Exhibit 1.1
[LETTERHEAD LEERINK SWANN & COMPANY]
February 4, 2004
Charles E. Bugg, Ph.D.
Chairman, Chief Executive Officer
BioCryst Pharmaceuticals, Inc.
2190 Parkway Lake Drive
Birmingham., AL 35244
Dear Dr. Bugg:
1. This letter agreement (the "Agreement") confirms our understanding that
BioCryst Pharmaceuticals, Inc. ("Company") has engaged Leerink Swann &
Company ("Leerink") to act as exclusive agent to the Company for a period
of 30 days, commencing as of the date hereof, for the sale by the Company
of up to $25,000,000 of the common stock of the Company (the "Common
Stock"), which shall not exceed 20% of the common stock outstanding before
the issuance (the "Securities" or the "Shares") of the Company (the
"Proposed Financing").
The Proposed Financing shall occur through a directed registered sale
under the Securities Act of 1933, as amended (the "Act") and in compliance
with applicable state securities laws. Our undertaking herein shall be
subject to, among other things, the terms and conditions set forth in this
Agreement, our due diligence investigation of the Company, the continuance
of the Company without material adverse change, the absence of unfavorable
market conditions in general and our continued satisfaction with the
results of our ongoing review of the Company's business and affairs. It is
understood that execution of this Agreement does not assure the successful
completion of the Proposed Financing.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-111226), which
was declared effective on January 5, 2004 (the "Effective Date"), covering
the registration of, among other things, the Securities under the
Securities Act and including the related preliminary prospectus (the "Base
Prospectus"). Promptly after execution and delivery of an agreement by the
Company with Purchasers (as defined below) for purchase of the Shares in
the Proposed Financing, the Company will prepare and file with the
Commission a prospectus supplement specifically relating to the Securities
(the "Prospectus Supplement") pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Securities Act (the
"Regulations"). The registration statement, as amended to the date of this
Agreement, by any post-effective amendment and by any Prospectus
Supplement, and including the exhibits thereto, schedules, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Securities Act, at the time that it became effective, is
herein called the "Registration Statement." The Base Prospectus and the
Prospectus Supplement, including the documents incorporated by reference
therein, are herein called, collectively, the "Offering Materials."
2. Our services to the Company will include: (i) assistance in the
preparation of the Prospectus Supplement; (ii) assistance in structuring
the Proposed Financing and its terms; (iii) subject to the provisions of
Section 10, identifying and contacting selected qualified purchasers (the
"Purchasers") of the Proposed Financing and furnishing them, on behalf of
the Company, with copies of the Offering Materials; and (iv) negotiating
under your guidance the financial aspects of the Proposed Financing.
Set forth on Exhibit B attached hereto is a list of institutional
investors who have previously expressed an interest in further investment
in the Company (the "Company Purchasers"). Also set forth on Exhibit B
attached hereto is a list of other potential investors where prior
contacts have been initiated with the assistance of other investment banks
(the "Other Purchasers").
The Company may decline to complete the Proposed Financing in its sole
discretion and will have full discretion as to which and how many Proposed
Purchasers to accept.
3. As compensation for the services to be provided by Leerink hereunder,
except as described below, the Company agrees to pay to Leerink at the
Closing (defined below) a cash fee equal to 6% of the gross proceeds of
the sale of the Common Stock. For sales to Other Purchasers, Leerink
agrees to reallocate up to 2% of the 6% fee to qualified investment banks
as requested by the Company. If the Proposed Financing is consummated by
means of more than one Closing, Leerink shall be entitled to the fees
provided herein with respect to each such Closing. The closing of the
Proposed Financing (the "Closing") shall take place on the date or dates
that the Common Stock is delivered to the Purchasers against payment
therefor.
Notwithstanding the foregoing, if any investors in the Proposed Financing
are Company Purchasers, the Company shall pay Leerink at the Closing a
cash fee equal to 4% of the gross proceeds of the Proposed Financing
invested by such Company Purchasers.
In addition and regardless of whether the Proposed Financing is
consummated, upon request by Leerink from time to time, the Company shall
reimburse Leerink for all reasonable out-of-pocket expenses incurred by
Leerink in connection with its engagement hereunder, including reasonable
fees and expenses of its counsel, not to exceed in the aggregate $25,000.
4. The Company acknowledges and agrees that Leerink has been retained solely
to provide the advice or services set forth in this Agreement. Leerink
shall act as an independent contractor, and any duties of Leerink arising
out of its engagement hereunder shall be owed solely to the Company. As
Leerink will be acting on your behalf in such capacity, it is our firm
practice to be indemnified in connection with engagements of this type and
the Company agrees to the indemnification agreement attached hereto as
Exhibit A and the other obligations as set forth in paragraph 13 of this
Agreement.
5. The Company will promptly, from time to time, take such action as Leerink
may reasonably request to qualify the Securities under the securities laws
of each of the states, as applicable, as Leerink may reasonably request
and to comply with such laws so as to permit such offers and sales;
provided that the Company shall not be required to qualify as a foreign
corporation in which it is not so qualified, to execute a general consent
to service of process in any jurisdiction or to subject itself to taxation
in any jurisdiction. Any applicable filings will be prepared by Leerink's
outside counsel, whose fees and disbursements in connection therewith
shall be for the account of the Company and which fees and disbursements
shall be in addition to the reimbursable expenses set forth in paragraph 3
of this Agreement.
6. The Company will cause to be furnished to Leerink at the Closing, copies
of such agreements, opinions, certificates and other documents delivered
at the Closing as Leerink may reasonably request including, without
limitation, an opinion of Company counsel to the effect that the
Securities have been duly authorized and, when delivered to the Purchasers
and Company Purchasers against payment therefor in accordance with the
Offering Materials, will be validly issued, fully paid and non-assessable.
7. The Company will also make available to Leerink all financial and other
information concerning the Company's business and operations and the
Proposed Financing which Leerink reasonably requests and will provide
access to the Company's officers, directors, employees, independent
accountants and legal counsel. Leerink shall be entitled to rely without
investigation upon all information that is available from public sources
as well as all other information supplied to it by or on behalf of the
Company or the Company's other advisors and
shall not in any respect be responsible for the accuracy or completeness
of, or have any obligation to verify, the same or to conduct any appraisal
of assets. To the extent consistent with legal requirements and except as
otherwise set forth in the Offering Materials, all information given to
Leerink by the Company, unless publicly available or otherwise available
to Leerink without restriction or breach of any confidentiality agreement
("Confidential Information"), will be held by Leerink in confidence and
will not be disclosed to anyone other than Leerink's agents and advisors
without the Company's prior approval or used for any purpose other than
those referred to in this Agreement; provided that nothing herein shall,
in itself, prevent Leerink from engaging in future transactions involving
companies in a similar industry to the Company or, provided no
Confidential Information is directly used in connection with such
engagement, be deemed to violate any of the terms hereof.
8. The Company, during the period when the Offering Materials are required to
be delivered under the Securities Act and the Regulations or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), will
file all reports and other documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act within the
time periods required by the Exchange Act and the regulations promulgated
thereunder.
9. Any advice, written or oral, provided by Leerink pursuant to this
Agreement will be treated by the Company as confidential, will be solely
for the information and assistance of the Company in connection with the
Proposed Financing and may not be quoted, nor will any such advice or the
name of Leerink be referred to, in any report, document, release or other
communication, whether written (including, without limitation, the
Offering Materials) or oral, prepared, issued or transmitted by the
Company or any affiliate, director, officer, employee, agent or
representative of any thereof, without, in each instance, Leerink's prior
written consent.
10. Leerink shall identify to the Company, in writing and in advance, each
potential Purchaser that it intends to contact with respect to the
Proposed Financing (the "Leerink Purchasers"). The Company shall have the
sole right to approve or reject each proposed Leerink Purchaser, and
Leerink shall not contact any proposed Leerink Purchaser that the Company
has rejected. Attached hereto as Exhibit C is a list of Leerink Purchasers
(and their affiliated entities) approved by the Company as of the date
hereof. Exhibit C shall be updated from time to time as additional Leerink
Purchasers are approved by the Company (collectively, all original and
additional approved Leerink Purchasers referred to as "Approved Leerink
Purchasers"). All Approved Leerink Purchasers and their affiliated
entities shall be deemed to be included on Exhibit C for purposes of this
Agreement. The Company shall identify to Leerink in writing each potential
Company Purchaser that it has contacted or intends to contact with respect
to the Proposed Financing. At or promptly following the Closing, the
parties shall update Exhibit C to list all Purchasers (not including
Company Purchasers) in the Proposed Financing and all additional parties
contacted by Leerink who did not participate in the Proposed Financing.
Leerink shall communicate to the Company, orally or in writing, each
reasonable offer to purchase Securities received by it as agent of the
Company. The Company shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in
part.
11. This Agreement may be terminated by either the Company or Leerink at any
time upon receipt of written notice to that effect by the other party. In
addition, if (i) the Company consummates the Proposed Financing of at
least $20 million of gross proceeds (whether through one closing or a
series of related closings) (the "Minimum Financing") within the original
30 day engagement of Leerink hereunder and (ii) at any time prior to 180
days after the termination or expiration of this Agreement the Company
consummates a private financing transaction with any Company Purchaser,
Other Purchaser or Approved Leerink Purchaser or any of their affiliated
entities, then Leerink will be entitled to payment in full of the
compensation described in the third paragraph of this Agreement; provided,
that, in the event that the Company does not consummate the Minimum
Financing within the original 30 day engagement of Leerink hereunder, then
the 180 day period set forth above shall be reduced to 90 days. Upon the
expiration or termination of this Agreement, Leerink will be entitled to
prompt reimbursement of all its reasonable out-of-pocket expenses and fees
as described above. Promptly following any termination or expiration of
this Agreement, Leerink will provide the Company with written notice of
the parties contacted by Leerink regarding the Proposed Financing during
the term of our engagement. The indemnity and other provisions contained
in Exhibit A will also remain operative and in full force and effect
regardless of any expiration or termination of this Agreement.
12. This Agreement shall not give rise to any express or implied commitment by
Leerink to purchase or place any securities of the Company.
13. The Company acknowledges that Leerink is acting as placement agent and
advisor for the Company in the transactions contemplated by this
engagement, and Leerink shall be entitled to the benefits of the indemnity
provided in Exhibit A.
14. This Agreement incorporates the entire understanding of the parties and
supersedes all previous agreements relating to the subject matter hereof.
The benefits of this Agreement shall inure to the parties hereto, their
respective successors and assigns and to the Indemnified Persons hereunder
and their respective successors and assigns, and the obligations and
liabilities assumed in this Agreement shall be binding upon the parties
hereto and their respective successors and assigns. Notwithstanding
anything contained herein to the contrary, none of the parties hereto
shall assign any of its obligations hereunder without the prior written
consent of each of the other parties hereto.
15. All notices provided hereunder shall be given in writing and either
delivered personally or by overnight courier service or sent by certified
mail, return receipt requested, if to Leerink, to Leerink Swann & Company,
One Federal Street, 37th Floor, Boston, Massachusetts 02110, Attention:
Stuart Barich, with a copy to Mintz Levin Cohn Glovsky and Popeo, PC, 666
Third Avenue, 25th Floor, New York, New York 10017, Attention: Ivan K.
Blumenthal, and if to the Company, to BioCryst Pharmaceuticals, Inc., 2190
Parkway Lane Drive, Birmingham, AL 35244, Attention: Charles E. Bugg,
Ph.D., with a copy to Holme Roberts & Owen LLP, 1700 Lincoln Street, Suite
4100, Denver, Colorado 80203, Attention: Richard R. Plumridge. Any notice
delivered personally shall be deemed given upon receipt; any notice given
by overnight courier shall be deemed given on the next business day after
delivery to the overnight courier; and any notice given by certified mail
shall be deemed given upon the second business day after certification
thereof.
16. The failure or neglect of either of the parties hereto to insist, in any
one or more instances, upon the strict performance of any of the terms or
conditions of this Agreement, or its waiver of strict performance of any
of the terms or conditions of this Agreement, shall not be construed as a
waiver or relinquishment in the future of such term or condition by such
party, but the same shall continue in full force and effect. Any waiver
must be in writing.
17. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
fully performed therein, without regard to conflicts of law principles.
The parties hereby expressly waive all rights to trial by jury in any
suit, action or proceeding arising under this Agreement.
18. This Agreement may not be modified or amended except in a writing duly
executed by the parties hereto.
19. At any time after the consummation or other public announcement of the
Proposed Financing, Leerink may place an announcement in such newspapers
and publications as it may choose, stating that Leerink has acted as
exclusive financial advisor and/or placement agent in connection with the
Proposed Financing.
20. For the convenience of the parties, this Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original
instrument, but all of which taken together shall constitute one and the
same agreement. Facsimile signatures shall be deemed to be original
signatures for all purposes.
21. After reviewing this Agreement, please confirm that the foregoing is in
accordance with your understanding by signing and returning the duplicate
of this letter attached hereto, whereupon it shall be our binding
Agreement.
Very truly yours,
Leerink, Swann & Company
By: /s/Stuart Barich
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Stuart Barich
Managing Director
Corporate Finance
Accepted and agreed to this 4th day of February, 2004.
BioCryst Pharmaceuticals, Inc.
By: /s/ Charles E. Bugg
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Name: Charles E. Bugg
Title: Chairman & Chief Executive Officer