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants),
or any material change in the short-term or long-term debt, or
any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock, of the Company, or
any occurrence, event or change which would have a Material
Adverse Effect, or any development involving or which might
involve a prospective Material Adverse Effect, whether or not
arising in the ordinary course of business, and (D) except as
stated in the Registration Statement and the Prospectus, there
is not pending, or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to
which the Company is a party before or by any court or
governmental agency, authority or body, or any arbitrator,
which might have a Material Adverse Effect.
(k) The Company shall have furnished to you and counsel for
the Underwriters such additional documents, certificates and evidence as you or
they may have reasonably requested.
(l) All necessary filings shall have been made as required and
all filing fees shall have been paid to effect the listing of the Securities on
the Nasdaq National Market.
(m) The "lock-up" agreements, each substantially in the form
of Exhibit B hereto, between you and certain stockholders, officers and
directors of the Company relating to sales and certain other dispositions of
shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on each Closing Date.
The several obligations of the Underwriters to purchase Option
Shares hereunder are subject to the delivery to you on the Second Closing Date
of such other documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Option Shares
and other matters relating to the issuance of the Option Shares.
All such opinions, certificates, letters and other documents
referred to hereinabove will be in compliance with the provisions hereof only if
they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such
opinions, certificates, letters and other documents as you shall reasonably
request.
28
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company) insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue
statement made by the Company in Section 2 of this Agreement;
(ii) an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement,
including the information deemed to be a part of the
Registration Statement at the time of effectiveness pursuant
to Rules 430A and 434(d) of the Rules and Regulations, if
applicable, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations),
or which arise out of or are based upon the omission or
alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; or
(iii) any untrue statement or alleged untrue
statement of any material fact contained in any audio or
visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company,
including, without limitation, slides, videos, films and tape
recordings, used in connection with the marketing of the
securities, including, without limitation, statements
communicated to securities analysts employed by the
Underwriters;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by it in connection with investigating or defending against such loss,
claim, damage, liability or action; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
In addition to their other obligations under this Section
6(a), the Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(a), they will reimburse each Underwriter on a
monthly basis for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of
29
the Company's obligation to reimburse the Underwriters for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that made
such payment, together with interest, compounded daily, determined on the basis
of the prime rate (or other commercial lending rate for borrowers of the highest
credit standing) announced from time to time by The Wall Street Journal (the
"Prime Rate"). Any such interim reimbursement payments which are not made to an
Underwriter within 30 days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request. This indemnity agreement shall be
in addition to any liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each officer who
signed the Registration Statement, and each person, if any, who controls the
Company within the Section 15 of the Act against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term sheet
within the meaning of Rule 434 of the Rules and Regulations), 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, 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 the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by you, or by such Underwriter
through you, specifically for use in the preparation thereof, and will reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending against any such loss, claim,
damage, liability or action.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
30
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of the Representatives, it is advisable for the
Underwriters to be represented as a group by separate counsel, the
Representatives shall have the right to employ a single counsel to represent the
Representatives and all Underwriters who may be subject to liability arising
from any claim in respect of which indemnity may be sought by the Underwriters
under subsection (a) of this Section 6, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Underwriters as incurred (in accordance with the
provisions of the second paragraph in subsection (a) above). An indemnifying
party shall not be obligated under any settlement agreement relating to any
action under this Section 6 to which it has not agreed in writing.
(d) If the indemnification provided for in this Section 6 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 other in connection with the statements or omissions that 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, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relevant intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this subsection (d). 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 against 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 that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No
31
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 6 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 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties, and agreements of the Company
herein or in certificates delivered pursuant hereto, and the agreements of
the several Underwriters and the Company contained in Section 6 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling person thereof, or
the Company or any of its officers, directors, or controlling persons, and
shall survive delivery of, and payment for, the Securities to and by the
Underwriters hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up
and pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule I hereto,
the remaining Underwriters shall be obligated to take up and pay for (in
proportion to their respective underwriting obligations hereunder as set forth
in Schedule I hereto except as may otherwise be determined by you) the Firm
Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up
and pay for the amount of Firm Shares agreed by such Underwriter or Underwriters
to be purchased hereunder, upon tender of such Firm Shares in accordance with
the terms hereof, and the amount of Firm Shares not purchased aggregates more
than 10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section
4(a)(viii) and Section 6 hereof) nor shall any Underwriter (other than an
Underwriter who shall have failed, otherwise than for some reason permitted
under this Agreement, to purchase the amount of Firm Shares agreed by such
32
Underwriter to be purchased hereunder) be under any liability to the Company
(except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased
by the non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m.,
Eastern time, on the effective date of the Registration Statement, or at such
earlier time after the effective time of the Registration Statement as you in
your discretion shall first release the Securities for sale to the public;
provided, that if the Registration Statement is effective at the time this
Agreement is executed, this Agreement shall become effective at such time as you
in your discretion shall first release the Securities for sale to the public.
For the purpose of this Section, the Securities shall be deemed to have been
released for sale to the public upon release by you of the publication of a
newspaper advertisement relating thereto or upon release by you of telexes
offering the Securities for sale to securities dealers, whichever shall first
occur. By giving notice as hereinafter specified before the time this Agreement
becomes effective, you, as Representatives of the several Underwriters, or the
Company may prevent this Agreement from becoming effective without liability of
any party to any other party, except that the provisions of Section 4(a)(viii)
and Section 6 hereof shall at all times be effective.
(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the First Closing Date, and the option
referred to in Section 3(b), if exercised, may be cancelled at any time prior to
the Second Closing Date, if (i) the Company shall have failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its part
to be performed hereunder, (ii) the Company shall have, in the sole judgment of
the Representatives, sustained any loss or interference with its business or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or legal or governmental
proceeding or there shall have occurred an event which has a Material Adverse
Effect, or any development which might have a Material Adverse Effect (including
without limitation a change in the Chief Executive Officer or control of the
Company), (iii) any other condition of the Underwriters' obligations hereunder
is not fulfilled, (iv) trading in the common stock shall have been suspended by
the Commission or the NASDAQ National Market or trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the NASDAQ
National Market shall have been wholly suspended, (v) minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required, on the New York Stock Exchange or the American Stock
Exchange, by such Exchange or by order of the Commission or any other
governmental authority having jurisdiction, (vi) a
33
banking moratorium shall have been declared by Federal, New York or California
authorities, or (vii) there has occurred any material adverse change in the
financial markets in the United States or an outbreak of major hostilities (or
an escalation thereof) in which the United States is involved, a declaration of
war by Congress, any other substantial national or international calamity or any
other event or occurrence of a similar character shall have occurred since the
execution of this Agreement that, in your judgment, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the
Securities. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(a)(viii) and Section 6
hereof shall at all times be effective.
(c) If you elect to prevent this Agreement from becoming
effective or to terminate this Agreement as provided in this Section, the
Company shall be notified promptly by you by telephone or telegram, confirmed by
letter. If the Company elects to prevent this Agreement from becoming effective,
you shall be notified by the Company by telephone or telegram, confirmed by
letter.
10. DEFAULT BY THE COMPANY. If the Company shall fail
at the First Closing Date to sell and deliver the number of Securities which
it is obligated to sell hereunder, then this Agreement shall terminate
without any liability on the part of any non-defaulting party. No action
taken pursuant to this Section 10 shall relieve the Company from liability,
if any, in respect of such default.
11. INFORMATION FURNISHED BY UNDERWRITERS. The
statements set forth in (i) the second paragraph of the text under the
caption "Underwriting" concerning the terms of the offering by the
Underwriters, and (ii) the eighth and ninth paragraphs of the text under the
caption "Underwriting" concerning stabilization and over-allotment in any
Preliminary Prospectus and in the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by or
on behalf of the Underwriters referred to in Section 2 and Section 6 hereof.
12. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing or by telegraph and, if to the
Underwriters, shall be mailed, telegraphed or delivered to the
Representatives c/o U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, except that notices given
to an Underwriter pursuant to Section 6 hereof shall be sent to such
Underwriter at the address stated in the Underwriters' Questionnaire
furnished by such Underwriter in connection with this offering; if to the
Company, shall be mailed, telegraphed or delivered to it at 0000 Xxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Hollings C. Renton; or to such
other address as the person to be notified may have requested in writing. All
notices given by telegram shall be promptly confirmed by letter. Any party to
this Agreement may change such address for notices by sending to the parties
to this Agreement written notice of a new address for such purpose.
34
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns and the controlling
persons, officers and directors referred to in Section 6. Nothing in this
Agreement is intended or shall be construed to give to any other person, firm
or corporation any legal or equitable remedy or claim under or in respect of
this Agreement or any provision herein contained. The term "successors and
assigns" as herein used shall not include any purchaser, as such purchaser,
of any of the Securities from any of the several Underwriters.
14. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Minnesota.
[Signature Page Follows]
35
Please sign and return to the Company the enclosed duplicates
of this letter whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
ONYX PHARMACEUTICALS, INC.
By _____________________________
Hollings C. Renton
President, Chief Executive Officer and
Chairman of the Board
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
CIBC World Markets Corp.
By: U.S. Bancorp Xxxxx Xxxxxxx Inc.
By_________________________
Name:
Title:
For itself and on behalf of the Representatives
36
SCHEDULE I
UNDERWRITER NUMBER OF FIRM SHARES (1)
- - - - - - - - - - - - - - - - - - -
U.S. Bancorp Xxxxx Xxxxxxx Inc.
CIBC World Markets Corp.
- - - - - - - -
Total. . . . .. . . . . . . . 3,000,000
===============
- - - - - - - - - - - - - - - - -
(1) The Underwriters may purchase up to an additional 450,000
Option Shares, to the extent the option described in
Section 3(b) of the Agreement is exercised, in the
proportions and in the manner described in the Agreement.
37
EXHIBIT A
Patents and Patent Applications
38
EXHIBIT B
"Lockup" Agreement
39
_________________________, 2000
U.S. Bancorp Xxxxx Xxxxxxx
CIBC World Markets, as Representatives
of the Several Underwriters Named in Schedule I
of the Underwriting Agreement
c/o U.S. Bancorp Xxxxx Xxxxxxx
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
Reference is made to a Registration Statement on Form S-3 of Onyx
Pharmaceuticals, Inc. (the "Company") (as the same may now or hereafter exist or
be amended, the "Registration Statement") pursuant to which it is proposed that
shares of the Company's Common Stock, $0.001 par value per share, will be
registered under the Securities Act of 1933 (the "Act"), for public sale (the
"Public Offering") underwritten by some or all of U.S. Bancorp Xxxxx Xxxxxxx and
CIBC World Markets, as representatives of the several underwriters (the
"Underwriters"). Shares of Common Stock, $0.001 par value per share, of the
Company ("Common Stock") are held by the undersigned.
In order to induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees not to, directly or indirectly, sell, offer to sell,
contract to sell, pledge, grant any option for sale or purchase of, agree to
sell or otherwise dispose of (individually and collectively, a "Disposition"),
any shares of Common Stock, or any securities convertible into or exercisable
for Common Stock (individually and collectively, the "Securities"), beneficially
owned by the undersigned now or acquired by the undersigned on or before the
effective date of the Registration Statement (the "Effective Date"), or with
respect to which the undersigned now has, or on or before the Effective Date
acquires, the power of Disposition, for a period commencing on the filing of the
Registration Statement and ending 90 days after the Effective Date (the "Lock-Up
Period"), without the prior written consent of U.S. Bancorp Xxxxx Xxxxxxx;
provided, however, that the foregoing agreement shall not apply to (i) gifts to
family members or charitable contributions of Common Stock or securities
convertible into or exercisable for Common Stock made by the undersigned in
transfers not involving a public distribution or public offering, if the
recipient of such gift or contribution agrees in writing as a condition
precedent to such gift or contribution to be bound by the terms hereof, or (ii)
transfers of Securities to "affiliates" of the transferor in transfers not
involving a public distribution or public offering, if the transferee agrees in
writing as a condition precedent to such transfer to be bound by the terms
hereof. The term "affiliate" shall have the meaning given such term in Rule 144
under the Act. The transferor shall notify U.S. Bancorp Xxxxx Xxxxxxx in writing
prior to the transfer and shall deliver the above-mentioned agreement on the
part of the permitted transferee, in form and substance satisfactory to U.S.
Bancorp Xxxxx Xxxxxxx. During the Lock-Up Period, there shall be no further
transfer of Common Stock or securities convertible into or exercisable for
Common Stock, by
1.
either the undersigned or any permitted transferee, except in
accordance with this letter agreement.
The foregoing restriction has been expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-Up Period, even if such Securities would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
included, relates to or derives any significant part of its value from, any
Securities.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this letter agreement. The undersigned
also agrees and consents to the entry of stock transfer instructions with the
Company's transfer agent against the transfer of any shares of Common Stock or
securities convertible into or exercisable for Common Stock.
In addition, the undersigned hereby waives any rights with respect to
the registration of Securities, including any "piggyback" or demand rights for
registration of the Securities under any federal or applicable state securities
laws, that the undersigned may be entitled to exercise as a result of or in
connection with the filing of the Registration Statement or the Public Offering
generally, and further agrees that, without the prior written consent of U.S.
Bancorp Xxxxx Xxxxxxx, it will not, during the period commencing on the date
hereof and ending on the earlier to occur of (i) 60 days after the Effective
Date and (ii) ten days after the Registration Statement, once filed, is
withdrawn for any reason, make any demand for or exercise any right with respect
to, the registration of any Securities.
Whether or not the Public Offering actually occurs depends upon a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an underwriting or purchase agreement, the terms of which are
subject to negotiation between the Underwriters and the Company. If the
Effective Date does not occur prior to November 15, 2000 or the Registration
Statement is withdrawn, the foregoing restrictions (except for the waiver of any
"piggyback" or demand rights for registration of the Securities under any
federal or applicable state securities laws, that the undersigned may be
entitled to exercise as a result of or in connection with the filing of the
Registration Statement or the Public Offering generally, which shall remain
effective) shall terminate and have no further force and effect.
2.
The undersigned intends to be legally bound hereby and agrees that the
benefits of the agreements on the part of the undersigned contained herein shall
enure to the benefit of, not only the Underwriters, but also the Company, and
the undersigned further acknowledges and agrees that both the Underwriters and
the Company are entitled to rely on this letter and the representations and
agreements of the undersigned contained herein.
Very truly yours,
---------------------------------
3.
