EXHIBIT 1.1
TRIANGLE PHARMACEUTICALS, INC.
COMMON STOCK
($0.001 Par Value)
U.S. UNDERWRITING AGREEMENT
October 31, 1996
U.S. UNDERWRITING AGREEMENT
November __, 1996
Xxxxxx, Read & Co. Inc.
Bear, Xxxxxxx & Co. Inc.
as representatives (the "U.S.
Representatives") of the several
underwriters listed on Schedule A
hereto
c/x Xxxxxx, Read & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Triangle Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to sell to the several underwriters named in Schedule A (the
"Underwriters") an aggregate of 3,200,000 shares (the "U.S. Firm Shares") of
Common Stock, par value $0.001 per share (the "Common Stock"), of the Company.
In addition, solely for the purpose of covering over-allotments, if any, the
Company proposes to sell to the Underwriters, at the Underwriters' option, an
aggregate of up to 600,000 additional shares of Common Stock (the "Additional
Shares"). The Additional Shares and the U.S. Firm Shares are collectively
referred to herein as the "U.S. Shares". The U.S. Shares are described in the
Prospectus that is referred to below.
It is understood and agreed to by all parties that the Company is
concurrently entering into an underwriting agreement (the "International
Underwriting Agreement") providing for the sale by the Company of an aggregate
of 800,000 shares of Common Stock (the "International Shares" and, together with
the U.S. Firm Shares, the "Firm Shares") through certain underwriters outside
the United States and Canada (the "International Underwriters"), for whom
Xxxxxx, Read & Co. Inc., Bear, Xxxxxxx International Limited and ING Baring
Securities Limited are acting as representatives (the "International
Representatives"). The U.S. Shares and the International Shares are collectively
referred to herein as the "Shares". Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another.
The Underwriters and the International Underwriters are simultaneously
entering into an Agreement Between U.S. and International Underwriters (the
"Agreement Between U.S. and International Underwriters"), which provides, among
other things, for the transfer of shares of Common Stock between the two
syndicates and for consultation by the International Representatives with the
U.S. Representatives. Two forms of prospectus are to be used in connection with
the offering and sale of shares of Common Stock contemplated by the foregoing,
one relating to the U.S. Shares and the other relating to the International
Shares. The latter form of prospectus will be identical to the former except
for the outside front and back cover pages as included in the registration
statement and amendments thereto. References herein to any Preliminary
Prospectus or Prospectus (in each case as hereinafter defined), whether amended
or supplemented, shall include both the international and U.S. versions thereof.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Act"), with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-1, including prospectuses relating to the U.S.
Shares and the International Shares. The Company has furnished to you, for use
by the Underwriters and by dealers, copies of one or more preliminary
prospectuses (collectively, the "Preliminary Prospectus"). Except where the
context otherwise requires, the registration statement as in effect at the time
of execution of this Agreement or, if the registration statement is not yet
effective, as amended when it becomes effective, including all documents filed
as a part thereof, and including any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) or Rule 434(b)
under the Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act and, if applicable, any
registration statement filed pursuant to Rule 462(b) under the Act, and any
"term sheet" described in Rule 434(b) under the Act that is deemed to be a part
of such registration statement pursuant to Rule 434(d) under the Act (a "Term
Sheet"), is herein called the "Registration Statement", and the prospectus, any
Term Sheet that, in addition to the related preliminary prospectus, constitutes
a part thereof pursuant to Rule 434(a) under the Act and any prospectus required
pursuant to Rule 434(b)(3) of the Act (the "Integrated Prospectus"), each in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act or, if none of such filings is required, in the form of final prospectus
included in the Registration Statement at the time it became effective, is
herein called the "Prospectus". Any reference herein to the "date" of a
Prospectus that includes a Term Sheet shall mean the date of such Term Sheet.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. On the basis of the representations and warranties
and the other terms and conditions herein set forth, the Company agrees to sell
to the respective Underwriters the U.S. Firm Shares and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of U.S. Firm Shares set forth opposite the
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name of such Underwriter on Schedule A, at a purchase price of $_____________
per Share. You may release the U.S. Firm Shares for public sale promptly after
this Agreement becomes effective. You may, from time to time, increase or
decrease the public offering price after the initial public offering to such
extent as you may determine.
In addition, on the basis of the representations and warranties and the
other terms and conditions herein set forth, the Company grants to the several
Underwriters an option to purchase, and the Underwriters shall have the right to
purchase, severally and not jointly, from the Company all or a portion of the
Additional Shares as may be necessary to cover overallotments made in connection
with the offering of the Shares, at the same purchase price per share to be paid
by the several Underwriters to the Company for the U.S. Firm Shares. This
option may be exercised at any time (but not more than once) on or before the
thirtieth day following the date hereof, by written notice to the Company. Such
notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time when the Additional Shares are
to be delivered (such date and time being herein referred to as the "additional
time of purchase"); PROVIDED, HOWEVER, that the additional time of purchase
shall not be earlier than the time of purchase (as defined below) nor earlier
than the second business day(1) after the date on which the option shall have
been exercised nor later than the eighth business day after the date on which
the option shall have been exercised. The number of Additional Shares to be
purchased by each Underwriter shall be the number that bears the same proportion
to the aggregate number of Additional Shares being purchased as the number of
Firm Shares set forth opposite the name of such Underwriter on Schedule A bears
to the total number of Firm Shares (subject, in each case, to such adjustment as
you may determine to eliminate fractional shares).
2. PAYMENT AND DELIVERY. Payment of the purchase price for the U.S. Firm
Shares shall be made to the Company, at the Company's election (which shall be
made in writing at least two business days prior to the time of purchase and the
additional time of purchase (each as hereinafter defined)), as the case may be,
by wire transfer to an account designated by the Company or by certified or
official bank check, in New York Clearing House funds, at the office of Xxxxxx,
Read & Co., Inc., in New York City, against delivery of the U.S. Firm Shares for
the respective accounts of the Underwriters. Such payment and delivery shall be
made at 10:00 a.m., New York City time, on November __, 1996 (unless another
time shall be agreed to by you and the Company or unless postponed in accordance
with the provisions of Section 8). The time at which such payment and delivery
are actually made is called the "time of purchase". The U.S. Firm Shares shall
be delivered in such names and in such denominations as you shall specify on the
second business day preceding the time of purchase.
-----------------------
(1) As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the U.S. Firm Shares. The Additional Shares shall be delivered in
such names and in such denominations as you shall specify on the second business
day preceding the additional time of purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of the Underwriters that:
(a) each Preliminary Prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, fully complied when so filed in all
material respects with the Act; when as the case may be, the Registration
Statement becomes or became effective and at all times subsequent thereto
up to the time of purchase and the additional time of purchase, as the case
may be, the Registration Statement and the Prospectus, and any supplements
or amendments thereto, fully complied and will fully comply in all material
respects with the provisions of the Act; and the Registration Statement at
all such times did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
Prospectus at all such times did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company makes no representation or warranty with respect
to any statement contained in the Registration Statement or the Prospectus
in reliance upon and in conformity with information concerning the
Underwriters that was furnished in writing by or on behalf of any
Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus and set forth in the section of
the Registration Statement and the Prospectus entitled "Underwriting";
(b) as of the date of this Agreement, the Company's authorized,
issued and outstanding capitalization is as set forth under the column
entitled "Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase and
the additional time of purchase, as the case may be, the Company's
authorized, issued and outstanding capitalization will be as set forth
under the column entitled "Pro Forma As Adjusted" under the section of the
Registration Statement and Prospectus entitled "Capitalization"; all of the
issued and outstanding shares of capital stock of the Company, including
the Common Stock and the Company's Series A Preferred Stock and Series B
Preferred Stock (collectively the "Preferred Stock"), have been duly
authorized and validly issued and are fully paid and nonassessable and free
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of any preemptive rights; the Shares have been duly authorized and, when
issued and delivered to and paid for by the Underwriters and the
International Underwriters as contemplated hereby and by the International
Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive rights; the Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware with full power and authority to own or
lease its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver this
Agreement and the International Underwriting Agreement and to issue, sell
and deliver the Shares as contemplated hereby and thereby; and the Company
does not own, directly or indirectly, any capital stock or other equity
securities of, or ownership interest in, any corporation, partnership,
joint venture or other association or entity;
(c) the Company is duly qualified or licensed by, and is in good
standing in, each jurisdiction in which it owns or leases property or
conducts business and in each other jurisdiction where the failure,
individually or in the aggregate, to be so qualified or licensed could have
a material adverse effect on the business, properties, results of
operations, condition (financial or otherwise) and assets of the Company (a
"Material Adverse Effect"); and the Company is in compliance with all laws,
orders, rules, regulations and directives issued or administered by such
jurisdictions, except where the failure to be in compliance could not have
a Material Adverse Effect;
(d) the Company is not in violation of any provision of its
certificate of incorporation or bylaws or in material breach of, or in
material default under (nor has any event occurred that with notice, lapse
of time or both would constitute a breach of, or default under), any
provision of any license, lease, indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which the
Company is a party or by which it or its properties is bound or affected or
under any law, regulation or rule or any decree, judgment or order
applicable to the Company; and the execution, delivery and performance of
this Agreement and the International Underwriting Agreement by the Company
and the consummation of the transactions contemplated hereby and thereby do
not and will not violate any provision of the certificate of incorporation
or bylaws of the Company or conflict with, result in any breach of, or
constitute a default under (or constitute any event that with notice, lapse
of time or both would constitute a breach of, or default under), any
provision of any license, lease, indenture, mortgage, deed of trust, bank
loan or credit agreement or other agreement or instrument to which the
Company is a party or by which it or its properties may be bound or
affected, or under any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to the Company;
(e) each of this Agreement and the International Underwriting
Agreement has been duly authorized, executed and delivered by the Company
and is a legal, valid and binding agreement of the Company enforceable in
accordance with its respective terms subject, however, to the limitations
of applicable bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of creditors' rights
generally and of laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and except to the extent that
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rights to indemnity and contribution hereunder may be limited by federal or
state securities laws or the public policy underlying such laws;
(f) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and the Prospectus and the certificates for the
Shares are in due and proper form and the holders of the Shares will not be
subject to personal liability by reason of being such holders;
(g) no approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency is required in connection with the
issuance and sale of the Shares as contemplated by this Agreement and the
International Underwriting Agreement other than registration of the Shares
under the Act and any necessary qualifications under the federal securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters;
(h) except as set forth in the Registration Statement and the
Prospectus under the caption "Description of Capital Stock--Registration
Rights" and except for rights that have been effectively waived in writing
(complete and accurate copies of which have been provided to the
Underwriters prior to the date of this Agreement), which waivers are in
full force and effect as of the date of this Agreement, no person has the
right, contractual or otherwise, to cause the Company to issue to it, or
register pursuant to the Act, any securities of the Company as a result of
the issuance and sale of the Shares to the Underwriters hereunder or under
the International Underwriting Agreement, nor does any person have
preemptive rights, rights of first refusal or other rights to purchase any
of the Shares;
(i) Price Waterhouse, LLP, whose report on the financial statements
of the Company is filed with the Commission as part of the Registration
Statement and the Prospectus, are independent public accountants with
respect to the Company as required by the Act;
(j) the Company has all licenses, authorizations, consents and
approvals and has made all filings required under any federal, state, local
or foreign law, regulation or rule, and has obtained all authorizations,
consents, licenses and approvals from other persons, in order to conduct
its business, except where the failure to have any such license,
authorization, consent or approval, or to make any such filing or obtain
any such authorization, consent or approval would not have a Material
Adverse Effect; and the Company is not in violation of, or in default
under, any such license, authorization, consent or approval or any federal,
state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company, the effect of which could have a
Material Adverse Effect;
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(k) all legal or governmental proceedings, contracts or documents of
a character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have
been so described or filed as required;
(l) there are no actions, suits or proceedings pending or, to the
best knowledge of the Company, threatened against the Company or any of its
properties at law or in equity or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or
agency that could result in a judgment, decree or order having a Material
Adverse Effect;
(m) the audited and unaudited financial statements included in the
Registration Statement and the Prospectus present fairly the financial
position of the Company as of the dates indicated and the results of
operations and cash flows of the Company for the periods specified,
subject, in the case of the Company's unaudited financial statements, to
normal recurring year-end adjustments; and such financial statements have
been prepared in conformity with generally accepted accounting principals
applied on a consistent basis during the periods involved;
(n) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as may
be otherwise stated in the Registration Statement or the Prospectus, there
has not been (i) any material adverse change in the business, properties,
results of operations, condition (financial or otherwise), assets or
prospects of the Company, (ii) any transaction that is, or the Company
reasonably expects could be, material to the Company, contemplated or
entered into by the Company or (iii) any obligation, contingent or
otherwise, directly or indirectly incurred by the Company that is, or the
Company reasonably expects could be, material to the Company;
(o) the Company has obtained the agreement of each of its directors
and officers and certain of its stockholders designated by you not to
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, shares of Common Stock or other securities of the Company that
are substantially similar to the Common Stock, including but not limited to
securities that are convertible into or exchangeable for, or that represent
the right to receive, Common Stock or any such substantially similar
securities for a period of 180 days after the date of the Prospectus
without the prior written consent of Xxxxxx, Read & Co. Inc.;
(p) the Company has filed all federal or state income or franchise
income and franchise tax returns required to be filed and has paid all
taxes shown thereon as due, and there is no tax deficiency that has been or
may reasonably be asserted against the Company; and all known tax
liabilities are adequately provided for on the books of the Company;
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(q) the business, operations and facilities of the Company have been
and are being conducted in compliance with all applicable laws, ordinances,
rules, regulations, licenses, permits, approvals, plans, authorizations or
requirements relating to occupational safety and health, pollution,
protection of health or the environment, or reclamation (including, without
limitation, those relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, gaseous or liquid in nature) or
otherwise relating to remediating real property in which the Company has
any interest, whether owned or leased, of any governmental department,
commission, board, bureau, agency or instrumentality of the United States,
any state or political subdivision thereof or any foreign jurisdiction and
all applicable judicial or administrative agency or regulatory decrees,
awards, judgments and orders relating thereto (collectively "Environmental
Regulations") except such failures to comply as would not individually or
in the aggregate have a Material Adverse Effect; and the Company has not
received any notice from a governmental instrumentality or any third party
alleging any violation of any Environmental Regulation or liability
thereunder (including, without limitation, liability for costs of
investigating or remediating sites containing hazardous substances or
damages to natural resources);
(r) the Company is not, will not become as a result of the
transactions contemplated hereby and by the International Underwriting
Agreement, and does not intend to conduct its business in a manner that
would cause it to become, an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(s) except as set forth in the Registration Statement and Prospectus,
the Company has obtained valid and enforceable licenses or options for the
inventions, patent applications, patents, trademarks (both registered and
unregistered), tradenames, copyrights and trade secrets necessary for the
conduct of the Company's business as currently conducted and as the
Registration Statement and Prospectus indicate the Company contemplates
conducting (collectively, the "Intellectual Property"); other than as set
forth in the Registration Statement and Prospectus, to the best knowledge
of the Company (for each of the following subsections): (i) there are no
third parties who have any ownership rights to any Intellectual Property
that has been licensed to the Company for the product indications described
in the Registration Statement and Prospectus that would preclude the
Company from conducting its business as currently conducted and as the
Registration Statement and Prospectus indicate the Company contemplates
conducting, except for the ownership rights of the owners of the
Intellectual Property licensed or optioned by the Company; (ii) there are
currently no sales of any products that would constitute an infringement by
third parties of any Intellectual Property licensed or optioned by the
Company; (iii) there is no pending or threatened action, suit, proceeding
or claim by others challenging the rights of the Company in or to any
Intellectual Property licensed or optioned by the Company, other
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than non-material claims; (iv) there is no pending or threatened action,
suit proceeding or claim by others challenging the validity or scope of
any Intellectual Property licensed or optioned by the Company, other
than non-material claims; and (v) there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others;
(t) as of the date of this Agreement, the Company is not required to
file any registration, application, license, request for exemption, permit
or other regulatory authorization with the U.S. Food and Drug
Administration (the "FDA"), or any state or local regulatory body in order
to conduct its business as described in the Registration Statement and
Prospectus;
(u) the human clinical trials, animal studies and other preclinical
tests conducted by or on behalf of the Company that are described in the
Registration Statement and the Prospectus (the "Company Studies"), were
and, if still pending, are being conducted in accordance with experimental
protocols, procedures and controls generally used by qualified experts in
the preclinical or clinical study of new drugs or diagnostics; the
descriptions of the results of such Company Studies contained in the
Registration Statement and Prospectus are accurate and complete in all
material respects, and the Company has no knowledge of any other trials,
studies or tests, the results of which reasonably call into question the
results described or referred to in the Registration Statement and
Prospectus; and the Company has not received any notices or correspondence
from the FDA or any other governmental agency requiring the termination,
suspension or modification of any Company Studies; and
(v) the Company has complied with all provisions of Section 517.075,
Florida Statutes relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as you may designate and to
maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required
to qualify as a foreign corporation or to consent to the service of process
under the laws of any such state (except for service of process with
respect to the offering and sale of the Shares); promptly to advise you of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and to
use every reasonable effort to obtain the withdrawal of any order of
suspension as soon as possible;
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(b) to make available to you in New York City, as soon as practicable
after the Registration Statement becomes effective, and thereafter from
time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company
shall have made any amendment or supplement thereto after the effective
date of the Registration Statement) as the Underwriters may request for the
purposes contemplated by the Act;
(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement (including any
registration statement filed pursuant to Rule 462(b) under the Act) has
become effective and when any post-effective amendment thereto becomes
effective and (ii) when the Prospectus, including any Term Sheet or
Integrated Prospectus, is filed with the Commission pursuant to Rule 424(b)
under the Act, if required under the Act (which the Company agrees to file
in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus or for additional information with respect
thereto, or of notice of institution of proceedings for or the entry of a
stop order suspending the effectiveness of the Registration Statement and,
if the Commission should enter a stop order suspending the effectiveness of
the Registration Statement, to use every reasonable effort to obtain the
lifting or removal of such order as soon as possible; and to advise you
promptly of any proposal to amend or supplement the Registration Statement
or the Prospectus and to file no such amendment or supplement to which you
shall object in writing;
(e) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement,
(i) copies of any reports or other communications that the Company shall
send to its stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports filed
with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form
as may be designated by the Commission, and (iii) such other information as
you may reasonably request regarding the Company, subject to the provisions
of any written agreement that, in the opinion of outside counsel to the
Company, prohibit the Company from furnishing such information under any
circumstances including, without limitation, an agreement by you to be
subject to the provisions of such written agreement;
(f) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a prospectus relating to
the Shares is required to be delivered under the Act that would require the
making of any change in the Prospectus then being used, so that the
Prospectus, as then supplemented, would not include an untrue statement of
a material fact or omit to state a material fact
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necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading and, during such time, promptly
to prepare and furnish, at the Company's expense, to the Underwriters such
amendments or supplements to such Prospectus as may be necessary to reflect
any such change in such quantities as reasonably requested by the
Underwriters, and to furnish to you a copy of such proposed amendment or
supplement before filing any such amendment or supplement with the
Commission;
(g) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) of the Act) covering a period of at least
twelve months beginning after the effective date of the Registration
Statement but ending not later than fifteen months after the effective date
of the Registration Statement (as defined in Rule 158(c) under the Act), as
soon as is reasonably practicable after the termination of such
twelve-month period;
(h) to furnish to you three signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments
thereto (including all exhibits thereto) and a sufficient number of
additional conformed copies of the foregoing (without exhibits) for
distribution of a copy of each to the other Underwriters;
(i) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim financial statements, if any, of the Company that have
been read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(d) of this
Agreement;
(j) to apply the net proceeds from the sale of the Shares in the
manner set forth under the caption "Use of Proceeds" in the Prospectus;
(k) to pay all expenses, fees and taxes (other than any transfer
taxes and fees and disbursements of counsel for the Underwriters except as
set forth under Section 5 hereof and (iii) and (iv) below) in connection
with (i) the preparation and filing of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the
Underwriters, the International Underwriters and to dealers (including
costs of mailing and shipment), (ii) the issue, sale and delivery of the
Shares, (iii) the word processing and/or printing of this Agreement, the
International Underwriting Agreement, the Agreement Between U.S. and
International Underwriters, the International Selling Agreement, any dealer
agreement, any Statements of Information and Powers of Attorney and the
reproduction and/or printing and furnishing of copies
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of each thereof to the Underwriters, the International Underwriters, and to
dealers (including costs of mailing and shipment), (iv) the qualification
of the Shares for offering and sale under state laws and the determination
of their eligibility for investment under state law as aforesaid (including
the legal fees and filing fees and other disbursements of counsel for the
Underwriters in connection therewith) and the printing and furnishing of
copies of any blue sky surveys or legal investment surveys to the
Underwriters, the International Underwriters and to dealers, (v) the
listing of the Shares on the Nasdaq National Market and any registration
thereof under the Exchange Act; (vi) any filing for review of the public
offering of the Shares by the National Association of Securities Dealers,
Inc. (the "NASD") and (vii) the performance of the Company's other
obligations hereunder;
(l) to furnish to you, before filing with the Commission subsequent
to the effective date of the Registration Statement and during the period
referred to in paragraph (e) above, a copy of any document proposed to be
filed pursuant to Sections 13, 14 or 15(d) of the Exchange Act;
(m) for a period of 180 days after the date hereof, without the prior
written consent of Xxxxxx, Read & Co. Inc, not to offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any shares of
Common Stock or other securities that are substantially similar to the
Common Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, shares of Common Stock or any such substantially similar
securities, or permit the registration under the Act of any shares of
Common Stock or any such substantially similar securities, except for (i)
the registration of the Shares and the sales to the Underwriters pursuant
to this Agreement, (ii) the issuance of Common Stock upon the exercise of
outstanding stock options and warrants to the extent disclosed in the
Registration Statement and the Prospectus and (iii) the grant of stock
options pursuant to stock option plans disclosed in the Registration
Statement and Prospectus;
(n) to use its best efforts to cause the Common Stock to be listed on
the Nasdaq National Market; and
(o) not to take, directly or indirectly, any action designated to
cause or to result in, or that might reasonably be expected to constitute
the stabilization or manipulation of the Common Stock to facilitate the
sale or resale of the Shares.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to (i) the first two paragraphs of Section 8 hereof, (ii) the termination of
this Agreement as a result of the failure of the condition set forth in Section
6(n) if such failure is a result of the termination of the International
Underwriting Agreement pursuant to the first two paragraphs of Section 8 thereof
or the default by one or more of the International Underwriters in its or their
respective
12
obligations thereunder or (iii) the default by one or more of the Underwriters
in its or their respective obligations hereunder, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company on the date hereof and at the time of purchase and at
the additional time of purchase, as the case may be), the performance by the
Company of its obligations hereunder and to the following conditions:
(a) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to King & Spalding,
counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement and the Prospectus, execute and deliver this
Agreement and the International Underwriting Agreement and issue, sell
and deliver the Shares as contemplated hereby and thereby;
(ii) the Company is duly qualified to do business as a
foreign corporation, and is in good standing, in each state or
jurisdiction of the United States where its failure, individually or
in the aggregate, to do so would have a material adverse effect on the
properties, assets, business or condition (financial or otherwise) of
the Company;
(iii) each of this Agreement and the International
Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Shares, when issued and delivered to and paid for
by the Underwriters in accordance with this Agreement and the
International Underwriting Agreement, will be duly authorized, validly
issued, fully paid and nonassessable and free of any preemptive
rights;
(v) the authorized capital stock of the Company, including
the Shares, conforms as to legal matters in all material respects to
the description thereof contained in the Registration Statement and
Prospectus;
13
(vi) based on an officer's certificate to the effect that
the consideration for all outstanding shares was received by the
Company in accordance with the applicable resolutions of the Board of
Directors of the Company, the outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, and are,
to such counsel's knowledge, fully paid and nonassessable;
(vii) the certificates for the Shares are in due and proper
form;
(viii) the Registration Statement has become effective under
the Act and, to such counsel's knowledge, no stop order proceedings
suspending the effectiveness of the Registration Statement have been
instituted or threatened or are pending under the Act;
(ix) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement and the International Underwriting Agreement will not
contravene any provision of applicable law or regulation or the
certificate of incorporation or bylaws of the Company, or, to such
counsel's knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of
its property, or, to such counsel's knowledge, constitute a breach or
a default under (nor constitute any event which, with notice, lapse of
time or both, would constitute a breach or default under) any
agreement or other instrument filed as an exhibit to the Registration
Statement and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under the Underwriting
Agreement or the International Underwriting Agreement, except such as
may be required by the securities or blue sky laws of the various
states or other jurisdictions (on which such counsel need not express
any opinion) in connection with the purchase and distribution of the
Shares by the Underwriters;
(x) to such counsel's knowledge, there is no legal or
governmental proceeding pending or threatened to which the Company is
or may become a party or to which any of the properties of the Company
is or may become subject that is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any statute, regulation, contract or other document that is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required;
(xi) to such counsel's knowledge, there is no action,
proceeding or governmental investigation pending, against the Company
or any of its officers
14
or directors, which are required to be described in the Prospectus but
are not so described;
(xii) to such counsel's knowledge and except as otherwise
described in the Registration Statement and the Prospectus, no person
has the right, contractual or otherwise, to cause the Company to issue
to it, or register pursuant to the Act, any shares of capital stock of
the Company in connection with the sale of the Shares to the
Underwriters, nor does any person have preemptive rights, rights of
first refusal or other rights to purchase any of the Shares;
(xiii) the descriptions of the charter and bylaws of the
Company and of statutes and contracts contained in "Risk
Factors--Anti-takeover Effects of Charter, Bylaws and Delaware Law,"
"Management," "Certain Transactions," "Description of Capital Stock"
(other than the statements under "--Transfer Agent and Registrar"),
"Certain United States Federal Tax Considerations for Non-United
States Holders of Common Stock" and in Items 14 and 15 of Part II of
the Registration Statement, to the extent that such statements
constitute a summary of documents referred to therein or matters of
law, are accurate and fairly present the information required to be
presented by the Act.
In addition, such counsel shall state that such counsel has
participated in conferences with certain officers and other representatives
of the Company, representatives of the independent public accountants of
the Company and representatives of the Underwriters at which the contents
of the Registration Statement, the Prospectus and related matters were
discussed. Such counsel state that they have not, however, except with
respect to matters expressly covered in paragraph (xiii) above,
independently checked or verified the accuracy, completeness or fairness of
the information contained in the Registration Statement and the Prospectus.
Such counsel shall also state that, based upon their participation as
described in the preceding paragraph, (i) they believe that the
Registration Statement and the Prospectus (except for financial statements
and schedules as to which such counsel need not express any belief), as of
the effective date of the Registration Statement, complied as to form in
all material respects with the requirements of the Act and the applicable
rules and regulations of the Commission thereunder; (ii) such counsel shall
confirm that they have no reason to believe that (except for financial
statements and schedules as to which such counsel need not express any
belief) either the Registration Statement or the Prospectus, as of such
effective date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that (except for financial
statements and schedules as to which such counsel need not express any
belief) the Prospectus, as of the date of such counsel's opinion, contains
any untrue statement of a material fact or omits to
15
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) such counsel shall confirm that they have no reason to believe that
any contract or agreement required to be described in the Registration
Statement or filed as an exhibit thereto is not so described or filed.
(b) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Xxxxxxxxxx & Xxxx, patent counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form reasonably satisfactory to King & Spalding,
counsel for the Underwriters, stating that:
(i) Such counsel have conducted searches or are otherwise
familiar with the Company's licensed and optioned proposed products as
described in the table on page 23 of the Registration Statement and
Prospectus (the "Licensed Properties"). Based on these searches and
the counsel's information, to such counsel's knowledge, except as
disclosed in the sections of the Registration Statement and Prospectus
entitled "Risk Factors--Uncertainty of Patents; Dependence on
Patents, Licenses and Proprietary Rights" and "Business--Patents and
Proprietary Rights," the Licensed Properties are not claimed in any
United States or foreign patents of record issued on or before
August 1, 1996.
(ii) Such counsel have reviewed the patents and patent
applications licensed to the Company, as described in the Registration
Statement and Prospectus, and, except as described in the Registration
Statement and Prospectus, to such counsel's knowledge and solely with
respect to the Licensed Properties: (i) such applications disclose
patentable subject matter and have been filed in a timely manner; (ii)
there is no prior art that anticipates the licensed or optioned
inventions disclosed therein under 35 U.S.C. Section 102; (iii) such
applications have not been finally abandoned; and (iv) such patents
have been lawfully issued.
(iii) To such counsel's knowledge, except as disclosed in the
Registration Statement and Prospectus: (i) there are no third parties
who have rights that would prevent the Company from using or selling
the Licensed Properties as described in the Registration Statement and
Prospectus; (ii) there are currently no sales of any products that
would constitute an infringement by third parties of the patents and
patent applications licensed or optioned by the Company as they
pertain to Licensed Properties; (iii) there is no pending or
threatened action, suit, proceeding or claim by others that the
current or planned activities of the Company as described in the
Registration Statement and Prospectus infringe or otherwise violate
any intellectual property right of
16
others; (iv) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company's rights in or
to any of the Licensed Properties; and (v) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity of the patents or patent applications as they cover the
Licensed Properties or the scope of any such patents or patent
applications.
(iv) The Statements in the Registration Statement and the
Prospectus under the captions "Risk Factors--Uncertainty of Patents;
Dependence on Patents, Licenses and Proprietary Rights" and
"Business--Patents and Proprietary Rights", in each case insofar as
such statements constitute summaries of the legal matters (including
statutes and legal and governmental proceedings) or contracts or other
agreements referred to therein, are accurate in all material respects.
(c) The Company shall furnish to you at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of Xxxxx X.
Xxxxxx, general counsel for the Company, addressed to the Underwriters, and
dated the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and in
form reasonably satisfactory to King & Spalding, counsel for the
Underwriters, stating that:
(i) to such counsel's knowledge, the Company does not own,
directly or indirectly, any capital stock or other equity securities
of, or ownership interests in, any corporation, partnership, joint
venture or other association or entity;
(ii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Underwriting
Agreement and the International Underwriting Agreement will not
contravene the certificate of incorporation or bylaws of the Company,
or, to such counsel's knowledge, any provision of applicable law or
regulation or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any of its
property, or, to such counsel's knowledge, constitute a breach or a
default under (nor constitute any event which, with notice, lapse of
time or both, would constitute a breach or default under) any
agreement or other instrument filed as an exhibit to the Registration
Statement;
(iii) to such counsel's knowledge, the Company is not in
violation of any provision of its certificate of incorporation or
bylaws or in breach of, or in default under (nor has any event
occurred which with notice, lapse of time, or both would constitute a
breach of, or default under), any license, lease,
17
indenture, mortgage, deed of trust, bank loan or credit agreement or
any other agreement or instrument known to such counsel to which the
Company is a party or by which the Company or any of its properties
may be bound or affected or under any law, regulation or rule or any
decree, judgment or order applicable to the Company and known to such
counsel; and
(iv) to such counsel's knowledge, there is no legal or
governmental proceeding pending or threatened to which the Company is
or may become a party or to which any of the properties of the Company
is or may become subject that is required to be described in the
Registration Statement or the Prospectus and is not so described.
(d) You shall have received from Price Waterhouse, LLP a letter or
letters dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, and addressed
to the Underwriters (with reproduced copies for each of the Underwriters)
in the form or forms heretofore approved by you.
(e) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of King &
Spalding and dated the time of purchase or the additional time of purchase,
as the case may be, as to the matters referred to in paragraph (iii),
paragraph (iv) and, with respect to statements in the Prospectus and the
Registration Statement under the captions "Business - Government Regulation
- FDA Approval," paragraph (xiii) of Section 6(a).
Such counsel shall state that, in their opinion, the Registration
Statement and the Prospectus, as of their respective effective or issue
dates (in each case other than the financial statements and notes thereto
and the schedules and other financial and statistical data included
therein, as to which such counsel need not express any opinion), complied
as to form in all material respects with the requirements of the Act and
the applicable rules and regulations of the Commission thereunder.
In addition, such counsel shall state that they have advised you as to
the requirements of the Act and the applicable rules and regulations
thereunder and rendered legal advice and assistance to you in the course of
your investigation pertaining to, and your participation in the preparation
of, the Registration Statement and the Prospectus. Such counsel shall
state that rendering such assistance involved, among other things,
discussions and inquiries concerning various legal matters and the review
of the documents referred to above. Such counsel shall state that they
have also participated in conferences with your representatives,
representatives of the Company and its counsel and accountants during which
the contents of the Registration Statement and the Prospectus and related
matters were discussed and reviewed. Such counsel shall state that,
nothing has come to their attention that causes such counsel to believe
18
that (i) the Registration Statement and the Prospectus (except for
financial statements and schedules as to which such counsel need not
express any belief), as of the effective date of the Registration
Statement, complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder; (ii) the Registration Statement (other than the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus, as to which such
counsel need express no belief, and other than the information omitted
therefrom in reliance upon Rule 430A under the Act and included in the
Prospectus filed with the Commission pursuant to Rule 424(b)), at the time
such Registration Statement became effective, contained any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or (iii) the Prospectus (other than the financial statements and
schedules and other financial and statistical data included in the
Registration Statement or Prospectus as to which such counsel need express
no belief), on the date of such Prospectus and as of the date of the time
of purchase or additional time of purchase, contained or contains any
untrue statement of a material fact or omitted or omits to state any
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) No amendment or supplement to the Registration Statement or the
Prospectus shall be filed prior to the time the Registration Statement
becomes effective to which you shall have reasonably objected in writing.
(g) The Registration Statement shall become effective at or before
5:00 P.M., New York City time, on the date of this Agreement and, if Rule
430A or Rule 434 under the Act is used, the Prospectus including any Term
Sheet constituting a part thereof, shall have been filed with the
Commission pursuant to Rule 424(b) under the Act at or before 5:00 P.M.,
New York City time, on the second full business day after the date of this
Agreement; PROVIDED, HOWEVER, that any Integrated Prospectus shall have
been filed on or prior to the date on which a confirmation is sent or
given;
(h) Prior to the time of purchase or the additional time of purchase,
as the case may be: (i) no stop order with respect to the effectiveness of
the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto, or modifications
thereof, if any, shall not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; and (iii) the Prospectus and
all amendments or supplements thereto, or modifications thereof, if any,
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
19
(i) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, there has
not been (i) any material adverse change, present or prospective, in the
business, properties, results of operations, condition (financial or
otherwise), assets or prospects of the Company other than as described in
the Registration Statement and the Prospectus, (ii) any transaction that is
material to the Company, entered into by the Company, other than as
described in the Registration Statement and the Prospectus, or (iii) any
obligation, contingent or otherwise, directly or indirectly, incurred by
the Company that is material to the Company other than as described in the
Registration Statement and the Prospectus.
(j) The Company, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two of
its executive officers to the effect that the representations and
warranties of the Company set forth in this Agreement are true and correct
as of each such date and the conditions set forth in Section 6(h) and
Section 6(i) have been met.
(k) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and officers of the Company and
certain stockholders of the Company designated by you to the effect that
such persons shall not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of Common Stock or other
securities of the Company that are substantially similar to the Common
Stock, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, shares of
Common Stock or any such substantially similar securities for a period of
180 days after the date of the Prospectus without the prior written consent
of Xxxxxx, Read & Co. Inc.
(l) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement or the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you reasonably may
request.
(m) The Company shall have performed such of its obligations under
this Agreement as are to be performed by the terms hereof at or before the
time of purchase and at or before the additional time of purchase, as the
case may be.
(n) The closing of the purchase and sale of the International Shares
shall occur concurrently with the closing of the purchase and sale of the
Shares hereunder.
(o) The Shares shall have been listed on the Nasdaq National Market.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement shall become
effective (i) if neither Rule 430A nor Rule 434 under the Act is used, when you
shall have
20
received notification of the effectiveness of the Registration Statement, or
(ii) if either Rule 430A or Rule 434 under the Act is used, when the parties
hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in your absolute discretion if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities generally
on the New York Stock Exchange shall have been suspended or minimum prices shall
have been established on the New York Stock Exchange, or if a general banking
moratorium shall have been declared either by the United States or New York
State authorities, or if the United States shall have declared war in accordance
with its constitutional processes or there shall have occurred any material
outbreak or escalation of hostilities or other national or international
calamity or crisis of such magnitude in its effect on, or any material adverse
change in, any financial market which, in each case, in your judgment makes it
impracticable to market the Shares or the International Shares.
If you elect to terminate this Agreement as provided in this Section 7, the
Company and each other Underwriter shall be notified promptly by written notice
transmitted by facsimile and confirmed by written notice sent by registered
mail, return receipt requested.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply with any of the terms of this Agreement, the Company shall not
be under any obligation or liability under this Agreement (except to the extent
provided in Sections 5 and 9), and the Underwriters shall be under no obligation
or liability to the Company under this Agreement (except to the extent provided
in Section 9) .
8. INCREASE IN UNDERWRITERS' COMMITMENTS. If any Underwriter shall
default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder and if the number of Firm Shares that all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the aggregate principal amount of Firm
Shares they are obligated to purchase pursuant to Section 1) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters as hereinafter
provided. Such Shares shall be taken up and paid for by such non-defaulting
Underwriter or Underwriters in such amount or amounts as you may designate with
the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Firm Shares
21
hereunder unless all of the Firm Shares are purchased by the Underwriters (or by
substituted underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters, in accordance with
the foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary change in the Registration Statement and the Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
9. INDEMNITY BY THE COMPANY AND THE UNDERWRITERS.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter, each person that controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively, the
"Underwriter indemnified parties") from and against any and all losses, claims,
damages, judgments, liabilities and expenses (including the reasonable fees and
expenses of counsel and other reasonable expenses in connection with
investigating, defending or settling any such action or claim) as they are
incurred (and regardless of whether the Underwriter indemnified party is a party
to the litigation, if any) which, jointly or severally, any such Underwriter
indemnified party may incur under the Act, the Exchange Act or otherwise arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, judgments, liabilities or expenses arise out of or are
based upon any such untrue statement or alleged untrue statement contained in
and in conformity with information with respect to any Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company expressly
for use therein with reference to such Underwriter or arises out of or is based
upon any omission or alleged omission to state a material fact in connection
with such information required to be stated in either such Registration
Statement or Prospectus or necessary to make such information not misleading;
PROVIDED, HOWEVER, that the indemnity agreement with respect to any Preliminary
Prospectus or the Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Shares to such
person, to the extent and only to the extent that the delivery of
22
the Prospectus (as so amended or supplemented) would have eliminated any such
loss, claim, damage or liability. This indemnity agreement will be in addition
to any liability the Company otherwise may have.
(b) If any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any
Underwriter indemnified party with respect to which indemnity may be sought
against the Company pursuant to this Section 9, such Underwriter indemnified
party shall promptly notify the Company in writing, and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to the Underwriter indemnified party and payment of all fees and expenses. An
Underwriter indemnified party shall have the right to employ separate counsel in
any such action or proceeding and to assume the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter
indemnified party unless (i) the employment of such counsel has been authorized
in writing by the Company, (ii) the Company has failed promptly after receipt of
such notice to assume the defense and employ counsel reasonably satisfactory to
the Underwriter indemnified party or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both one or more
Underwriter indemnified parties and the Company, and such Underwriter
indemnified parties shall have reasonably concluded that there may be one or
more legal defenses available to them that are different from or additional to
those available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter
indemnified parties), in any of which events such fees and expenses shall be
borne by the Company and reimbursed as they are incurred (it being understood
that the Company shall not be liable for the fees and expenses of more than one
separate law firm (in addition to any local counsel) for all Underwriter
indemnified parties in any one action or series of related transactions in the
same jurisdiction). The Company shall not be liable for any settlement of any
such action effected without the written consent of the Company (which consent
shall not be unreasonably withheld or delayed), but if settled with the written
consent of the Company, or if there is a final judgment with respect thereto,
the Company agrees to indemnify and hold harmless each Underwriter indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
(c) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement, and
any person that controls the Company within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act (collectively, the "Company indemnified
parties") from and against any losses, claims, damages, judgments, liabilities
and expenses to the same extent as the foregoing indemnity from the Company to
the Underwriter indemnified parties, but only with respect to information
concerning such Underwriter furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use with respect to such
Underwriter in the Registration Statement, any Preliminary Prospectus or the
Prospectus. In case any action shall be brought against any Company indemnified
party based on the Registration Statement, any Preliminary Prospectus or the
Prospectus and in respect of which indemnity
23
may be sought against any Underwriter pursuant to this Section 9(c), such
Underwriter shall have the rights and duties given to the Company by Section
9(b) (except that if the Company shall have assumed the defense thereof, such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, provided that the fees and
expenses of such separate counsel shall be at the expense of such Underwriter),
and the Company indemnified parties shall have the rights and duties given to
the Underwriter indemnified parties by Section 9(b).
(d) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless any Underwriter indemnified party or any
Company indemnified party, then the party required to indemnify such indemnified
party under this Section 9, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, judgments, liabilities and expenses (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other hand from the
offering of the Shares or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages, judgments, liabilities or expenses, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same proportion as the total proceeds from the offering of the
Shares (net of underwriting discounts and commissions but before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault of the Company on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, judgments, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any claim or action.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation or by any other method of allocation (even if the Underwriters
were treated as one entity for such purpose) that does not take account of the
equitable considerations referred to in this Section 9(d). Notwithstanding the
provisions of this Section 9(d), no Underwriter indemnified party shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter indemnified party and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter
24
indemnified party otherwise has been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to their
respective underwriting commitments and are not joint.
The Company hereby acknowledges and agrees with the Underwriters that the
statements set forth in (i) the last paragraph on the cover page of the
Prospectus, (ii) the paragraph in boldface type on the inside cover page of the
Prospectus relating to stabilization, (iii) the list of Underwriters and
International Underwriters under the caption "Underwriting" in the Prospectus
and (iv) the statements relating to the selling concession and reallowance in
the third paragraph below the tables under the caption "Underwriting" in the
Prospectus constitute the only information furnished to the Company in writing
by the Underwriters expressly for use in the Registration statement, any
Preliminary Prospectus or the Prospectus.
(e) The indemnity and contribution agreements contained in this Section 9
and the representations, warranties and covenants of the Company contained in
this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter indemnified party or by or
on behalf of any Company indemnified party and shall survive any termination of
this Agreement or the issuance and delivery of the Shares. Subject to the
provisions of Section 9(b) and Section 9(c), the Company and each Underwriter
agree promptly to notify the other of the commencement of any litigation or
proceeding against it in connection with the issuance and sale of the Shares or
in connection with the Registration Statement or the Prospectus.
10. NOTICES. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
Xxxxxx, Read & Co., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department; and Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department; and if to the
Company, shall be sufficient in all respects if delivered or sent to the
Company, at the offices of the Company at Triangle Pharmaceuticals, Inc., 0
Xxxxxxxxxx Xxxxx, 0000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xx. Xxxxx X. Xxxxx.
11. CONSTRUCTION. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS AGREEMENT HAVE BEEN INSERTED
AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF THIS AGREEMENT.
12. PARTIES AT INTEREST. The agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Underwriter
indemnified parties and the
25
Company indemnified parties, and their respective successors, assigns, executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
13. COUNTERPARTS. This Agreement may be signed by the parties in
counterparts, which together shall constitute one and the same agreement among
the parties.
26
If the foregoing correctly sets forth the understanding among the Company
and the Underwriters, please so indicate in the space provided below for such
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement among the Company, and the Underwriters, severally.
Very truly yours,
TRIANGLE PHARMACEUTICALS, INC.
By:
--------------------------------
Accepted and agreed to as of the date first
above written, on behalf of themselves
and the other several Underwriters
named in Schedule A
XXXXXX, READ & COMPANY, INC.
BEAR, XXXXXXX & CO. INC.
BY: XXXXXX, READ & CO. INC.
By:
--------------------------------
Name:
Title:
SCHEDULE A
Underwriters Number of Firm Shares
------------ ---------------------
Xxxxxx, Read & Co. Inc.. . . . . . . . . . . . . . . .
Bear, Xxxxxxx & Co. Inc. . . . . . . . . . . . . . . .
