<PAGE>
As filed with the Securities and Exchange Commission on May 18, 2000
Registration No. 333-33198
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------
MGI PHARMA, INC.
(Exact name of registrant as specified in its charter)
----------------
Minnesota 2834 41-1364647
(State or other (Primary Standard (I.R.S. Employer
jurisdiction Industrial Identification No.)
of incorporation or Classification Code)
organization)
6300 West Old Shakopee Road, Suite 110
Bloomington, Minnesota 55438
(952) 346-4700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Charles N. Blitzer
Chief Executive Officer
MGI PHARMA, INC.
6300 West Old Shakopee Road, Suite 110
Bloomington, Minnesota 55438
(952) 346-4700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Timothy S. Hearn, Esq. David R. King, Esq.
Dorsey & Whitney LLP Morgan, Lewis & Bockius LLP
220 South Sixth Street 1701 Market Street
Minneapolis, Minnesota 55402 Philadelphia, Pennsylvania 19103
(612) 340-2600 (215) 963-5000
Facsimile: (612) 340-8827 Facsimile: (215) 963-5299
---------------
Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earliest effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following is an itemized statement of the estimated amounts of all expenses
payable by the Registrant in connection with the registration of the common
stock offered hereby, other than placement commissions:
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 22,296
NASD Filing Fee.................................................. 8,946
Nasdaq Filing Fee................................................ 1,750
Accountants' fees and expenses................................... 65,000
Legal fees and expenses.......................................... 190,000
Printing expenses................................................ 120,000
Transfer agent and registrar fees................................ 1,500
Miscellaneous.................................................... 43,508
--------
Total.......................................................... $453,000
</TABLE>
Item 15. Indemnification of Officers and Directors
Minnesota Statutes Section 302A.521 provides that a corporation shall indemnify
any person made or threatened to be made a party to a proceeding by reason of
the former or present official capacity of such
person against judgments, penalties, fines (including, without limitation
excise taxes assessed against such person with respect to any employee benefit
plan), settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding, if,
with respect to the acts or omissions of such person complained of in the
proceeding, such person (1) has not been indemnified therefor by another
organization or employee benefit plan; (2) acted in good faith; (3) received no
improper personal benefit and Section 302A.255 (with respect to director
conflicts of interest), if applicable, has been satisfied; (4) in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was
unlawful; and (5) reasonably believed that the conduct was in the best
interests of the corporation in the case of acts or omissions in such person's
official capacity for the corporation or reasonably believed that the conduct
was not opposed to the best interests of the corporation in the case of acts or
omissions in such person's official capacity for other affiliated
organizations. The Bylaws of the Company provide that the Company shall
indemnify its officers and directors under such circumstances and to the extent
permitted by Section 302A.521 as now enacted or hereafter amended.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1 Form of Placement Agency Agreement*
5.1 Opinion of Dorsey & Whitney LLP**
23.1 Consent of KPMG LLP**
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)**
24.1 Power of Attorney (included on signature page)**
</TABLE>
- --------
* Filed herewith.
** Previously filed.
II-1
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that (1) for purposes of
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the time it was
declared effective; and (2) for the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment No. 3 to the
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on May 18, 2000.
MGI PHARMA, INC.
By: /s/ Charles N. Blitzer
__________________________________
Charles N. Blitzer,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act, this Amendment No. 3 to the
Registration Statement on Form S-3 has been signed by the following persons in
the indicated capacities on May 18, 2000.
Signature Title
/s/ Charles N. Blitzer
President, Chief Executive Officer
By: and Director (principal executive
---------------------------------- officer)
Charles N. Blitzer
/s/ William C. Brown
Chief Financial Officer and
By: Secretary (principal financial and
---------------------------------- accounting officer)
William C. Brown
By: /s/ * Director
----------------------------------
Andrew J. Ferrara
By: /s/ * Director
----------------------------------
Joseph S. Frelinghuysen
By: /s/ * Director
----------------------------------
Michael E. Hanson
By: /s/ * Director
----------------------------------
Hugh E. Miller
By: /s/ * Director
----------------------------------
Timothy G. Rothwell
By: /s/ * Director
----------------------------------
Lee J. Schroeder
By: /s/ * Director
----------------------------------
Arthur L. Weaver, M.D.
/s/ William C. Brown
*By:
---------------------------------
Attorney-in-Fact
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1 Form of Placement Agency Agreement*
5.1 Opinion of Dorsey & Whitney LLP**
23.1 Consent of KPMG LLP**
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)**
24.1 Power of Attorney (included on signature page)**
</TABLE>
- --------
* Filed herewith.
** Previously filed.
<PAGE>
EXHIBIT 1.1
-----------
1,000,000 Shares
MGI PHARMA, INC.
Common Stock, par value $0.01 per share
FORM OF PLACEMENT AGENCY AGREEMENT
----------------------------------
May __, 2000
U.S. BANCORP PIPER JAFFRAY INC.
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS CORP.
c/o U.S. Bancorp Piper Jaffray Inc.
800 Nicollet Mall, Suite 800
Minneapolis, Minnesota 55402
Ladies and Gentlemen:
MGI PHARMA, INC., a Minnesota corporation (the "Company") proposes to
issue, offer and sell (the "Offering"), an aggregate of 1,000,000 shares (the
"Shares") of its common stock (the "Offering Amount"), par value $.01 per share
(the "Common Stock"). The Company hereby confirms its agreement to retain U.S.
Bancorp Piper Jaffray Inc. ("Piper Jaffray"), Banc of America Securities LLC and
CIBC World Markets Corp. (together with Piper Jaffray, the "Placement Agents")
on an exclusive "best efforts" basis to introduce the Company to, and to obtain
indications of interest from, prospective purchasers ("Purchasers") of the
Shares, at a price per share (the "Offering Price") equal to the price set forth
on the cover page of the Prospectus (as defined below) on the date that the
Registration Statement is declared effective (the "Effective Date").
The Company hereby confirms its agreement with respect to the sale of the
Shares to the Placement Agents:
1. Registration Statement and Prospectus. A registration statement on
-------------------------------------
Form S-3 (File No. 333-33198) with respect to the Shares, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations ("Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission; one or more amendments to such registration statement have also been
so prepared and have been, or will be, so filed. Copies of such registration
statement(s) and amendments and each related preliminary prospectus have been
delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, including
all documents incorporated by reference therein, and, in the event of any
amendment thereto after the effective date and prior to the Closing Date (as
hereinafter defined),
1
<PAGE>
such registration statement as so amended (but only from and after the
effectiveness of such amendment), including a registration statement (if any)
filed pursuant to Rule 462(b) of the Rules and Regulations increasing the size
of the offering registered under the Act and information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to
Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the
"Registration Statement." The prospectus included in the Registration Statement
at the time it is or was declared effective by the Commission is hereinafter
called the "Prospectus," except that if any prospectus (including any term sheet
meeting the requirements of Rule 434 of the Rules and Regulations provided by
the Company for use with a prospectus subject to completion within the meaning
of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and
Regulations) filed by the Company with the Commission pursuant to Rule 424(b)
(and Rule 434, if applicable) of the Rules and Regulations or any other such
prospectus provided to the Placement Agents by the Company for use in connection
with the offering of the Shares (whether or not required to be filed by the
Company with the Commission pursuant to Rule 424(b) of the Rules and
Regulations) differs from the prospectus on file at the time the Registration
Statement is or was declared effective by the Commission, the term "Prospectus"
shall refer to such differing prospectus (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) from and after the time such
prospectus is filed with the Commission or transmitted to the Commission for
filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and
after the time it is first provided to the Placement Agents by the Company for
such use. The term "Preliminary Prospectus" as used herein means any preliminary
prospectus included in the Registration Statement prior to the time it becomes
or became effective under the Act and any prospectus subject to completion as
described in Rule 430A or 434 of the Rules and Regulations.
2. Representations and Warranties of the Company.
----------------------------------------------
(a) The Company represents and warrants to, and agrees with, the
several Placement Agents as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary Prospectus, at
the time of filing thereof, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; except that the foregoing shall not apply to
statements in or omissions from any Preliminary Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by you, or by
any Placement Agents through you, specifically for use in the preparation
thereof.
(ii) As of the time the Registration Statement (or any post-
effective amendment thereto) was declared effective by the Commission, upon the
filing or first delivery to the Placement Agents of the Prospectus (or any
supplement to the Prospectus (including any term sheet meeting the requirements
of Rule 434 of the Rules and Regulations)) and at the Closing Date (as
hereinafter defined), (A) the Registration Statement and Prospectus (in each
case, as so amended and/or supplemented) conformed in all material respects to
the requirements of the Act and the Rules and Regulations, (B) the Registration
Statement (as so amended) did not or will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (C) the Prospectus
(as so supplemented) did not or will not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they are or were made, not misleading; except that the foregoing shall not apply
to statements in or omissions from any such document in reliance upon, and in
2
<PAGE>
conformity with, written information furnished to the Company by you, or by any
Placement Agents through you, specifically for use in the preparation thereof.
If the Registration Statement has been declared effective by the Commission, no
stop order suspending the effectiveness of the Registration Statement has been
issued, and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission.
(iii) The financial statements of the Company, together with the
notes thereto, set forth in or incorporated by reference in the Registration
Statement and Prospectus comply in all material respects with the requirements
of the Act and fairly present the financial condition of the Company as of the
dates indicated and the results of operations and changes in cash flows for the
periods therein specified in conformity with generally accepted accounting
principles consistently applied throughout the periods involved (except as
otherwise stated therein); and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. No other financial statements or schedules are required to be included
in the Registration Statement or Prospectus. KPMG LLP, which has expressed its
opinion with respect to the financial statements and schedules filed as a part
of the Registration Statement and included in the Registration Statement and
Prospectus, are, and during the periods covering their report included in the
Registration Statement and Prospectus were, independent public accountants as
required by the Act and the Rules and Regulations.
(iv) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation. The Company has full corporate power and authority to own its
properties and conduct its business as currently being carried on and as
described in the Registration Statement and Prospectus, and is duly qualified to
do business as a foreign corporation in good standing in each jurisdiction in
which it owns or leases real property or in which the conduct of its business
makes such qualification necessary and in which the failure to so qualify would
have a material adverse effect upon its business, condition (financial or
otherwise) or properties of the Company.
(v) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect
to its capital stock; and there has not been any change in the capital stock
(other than a change in the number of outstanding shares of Common Stock due to
the issuance of shares upon the exercise of outstanding options or warrants), or
any material change in the short-term or long-term debt, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock, of the Company, or any material adverse change, or any
development involving a prospective material adverse change, in the general
affairs, condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the Company.
(vi) Except as set forth in the Prospectus, there is not pending
or, to the knowledge of the Company, threatened or contemplated, any action,
suit or proceeding to which the Company is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which might result in
any material adverse change in the condition (financial or otherwise), business,
prospects, net worth or results of operations of the Company.
3
<PAGE>
(vii) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statement by the Act or
by the Rules and Regulations that have not been so filed.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding obligation
of the Company, enforceable in accordance with its terms, except as rights to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any agreement or instrument to which
the Company is a party or by which it is bound or to which any of its property
is subject, the Company's charter or by-laws, or any order, rule, regulation or
decree of any court or governmental agency or body having jurisdiction over the
Company or any of its properties; no consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required for the
execution, delivery and performance of this Agreement or for the consummation of
the transactions contemplated hereby, including the issuance or sale of the
Shares by the Company, except such as may be required under the Act or state
securities or blue sky laws or by the National Association of Securities
Dealers, Inc. ("NASD"); and the Company has full power and authority to enter
into this Agreement and to authorize, issue and sell the Shares as contemplated
by this Agreement.
(ix) All of the issued and outstanding shares of capital stock
of the Company, including the outstanding shares of Common Stock, are duly
authorized and validly issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and the holders thereof are not subject to personal
liability by reason of being such holders; the Shares which may be sold
hereunder by the Company have been duly authorized and, when issued, delivered
and paid for in accordance with the terms hereof, will have been validly issued
and will be fully paid and nonassessable, and the holders thereof will not be
subject to personal liability by reason of being such holders; and the capital
stock of the Company, including the Common Stock, conforms to the description
thereof in the Registration Statement and Prospectus. Except as otherwise stated
in the Registration Statement and Prospectus, there are no preemptive rights or
other rights to subscribe for or to purchase, or any restriction upon the voting
or transfer of, any shares of Common Stock pursuant to the Company's charter,
by-laws or any agreement or other instrument to which the Company is a party or
by which the Company is bound. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any shares of Common
Stock or other securities of the Company. Except as described in the
Registration Statement and the Prospectus, there are no options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company. The Company has an
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus under the heading "Capitalization."
4
<PAGE>
(x) The Company holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders of any governmental or
self-regulatory body required for the conduct of its business (including those
required by the U.S. Food and Drug Administration, the U.S. Nuclear Regulatory
Commission and any federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous substances) and all such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and the
Company is in compliance in all material respects with all applicable federal,
state, local and foreign laws, regulations, orders and decrees; the Company has
not received any notice of proceedings relating to the revocation or
modification of any such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders, which singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a material adverse effect on the Company.
(xi) The Company has good and marketable title to all property
described in the Registration Statement and Prospectus as being owned by it, in
each case free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement and the
Prospectus; the property held under lease by the Company is held by it under
valid, subsisting and enforceable leases with only such exceptions with respect
to any particular lease as do not interfere in any material respect with the
conduct of the business of the Company.
(xii) The Company owns or possesses or has licenses to use all
patents, patent applications, trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights, licenses, inventions,
trade secrets and (such patents referred to herein as the "Patents" and all of
such intellectual property referred to collectively as the "Intellectual
Property") rights necessary for the conduct of the business of the Company as
currently carried on and as described in the Registration Statement and
Prospectus; except as stated in the Registration Statement and Prospectus, to
the Company's knowledge, no name which the Company uses and no other aspect of
the business of the Company as conducted on the date hereof involves or give
rise to any infringement of, or license or similar fees for, any patents, patent
applications, trademarks, service marks, tradenames, trademark registrations,
service mark registrations, copyrights, licenses, inventions, trade secrets or
other similar rights of others material to the business or prospects of the
Company and the Company has not received any notice alleging any such
infringement or fee; except as stated in the Registration Statement and
Prospectus, no third party, including any academic or governmental organization,
possesses rights to the Company's Intellectual Property which, if exercised,
could enable such party to develop products competitive to those of the Company
or could have a material adverse effect on the ability of the Company to conduct
its business in the manner described in the Prospectus. The Company has duly and
properly filed or caused to be filed with the U.S. Patent and Trademark Office
(the "PTO") and applicable foreign and international patent authorities all
patent applications described in the Registration Statement and the Prospectus
(the "Patent Applications"); in connection with the filing of the Patent
Applications, the Company conducted reasonable investigations of the published
literature and patent references relating to the inventions claimed in such
applications; to the best of the Company's knowledge, it has complied with the
PTO's duty of candor and disclosure for the Patent Applications and has made no
misrepresentation in the Patent Applications; the Company is not aware of any
facts material to a determination of patentability regarding the Patent
Applications not called to the attention of the PTO which could preclude the
grant of a patent for the Patent Applications; and the Company has
5
<PAGE>
no knowledge of any facts which would preclude it from having clear title to the
Patent Applications.
(xiii) The Company is not in violation of its charter or by-laws
or in breach of or otherwise in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or other
instrument to which it is subject or may be bound, or to which any of the
material property or assets of the Company is subject.
(xiv) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed and are not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, other than any which the Company is
contesting in good faith or which would not result in a material adverse effect
on the financial condition of the Company.
(xv) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering and
sale of the Shares other than any Preliminary Prospectus or the Prospectus or
other materials permitted by the Act to be distributed by the Company.
(xvi) All necessary filings shall have been made and all filing
fees shall have been paid to effect the listing of the Shares on the Nasdaq
National Market.
(xvii) The Company owns no capital stock or other equity or
ownership or proprietary interest in any corporation, partnership, association,
trust or other entity.
(xviii) 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.
(xix) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or agent's
commission in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
(xx) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or affiliate
located in Cuba
(b) Any certificate signed by any officer of the Company and delivered
to you or to counsel for the Placement Agents shall be deemed a representation
and warranty by the Company to each of the Placement Agents as to the matters
covered thereby.
3. Purchase, Sale and Delivery of Shares.
-------------------------------------
(a) The Placement Agents are hereby appointed exclusive Placement
Agents of the Company (subject to the Placement Agents' right to have Selected
Agents, as defined in
6
<PAGE>
Section 3(c) hereof, participate in the Offering) during the Offering Period
described in Section 3(d) herein for the purposes of assisting the Company in
obtaining indications of interest from qualified Purchasers. The Placement
Agents shall not be deemed agents of the Company for any other purpose.
(b) Subject to the performance by the Company of all of its
obligations to be performed under this Agreement and to the completeness and
accuracy of all representations and warranties of the Company contained in this
Agreement, the Placement Agents hereby accept such agency and agree to use their
best efforts to assist the Company in obtaining indications of interest from
Purchasers pursuant to the Offering. It is understood that the Placement Agents
have no obligation to sell the Shares, but only to use their best efforts to
obtain indications of interest therefor. Furthermore, it is understood that
neither the Placement Agents nor any of their affiliates are under any
obligation to purchase any Shares in the Offering. The Placement Agents'
agencies hereunder are not terminable by the Company prior to the Termination
Date (as defined herein) except as set forth in Section 8(a).
(c) The Placement Agents may engage other persons, selected by them
in their sole discretion, who are members of the NASD or who are located outside
the United States and that have executed a Selected Agents' Agreement (each such
person being hereinafter referred to as a "Selected Agent") and the Placement
Agents may allow such persons such part of the compensation and payment of
expenses payable to the Placement Agents hereunder as the Placement Agents shall
determine; provided, however, that any such compensation shall be received
pursuant to Section 5(l) hereof.
(d) The "Offering Period" shall be deemed to have commenced on May 5,
2000 (the date on which the Prospectus was first made available to the Placement
Agents by the Company for use in connection with the Offering). If not
terminated earlier pursuant to this Agreement, the Offering Period shall
terminate at 11:59 p.m. Eastern Standard Time on June 30, 2000, or such later
time and date as may be consented to by the Placement Agents (the "Termination
Date"). If indications of interest for the entire Offering Amount are not
received prior to the end of the Offering Period, the Offering will be
terminated.
(e) On or prior to the Effective Date, the Company, the Placement
Agents and Norwest Bank Minnesota, N.A., as escrow agent (the "Escrow Agent"),
shall enter into an escrow agreement, reasonably acceptable to the Company, the
Placement Agents and the Escrow Agent (the "Escrow Agreement"), pursuant to
which an escrow account will be established, at the Company's expense, for the
benefit of the Purchasers (the "Escrow Account"). Such Escrow Agreement shall
conform in all material respects to the requirements of Rule 15c2-4 under the
Securities Exchange Act of 1934, as amended. The Company will not request
effectiveness of the Registration Statement until indications of interest for
the entire Offering Amount have been received. When the condition set forth in
the immediately preceding sentence has been met, the Company shall request that
the Commission (as defined below) declare the Registration Statement effective.
The Offering Price shall be determined (the "Pricing") on the Effective Date.
Immediately after the Pricing, the Placement Agents will distribute
confirmations and final prospectuses to all Purchasers, and shall inform each
Purchaser of the following: (i) the closing date (the "Closing Date"), which
will be scheduled for three business days after the Pricing or such other time
as may be agreed upon by the Company and the Placement Agents, but in no event
on the date prior to the date on which the Escrow Agent has received an amount
equal to the proceeds of the sale of all of the Shares offered hereby (the
"Requisite Funds"); (ii) the Offering Price; and (iii) the total amount of funds
such Purchaser shall deposit in the Escrow Account. The Escrow Agreement shall
provide that the Escrow Agent shall notify the Company
7
<PAGE>
and the Placement Agents in writing when the Purchasers have deposited the
Requisite Funds into the Escrow Account. At 9:00 a.m., New York City time, on
the Closing Date, the Escrow Agent will release the Requisite Funds from the
Escrow Account for collection by the Company and the Placement Agents as
provided in the Escrow Agreement and the Company shall deliver the Shares to the
Purchasers, which delivery may be made through the facilities of The Depository
Trust Company. The Closing shall take place at the offices of Dorsey & Whitney
LLP, 220 South Sixth Street, Minneapolis, Minnesota, 55402. All actions taken at
the Closing shall be deemed to have occurred simultaneously. If the Closing Date
shall not have occurred on or prior to the Termination Date, or such later date
as may be consented to by the Placement Agents, all funds together with any
interest earned thereon or provided in the Escrow Agreement shall be returned to
the Purchasers who deposited such funds in the Escrow Account and the Offering
shall terminate. Furthermore, the Company shall reimburse the Placements Agents
for all expenses as provided for in Section 4(h).
(f) Unless delivery of the Shares is made through the facilities of
The Depository Trust Company, certificates evidencing the Shares shall be in
definitive form and shall be registered in such names and in such denominations
as the Placement Agents shall request by written notice to the Company and shall
be available at the Closing for immediate delivery thereafter to the Purchasers.
For the purpose of expediting the checking and packaging of certificates for the
Shares, the Company agrees to make such certificates available for inspection at
least 24 hours prior to the Closing Date.
4. Covenants. The Company covenants and agrees with the several
---------
Placement Agents as follows:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendments thereto to become effective pursuant to the terms
hereof. If required, the Company will file the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time period
required by Rule 424(b) under the Act. During any time when a prospectus
relating to the Shares is required to be delivered under the Act, the Company
(i) will comply with all requirements imposed upon it by the Act and the Rules
and Regulations to the extent necessary to permit the continuance of sales of or
dealings in the Shares in accordance with the provisions hereof and of the
Prospectus, as then amended or supplemented, and (ii) will not file with the
Commission any prospectus, any amendment or supplement to any prospectus or any
amendment to the Registration Statement of which the Placement Agents shall not
previously have been advised and furnished with a copy a reasonable period of
time prior to the proposed filing and as to which filling the Placement Agents
shall not have given its consent.
(b) As soon as the Company is advised or obtains knowledge thereof,
the Company will advise the Placement Agents (i) when the Registration
Statement, as amended, has become effective; (ii) if the provisions of Rule 430A
promulgated under the Act will be relied upon, when the Prospectus has been
filed in accordance with said Rule 430A and when any post-effective amendment to
the Registration Statement becomes effective; (iii) of any request made by the
Commission for amending the Registration Statement, for supplementing any
Preliminary Prospectus or the Prospectus or for additional information; or (iv)
of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto or the institution or threat
of any investigation or proceeding for that purpose, and will use its best
efforts to prevent the issuance of any such order and, if issued, to obtain the
lifting thereof as soon
8
<PAGE>
as possible.
(c) Within the time during which a prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) relating to
the Shares is required to be delivered under the Act, the Company will comply as
far as it is able with all requirements imposed upon it by the Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Shares as contemplated by the provisions hereof and the Prospectus. If
during such period any event occurs as a result of which the Prospectus would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the Act, the
Company will promptly notify you and will amend the Registration Statement or
supplement the Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) The Company will use its best efforts to qualify the Shares for
sale under the securities laws of such jurisdictions as you reasonably designate
and to continue such qualifications in effect so long as required for the
distribution of the Shares, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any state.
(e) The Company will furnish to the Placement Agents copies of the
Registration Statement (three of which will be signed and will include all
exhibits), each Preliminary Prospectus, the Prospectus, and all amendments and
supplements (including any term sheet within the meaning of Rule 434 of the
Rules and Regulations) to such documents, in each case as soon as available and
in such quantities as you may from time to time reasonably request. The Company
consents to the use of the Prospectus (and any amendment or supplement thereto)
by the Placement Agents in connection with the solicitation of indications of
interest in purchasing the Shares and for such period of time thereafter as the
Prospectus is required by law to be delivered in connection therewith.
(f) During a period of five years commencing with the date hereof, the
Company will furnish to Piper Jaffray, and to each other Placement Agent who may
so request in writing, copies of all periodic and special reports furnished to
the stockholders of the Company and all information, documents and reports filed
with the Commission, the National Association of Securities Dealers, Inc., or
any securities exchange.
(g) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period beginning after the effective date of the
Registration Statement that shall satisfy the provisions of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay or cause to
be paid (A) all expenses and fees (including, without limitation, fees and
expenses of the Company's accountants and counsel) in connection with the
preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Shares, each Preliminary Prospectus, the
Prospectus, and any
9
<PAGE>
amendment thereof or supplement thereto, and the printing, delivery, and
shipping of this Agreement and other offering documents, including "blue sky"
memoranda, (B) all expenses and fees of each of the Placement Agent's counsel
incurred in connection with the Offering, (C) the fees and expenses of any
transfer agent or registrar, (D) the filing fees incident to any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Shares, (E) listing fees, if any, of the Nasdaq National Market, (F) the
fees of the Escrow Agent and (G) all other costs and expenses incident to the
performance of its obligations hereunder that are not otherwise specifically
provided for herein. If the sale of the Shares provided for herein is not
consummated by reason of action by the Company pursuant to Section 8 of this
Agreement, or by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed, or because any
other condition of the Placement Agents' obligations hereunder required to be
fulfilled by the Company is not fulfilled, the Company will also reimburse the
several Placement Agents for all other out-of-pocket disbursements (including
fees and disbursements of counsel) incurred by the Placement Agents in
connection with their investigation, preparing to market and marketing the
Shares or in contemplation of performing their obligations hereunder and in
connection with the prior proposed underwriting of 2,500,000 shares of the
Company's common stock. The Company shall not in any event be liable to any of
the Placement Agents for loss of anticipated profits from the transactions
covered by this Agreement.
(i) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder for the purposes set forth in the Prospectus
under the heading "Use of Proceeds" and will file such reports with the
Commission with respect to the sale of the Shares and the application of the
proceeds therefrom as may be required in accordance with Rule 463 of the Rules
and Regulations.
(j) The Company will not, without your prior written consent, offer
for sale, sell, contract to sell, grant any option for the sale of or otherwise
issue or dispose of any Common Stock or any securities convertible into or
exchangeable for, or any options or rights to purchase or acquire, Common Stock
for a period of 90 days after the commencement of the public offering of the
Shares by the Placement Agents, except for sales of shares in connection with
the exercise of options granted prior to the date hereof, and shares issued in
connection with a merger of the Company or a strategic acquisition, partnership
or other collaboration of or with another company.
(k) The Company either has caused to be delivered to you or will cause
to be delivered to you prior to the effective date of the Registration Statement
a letter from each of the persons listed on the attached Schedule I prior to the
offering stating that such person agrees that he or she will not, without your
prior written consent, offer for sale, sell, contract to sell or otherwise
dispose of any shares of Common Stock or rights to purchase Common Stock for a
period of 90 days after commencement of the public offering of the Shares by the
Placement Agents.
(l) The Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares, and has not effected any sales of Common Stock which are required to
be disclosed in response to Item 701 of Regulation S-K under the Act which have
not been so disclosed in the Registration Statement, other than as described in
the Company's Exchange Act filings.
10
<PAGE>
(m) Except as contemplated by this Agreement, the Company will not
incur any liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(n) The Company will inform the Florida Department of Banking and
Finance at any time prior to the consummation of the distribution of the Shares
by the Placement Agents if it commences engaging in business with the government
of Cuba or with any person or affiliate located in Cuba. Such information will
be provided within 90 days after the commencement thereof or after a change
occurs with respect to previously reported information.
5. Conditions of Placement Agents' Obligations. The obligations of the
-------------------------------------------
Placement Agents hereunder are subject to the accuracy, as of the date hereof
and at each of the Closing Date (as if made at such Closing Date), of and
compliance with all representations, warranties and agreements of the Company
contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) If the Company has elected to rely on Rule 430A under the Act, the
Registration Statement shall have been declared effective, and the Prospectus
(containing the information omitted pursuant to Rule 430A) shall have been filed
with the Commission not later than the Commission's close of business on the
second business day following the date hereof or such later time and date to
which the Placement Agents shall have consented; if the Company does not elect
to rely on Rule 430A, the Registration Statement shall have been declared
effective not later than the Termination Date or such later time and date to
which the Placement Agents shall have consented. No stop order suspending the
effectiveness of the Registration Statement or any amendment thereto shall have
been issued, and no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Placement Agents, shall be
contemplated by the Commission. The Company shall have complied with any request
of the Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) None of the Placement Agents shall have advised the Company that
the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the Company shall not have incurred any material liabilities
or obligations, direct or contingent, or entered into any material transactions,
or declared or paid any dividends or made any distribution of any kind with
respect to its capital stock; and there shall not have been any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt of the
Company, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Company, or any material adverse
change or any development involving a prospective material adverse change
(whether or not arising in the ordinary course of business), in the general
affairs, condition (financial or otherwise), business, key personnel, property,
prospects, net worth or results of operations of the
11
<PAGE>
Company that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Shares on the terms and in the manner contemplated in the
Prospectus.
(d) On the Closing Date, there shall have been furnished to the
Placement Agents, the opinion of Dorsey & Whitney LLP, counsel for the Company,
dated such Closing Date and addressed to the Placement Agents, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Minnesota. The Company has corporate power to own its properties and conduct
its business as described in the Registration Statement and Prospectus, and is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which the
failure to so qualify would have a material adverse effect upon the business,
condition (financial or otherwise) or properties of the Company.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the caption
"Description of Capital Stock." All of the issued and outstanding shares of the
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, and the holders thereof are not subject to
personal liability by reason of being such holders. The Shares to be issued and
sold by the Company hereunder have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being such
holders. Except as otherwise stated in the Registration Statement and
Prospectus, there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company's charter, by-laws or any agreement or
other instrument known to such counsel to which the Company is a party or by
which the Company is bound. To the best of such counsel's knowledge, neither the
filing of the Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company.
(iii) The Registration Statement has been declared effective by
the Commission under the Act and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or, to the
knowledge of such counsel, threatened by the Commission.
(iv) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts and other
documents are accurate and fairly present the information required to be shown;
and such counsel does not know of any statutes or legal or governmental
proceedings required to be described in the Prospectus that are not described as
required, or of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or included as exhibits to
the Registration Statement that are not described or included as required.
(v) The Company has corporate power to enter into this
Agreement, and this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid, legal and binding obligation of the
Company enforceable in accordance with its terms (except as rights to indemnity
hereunder may be limited by federal or state securities
12
<PAGE>
laws and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity); the execution, delivery and
performance of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule or regulation,
any agreement or instrument known to such counsel to which the Company is a
party or by which it is bound or to which any of its property is subject, the
Company's charter or by-laws, or any order or decree known to such counsel of
any court or governmental agency or body having jurisdiction over the Company or
any of its respective properties; and no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body is required
for the execution, delivery and performance of this Agreement or for the
consummation of the transactions contemplated hereby, including the issuance or
sale of the Shares by the Company, except such as may be required under the Act
or state securities laws.
(vi) To the best of such counsel's knowledge, the Company
holds, and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates and orders of any governmental or self-regulatory body required for
the conduct of its business and all such franchises, grants, authorizations,
licenses, permits, easements, consents, certifications and orders are valid and
in full force and effect.
(vii) To the best of such counsel's knowledge, the Company is
not in violation of its charter or by-laws. To the best of such counsel's
knowledge, the Company is not in breach of or otherwise in default in the
performance of any material obligation, agreement or condition contained in any
bond, debenture, note, indenture, loan agreement or any other material contract,
lease or other instrument to which it is subject or by which it may be bound, or
to which any of the material property or assets of the Company is subject.
(viii) The Registration Statement and the Prospectus, and any
amendment thereof or supplement thereto (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations), comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; and on the basis of conferences with officers of the Company,
examination of documents referred to in the Registration Statement and
Prospectus and such other procedures as such counsel deemed appropriate, nothing
has come to the attention of such counsel that causes such counsel to believe
that the Registration Statement or any amendment thereof, at the time the
Registration Statement became effective and as of such Closing Date (including
any Registration Statement filed under Rule 462(b) of the Rules and
Regulations), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (as of its date and as
of such Closing Date), as amended or supplemented, includes any untrue statement
of material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; it being understood that such counsel need express no opinion as
to the financial statements or other financial data included in any of the
documents mentioned in this clause.
(ix) Such other matters as you may reasonably request.
In rendering such opinion such counsel may state that such counsel (i)
expresses no opinion as to the laws of any jurisdiction other than the laws of
the State of Minnesota, the
13
<PAGE>
Minnesota Business Corporation Act and the federal laws of the United States and
(ii) expresses no opinions concerning the Federal Food, Drug and Cosmetic Act or
related rules and regulations.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Minnesota and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that although such counsel is not admitted to
practice law in such jurisdiction, it has no reason to believe that they and you
are not entitled to rely on such opinion and (ii) as to matters of fact, to the
extent that such counsel deems reasonable upon certificates of public officials
and officers of the Company provided that the extent of such reliance is
specified in such opinion.
(e) On the Closing Date, there shall have been furnished to the
Placement Agents, the opinion of Schwegman, Lundberg, Woessner & Kluth, P.A.,
special patent counsel for the Company, dated such Closing Date and addressed to
the Placement Agents, to the effect that:
(i) Such counsel is familiar with the acylfulvene technology
and intellectual property and, in particular, the irofulven products under
development by the Company and has read the portions of the Registration
Statement entitled "If we are unable to obtain intellectual property protection,
or protect our proprietary technology, we may be unable to compete effectively";
"If the validity of our patents or other proprietary rights are successfully
challenged, our business will suffer"; and "Patents and Proprietary Rights";
(ii) To such counsel's knowledge, the portions of the
Registration Statement and the Prospectus referenced in paragraph (i): (A) do
not contain any untrue statement of a material fact with respect to patents,
trade secrets, trademarks, service marks or other proprietary information or
materials owned or used by the Company, or the manner of its use thereof, or any
allegation on the part of any person that the Company is infringing any patent
rights, trade secrets, trademarks, service marks or other proprietary
information or materials of any such person; and (B) do not omit to state any
material fact relating to patents, trade secrets, trademarks, service marks or
other proprietary information or materials owned or used by the Company, or the
manner of its use thereof, necessary to make the statements therein not
misleading;
(iii) To such counsel's knowledge, there are no actions, suits,
claims, or adverse legal or governmental proceedings pending relating to patent
rights, trade secrets, trademarks, service marks or other proprietary
information or materials of the Company, and to such counsel's knowledge no such
proceedings are threatened or contemplated by governmental authorities or
others;
(iv) To such counsel's knowledge, the Company is not infringing
or otherwise violating any valid and enforceable patents, trade secrets,
trademarks, service marks or other proprietary information or materials, of
others, and to the best of such knowledge there are no infringements by others
of any of the Company's patents, trade secrets, trademarks, service marks or
other proprietary information or materials which in our judgement could affect
materially the use thereof by the Company;
(v) To such counsel's knowledge, patent applications, trademark
registrations and trademark registration applications listed on the attached
schedules have been properly prepared and filed; the Company has complied with
any applicable duties of disclosure at the PTO or elsewhere; the Company is
pursuing and/or maintaining the patents, patent
14
<PAGE>
applications, trademark registrations and trademark registration applications
listed on the attached schedule; and all of the patents, patent applications,
trademark registrations and trademark registration applications listed on the
attached schedule are either, owned by the Company, assigned to the Company or
exclusively licensed by the Company;
(vi) With respect to any patents, patent applications,
trademark rights or other proprietary information or materials licensed by the
Company from third parties (individually, a "Licensor"), to our knowledge, there
is no reason why the Company would not have or could not obtain a valid license
from any such Licensor; and, specifically with respect to patents and patent
applications, counsel is unaware of any facts that would cause such counsel to
believe that any such Licensor has failed to comply with applicable duties of
disclosure at the PTO or elsewhere;
(vii) To such counsel's knowledge, there is no reason why the
patents and trademark registrations listed on the attached schedules or licensed
by the Company from a Licensor are invalid or unenforceable as issued; and
(viii) To such counsel's knowledge, there are no claims of third
parties to any ownership interest or lien with respect to any of the patents,
patent applications, trademark rights or other proprietary information or
materials listed on the attached schedule or licensed by the Company from a
Licensor.
(f) On the Closing Date, there shall have been furnished to the
Placement Agents, the opinion of Hyman, Phelps & McNamara, P.C., special
regulatory counsel for the Company, dated such Closing Date and addressed to the
Placement Agents, to the effect that:
(i) The statements of federal law or regulation in the
Registration Statement and Prospectus under the captions "Risk Factors - If we
do not receive regulatory approvals of irofulven is delayed or any of our other
product candidates, or if regulatory approval is delayed for any reason, we will
be unable to commercialize and sell our products as we expect," "Risk Factors -
We will not be able to manufacture or sell our products if our third-party
manufacturers cease operations or fail to comply with applicable manufacturing
regulations," and "Business - Government Regulation: are, in all material
respects, correct and accurate statements or summaries of applicable federal law
and regulation, subject to the qualifications set forth therein;
(ii) Nothing has come to such counsel's attention which has
caused such counsel to believe that the above-mentioned sections of the
Registration Statement and Prospectus and any amendment or supplement thereto
made available to and reviewed by such counsel, at the time the Registration
Statement became effective and at all times subsequent thereto and on the
Closing Date, contained any untrue statement of a material fact required to be
stated therein or necessary to make the statements there, in light of the
circumstances under which they were made, not misleading; and
(iii) To the best of such counsel's knowledge the Company's
business, as currently conducted and as described in the Registration Statement
and Prospectus, does not violate the Federal Food, Drug and Cosmetic Act, or any
Food and Drug Administration ("FDA") rule or regulation, and to the best of such
counsel's knowledge, there are no FDA judicial or administrative proceedings
pending or threatened against the Company.
15
<PAGE>
(g) On the Closing Date the Placement Agents shall have received a
letter of KPMG LLP, dated such Closing Date and addressed to the Placement
Agents, confirming that they are independent public accountants within the
meaning of the Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2-01 of Regulation S-X
of the Commission, and stating, as of the date of such letter (or, with respect
to matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a date
not more than five days prior to the date of such letter), the conclusions and
findings of said firm with respect to the financial information and other
matters covered by its letter delivered to you concurrently with the execution
of this Agreement, and the effect of the letter so to be delivered on such
Closing Date shall be to confirm the conclusions and findings set forth in such
prior letter.
(h) On the Closing Date, there shall have been furnished to the
Placement Agents, a certificate, dated such Closing Date and addressed to the
Placement Agents, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made at and as
of such Closing Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness
of the Registration Statement or any amendment thereof or the qualification of
the Shares for offering or sale has been issued, and no proceeding for that
purpose has been instituted or, to the best of their knowledge, is contemplated
by the Commission or any state or regulatory body; and
(iii) The Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations), and (A) such documents
contain all statements and information required to be included therein, the
Registration Statement, or any amendment thereof, does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Prospectus, as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, (B) since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, (C) subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions,
not in the ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock, and except
as disclosed in the Prospectus, there has not been any change in the capital
stock (other than a change in the number of outstanding shares of Common Stock
due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short-term or long-term debt, or any
issuance of options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any material adverse change or
any development involving a prospective material adverse change (whether or not
arising in the ordinary course of business), in the general affairs, condition
(financial or otherwise), business, key personnel, property, prospects, net
worth or results of operations of the Company, and (D) except as stated in the
Registration Statement and the Prospectus, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company is a
16
<PAGE>
party before or by any court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in the condition
(financial or otherwise), business, prospects or results of operations of the
Company.
(i) The Company shall have furnished to the Placement Agents and
counsel for the Placement Agents such additional documents, certificates and
evidence as you or they may have reasonably requested.
(j) All necessary filings shall have been made as required and all
filing fees shall have been paid to effect the listing of the Shares on the
Nasdaq National Market.
(k) The Placement Agents shall receive a copy of a duly executed
Escrow Agreement with Norwest Bank Minnesota, N.A.
(l) Placement Fees and Expenses. (i) At the Closing, pursuant to the
terms of the Escrow Agreement, the Escrow Agent shall release the funds held in
the Escrow Account for collection by the Company and the Placement Agents. The
Company agrees that the Placement Agents shall receive a commission (the "Cash
Commission") equal to six percent (6%) of the aggregate purchase price of all of
the Shares sold in the Offering. The Company further agrees to reimburse the
Placement Agents for all out-of-pocket expenses incurred by the Placement Agents
in connection with such Offering to the extent required by Section 4(h) hereof
(the "Expenses").
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 Placement Agents. The Company will
furnish you with such conformed copies of such opinions, certificates, letters
and other documents as you shall reasonably request.
6. Indemnification and Contribution.
--------------------------------
(a) The Company, agrees to indemnify and hold harmless each of the
Placement Agents against any losses, claims, damages or liabilities, joint or
several, to which such Placement Agents may become subject, under the Act or
otherwise (including in settlement of any litigation if such settlement is
effected with the written consent of the Company) insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed
to be a part of the Registration Statement at the time of effectiveness pursuant
to Rules 430A and 434(d) of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations), or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Placement
Agent for any legal or other expenses reasonably incurred by it in connection
with investigating or defending against such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by you,
or by any Placement Agents through you, specifically for use in the preparation
thereof.
17
<PAGE>
In addition to their other obligations under this Section 6(a), the
Company, agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 6(a), they will reimburse each of the Placement Agents on a monthly
basis for all reasonable legal fees or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's obligation to reimburse the
Placement Agents for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To
the extent that any such interim reimbursement payment is so held to have been
improper, the Placement Agents that received such payment shall promptly return
it to the party or parties that made such payment, together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from time
to time by the Wall Street Journal (the "Prime Rate"). Any such interim
reimbursement payments which are not made to the Placement Agents within 30 days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Placement Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Placement Agents), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto (including any term sheet within the meaning of Rule 434 of
the Rules and Regulations), or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by you, or by such Placement Agents through you,
specifically for use in the preparation thereof, and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending against any such loss, claim, damage, liability
or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
that if, in the sole judgment of Piper Jaffray, it is advisable for the
Placement Agents to be represented as a group by separate counsel,
18
<PAGE>
Piper Jaffray shall have the right to employ a single counsel to represent Piper
Jaffray and the other Placement Agents who may be subject to liability arising
from any claim in respect of which indemnity may be sought by the Placement
Agents under subsection (a) of this Section 6, in which event the reasonable
fees and expenses of such separate counsel shall be borne by the indemnifying
party or parties and reimbursed to the Placement Agents as incurred (in
accordance with the provisions of the second paragraph in subsection (a) above).
An indemnifying party shall not be obligated under any settlement agreement
relating to any action under this Section 6 to which it has not agreed in
writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Placement Agents on the other 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 Placement Agents on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Placement Agents on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total fees and commissions
received by the Placement Agents, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Placement Agents and the
parties' relevant intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
Placement Agents agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were to be determined by pro rata allocation
(even if the Placement Agents were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this subsection (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Placement Agent shall be required to
contribute an amount in excess of the portion of the Cash Commission received by
such Placement Agent. 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
Placement Agents' obligations in this subsection (d) to contribute are several
in proportion to the amount of the Cash Commission received by each Placement
Agent and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Placement Agents within the meaning of the Act; and the obligations of the
Placement Agents under this Section 6 shall be in addition to any liability that
the respective Placement Agents may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company (including any person
who, with his consent, is named in the Registration Statement as about to become
a director of the Company),
19
<PAGE>
to each officer of the Company who has signed the Registration Statement and to
each person, if any, who controls the Company within the meaning of the Act.
7. Representations and Agreements to Completion. All representations,
--------------------------------------------
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, and the agreements of the several Placement Agents and the
Company contained in Section 6 hereof, shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any Placement
Agents or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive completion of the offering
contemplated herein.
8. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall become effective upon execution by the
Company and each of the Placement Agents. By giving notice as hereinafter
specified after the time this Agreement becomes effective but prior to the time
the Registration Statement is declared effective by the Commission, Piper
Jaffray, on behalf of the several Placement Agents, or the Company may terminate
this Agreement without liability of any party to any other party, except that
the provisions of Section 4(h) and Section 6 hereof shall at all times be
effective.
(b) Piper Jaffray, on behalf of the several Placement Agents, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the Closing Date if (i) the Company shall
have failed, refused or been unable, at or prior to such Closing Date, to
perform any agreement on its part to be performed hereunder, (ii) any other
condition of the Placement Agents' obligations hereunder is not fulfilled, (iii)
trading on the New York Stock Exchange or the American Stock Exchange shall have
been wholly suspended, (iv) minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange or the American Stock Exchange, by such
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, (v) a banking moratorium shall have been declared by
Federal, New York or Minnesota authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Shares. Any such termination shall
be without liability of any party to any other party except that the provisions
of Section 4(h) and Section 6 hereof shall at all times be effective.
(c) If you elect to terminate this Agreement as provided in this
Section, the Company shall be notified promptly by you by telephone or telegram,
confirmed by letter. If the Company elects to terminate this Agreement, you
shall be notified by the Company by telephone or telegram, confirmed by letter.
9. Default by the Company. If the Company shall fail at the Closing Date
----------------------
to sell and deliver the number of Shares which it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company
from liability, if any, in respect of such default.
20
<PAGE>
10. Information Furnished by Underwriters. The Company acknowledges that
-------------------------------------
the statements set forth in the last sentence of the last paragraph of the cover
page and in the last sentence of the first paragraph under the heading "Plan of
Distribution" in any Preliminary Prospectus and in the Prospectus constitute the
only written information furnished by or on behalf of the Placement Agents for
use in the Registration Statement or any Preliminary Prospectus or the
Prospectus.
11. Notices. Except as otherwise provided herein, all communications
-------
hereunder shall be in writing or by telegraph and, if to the Placement Agents,
shall be mailed, telegraphed or delivered on behalf of the several Placement
Agents to U.S. Bancorp Piper Jaffray, 800 Nicollet Mall, Suite 800, Minneapolis,
Minnesota 55402, except that notices given to an Placement Agents pursuant to
Section 6 hereof shall be sent to such Placement Agents at the address stated in
the Placement Agents' Questionnaire furnished by such Placement Agents in
connection with this offering; if to the Company, shall be mailed, telegraphed
or delivered to it at 6300 West Old Shakopee Road, Suite 110, Bloomington, MN
55438, Attention: Charles Blitzer; or to such other address as the person to be
notified may have requested in writing. All notices given by telegram shall be
promptly confirmed by letter. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
----------------------------------------
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Shares from any of the
several Placement Agents.
13. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Minnesota.
21
<PAGE>
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the several Placement Agents in accordance with its terms.
Very truly yours,
MGI PHARMA, INC.
By _______________________________________
Charles N. Blitzer
President and Chief Executive Officer
Confirmed as of the date first
above mentioned, on behalf of
U.S. BANCORP PIPER JAFFRAY
By ________________________________________
BANC OF AMERICA SECURITIES LLC
By ________________________________________
CIBC WORLD MARKETS CORP.
By ________________________________________
22
