Exhibit 1.1
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900,000 Shares
MGI PHARMA, INC.
Common Stock, par value $0.01 per share
PURCHASE AGREEMENT
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November 26, 2001
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
U.S. Bancorp Center
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Ladies and Gentlemen:
MGI PHARMA, INC., a Minnesota corporation (the "Company"), proposes to sell
to U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. (the "Purchaser") an aggregate of 900,000
authorized but unissued shares (the "Firm Shares") of common stock, $0.01 par
value per share (the "Common Stock"), of the Company.
The Company hereby confirms its agreement with respect to the sale of the
Firm Shares to the Purchaser.
1. Registration Statement and Prospectus. A registration statement (No. 333-
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50542), including a prospectus, relating to 5,000,000 shares of the Common Stock
has been filed with the Securities and Exchange Commission (the "Commission")
and has become effective. There are currently 1,000,000 shares remaining for
sale on the registration statement. The registration statement, as amended or
supplemented at the time of this Agreement and including all material
incorporated by reference therein as of the date of this Agreement, is
hereinafter referred to as the "Registration Statement", and the prospectus
included in the Registration Statement, as supplemented as contemplated by
Section 5(a) to reflect the terms of the offering of the Firm Shares, as first
filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") or Rule 430A ("Rule 430A") under the Securities Act of 1933, as amended
(the "Act"), including all material incorporated by reference therein as of the
date of such filing, is hereinafter referred to as the "Prospectus". No
document has been or will be prepared or distributed in reliance on Rule 434
under the Act.
2. Representations and Warranties of the Company.
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(a) The Company represents and warrants to, and agrees with, the Purchaser
as follows:
(i) The Company meets the requirements for use of Form S-3 under
the Act, the Registration Statement has been declared effective by the
Commission and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose
has been instituted or overtly threatened by the Commission. On the
effective date of the Registration Statement, the Registration Statement
conformed in all material respects to the requirements of the Act and the
rules and regulations of the Commission (the "Rules and Regulations"),
except to the extent of the information permitted to be omitted pursuant to
Rule 430A, and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and,
on the date of this Agreement, the Registration Statement conforms and, on
the date of the filing of the Prospectus, the Registration Statement and
the Prospectus will conform in all material respects to the requirements of
the Act and the Rules and Regulations, and neither of such documents
includes or will include any untrue statement of a material fact or omits
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, except that the
foregoing does not apply to statements in or omissions from any of such
documents based upon written information furnished to the Company by the
Purchaser, if any, specifically for use therein.
(ii) The financial statements of the Company, together with the
notes thereto, set forth 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 except such financial
statements or schedules that are disclosed therein. KPMG LLP, which has
expressed its opinion with respect to the audited consolidated financial
statements of the Company filed as a part of the Registration Statement and
included in the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the Rules and Regulations.
(iii) To the Company's knowledge, the statement of assets
acquired and liabilities assumed as of September 30, 2000, and the related
statement of direct revenues and direct expenses for the nine-month period
then ended of The Hexalen(R) Business of MedImmune, Inc. (the "Hexalen
Business"), together with the notes thereto, set forth in the Registration
Statement and Prospectus, comply in all material respects with the
requirements of the Act and fairly present the statement of assets acquired
and liabilities assumed as of September 30, 2000, and the related statement
of direct revenues and direct expenses for the nine-month period then ended
of the Hexalen Business, in conformity with generally accepted accounting
principles. The unaudited pro forma financial statements of the Company
that give effect to the acquisition of the Hexalen Business and are
included in the Registration Statement and Prospectus comply in all
material respects with the requirements of the Act and the Rules and
Regulations.
(iv) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Minnesota, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification and in which the
failure to so qualify would have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company ("Material Adverse Effect").
(v) The Firm Shares and all of the outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Firm Shares have
been delivered and paid for in accordance with this Agreement on the
Closing Date, such Firm Shares will be validly issued, fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus. There are no preemptive rights or other rights to subscribe for
or to purchase, or any restriction upon the voting or transfer
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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.
(vi) There are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim
against the Company or the Purchaser for a brokerage commission, finder's
fee or other like payment in connection with this offering.
(vii) Except with regard to (A) the Flexible Underwritten
Equity facility arrangement with Ramius Securities, LLC (the "FUEL"), (B)
the Company's License, Research and Development Agreement with MethylGene,
Inc. dated August 2, 2000, (C) the Company's License Agreement with Helsinn
Healthcare SA dated April 6, 2001 and (D) the stock purchase agreements
effective as of October 31, 2001 between the Company and certain of its
shareholders, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or among any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(viii) The outstanding shares of Common Stock are listed on The
Nasdaq National Stock Market ("Nasdaq National Market") and all filings
have been made and all filing fees have been paid which are necessary to
effect the listing of the Firm Shares on the Nasdaq National Market.
(ix) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required for
the consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Firm Shares by the Company,
except such as may be required under the Act and under state securities
laws.
(x) Except as disclosed in the Prospectus, the Company has
good and marketable title to all real properties and all other properties
and assets owned by it, in each case free from liens, encumbrances and
defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by it; and except as
disclosed in the Prospectus, the Company holds any leased real or personal
property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by it.
(xi) The Company is not in violation of its articles of
incorporation, or by-laws, or other organizational documents, 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,
if continued, have a Material Adverse Effect.
(xii) The Company is not in breach, default or violation 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 any of the Company's properties may be bound
(a "Company Contract") which breach, default or violation would, if
continued, have a Material Adverse Effect. To the Company's knowledge, all
of the parties to Company Contracts have
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complied in all material respects with the provisions thereof, and no party
is in material default thereunder.
(xiii) To the Company's knowledge, no party to a Company
Contract (a "Third Party") is a party to any other agreement, lease or
other instrument (a "Third Party Contract") under which the failure by the
Third Party to perform under such Third Party Contract would adversely
affect the Company's Rights under the express terms of any of the Company
Contracts.
(xiv) The Company has provided to the Purchaser all material
information relating to the signing of the definitive agreements with
Helsinn Healthcare S.A., including all exhibits and schedules thereto (the
"Helsinn Agreements"), granting the Company exclusive license and
distribution rights to palonosetron in the United States and Canada. In
addition, all disclosures required to be made by the Company in the
Registration Statement and Prospectus regarding the Helsinn Agreements have
been made and such disclosures do not contain an 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.
Further, the Helsinn Agreements were duly authorized, executed and
delivered by the Company, and to the Company's knowledge, Helsinn, and
constitute valid, legal and binding obligations of both the Company and
Helsinn, enforceable in accordance with their terms.
(xv) The Company possesses adequate certificates, authorities
or permits issued by appropriate governmental agencies or bodies necessary
to conduct the business now operated by it (except for any such
certificate, authority or permit with respect to which the failure to
obtain would not individually or in the aggregate have a Material Adverse
Effect) and has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company, would individually or in the
aggregate have a Material Adverse Effect.
(xvi) No labor dispute with the employees of the Company exists
or, to the knowledge of the Company, is imminent that might have a Material
Adverse Effect.
(xvii) Except as disclosed in the Prospectus, the Company is not
in violation of any statute, any rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"), owns or
operates any real property contaminated with any substance that is subject
to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation
which might lead to such a claim.
(xviii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company or
any of its properties that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the
context of the sale of the Firm Shares; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge, contemplated.
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(xix) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus there
has been no material adverse change, nor any development or event involving
a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company, and,
except as disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
(xx) The Company is not and, after giving effect to the
offering and sale of the Firm Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company"
as defined in the Investment Company Act of 1940.
(xxi) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is incorporated by reference
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 to consultants, upon the exercise of outstanding options or
warrants, or pursuant to the Company's License Agreement with Helsinn
Healthcare SA dated April 6, 2001) or any material change in the short-term
or long-term debt, or any issuance by the Company of options, warrants,
convertible securities or other rights to purchase the capital stock of the
Company (other than option grants to employees of the Company in the
ordinary course of business), 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, net worth or results of operations of the Company.
(xxii) 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.
(xxiii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms, except
as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity. The
execution, delivery and performance of this Agreement by the Company and
the consummation by the Company of the transactions herein contemplated
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, agreement or instrument to
which the Company is a party or by which it is bound or to which any of its
property is subject, the Company's charter or by-laws, or any order, rule,
regulation or decree of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; no consent,
approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company or for the consummation by the
Company of the transactions contemplated hereby, including the issuance or
sale of the Firm Shares by the Company, except such as may be required
under the Act or state securities or blue sky laws; and the Company has
full power and authority to enter into this Agreement and to authorize,
issue and sell the Firm Shares as contemplated by this Agreement.
(xxiv) The Company owns or possesses or has licenses to use all
patents, patent applications, trademarks, service marks, tradenames,
trademark registrations, service ▇▇▇▇
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registrations, copyrights, licenses, inventions, trade secrets and other
similar rights (such patents referred to herein as the "Patents" and all of
such intellectual property referred to collectively as the "Intellectual
Property") necessary for the conduct of the business of the Company as
currently carried on and as 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 gives rise to any infringement of, or license or similar fees
for, any patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, inventions, trade secrets or other similar rights of
others material to the business of the Company and the Company has not
received any notice alleging any such infringement or fee. The Company or
the licensor 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 or the
licensor has 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 would
preclude the grant of a patent for the Patent Applications; and the Company
has no knowledge of any facts which would preclude it from having an
enforceable license or clear title to the Patent Applications.
(xxv) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed and is not in
default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company is contesting in good faith or which could result in a material
adverse effect on the financial condition of the Company.
(xxvi) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the offering
and sale of the Firm Shares other than the Prospectus or other materials
permitted by the Act to be distributed by the Company.
(xxvii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions
are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxviii) The Company is not 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 Purchaser shall be deemed a representation and
warranty by the Company to the Purchaser as to the matters covered thereby.
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3. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell the
Firm Shares to the Purchaser, and the Purchaser agrees to purchase from the
Company the Firm Shares. The purchase price for each Firm Share shall be $13.25
per share.
The Firm Shares will be delivered by the Company to you against
payment of the purchase price therefor by same day funds payable to the order of
the Company, as appropriate, at the offices of U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, U.S.
Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or such
other location as may be mutually acceptable, at 9:00 a.m. Central time on the
third (or if the Firm Shares are priced, as contemplated by Rule 15c6-1(c) under
the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as you and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date
of delivery being herein referred to as the "Closing Date." If you so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Purchaser.
Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company, will be made available for checking
and packaging not later than 10:30 a.m., Central time, on the business day next
preceding the Closing Date at the offices of U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, U.S.
Bancorp Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or such
other location as may be mutually acceptable.
4. Covenants.
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(a) The Company Covenants and agrees with the Purchaser as follows:
(i) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable and if
consented to by the Purchaser, subparagraph (5)) not later than the second
business day following the execution and delivery of this Agreement.
(ii) The Company will advise the Purchaser promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Purchaser a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Purchaser promptly of the filing of any such amendment or
supplement and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or of any part thereof
and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(iii) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Common Stock.
(iv) If, at any time when a prospectus relating to the Firm
Shares is required to be delivered under the Act in connection with sales
by the Purchaser, any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company promptly will notify the
Purchaser of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission
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or an amendment which will effect such compliance. Neither the Purchaser's
consent to, nor its delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(v) As soon as practicable, but not later than 16 months after
the date of this Agreement, the Company will make generally available to
its securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
Registration Statement relating to the Firm Shares, (ii) the effective date
of the most recent post-effective amendment to the Registration Statement
to become effective prior to the date of this Agreement and (iii) the date
of the Company's most recent Annual Report on Form 10-K filed with the
Commission prior to the date of this Agreement, which will satisfy the
provisions of Section 11(a) of the Act.
(vi) The Company will furnish to the Purchaser copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Purchaser reasonably requests.
The Company will pay the expenses of printing and distributing all such
documents.
(vii) The Company will use its best efforts to qualify the Firm
Shares for sale under the laws of such jurisdictions as the Purchaser
reasonably designates and to continue such qualifications in effect so long
as required for the distribution of the Firm 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.
(viii) During the period of five years hereafter, the Company
will furnish to the Purchaser, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year; and
the Company will furnish to the Purchaser (i) as soon as available, a copy
of each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as the
Purchaser may reasonably request.
(ix) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay or
cause to be paid, upon receipt of a reasonably detailed accounting, (A) all
expenses (including transfer taxes allocated to the respective transferees)
incurred in connection with the delivery to the Purchaser of the Firm
Shares, (B) 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 Firm Shares, the Prospectus, and any
amendment thereof or supplement thereto, and the printing, delivery, and
shipping of this Agreement and other underwriting documents, including any
blue sky memoranda, (C) all filing fees and fees and disbursements of the
Purchaser's counsel incurred in connection with the qualification of the
Firm Shares for offering and sale by the Purchaser or by dealers under the
securities or blue sky laws of the states and other jurisdictions which you
shall designate in accordance with Section 4(a)(vii) hereof, (D) the fees
and expenses of any transfer agent or registrar, (E) the filing fees
incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Firm Shares, (F) listing
fees, if any, (G) all customary and reasonable out-of-pocket expenses
incurred by the Purchaser in connection with its services to be rendered
hereunder (including without limitation the fees and disbursements of the
Purchaser's legal counsel); provided that such fees and expenses will not
exceed $50,000
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without the consent of the Company, which consent shall not be unreasonably
withheld, and (H) 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 Firm Shares provided for herein is not
consummated 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 Purchaser's obligations hereunder
required to be fulfilled by the Company is not fulfilled, upon receipt of a
reasonably detailed accounting, the Company will reimburse the Purchaser
for all out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Purchaser in connection with their investigation,
preparing to market and marketing the Firm Shares or in contemplation of
performing their obligations hereunder. The Company shall not in any event
be liable to the Purchaser for loss of anticipated profits from the
transactions covered by this Agreement.
(x) For a period of 90 days after the date hereof, the Company
will not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of Common Stock
or securities convertible into or exchangeable or exercisable for any
shares of Common Stock, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written
consent of the Purchaser except for (A) grants of stock options or shares
to employees, consultants or directors pursuant to the terms of a plan in
effect on the date hereof or adopted hereafter in accordance with past
practice, (B) issuances of Common Stock pursuant to the exercise of such
options or the exercise of any other stock options outstanding on the date
hereof, (C) issuances of Common Stock pursuant to the Company's License,
Research and Development Agreement with MethylGene, Inc. dated ▇▇▇▇▇▇ ▇,
▇▇▇▇, (▇) issuances of Common Stock pursuant to the Company's License
Agreement with Helsinn Healthcare SA dated April 6, 2001, and (E) issuances
of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock pursuant to any technology
license from or to a third party entered into after the date of this
Agreement.
(xi) 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.
(xii) The Company will inform the Florida Department of Banking
and Finance at any time prior to the consummation of the distribution of
the Firm Shares by the Purchaser 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 Purchaser's Obligations. The obligations of the Purchaser
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hereunder are subject to the accuracy, as of the date hereof and at the Closing
Date (as if made at the Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission in accordance
with the Rules and Regulations and Section 4(a) of this Agreement. No stop order
suspending the effectiveness of the Registration Statement or of any part
thereof shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or the Purchaser, shall be
contemplated by the Commission.
9
(b) The Purchaser shall not 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 incorporated by reference 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 to consultants, upon the exercise of
outstanding options or warrants, or pursuant to the Company's License Agreement
with Helsinn Healthcare SA dated April 6, 2001), 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, net worth or results of operations of the
Company, that, in your judgment, makes it impractical or inadvisable to offer or
deliver the Firm Shares on the terms and in the manner contemplated in the
Prospectus.
(d) You shall have received an opinion substantially in the form
previously agreed upon, dated such Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel for the Company.
(e) On each Closing Date, there shall have been furnished to you the
opinion of Schwegman, Lundberg, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., special patent counsel
for the Company substantially in the form previously agreed upon, dated such
Closing Date.
(f) On each Closing Date, there shall have been furnished to you the
opinion of ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C., special regulatory counsel for the
Company substantially in the form previously agreed upon, dated such Closing
Date.
(g) On the Closing Date, there shall have been furnished to the Purchaser,
such opinion or opinions from ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP, counsel for the
Purchaser, dated such Closing Date and addressed to you, with respect to the
formation of the Company, the validity of the Firm Shares, the Registration
Statement, the Prospectus and other related matters as you reasonably may
request, and such counsel shall have received such papers and information as
they request to enable them to pass upon such matters.
(h) On the Closing Date, the Purchaser shall have received a letter of
KPMG LLP, dated such Closing Date and addressed to you, 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 or as
soon as practicable thereafter, and the effect of the letter so to be delivered
on the Closing Date shall be to confirm the conclusions and findings set forth
in such prior letter.
10
(i) On the Closing Date, there shall have been furnished to you, as the
Purchaser, a certificate, dated such Closing Date and addressed to you, 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
Firm 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 signers of said certificate have carefully examined the
Registration Statement and the Prospectus, and any amendments thereof or
supplements thereto, 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 to consultants, upon the exercise of outstanding options or
warrants, or pursuant to the Company's License Agreement with Helsinn
Healthcare SA dated April 6, 2001), 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 of its subsidiaries, 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, net
worth or results of operations of the Company and its subsidiaries, taken
as a whole, 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 or any of its subsidiaries 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 or results of operations of the Company and its
subsidiaries, taken as a whole.
(j) The Company shall have furnished to you and counsel for the Purchaser
such additional documents, certificates and evidence as you or they may have
reasonably requested.
(k) All necessary filings shall have been made as required and all filing
fees shall have been paid to effect the listing of the Firm Shares on the Nasdaq
National Market.
11
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 Purchaser. 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 the Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
the Purchaser 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, 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
the Purchaser 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,
the Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by you specifically
for use in the preparation thereof.
In addition to its 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), it will reimburse the Purchaser 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
Purchaser 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 Purchaser 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 Purchaser 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) The Purchaser 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 the Purchaser), 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, the Prospectus, or
any amendment or supplement thereto, 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, the Prospectus, or any such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by you specifically for use in the preparation thereof, and will
reimburse the Company for any legal or other expenses reasonably incurred
12
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 the Purchaser, it is advisable for the Purchaser to
be represented by separate counsel, the Purchaser shall have the right to employ
a single counsel 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 Purchaser 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 Purchaser on the other from the offering of the Firm 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 Purchaser 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 Purchaser on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Purchaser. 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 Purchaser and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Purchaser agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined
by pro rata allocation 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).
(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 the
Purchaser within the meaning of the Act; and the obligations of the
13
Purchaser under this Section 6 shall be in addition to any liability that the
Purchaser may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
consent, is named in the Registration Statement as about to become a director of
the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
7. Representations and Agreements to Survive Delivery. All representations,
--------------------------------------------------
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, and the agreements of the Purchaser 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 the Purchaser or any
controlling person thereof, or the Company or any of its officers, directors, or
controlling persons, and shall survive delivery of, and payment for, the Firm
Shares to and by the Purchaser hereunder.
8. Effective Date of this Agreement and Termination.
------------------------------------------------
(a) This Agreement shall immediately become effective upon execution by
all of the parties hereto.
(b) The Purchaser 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 Purchaser's obligations hereunder is
not fulfilled, (iii) trading of the Company's Common Stock or 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
Firm Shares. Any such termination shall be without liability of any party to any
other party except that the provisions of Section 4(a)(ix) 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.
9. Default by the Company. If the Company shall fail at the Closing Date to
----------------------
sell and deliver the number of Firm 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.
10. Information Furnished by Purchaser. The statements set forth in the second
----------------------------------
paragraph of the text under the caption "Underwriting" concerning the terms of
the offering by the Purchaser in the Prospectus constitute, to the extent such
statements relate to the Purchaser, the written information furnished by or on
behalf of the Purchaser referred to in Section 6 hereof.
14
11. Notices. Except as otherwise provided herein, all communications hereunder
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shall be in writing or by telegraph and, if to the Purchaser shall be mailed,
telegraphed or delivered to U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, U.S. Bancorp Center, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if to the Company, shall
be mailed, telegraphed or delivered to it at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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.
13. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Minnesota.
[Signature Page Follows]
15
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 Purchaser in accordance with its terms.
Very truly yours,
MGI PHARMA, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer and Secretary
Confirmed as of the date first
above mentioned
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. Parrot
---------------------------------
▇▇▇▇▇ ▇. Parrot
Principal