EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE
- ------- ----------------------------------------------------------------------------- ----
1.1 Form of Underwriting Agreement
4.1 Specimen certificate for shares of the Registrant's Common Stock,
incorporated herein by reference to Exhibit 4.1 to Registration Statement No.
33-73868
4.2 Provisions of the Certificate of Incorporation and By-Laws of the Registrant
defining rights of holders of Common Stock of the Registrant, incorporated
herein by reference to Exhibits 3.1 and 3.2 to the Company's Form 10-Q for
the second quarter ending June 30, 1995 dated August 11, 1995
5. Opinion and Consent of Brobeck, Phleger & Harrison LLP
23.1 Consent of Ernst & Young LLP, independent auditors
23.2 Consent of Pollock, Vande Sande & Priddy, R.L.L.P.
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in the opinion filed as
Exhibit 5)
24. ** Powers of Attorney
27.1** Financial Data Schedule
- -------------------
** Previously filed.
Exhibit 1.1
Draft of 9/20/96
2,000,000 Shares
BIOCRYST PHARMACEUTICALS, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1996
SMITH BARNEY INC.
NEEDHAM & COMPANY, INC.
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
BioCryst Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell an aggregate of 2,000,000 shares (the
"Firm Shares") of its common stock, par value $0.01 per share (the "Common
Stock"), to the several Underwriters named in Schedule I hereto (the
"Underwriters"). In addition, solely for the purpose of covering over-
allotments, the Company proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 300,000 shares
(the "Additional Shares") of Common Stock. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares."
The Company wishes to confirm as follows its agreement with you, in
connection with the several purchases of the Shares by the Underwriters.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion, relating to the
Shares. The term "Registration Statement" as used in this Agreement means the
registration statement (including all financial schedules and exhibits) as
amended at the time it becomes effective or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the registration statement as amended
by said post-effective amendment. If an abbreviated registration statement
relating to the offering of the Shares is prepared and filed with the Commission
in accordance with Rule 462(b) under the Act (an "Abbreviated Registration
Statement"), the term "Registration Statement" as used in this Agreement
includes the Abbreviated Registration Statement. The term "Prospectus" as used
in this Agreement means the prospectus in the form included in the Registration
Statement, or, if the prospectus included in the Registration Statement omits
information in reliance on Rule 430A under the Act and such information is
included in a prospectus filed with the Commission pursuant to Rule 424(b) under
the Act, the term "Prospectus" as used in this Agreement means the prospectus in
the form included in the Registration Statement as supplemented by the addition
of the Rule 430A information contained in the prospectus filed with the
Commission pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in
this Agreement means the prospectus subject to completion in the form included
in the registration statement at the time of the initial filing of the
registration statement with the Commission and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus. Any
reference herein to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Form S-3 under the
Act, as of the date of the registration statement, the Registration Statement,
such Prepricing Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to the registration statement, the
Registration Statement, any Prepricing Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") and deemed
incorporated by reference pursuant to Form S-3 under the Act. As used herein,
the term "Incorporated Documents" means the documents which at the time are
incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus or any amendment or
supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $ per share (the
"purchase price per share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares
increased as set forth in Section 10 hereof).
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right to purchase from the Company, at the purchase price per share,
pursuant to an option (the "over-allotment option") which may be exercised at
any time and from time to time prior to 9:00 p.m., New York City time, on the
30th day after the date of the Prospectus (or, if such 30th day shall be a
Saturday or Sunday or a holiday, on the next business day thereafter when the
New York Stock Exchange is open for trading), up to an aggregate of 300,000
Additional Shares from the Company. Additional Shares may be purchased solely
to cover over-allotments made in connection with the offering of the Firm
Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 10 hereof) bears to
the aggregate number of Firm Shares.
2
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Firm Shares shall be made at the office of
Smith Barney Inc., 388 Greenwich Street, New York, New York 10013, at 10:00
A.M., New York City time, on , 1996 (the "Closing Date"). The place
of closing for the Firm Shares and the Closing Date may be varied by agreement
among you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement among you and the
Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice, it being understood that a facsimile
transmission shall be deemed written notice, prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and any Additional Shares to be purchased hereunder shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor in immediately available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or any Abbreviated Registration Statement to be declared or, in the case of an
Abbreviated Registration Statement, to become effective before the offering of
the Shares may commence, the Company will endeavor to cause the Registration
Statement or such post-effective amendment or Abbreviated Registration Statement
to become effective as soon as possible and will advise you promptly and, if
requested by you, will confirm such advice in writing, when the Registration
Statement or such post-effective amendment or Abbreviated Registration Statement
has become effective.
3
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, of which the Company has or should reasonably be expected to have
knowledge, which makes any statement of a material fact made in the Registration
Statement (as then amended) untrue or which requires the making of any additions
to or changes in the Registration Statement or the Prospectus (as then amended)
in order to state a material fact required by the Act or the regulations
thereunder to be stated therein or necessary in order to make the statements
therein not misleading, or which makes any statement of a material fact made in
the Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented) to comply
with the Act or any other law. If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain the withdrawal of such order
at the earliest possible time.
(c) The Company will furnish to you, without charge, four signed
copies of the registration statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits and
Incorporated Documents thereto and will also furnish to you, without charge,
such number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, and Incorporated
Documents thereto as you may reasonably request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall reasonably object
after being so advised or (ii) so long as, in the reasonable opinion of counsel
for the Underwriters, a prospectus is required to be delivered in connection
with sales by any Underwriter or dealer, file any information, documents or
reports pursuant to the Exchange Act which upon filing becomes an Incorporated
Document, without delivering a copy of such information, documents or reports to
you, prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have reasonably requested or may hereafter reasonably request, copies of
each form of the Prepricing Prospectus. The Company consents to the use, in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the several
Underwriters and by dealers, prior to the date of the Prospectus, of each
Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company
4
consents to the use of the Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Company or in the opinion
of counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend the
Prospectus, or to file under the Exchange Act any document which upon filing
becomes an Incorporated Document, to comply with the Act, the Exchange Act or
any other law, the Company will forthwith prepare and, subject to the provisions
of paragraph (d) above, file with the Commission an appropriate supplement or
amendment thereto or Incorporated Document and will expeditiously furnish copies
thereof to the Underwriters and dealers in such quantities as you shall request.
In the event that the Company and you agree that the Prospectus should be
amended or supplemented, or that a document should be filed under the Exchange
Act which upon filing becomes an Incorporated Document, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission and (ii) from time to time
such other information concerning the Company as you may reasonably request,
provided, however, that the Company shall not be required to furnish any
information deemed confidential by the Company.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof), or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Underwriters for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
5
(k) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus under "Use of Proceeds."
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
(m) Except as provided in this Agreement, the Company will not (and
will not announce or disclose any intention to) sell, offer to sell, contract to
sell or otherwise transfer or dispose of any Common Stock (or any securities
convertible into or exercisable or exchangeable for Common Stock), other than
upon the exercise of options or warrants outstanding on the date hereof and
disclosed in the Prospectus, or grant any options or warrants to purchase Common
Stock, other than to purchase shares of Common Stock pursuant to option plans
existing on the date hereof and disclosed in the Prospectus, for a period of 90
days after the date of the Prospectus, without the prior written consent of
Smith Barney Inc.; provided, however, that the Company may sell shares of its
-------- -------
Common Stock in connection with corporate partnering or collaboration
arrangements where such purchaser agrees not to sell, offer to sell or otherwise
transfer or dispose of such Common Stock for a period of 90 days after the date
of the Prospectus.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, the Company has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Shares.
(p) The Company will timely file with The Nasdaq Stock Market a
notification form for listing of additional shares on The Nasdaq National Market
with respect to the Shares.
(q) Any Incorporated Documents filed subsequent to the date hereof
will, when so filed, be filed in a timely manner and conform with the
requirements of the Exchange Act 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.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Company meets the requirements for use of Form S-3 under the
Act. The registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto or any Abbreviated Registration Statement shall become effective
complied or will comply in all material respects with the provisions of the Act
and did not or will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required
6
to be stated therein or necessary to make the statements therein not misleading,
and the Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times 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, except that this representation and warranty does not apply to
statements in or omissions from the registration statement or the Prospectus
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable, are
free of any preemptive or similar rights (other than such rights as shall
terminate upon completion of the offering contemplated hereby, as set forth in
the Registration Statement and the Prospectus) and have been issued and sold in
compliance with all Federal and state securities laws; the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms in all material respects to the description
thereof in the Registration Statement and the Prospectus.
(d) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure to so register or qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net worth or
results of operations of the Company (a "Material Adverse Effect"). The Company
has no subsidiaries (as defined in the Act).
(e) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company, or to which the
Company or any of its properties is subject, that are required to be described
in the Registration Statement or the Prospectus but are not described as
required. There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
are not described or filed as required by the Act. The Company is not involved
in any strike, job action or labor dispute, and to the Company's knowledge no
such action or dispute is threatened.
(f) The Company is not (i) in violation of its certificate of
incorporation or by-laws, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or of any decree of
any court or governmental agency or body having jurisdiction over the Company,
which violation would have a Material Adverse Effect, or (ii) in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to which the
Company is a party or by which it or any of its properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement by the Company nor the consummation by
the Company of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of, or registration or filing with, any
court, regulatory body, administrative agency or other governmental body, agency
or official (except
7
such as may be required for the registration of the Shares under the Act, which
has been or will be effected in accordance with this Agreement, and compliance
with the securities or Blue Sky laws of various jurisdictions) or conflicts or
will conflict with or constitutes or will constitute a breach of, or a default
under, the certificate of incorporation or bylaws, or other organizational
documents, of the Company or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company is a party or by which the
Company or any of its properties may be bound, or violates or will violate any
statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of its properties and which would have a
Material Adverse Effect, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to the terms of any agreement or instrument to which it is a party or by which
it may be bound or to which any of the property or assets of it is subject.
(h) The accountants, Ernst & Young LLP, who have certified or shall
certify the financial statements filed or to be filed as part of the
Registration Statement or the Prospectus (or any amendment or supplement
thereto), or incorporated by reference therein are independent public
accountants as required by the Act and the Exchange Act.
(i) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), comply in all material respects with the
requirements of the Act and present fairly the financial position, results of
operations and changes in stockholders' equity and cash flows of the Company on
the basis stated in the Registration Statement at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; and the other financial data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(j) The Company has all requisite power and authority to execute,
deliver and perform its obligations under this Agreement; the execution and
delivery of, and the performance by the Company of its obligations under, this
Agreement have been duly and validly authorized by the Company, and this
Agreement has been duly executed and delivered by the Company and constitutes
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
(k) Except as disclosed in or contemplated by the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), the Company has not incurred any liability or obligation, direct or
contingent, or entered into any transaction that is material to the Company, and
there has not been any change in the capital stock, or material increase in the
short-term or long-term debt, of the Company, or any material adverse change, or
any development involving or which may reasonably be expected to involve a
prospective material
8
adverse change, in the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Company.
(l) The Company has good and marketable title to all property (real
and personal) described in the Prospectus as being owned by it, free and clear
of all liens, claims, security interests or other encumbrances except such as
are described in the Registration Statement and the Prospectus or in a document
filed as an exhibit to the Registration Statement, and all the property
described in the Prospectus as being held under lease by the Company is held by
it, to the extent material, under valid, subsisting and enforceable leases.
(m) The Company has not distributed and, prior to the later to occur
of the Closing Date and completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the Act; provided, however,
that nothing contained herein is intended to prohibit the Company from making
required or permitted filings with the Commission pursuant to the Exchange Act.
(n) The Company has such permits, licenses, franchises,
authorizations and clearances ("Permits") of governmental or regulatory
authorities, including, without limitation, the Food and Drug Administration
(the "FDA") of the U.S. Department of Health and Human Services and/or any
committee thereof, as are necessary to own, lease and operate its properties and
to conduct its business in the manner described in the Prospectus, subject to
such qualifications as may be set forth in the Prospectus; subject to such
qualifications as may be set forth in the Prospectus, the Company has fulfilled
and performed all its material obligations with respect to the Permits, and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any Permit, subject in each case to such
qualification as may be set forth in the Prospectus. Except as described in the
Prospectus, none of the Permits contains any restriction that is materially
burdensome to the Company.
(o) Except to the extent disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), the clinical, pre-
clinical and other studies and tests conducted by or on behalf of or sponsored
by the Company or in which the Company or the Company's products under
development have participated that are described in the Prospectus or the
results of which are referred to in the Prospectus were and, if still pending,
are being conducted in accordance with standard medical and scientific research
procedures. The descriptions of the results of such studies and tests are
accurate and complete in all material respects and fairly present the data
derived from such studies and tests, and the Company has no knowledge of any
other studies or tests the results of which are inconsistent with or otherwise
call into question the results described or referred to in the Prospectus.
Except to the extent disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), the Company has operated and currently
is in compliance in all material respects with all applicable FDA rules,
regulations and policies. Except to the extent disclosed in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), the
Company has not received any notices or other correspondence from the FDA or any
other governmental agency requiring the termination, suspension or modification
of any clinical or pre-clinical studies or tests that are described in the
Prospectus or the results of which are referred to in the Prospectus.
(p) The Company has not received nor is it aware of any communication
(written or oral) relating to the termination or modification or threatened
termination or modification of any of the
9
agreements described or referred to in the Prospectus under the captions "Risk
Factors-Dependence on Collaborative Partner; Relationship with the University of
Alabama at Birmingham" and "Business--Collaborative Arrangements," nor is it
aware of any communication (written or oral) relating to any determination or
threatened determination not to renew or extend any agreement described or
referred to under such captions at the end of the current term of any such
agreement.
(q) The property, assets and operations of the Company comply in all
material respects with all applicable federal, state and local laws, rules,
orders, decrees, judgments, injunctions, licenses, permits or regulations
relating to environmental matters (the "Environmental Laws"). To the Company's
knowledge, none of the Company's property, assets or operations is the subject
of any federal, state or local investigation evaluating whether any remedial
action is needed to respond to a release of any substance regulated by or form
the basis of liability under any Environmental Laws (a "Hazardous Material")
into the environment or is in contravention of any federal, state, local or
foreign law, order or regulation. The Company has not received any notice or
claim, nor are there any pending or, to the Company's knowledge, threatened or
reasonably anticipated lawsuits or other proceedings against it with respect to
violations of an Environmental Law or in connection with the release of any
Hazardous Material into the environment. The Company has no knowledge of any
material contingent liability in connection with any release of Hazardous
Material into the environment.
(r) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amount as are customary
in the business in which it is engaged. All policies of insurance insuring the
Company or its business, assets, employees, officers and directors are in full
force and effect, and the Company is in compliance with the terms of such
policies in all material respects. There are no claims by the Company under any
such policy or instrument as to which any insurance company is denying liability
or defending under a reservation of rights clause.
(s) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(t) Neither the Company nor, to the Company's knowledge, any employee
or agent of the Company has made any payment of funds of the Company or received
or retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(u) The Company has filed all federal, state, local and foreign tax
returns and tax forms required to be filed, such returns and forms are complete
and correct in all material respects, and all taxes shown by such terms or
otherwise assessed that are due or payable have been paid, except such taxes as
are being contested in good faith and as to which adequate reserves have been
provided. All payroll withholdings required to be made by the Company with
respect to employees have been made. The charges, accruals and reserves on the
books of the Company in respect of any tax liability for any year not finally
determined are adequate to meet any assessments or reassessments for additional
taxes. There have been no tax deficiencies asserted and, to the best knowledge
of the Company, no tax deficiency might be
10
reasonably asserted or threatened against the Company that could, individually
or in the aggregate, have a Material Adverse Effect.
(v) No holder of any security of the Company has any right (other
than a right that has been waived or any other right set forth in the Prospectus
which is not exercisable for a period of at least 90 days after the date of the
Prospectus) to require registration of shares of Common Stock or any other
security of the Company because of the filing of the registration statement or
the consummation of the transactions contemplated by this Agreement and, except
as disclosed in the Prospectus, no person has the right to require registration
under the Act of any shares of Common Stock or other securities of the Company.
No person has the right, contractual or otherwise, to cause the Company to
permit such person to underwrite the sale of any of the Shares. Except as
described in or contemplated by the Prospectus, there are no outstanding
options, warrants or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable or exercisable for
capital stock of the Company.
(w) The Company owns or has obtained licenses (which such licenses
are enforceable against the Company and, to the Company's best knowledge, the
other parties thereto) for the patents, patent applications, inventions,
technology, trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, trade secrets and rights described in
the Prospectus as being owned or used by or licensed to it or necessary for the
conduct of its business as currently conducted (collectively, the "Intellectual
Property"). Except as set forth in the Prospectus (i) there are no rights of
third parties to any such Intellectual Property; (ii) to the Company's best
knowledge there is no infringement by third parties of any such Intellectual
Property; (iii) there is no pending or, to the Company's best knowledge,
threatened action, suit, proceeding or claim by others challenging the Company's
rights in or to any such Intellectual Property, and the Company is unaware of
any facts which would form a reasonable basis for any such claim; (iv) there is
no pending or, to the Company's best knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property, and the Company is unaware of any facts which would form
a reasonable basis for any such claim; (v) there is no pending or, to the
Company's best knowledge, 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, and the Company
is unaware of any facts which would form a reasonable basis for any such claim;
(vi) to the Company's best knowledge there is no patent or patent application
which contains claims that dominate or may dominate any Intellectual Property
described in the Prospectus as being owned by or licensed to the Company or that
is necessary for the conduct of its business as currently conducted or that
interferes with the issued or pending claims of any such Intellectual Property;
and (vii) there is no prior art of which the Company is aware that may render
any patent held by the Company invalid or any patent application held by the
Company unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office.
(x) The Company is not, and, upon the sale of the Shares to be issued
and sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(y) The Company is in compliance with all provisions of Florida
Statutes Sec.517.075 and the regulations thereunder, relating to issuers doing
business with Cuba.
11
(z) The Incorporated Documents heretofore filed were filed in a
timely manner and, when they were filed (or, if any amendment with respect to
any such document was filed, when such document was filed), conformed with the
requirements of the Exchange Act and 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 not misleading.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses (including reasonable costs of investigation) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in or in the Registration Statement or in any amendment thereto, 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, or arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Prepricing
Prospectus or in the Prospectus or in any amendment or supplement thereto, 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, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with the information relating to
such Underwriter furnished in writing to the Company by or on behalf of any
Underwriter expressly for use in connection therewith; provided, however, that
the indemnification contained in this paragraph (a) with respect to any
Prepricing Prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) on account of any such
loss, claim, damage, liability or expense arising from the sale of Shares by
such Underwriter to any person if (i) a copy of the Prospectus shall not have
been delivered or sent to such person within the time required by the Act and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such Prepricing Prospectus was corrected in the
Prospectus and (ii) the Company has delivered the Prospectus to the several
Underwriters in requisite quantity on a timely basis to permit such delivery or
sending. The foregoing indemnity agreement shall be in addition to any
liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses,
(ii) the Company has failed to assume the defense and employ counsel or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit
12
or proceeding or separate but substantially similar or related actions, suits or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel, as deemed
necessary or appropriate) at any time for all such Underwriters and controlling
persons not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Smith Barney Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
Company shall not be liable for any settlement of any such action, suit or
proceeding effected without its written consent, but if settled with such
written consent, or if there be a final judgment for the plaintiff in any such
action, suit or proceeding, the Company agrees to indemnify and hold harmless
any Underwriter and any such controlling person, to the extent provided in the
preceding paragraph, from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with respect to information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect of
which indemnity may be sought against any Underwriter pursuant to this paragraph
(c), such Underwriter shall have the rights and duties given to the Company by
paragraph (b) above (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, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company, its directors, any such officer, and any such controlling person shall
have the rights and duties given to the Underwriters by paragraph (b) above.
The foregoing indemnity agreement shall be in addition to any liability which
the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, 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, liabilities or 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, 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 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; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company and the
Underwriters from the offering of the Shares shall include the net proceeds
(before deducting expenses) received by the Company, and the underwriting
discounts and commissions received by the Underwriters,
13
from the sale of such Additional Shares, in each case computed on the basis of
the respective amounts set forth in the notes to 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 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 on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by a
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Shares underwritten by it and distributed to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective numbers of Firm Shares set forth opposite their names in
Schedule I hereto (or such numbers of Firm Shares increased as set forth in
Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter or any person controlling any Underwriter, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or an Abbreviated Registration Statement to
14
be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment or Abbreviated
Registration Statement shall have become effective not later than 5:30 P.M., New
York City time, on the date hereof, or at such later date and time as shall be
consented to in writing by you, and all filings, if any, required by Rules 424
and 430A under the Act shall have been timely made.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business, prospects,
properties, net worth, or results of operations of the Company not contemplated
by the Prospectus, which in your opinion would materially, adversely affect the
market for the Shares, or (ii) any event or development relating to or involving
the Company, or any officer or director of the Company, which makes any
statement made in the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your opinion,
materially, adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of Brobeck
Phleger & Harrison LLP, counsel for the Company, dated the Closing Date and
addressed to you, that:
(i) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify does not have a Material
Adverse Effect;
(ii) The authorized capital stock of the Company is as set forth
under the caption "Capitalization" in the Prospectus;
(iii) All the shares of capital stock of the Company outstanding
prior to the issuance of the Shares have been duly authorized and validly
issued, are fully paid and nonassessable and were issued and, based solely
as to factual matters on the representations and warranties of the Company
and the purchasers set forth in the applicable purchase agreement, sold in
compliance with all applicable federal and state securities laws;
(iv) The Shares have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and
free of (A) any preemptive rights arising under the Company's certificate
of incorporation or the Delaware General Corporation Law or (B) to the
knowledge of such counsel, similar rights that entitle or will entitle any
person to acquire any shares of capital stock of the Company upon the
issuance and sale of the Shares by the Company;
(v) The form of certificate for the Shares conforms in all
material respects to the requirements of the Delaware General Corporation
Law;
15
(vi) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the
knowledge of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(vii) The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to the
Underwriters as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company;
(viii) To the knowledge of such counsel, the Company is not in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or other evidence of indebtedness
included as an exhibit to the Registration Statement or any Incorporated
Document, which default would have a Material Adverse Effect;
(ix) Neither the offer, sale or delivery of the Shares, the
execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
certificate of incorporation or bylaws, or other organizational documents,
of the Company or any agreement, indenture, lease or other instrument to
which the Company is a party or by which the Company or any of its
properties is bound that is an exhibit to the Registration Statement, or is
known to such counsel after reasonable inquiry, or to the knowledge of such
counsel will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company, nor will any such
action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel and
applicable to the Company or any of its properties;
(x) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company (except as have been obtained under the Act or such as
may be required under state securities or Blue Sky laws governing the
purchase and distribution of the Shares) for the valid issuance and sale of
the Shares to the Underwriters as contemplated by this Agreement;
(xi) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and
the notes thereto and the schedules and other financial and statistical
data included therein, as to which such counsel need not express any
opinion) comply as to form in all material respects with the requirements
of the Act;
(xii) To the knowledge of such counsel, (A) there are no legal or
governmental proceedings pending or threatened against the Company, or to
which the Company or any of its properties is subject, which are required
to be described in the Registration Statement or Prospectus (or any
amendment or supplement thereto) that are not described as required and (B)
there are no agreements, contracts, indentures, leases or other instruments
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required, as the case may be;
16
(xiii) The Company has all necessary Permits (except where the
failure to so have any such Permits, individually or in the aggregate,
would not have a Material Adverse Effect to own its properties and to
conduct its business as now being conducted as described in the Prospectus;
(xiv) The statements in: (A) the Registration Statement and the
Prospectus under the captions "Risk Factors-Control by Existing Management
and Stockholders; Effect of Certain Anti-Takeover Considerations", "Risk
Factors-Shares Eligible for Future Sale", and (B) the Annual Report of the
Company on Form 10-K/A for the fiscal year ended December 31, 1995 under
the captions "Business-Properties" and "Executive Compensation-Employment
Agreement", insofar as they are descriptions of specific contracts,
agreements or other legal documents to which the Company is a party, or
refer to statements of law or legal conclusions applicable to the Company,
are accurate in all material respects and present fairly the information
purported to be shown;
(xv) Except as described in the Prospectus, such counsel does not
know of any holder of any securities of the Company or any other person who
has the right, contractual or otherwise, to cause the Company to sell or
otherwise issue to them, or to permit them to underwrite the sale of, any
of the Shares or the right to have any Common Stock or other securities of
the Company included in the Registration Statement or the right, as a
result of the filing of the Registration Statement, to require the Company
to register under the Act any shares of Common Stock or other securities of
the Company, and any registration rights in connection with the offering
contemplated hereby have been waived;
(xvi) The Company is not an "investment company" or a person
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; and
(xvii) All documents incorporated by reference in the Prospectus
(excluding any financial statements and footnotes thereto and other
financial or statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion), at the time
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act.
In addition, such counsel shall state that although such counsel does
not assume any responsibility for the accuracy, completeness or fairness of the
statements in the Registration Statement, such counsel has participated in the
preparation of the Registration Statement and the Prospectus, including review
and discussion of the contents thereof with representatives of the Underwriters
and their counsel, officers and representatives of the Company, and
representatives of the independent certified public accountants of the Company,
and nothing has come to the attention of such counsel that has caused it to
believe that the Registration Statement, at the time the Registration Statement
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its date and as
of the Closing Date or the Option Closing Date, as the case may be, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or that any
amendment or supplement to the Prospectus, as of its date, and as of the Closing
Date or the Option Closing Date, as the case may be, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
17
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus).
In rendering their opinion as aforesaid, counsel may rely as to
matters of fact upon certificates of officers of the Company and public
officials and upon an opinion or opinions, each dated the Closing Date, of other
counsel retained by them or the Company as to laws of any jurisdiction other
than the United States or the State of New York or the corporation law of the
State of Delaware, provided that (1) each such local counsel is acceptable to
the Underwriters, (2) such reliance is expressly authorized by each opinion so
relied upon and a copy of each such opinion is delivered to the Underwriters and
is, in form and substance, satisfactory to them and counsel for the Underwriters
and (3) counsel shall state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of
Pollock, Vande Sande & Priddy, R.L.L.P., patent counsel for the Company, dated
the Closing Date and addressed to you, that:
(i) to the knowledge of such counsel after reasonable inquiry,
the Company owns or has obtained licenses for all applications relating to
the Intellectual Property described in the Prospectus as being owned or
used by or licensed to the Company;
(ii) to the best knowledge of such counsel after reasonable
inquiry (A) except as described in the Prospectus, there are no rights of
third parties to any Intellectual Property described in the Prospectus as
being owned by or licensed to the Company or that is necessary for the
conduct of its business; (B) there is no infringement by third parties of
any such Intellectual Property; (C) there is no pending or threatened
action, suit, proceeding or claim by others challenging the rights of the
Company in or to such Intellectual Property, and such counsel is unaware of
any facts which would form a reasonable basis for any such claim; (D) there
is no pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of such Intellectual Property, and such
counsel is unaware of any facts which would form a reasonable basis for any
such claim; (E) 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 right of
others, and such counsel is unaware of any facts which would form a
reasonable basis for any such claim; (F) there is no patent or patent
application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned or used by
or licensed to the Company or that is necessary for the conduct of its
business or that interferes with the issued or pending claims of any such
Intellectual Property; and (G) there is no prior art that may render any
patent held by the Company invalid or any patent application held by the
Company unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office; and
(iii) the statements in: (A) the Prospectus under the captions
"Risk Factors--Uncertainty of Protection of Patents and Proprietary
Rights", "Business--Patents and Proprietary Information" and other
references therein to patent and licensing matters, and (B) the Annual
Report of the Company on Form 10-K for the fiscal year ended December 31,
1995 under the caption "Business-Patents and Proprietary Information," and
other references therein to patent and licensing matters, insofar as such
statements constitute a summary of legal matters, documents or proceedings
referred to therein, are accurate and fairly present the information
purported to be shown.
18
(e) You shall have received on the Closing Date an opinion of Fenwick
& West, regulatory counsel for the Company, dated the Closing Date and addressed
to you, to the effect that the statements in: (A) the Prospectus under the
captions "Risk Factors--Uncertainty Associated with Preclinical and Clinical
Testing," "Risk Factors--Government Regulation; No Assurance of Product
Approval," and "Business--Government Regulation" and (B) the Annual Report of
the Company on Form 10-K/A for the fiscal year ended December 31, 1995 under the
caption "Business-Government Regulation", insofar as such statements constitute
descriptions or summaries of the Federal Food, Drug, and Cosmetic Act ("FDC
Act") or the regulations of the Food and Drug Administration ("FDA") or of
relevant FDA requirements or procedures or the Form 483's, are accurate and
complete in all material respects and fairly present the information set forth
therein shown in light of the circumstances under which they were made.
(f) You shall have received on the Closing Date an opinion of
Bradley, Arant, Rose & White, counsel for the Company, dated the Closing Date
and addressed to you, to the effect that the statements in: (A) the Registration
Statement and the Prospectus under the caption "Business-Legal Proceedings" and
(B) the Annual Report of the Company on Form 10K/A for the fiscal year ended
December 31, 1995 under the captions "Legal Proceedings" insofar as they
describe legal proceedings, or refer to statements of laws or legal conclusions
applicable to the Company, are accurate in all material respects and present
fairly the information therein.
(g) You shall have received on the Closing Date an opinion of Dewey
Ballantine, counsel for the Underwriters, dated the Closing Date and addressed
to you, with respect to the matters referred to in clauses (iv) (other than
subclause (B) thereof), (vi), (vii), (xi) and the penultimate paragraph of
Section 8(c) hereof and such other related matters as you may request.
(h) You shall have received letters addressed to you and dated the
date hereof and the Closing Date from Ernst & Young LLP, independent certified
public accountants, substantially in the forms heretofore approved by you.
(i)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company, contemplated by the
Commission at or prior to the Closing Date and any request of the Commission for
additional information (to be included in the registration statement or the
Prospectus or any Prepricing Prospectus or otherwise) shall have been complied
with; (ii) there shall not have been any change in the capital stock of the
Company nor any material increase in the short-term debt (other than in the
ordinary course of business) or long-term debt of the Company from that set
forth or contemplated in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in or contemplated by the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse change
in the condition (financial or otherwise), business, prospects, properties, net
worth or results of operations of the Company; (iv) the Company shall not have
any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company other than those
reflected in or contemplated by the Registration Statement or the Prospectus (or
any amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on and as of the date hereof and on and as of the
Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer
19
of the Company (or such other officers as are acceptable to you), as to the
matters set forth in this Section 8(h) and in Section 8(i) hereof.
(j) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(k) The Company shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and counsel for the Underwriters.
Any certificate or document signed by any officer of the Company and
delivered to you, or to counsel for the Underwriters, shall be deemed a
representation or warranty by the Company to each Underwriter as to the
statements made therein.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option Closing
Date of the conditions set forth in this Section 8, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (i) and paragraph (k) shall be
dated the Option Closing Date in question and the opinions called for by
paragraphs (c), (d), (e), (f) and (g) shall be revised to reflect the sale of
Additional Shares.
9. EXPENSES. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration statement, each
Prepricing Prospectus, the Prospectus, the Incorporated Documents and all
amendments or supplements to any of them as may be reasonably requested for use
in connection with the offering and sale of the Shares; (iii) the preparation,
printing, authentication, issuance and delivery of certificates for the Shares,
including any stamp taxes in connection with the offering of the Shares; (iv)
the printing (or reproduction) and delivery of this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Shares; (v) the additional listing of the Shares on The Nasdaq National Market;
(vi) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states as provided in Section
5(g) hereof (including the reasonable fees, expenses and disbursements of
counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees and
the reasonable fees and expenses of counsel for the Underwriters in connection
with any filings required to be made with the National Association of Securities
Dealers, Inc. in connection with the offering; (viii) the transportation and
other expenses incurred by or on behalf of representatives of the Company in
connection with presentations to prospective purchasers of the Shares; (ix) the
fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company; and (x) the
performance by the Company of its other obligations under this Agreement.
20
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto or an Abbreviated
Registration Statement to be declared or, in the case of any Abbreviated
Registration Statement, to become effective before the offering of the Shares
may commence, when notification of the effectiveness of the registration
statement or such post-effective amendment has been released by the Commission
or such Abbreviated Registration Statement has become effective pursuant to Rule
462(b) under the Act. Until such time as this Agreement shall have become
effective, it may be terminated by the Company, by notifying you, or by you, by
notifying the Company.
If any Underwriter shall fail or refuse to purchase Firm Shares which
it is obligated to purchase on the Closing Date and arrangements satisfactory to
the non-defaulting Underwriters and the Company for the purchase of such Firm
Shares by the non-defaulting Underwriters or by another party or parties
satisfactory to the non-defaulting Underwriters and the Company are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of the non-defaulting Underwriters or the Company. In any
such case which does not result in termination of this Agreement, either the
non-defaulting Underwriters or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven (7) days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve the defaulting Underwriter from liability in
respect of such default under this Agreement. The term "Underwriter" as used in
this Agreement includes, for all purposes of this Agreement, any party not
identified in this Agreement who purchases Firm Shares which a defaulting
Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or The
Nasdaq National Market shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared by either federal or state authorities, or (iii) there shall have
occurred any outbreak or escalation of hostilities or other international or
domestic calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable or inadvisable to commence
or continue the offering of the Shares at the offering price to the public set
forth on the cover page of the Prospectus or to enforce contracts for the resale
of the Shares by the Underwriters. Notice of such termination may be given by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the last paragraph on the cover page, the stabilization and passive market
making legends on the inside front cover page and the statements in the first,
third and seventh paragraphs under the caption "Underwriting" in any Prepricing
Prospectus and in the Prospectus constitute the only information furnished by or
on behalf of the Underwriters as such information is referred to in Sections
6(b) and 7 hereof.
21
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10 and 11
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 2190 Parkway Lake Drive, Birmingham, Alabama 35244, Attention:
Charles F. Bugg, Ph.D., President and Chief Executive Officer, with a copy to
Brobeck, Phleger & Harrison LLP, 1301 Avenue of the Americas, New York, New York
10019, Attention: Richard R. Plumridge, Esq., or (ii) if to you, care of Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager,
Investment Banking Division, with a copy to Dewey Ballantine, 1301 Avenue of the
Americas, New York, New York 10019, Attention: Frederick W. Kanner, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors, its officers who sign the
Registration Statement and the controlling persons referred to in Section 7
hereof and, to the extent provided herein, their respective successors and
assigns and no other person shall acquire or have any right under or by virtue
of this Agreement. Neither the term "successor" nor the term "successors and
assigns" as used in this Agreement shall include a purchaser from any
Underwriter of any of the Shares in his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
22
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
BIOCRYST PHARMACEUTICALS, INC.
By:
------------------------------------------
Charles E. Bugg
President and Chief Executive Officer
Confirmed as of the date first
above-mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
SMITH BARNEY INC.
NEEDHAM & COMPANY, INC.
By: SMITH BARNEY INC.
By:
---------------------------
Managing Director
23
SCHEDULE I
BIOCRYST PHARMACEUTICALS, INC.
Number of
Underwriter Firm Shares
----------- -----------
Smith Barney Inc. . . . . . . . . . . . . .
Needham & Co., Inc. . . . . . . . . . . . .
__________
Total . . .
. . . . . . . . . . . . . . . . . . 2,000,000
==========
EXHIBIT 5
[BROBECK, PHLEGER & HARRISON LLP LOGO]
September 24, 1996
Biocryst Pharmaceuticals, Inc.
2190 Parkway Lake Drive
Birmingham, Alabama 35244
Ladies and Gentlemen:
We have assisted in the preparation and filing by Biocryst
Pharmaceuticals, Inc. (the "Company") of a Registration Statement on Form S-3,
as amended through August 21, 1966 (the "Registration Statement"), with the
Securities and Exchange Commission, relating to the sale of up to 2,300,000
shares (the "Shares") of Common Stock, $0.01 par value (the "Common Stock"), of
the Company. A form of underwriting agreement (the "Underwriting Agreement") is
filed as an exhibit to the Registration Statement.
We have examined such records and documents and have made such
examination of laws as we considered necessary to form a basis for the opinion
set forth herein. In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing, we are of the opinion that
the Shares have been duly authorized and, when sold and paid for in accordance
with the terms of the Underwriting Agreement, well be validly issued, fully paid
and nonassessable.
We hereby consent to the use of our name in the Registration Statement
under the caption "Legal Matters" in the related Prospectus and consent to the
filing of this opinion as an exhibit thereto.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
BROBECK, PHLEGER & HARRISON LLP
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Experts" and
"Selected Financial Data" and to the use of our report dated January 24, 1996,
in Amendment No. 2 to the Registration Statement (Form S-3 No. 333-07183) and
related Prospectus of BioCryst Pharmaceuticals, Inc. for the registration of
2,300,000 shares of its common stock.
/s/ERNST & YOUNG LLP
Birmingham, Alabama
September 20, 1996
EXHIBIT 23.2
CONSENT OF EXPERTS
We hereby consent to the reference to our firm under the caption "Experts"
in the Prospectus which is part of the Registration Statement.
/s/ Burton A. Amernick
POLLOCK, VANDE SANDE & PRIDDY,
R.L.L.P.
Washington, D.C.
September 24, 1996
