10,000,000 Shares ONCOTHYREON INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
EXECUTION COPY
10,000,000 Shares
Common Stock
April 29, 2011
Xxxxx and Company, LLC
As Representative of the several Underwriters
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Oncothyreon Inc., a Delaware corporation (the
“Company”), proposes to sell, pursuant to the terms of this Agreement, to the several
underwriters named in Schedule I hereto (the “Underwriters,” or, each, an
“Underwriter”), an aggregate of 10,000,000 shares of the Company’s common stock, $0.0001
par value per share (the “Common Stock”). The aggregate of 10,000,000 shares so proposed
to be sold is hereinafter referred to as the “Firm Stock”. The Company also proposes to
sell to the Underwriters, upon the terms and conditions set forth in Section 3 hereof, up
to an additional 1,500,000 shares of Common Stock (the “Optional Stock”). The Firm Stock
and the Optional Stock are hereinafter collectively referred to as the “Stock”. Xxxxx and
Company, LLC (“Cowen”) is acting as representative of the several Underwriters and in such
capacity is hereinafter referred to as the “Representative.”
2. Representations and Warranties of the Company. The Company represents and
warrants to the several Underwriters, as of the date hereof and as of each Closing Date (as defined
below), and agrees with the several Underwriters, that:
(a) A registration statement of the Company on Form S-3 (File No. 333-173227) (including
such amendments and supplements thereto as may have been filed before execution of this
Agreement, the “Initial Registration Statement”) in respect of the Stock has been
filed with the Securities and Exchange Commission (the “Commission”) pursuant to
Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). The
Company meets the requirements for use of Form S-3 under the Securities Act and the rules
and regulations of the Commission thereunder (the “Rules and Regulations”). The
Initial Registration Statement and any post-effective amendment thereto, excluding exhibits
thereto, each in the form heretofore delivered to you as Representative of the other
Underwriters, have been declared effective by the Commission in such form and meet the
requirements of the Securities Act and the Rules and Regulations. The proposed offering of
the Stock may be made pursuant to General Instruction I.B.1. of Form S-3. Other than (i) a
registration statement, if any, increasing the size of the offering filed pursuant to Rule
462(b) under the Securities Act and the Rules and Regulations (a “Rule 462(b)
Registration Statement”) and (ii) the Prospectus (as defined below) contemplated by this
Agreement to be filed pursuant to Rule 424(b) of the Rules and Regulations in accordance
with Section 4(a) hereof and (iii) any Issuer Free Writing Prospectus (as defined
below), no other document with respect to the offer and sale of the Stock has heretofore
been filed with the Commission. No stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose or pursuant to Section
8A of the Securities Act has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the Rules and Regulations is hereinafter
called a “Preliminary Prospectus”). The various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, in each case including all
exhibits thereto and including the information contained in the Prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and deemed by virtue of
Rules 430A, 430B and 430C under the Securities Act to be part of the Initial Registration
Statement at the time it became effective are hereinafter collectively called the
“Registration Statements.” The base prospectus included in the Initial Registration
Statement at the time of effectiveness thereof (the “Base Prospectus”), as
supplemented by the final prospectus supplement relating to the offer and sale of the Stock,
in the form to be filed pursuant to and within the time limits described in Rule 424(b)
under the Rules and Regulations, is hereinafter called the “Prospectus.”
Any reference herein to any Registration Statement, Base Prospectus, Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein. Any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or the Prospectus under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be. Any reference to any
amendment to the Registration Statements shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
date of this Agreement that is incorporated by reference in the Registration Statements.
(b) As of the Applicable Time (as defined below) and as of the Closing Date or the Option
Closing Date (as defined below), as the case may be, none of (i) the General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the
Pricing Prospectus (as defined below) and the information included on Schedule III
hereto, if any, all considered together (collectively, the “General Disclosure
Package”), (ii) any individual Limited Use Free Writing Prospectus (as defined below),
or (iii) any bona fide electronic road show (as defined in Rule 433(h)(5) of the Rules and
Regulations that has been made available without restriction to any person), when considered
together with the General Disclosure Package, included or will include any untrue statement
of a material fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Company makes no representations or warranties
as to information contained in or omitted from the Pricing Prospectus or any Issuer Free
Writing Prospectus, in reliance upon, and in conformity with, written information furnished
to the Company through the Representative by or on behalf of any Underwriter specifically
for inclusion therein, which information the parties hereto agree is limited to the
Underwriters’ Information as defined in Section 17. As used in this paragraph (b)
and elsewhere in this Agreement:
“Applicable Time” means 8:00 a.m., New York time, on the date of this Agreement
or such other time as agreed to by the Company and the Representative.
“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base
Prospectus, each as amended and supplemented immediately prior to the Applicable Time,
including any document incorporated by reference therein and any prospectus supplement
deemed to be a part thereof.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 of the Rules and Regulations relating to the Stock in the form filed or
required to be filed with the Commission or, if not required to be filed, in the form
retained in the Company’s records pursuant to Rule 433(g) of the Rules and Regulations.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is identified on Schedule II to this Agreement.
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“Limited Use Free Writing Prospectuses” means any Issuer Free Writing
Prospectus that is not a General Use Free Writing Prospectus.
(c) No order preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus relating to the proposed offering of the
Stock has been issued by the Commission, and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act has been instituted or, to the Company’s knowledge,
threatened by the Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the Securities Act and
the Rules and Regulations, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from any Preliminary Prospectus, in reliance upon, and
in conformity with, written information furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters’ Information as defined in Section
17.
(d) At the respective time the Registration Statements and any amendments thereto
became or become effective as to the Underwriters, at the date of this Agreement and at each
Closing Date, each Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities Act and the Rules and
Regulations and did not and will 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 and any amendments or supplements thereto, at the
time the Prospectus or any amendment or supplement thereto was issued and at each Closing
Date, conformed and will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and warranties in this
paragraph (d) shall not apply to information contained in or omitted from the Registration
Statements or the Prospectus, or any amendment or supplement thereto, in reliance upon, and
in conformity with, written information furnished to the Company through the Representative
by or on behalf of any Underwriter specifically for inclusion therein, which information the
parties hereto agree is limited to the Underwriters’ Information (as defined in Section
17).
(e) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the Stock or until
any earlier date that the Company notified or notifies the Representative as described in
Section 4(f), did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or the Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not
been superseded or modified, or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing sentence does not apply to statements
in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in conformity
with, written information furnished to the Company by the Representative by or on behalf of
the Underwriters specifically for inclusion therein, which information the parties hereto
agree is limited to the Underwriters’ Information.
(f) The documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the
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requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and none of such documents 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, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with Commission, will conform in
all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will 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, in light of the circumstances
under which they were made, not misleading.
(g) The Company has not, directly or indirectly, distributed and will not
distribute any offering material in connection with the proposed offering and sale of the
Stock other than any Preliminary Prospectus, the Prospectus and other materials, if any,
permitted under the Securities Act and consistent with Section 4(b) below. The
Company will file with the Commission all Issuer Free Writing Prospectuses (other than a
“road show,” as described in Rule 433(d)(8) of the Rules and Regulations) in the time and
manner required under Rules 163(b)(2) and 433(d) of the Rules and Regulations.
(h) At the time of filing the Initial Registration Statement and any
post-effective amendments thereto, and at the date hereof, the Company was not, and the
Company currently is not, an “ineligible issuer,” as defined in Rule 405 of the Rules and
Regulations.
(i) The Company and each of its subsidiaries (as defined in Section 15)
have been duly organized and are validly existing as corporations or other legal entities in
good standing (or the foreign equivalent thereof) under the laws of their respective
jurisdictions of organization. The Company and each of its subsidiaries are duly qualified
to do business and are in good standing or validly existing, as the case may be, as foreign
corporations or other legal entities in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses requires such
qualification and have all power and authority (corporate or other) necessary to own or hold
their respective properties and to conduct the businesses in which they are engaged, except
where the failure to so qualify or have such power or authority would not (i) have,
singularly or in the aggregate, a material adverse effect on the condition (financial or
otherwise), results of operations, assets, business or prospects of the Company and its
subsidiaries taken as a whole, or (ii) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or to consummate any transactions
contemplated by this Agreement, the General Disclosure Package or the Prospectus (any such
effect as described in clauses (i) or (ii), a “Material Adverse Effect”). The
Company owns or controls, directly or indirectly, only the following corporations,
partnerships, limited liability partnerships, limited liability companies, associations or
other entities: Oncothyreon Canada Inc., Biomira Management, Inc., ProlX Pharmaceuticals
Corporation, Biomira B.V. (Netherlands), 0811769 B.C. ULC (British Columbia, Canada),
Oncothyreon Luxembourg s.a.r.l.
(j) This Agreement has been duly authorized, executed and delivered by the
Company.
(k) The Stock to be issued and sold by the Company to the Underwriters hereunder
has been duly and validly authorized and, when issued and delivered by the Company against
payment therefor as provided herein, will be duly and validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and will conform to the
description thereof contained in the General Disclosure Package and the Prospectus.
(l) The Company has an authorized capitalization as set forth under the heading
“Description of Capital Stock” in the Pricing Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable, have been issued in compliance with federal and state securities
laws, and conform to the
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description thereof contained in the General Disclosure Package and the Prospectus. As of
the date of this Agreement, there were 30,088,628 shares of Common Stock issued and
outstanding, 12,500 shares of Series UA preferred stock of the Company were issued and
outstanding and 9,111,864 shares of Common Stock were issuable upon the exercise of all
options, warrants and convertible securities outstanding as of such date. All of the
Company’s options, warrants and other rights to purchase or
exchange any securities for shares of the Company’s capital stock have been duly authorized and validly issued and were
issued in compliance with federal and state securities laws. None of the outstanding shares
of Common Stock was issued in violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding shares of capital stock, options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those described above or accurately described in the General
Disclosure Package. The description of the Company’s share option plan, restricted share
unit plan, employee stock purchase plan and other stock plans or arrangements, and the
options or other rights granted thereunder, as described in the General Disclosure Package
and the Prospectus, accurately and fairly present the information required to be shown with
respect to the share option plan, restricted share unit plan, employee stock purchase plan
and such other plans and arrangements, and the options and rights granted thereunder.
(m) All the outstanding shares of capital stock of each subsidiary of the Company
have been duly authorized and validly issued, are fully paid and nonassessable and, except
to the extent set forth in the General Disclosure Package or the Prospectus, are owned by
the Company directly or indirectly through one or more wholly-owned subsidiaries, free and
clear of any claim, lien, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party.
(n) The execution, delivery and performance of this Agreement by the Company, the
issuance and sale of the Stock by the Company and the consummation of the transactions
contemplated hereby will not (with or without notice or lapse of time or both) (i) conflict
with or result in a breach or violation of any of the terms or provisions of, constitute a
default or a Debt Repayment Triggering Event (as defined below) under, give rise to any
right of termination or other right or the cancellation or acceleration of any right or
obligation or loss of a benefit under, or give rise to the creation or imposition of any
lien, encumbrance, security interest, claim or charge upon any property or assets of the
Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is subject, (ii) result in
any violation of the provisions of the certificate of incorporation or by-laws (or analogous
governing instruments, as applicable) of the Company or any of its subsidiaries, or (iii)
result in a violation of any law, statute, rule, regulation, judgment, order or decree of
any court or governmental agency or body, domestic or foreign, having jurisdiction over the
Company or any of its properties or assets; except in the cases of clauses (i) and (iii), to
the extent that any such conflict, breach, violation or default would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. A “Debt
Repayment Triggering Event” means any event or condition that gives, or with the giving
of notice or lapse of time would give the holder of any note, debenture or other evidence of
material indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(o) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws, the
Financial Industry Regulatory Authority
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(“FINRA”) and the NASDAQ Global Market in connection with the purchase and
distribution of the Stock by the Underwriters and the listing of the Stock on the NASDAQ
Global Market, no consent, approval, authorization or order of, or filing, qualification or
registration (each an “Authorization”) with, any court, governmental or
non-governmental agency or body, foreign or domestic having jurisdiction over the Company or
any of its properties or assets which has not been made, obtained or taken and is not in
full force and effect, is required for the execution, delivery and performance of this
Agreement by the Company, the offer or sale of the Stock or the consummation of the
transactions contemplated hereby. All corporate approvals necessary for the Company to
consummate the transactions contemplated by this Agreement have been obtained and are in
effect.
(p) Ernst & Young LLP, who have audited certain financial statements included or
incorporated by reference in the Registration Statements, the General Disclosure Package and
the Prospectus, is an independent registered public accounting firm as required by
Regulation S-X and the Public Company Accounting Oversight Board (United States) (the
“PCAOB”).
(q) The financial statements, together with the related notes and schedules,
included or incorporated by reference in the General Disclosure Package, the Prospectus and
in each Registration Statement fairly present in all material respects the financial
position and the results of operations and changes in financial position of the Company and
its subsidiaries at the respective dates or for the respective periods therein specified.
Such statements and related notes and schedules have been prepared in accordance with the
generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved except as may be set forth in the related
notes included or incorporated by reference in the General Disclosure Package. The
financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus comply as to
form in all material respects with Regulation S-X. No other financial statements or
supporting schedules or exhibits are required by Regulation S-X to be described, included or
incorporated by reference in the Registration Statements, the General Disclosure Package or
the Prospectus. There is no pro forma or as adjusted financial information which is required
to be included in the Registration Statements, the General Disclosure Package, and the
Prospectus or a document incorporated by reference therein in accordance with Regulation S-X
which has not been included or incorporated as so required.
(r) Neither the Company nor any of its subsidiaries has sustained, since the date
of the latest audited financial statements included or incorporated by reference in the
General Disclosure Package, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the General Disclosure Package; and, since such date, there has not been any
material change in the capital stock (other than stock option and warrant exercises and
stock repurchases in the ordinary course of business) or long-term debt of the Company or
any of its subsidiaries, or any material adverse changes, or any development involving a
prospective material adverse change, in or affecting the business, assets, management,
financial position, prospects, stockholders’ equity or results of operations of the Company
or any of its subsidiaries, in each case other than as set forth or contemplated in the
General Disclosure Package.
(s) Except as set forth in the General Disclosure Package, there is no legal or
governmental proceeding to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries is the subject,
including any proceeding before the United States Food and Drug Administration of the U.S.
Department of Health and Human Services (“FDA”) or comparable federal, state, local
or foreign governmental bodies (it being understood that the interactions between the
Company and the FDA and such comparable governmental bodies relating to the testing,
clinical development, manufacture and product
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approval process for its products shall not be deemed proceedings for purposes of this
representation), which is required to be described in the Registration Statement, the
General Disclosure Package or the Prospectus or a document incorporated by reference therein
and is not described therein, or which, singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect; and to the Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities. The Company is in compliance with all
applicable federal, state, local and foreign laws, regulations, orders and decrees governing
its business as currently conducted, or any other federal, state or foreign agencies or
bodies engaged in the regulation of pharmaceuticals or biohazardous substances or materials,
except where noncompliance would not, singly or in the aggregate, have a Material Adverse
Effect. All preclinical and clinical studies conducted by or on behalf of the Company and
submitted to regulatory authorities to support approval for commercialization of the
Company’s products have been conducted by the Company, or to the Company’s knowledge by
third parties, in compliance with all applicable federal, state or foreign laws, rules,
orders and regulations, except for such failure or failures to be in compliance as could not
reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect.
(t) Neither the Company nor any of its subsidiaries is in (i) violation of its
charter or by-laws (or analogous governing instrument, as applicable), (ii) default in any
respect, and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or (iii) violation in any respect of
any law, ordinance, governmental rule, regulation or court order, decree or judgment to
which it or its property or assets may be subject (including, without limitation, those
administrated by the FDA or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by the FDA) except, in
the case of clauses (ii) and (iii) of this paragraph (t), for any violations or defaults
which, singularly or in the aggregate, would not have a Material Adverse Effect.
(u) The Company and each of its subsidiaries possesses all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings with, the
appropriate local, state, federal or foreign regulatory agencies or bodies (including,
without limitation, those administered by the FDA or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those performed by the
FDA) which are required for the ownership of their respective properties or the conduct of
their respective businesses as described in the General Disclosure Package and the
Prospectus (collectively, the “Governmental Permits”) except where any failures to
possess or make the same, singularly or in the aggregate, would not have a Material Adverse
Effect. The Company and its subsidiaries are in compliance with all such Governmental
Permits; all such Governmental Permits are valid and in full force and effect, except where
the validity or failure to be in full force and effect would not, singularly or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any of its subsidiaries
has received written notification of any revocation, suspension, termination or invalidation
(or proceedings related thereto) of any such Governmental Permit and to the knowledge of the
Company, no event has occurred that allows or results in, or after notice or lapse of time
or both would allow or result in, revocation, suspension, termination or invalidation (or
proceedings related thereto ) of any such Governmental Permit. The studies, tests and
preclinical or clinical trials conducted by or on behalf of the Company that are described
in the General Disclosure Package and the Prospectus (the “Company Studies and
Trials”) were and, if still pending, are being, conducted in all material respects in
accordance with experimental protocols, procedures and controls pursuant to, where
applicable, accepted professional scientific standards; the descriptions of the results of
the Company Studies and Trials contained in the General Disclosure Package and Prospectus
are accurate in all material respects; and the
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Company has not received any written notices or correspondence from the FDA or any foreign,
state or local governmental body exercising comparable authority requiring the termination
or suspension of any Company Studies or Trials which termination or suspension would
reasonably be expected to have a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries is, and, after giving effect
to the proposed offering of the Stock and the application of the proceeds thereof as
described in the General Disclosure Package and the Prospectus, will be required to register
as an “investment company” within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
(w) Neither the Company nor any of its officers, directors or affiliates has taken
or will take, directly or indirectly, any action designed or intended to stabilize or
manipulate the price of any security of the Company, or which caused or resulted in, or
which might in the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(x) The Company and its subsidiaries own or possess the right to use all (i)
patents, patent applications, trademarks, trademark registrations, service marks, service
xxxx registrations, Internet domain name registrations, copyrights, copyright registrations,
licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions,
software, works of authorships, trade marks, service marks, trade names, databases,
formulae, know how, Internet domain names and other intellectual property (including trade
secrets and other unpatented and/or unpatentable proprietary confidential information,
systems, or procedures) (collectively, “Intellectual Property Assets”) necessary to
conduct its businesses as currently conducted, and as currently proposed to be conducted and
described in the General Disclosure Package and the Prospectus. Neither the Company nor any
subsidiary has received any opinion from its legal counsel concluding that any activities of
their respective businesses infringe, misappropriate, or otherwise violate, valid and
enforceable Intellectual Property Rights of any other person, and have not received written
notice of any challenge, which is to their knowledge still pending, by any other person to
the rights of the Company and its subsidiaries with respect to any Intellectual Property
Rights or Intellectual Property Assets owned or used by the Company and its subsidiaries.
To the knowledge of the Company, the business of the Company and its subsidiaries as now
conducted does not give rise to any infringement of, any misappropriation of, or other
violation of, any valid and enforceable Intellectual Property Rights of any other person.
To the knowledge of the Company, all licenses for the use of the Intellectual Property
Rights described in the General Disclosure Package and the Prospectus are valid, binding
upon, and enforceable by or against the parties thereto in accordance to its terms. The
Company and its subsidiaries have complied in all material respects with, and are not in
breach nor has received any written notice of any asserted or threatened claim of breach of
any Intellectual Property license, and the Company has no knowledge of any breach by any
other person to any Intellectual Property license. Except as described in the General
Disclosure Package, no claim has been made against the Company nor any of its subsidiaries
alleging the infringement by the Company or any of its subsidiaries of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person. The Company and its
subsidiaries have taken reasonable steps to protect, maintain and safeguard its Intellectual
Property Rights, including the execution of appropriate nondisclosure and confidentiality
agreements. The consummation of the transactions contemplated by this Agreement will not
result in the loss or impairment of or payment of any additional amounts with respect to,
nor require any further consent of any other person in respect of, the right of the Company
and its subsidiaries to own, use, or hold for use any of the Intellectual Property Rights as
owned, used or held for use in the conduct of the business as currently conducted. The
Company and its subsidiaries have taken reasonable actions to obtain ownership of works of
authorship and inventions made by its employees, consultants and
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contractors during the time they were employed by or under contract with the Company and its
subsidiaries and which relate to the business of the Company, or licenses to use such works
of authorship or inventions.
(y) The Company and each of its subsidiaries has valid title to, or have valid
rights to lease or otherwise use, all items of real or personal property which are material
to the business of the Company and its subsidiaries taken as a whole, in each case free and
clear of all liens, encumbrances, security interests, claims and defects that do not,
singularly or in the aggregate, materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries ; and all of the leases and subleases material to the business
of the Company and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the General Disclosure
Package and the Prospectus, are in full force and effect, and neither the Company nor any of
its subsidiaries has received any written notice of any claim (i) adverse to the rights of
the Company or any of its subsidiaries under any of the leases or subleases mentioned above,
or (ii) affecting or questioning the rights of the Company or any of its subsidiaries to the
continued possession of the leased or subleased premises under any such lease or sublease,
which in each of clauses (i) and (ii) would reasonably be expected to result in a Material
Adverse Effect.
(z) There is (A) no significant unfair labor practice complaint pending against
the Company, or any of its subsidiaries, nor to the knowledge of the Company, threatened
against it or any of its subsidiaries, before the National Labor Relations Board, any state
or local labor relation board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company or any of its subsidiaries, or, to
the knowledge of the Company, threatened against the Company and (B) no labor disturbance by
the employees of the Company or any of its subsidiaries exists or, to the Company’s
knowledge, is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries principal suppliers,
manufacturers, customers or contractors, that could reasonably be expected, singularly or in
the aggregate, to have a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any subsidiary plans to
terminate employment with the Company or any such subsidiary.
(aa) No “prohibited transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code
of 1986, as amended from time to time (the “Code”)) or “accumulated funding
deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice
requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be
expected to occur with respect to any employee benefit plan of the Company or any of its
subsidiaries which could, singularly or in the aggregate, have a Material Adverse Effect.
Each employee benefit plan of the Company or any of its subsidiaries is in compliance in all
material respects with applicable law, including ERISA and the Code. The Company and its
subsidiaries have not incurred and could not reasonably be expected to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan
(as defined in ERISA). Each pension plan for which the Company or any of its subsidiaries
would have any liability that is intended to be qualified under Section 401(a) of the Code
is so qualified, and nothing has occurred, whether by action or by failure to act, which
could, singularly or in the aggregate, cause the loss of such qualification.
(bb) The Company and its subsidiaries are in compliance with all foreign, federal,
state and local rules, laws and regulations relating to the use, treatment, storage and
disposal of hazardous or toxic substances or waste and protection of health and safety or
the environment which are
9
applicable to the Company’s business (“Environmental Laws”), except where
the failure to comply would not, singularly or in the aggregate, have a Material Adverse
Effect. There has been no storage, generation, transportation, handling, treatment,
disposal, discharge, emission, or other release of any kind of toxic or other wastes or
other hazardous substances by, due to, or caused by the Company or any of its subsidiaries
(or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or
any of its subsidiaries is or may otherwise be liable) upon any of the property now or
previously owned or leased by the Company or any of its subsidiaries, or upon any other
property, in violation of any law, statute, ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any law, statute, ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to any liability
except for any violation or liability which would not have, singularly or in the
aggregate with all such violations and liabilities, a Material Adverse Effect; and there has
been no disposal, discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other wastes or other
hazardous substances with respect to which the Company or any of its subsidiaries has
knowledge, except for any such disposal, discharge, emission, or other release of
any kind which would not have, singularly or in the aggregate with all such discharges and
other releases, a Material Adverse Effect. In the ordinary course of business, the Company
and its subsidiaries conduct periodic reviews of the effect of Environmental Laws on their
business and assets, in the course of which they identify and evaluate any associated
material costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with Environmental
Laws or Governmental Permits issued thereunder, any related material constraints on
operating activities and any potential material liabilities to third parties). On the basis
of such reviews, the Company has reasonably concluded that such associated costs and
liabilities would not have, singularly or in the aggregate, a Material Adverse Effect
(cc) The Company and its subsidiaries each (i) have timely filed all necessary
federal, state, local and foreign tax returns (or timely filed applicable extensions
therefor) that have been required to be filed, and all such returns were true, complete and
correct, (ii) have paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is liable, including, without
limitation, all sales and use taxes and all taxes which the Company or any of its
subsidiaries is obligated to withhold from amounts owing to employees, creditors and third
parties, and (iii) do not have any tax deficiency or claims outstanding or assessed or, to
its knowledge, proposed against any of them, except those, in each of the cases described in
clauses (i), (ii) and (iii) of this paragraph (cc), that would not, singularly or in the
aggregate, have a Material Adverse Effect. The Company and its subsidiaries have not
engaged in any transaction which is a corporate tax shelter or which could be characterized
as such by the Internal Revenue Service or any other taxing authority. The accruals and
reserves on the books and records of the Company and its subsidiaries in respect of tax
liabilities for any taxable period not yet finally determined are adequate to meet any
assessments and related liabilities for any such period, and since December 31, 2010 the
Company and its subsidiaries have not incurred any liability for taxes other than in the
ordinary course.
(dd) The Company and each of its subsidiaries carry, or are covered by, insurance
in such amounts and covering such risks as is adequate for the conduct of the business of
the Company taken as a whole and the value of their properties taken as a whole, and as is
customary for companies engaged in similar businesses in similar industries. Neither the
Company nor any of its subsidiaries has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect. All policies of insurance owned by the Company or
any of its subsidiaries are, to the Company’s knowledge, in full force and effect and the
Company and its subsidiaries are in compliance with the terms of such policies. Neither the
Company nor any of its subsidiaries has
10
received written notice from any insurer, agent of such insurer or the broker of the Company
or any of its subsidiaries that any material capital improvements or any other material
expenditures (other than premium payments) are required or necessary to be made in order to
continue such insurance. None of the Company or any of its subsidiaries insures risk of
loss through any captive insurance, risk retention group, reciprocal group or by means of
any fund or pool of assets specifically set aside for contingent liabilities other than as
described in the General Disclosure Package.
(ee) The Company maintains a system of internal control over financial reporting
(as such term is defined in Rule 13a-15 of the General Rules and Regulations under the
Exchange Act (the “Exchange Act Rules”)) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and
principal financial officer, or under their supervision, to provide reasonable assurances
that (i) transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP 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. Except as described in the General Disclosure Package, since the end of the
Company’s most recent audited fiscal year, there has been (A) no material weakness in the
Company’s internal control over financial reporting (whether or not remediated) and (B) no
change in the Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal control over
financial reporting. The Company’s internal control over financial reporting is, or upon
consummation of the offering of the Stock will be, overseen by the Audit Committee of the
Board of Directors of the Company (the “Audit Committee”) in accordance with the
Exchange Act Rules.
(ff) A member of the Audit Committee of the Board of directors of the Company (the
“Audit Committee”) has confirmed to the Chief Executive Officer or Chief Financial
Officer that, except as set forth in the General Disclosure Package, the Audit Committee is
not reviewing or investigating, and neither the Company’s independent auditors nor its
internal auditors have recommended that the Audit Committee review or investigate, (i)
adding to, deleting, changing the application of or changing the Company’s disclosure with
respect to, any of the Company’s material accounting policies, (ii) any matter which could
result in a restatement of the Company’s financial statements for any annual or interim
period during the current or prior three fiscal years, or (iii) any Internal Control Event.
(gg) The Company maintains disclosure controls and procedures (as such is defined
in Rule 13a-15 of the Exchange Act Rules) that comply with the requirements of the Exchange
Act; such disclosure controls and procedures have been designed to ensure that information
required to be disclosed by the Company is accumulated and communicated to the Company’s
management, including the Company’s principal executive officer and principal financial
officer by others within those entities, such disclosure controls and procedures are
effective in all material respects to perform the functions for which they were established.
(hh) The minute books of the Company have been made available to the Underwriters
and counsel for the Underwriters, and such books (i) contain a complete summary of all
meetings and actions of the board of directors (including each board committee) and
stockholders of the Company (or analogous governing bodies and interest holders, as
applicable) since January 1, 2008 through the date of the latest meeting and action, and
(ii) accurately in all material respects reflect all transactions referred to in such
minutes.
(ii) There is no material franchise agreement, lease, contract, or other agreement
or document required by the Securities Act or by the Rules and Regulations to be described
in the General
11
Disclosure Package and in the Prospectus or a document incorporated by reference therein or
to be filed as an exhibit to the Registration Statements or a document incorporated by
reference therein which is not so described or filed therein as required; and all
descriptions of any such franchise agreements, leases, contracts, or other agreements or
documents contained in the General Disclosure Package and in the Prospectus or in a document
incorporated by reference therein are accurate and complete descriptions of such documents
in all material respects. Other than as described in the General Disclosure Package, no
such franchise agreement, lease, contract or other agreement has been suspended or
terminated for convenience or default by the Company, any of its subsidiaries or any of the
other parties thereto, and neither the Company nor any of its subsidiaries has received
notice of and the Company does not have knowledge of any such pending or threatened
suspension or termination except for such suspensions or terminations or pending or
threatened suspensions or terminations that would not reasonably be expected to, singularly
or in the aggregate, have a Material Adverse Effect.
(jj) No relationship, direct or indirect, exists between or among the Company or
any of its subsidiaries on the one hand, and the directors, officers, stockholders (or
analogous interest holders), customers or suppliers of the Company, and of its subsidiaries
or any of their affiliates on the other hand, which is required to be described in the
General Disclosure Package and the Prospectus or a document incorporated by reference
therein and which is not so described.
(kk) No person or entity has the right to require registration of shares of Common
Stock or other securities of the Company because of the filing or effectiveness of the
Registration Statements or otherwise, except for persons and entities who have expressly
waived such right in writing or who have been given timely and proper written notice and
have failed to exercise such right within the time or times required under the terms and
conditions of such right. Except as described in the General Disclosure Package, there are
no persons with registration rights or similar rights to have any securities registered by
the Company under the Securities Act.
(ll) The Company does not own any “margin securities” as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”), and none of the proceeds of the sale of the Stock will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally incurred to
purchase or carry any margin security or for any other purpose which might cause any of the
Stock to be considered a “purpose credit” within the meanings of Regulation T, U or X of the
Federal Reserve Board.
(mm) The Company is not a party to any contract, agreement or understanding with
any person that would give rise to a valid claim against the Company or the Underwriters for
a brokerage commission, finder’s fee or like payment in connection with the offering and
sale of the Stock or any transaction contemplated by this Agreement, the Registration
Statements, the General Disclosure Package or the Prospectus.
(nn) All grants of options were validly issued and properly approved by the board
of directors of the Company (or a duly authorized committee thereof) in material compliance
with all applicable laws and regulations and recorded in the Company’s financial statements
in accordance with GAAP.
(oo) Except as described in the General Disclosure Package and the Prospectus, no
subsidiary of the Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject, from paying any
dividends to the Company, from making any other distribution on such subsidiary’s capital
stock, from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s properties or assets to the Company or
any other subsidiary of the Company.
(pp) Since the date as of which information is given in the General Disclosure
Package and the Prospectus through the date hereof, and except as set forth in the Pricing
Prospectus, the
12
Company has not (i) issued or granted any securities other than pursuant to the Company’s
share option plan, restricted share unit plan and employee stock purchase plan or securities
issued upon exercise of stock options in the ordinary course of business, (ii) incurred any
material liability or obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business, (iii) entered into any
material transaction other than in the ordinary course of business or (iv) declared or paid
any dividend on its capital stock.
(qq) No forward-looking statement (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) contained in either the General
Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(rr) The Company is subject to and in compliance in all material respects with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock
is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and is listed on the
NASDAQ Global Market, and except as described in the General Disclosure Package, the Company
has taken no action designed to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common Stock from
the NASDAQ Global Market, nor has the Company received any notification that the Commission
or FINRA is contemplating terminating such registration or listing. The Company has filed
with the NASDAQ Global Market a notification of the listing of the Stock on the NASDAQ
Global Market.
(ss) The Company is in compliance in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the “Xxxxxxxx-Xxxxx Act”) that
are in effect.
(tt) The Company is in compliance in all material respects with all applicable
corporate governance requirements set forth in the rules of the NASDAQ Global Market that
are in effect.
(uu) Neither the Company nor, to the Company’s knowledge, any employee or agent
of the Company, has while acting on behalf of the Company (i) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns from
corporate funds, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended or (iv) made any other unlawful payment.
(vv) There are no transactions, arrangements or other relationships between and/or
among the Company, any of its affiliates (as such term is defined in Rule 405 of the Rules
and Regulations) and any unconsolidated entity, including, but not limited to, any
structured finance, special purpose or limited purpose entity that could reasonably be
expected to materially affect the Company’s liquidity or the availability of or requirements
for its capital resources required to be described in the General Disclosure Package and the
Prospectus or a document incorporated by reference therein which have not been described as
required.
(ww) There are no outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of indebtedness by the Company to
or for the benefit of any of the officers or directors of the Company or any of their
respective family members, except as disclosed in the Registration Statements, the General
Disclosure Package and the Prospectus. All transactions by the Company with office holders
or control persons of the Company have been duly approved by the board of directors of the
Company, or duly appointed committees or officers thereof, if and to the extent required
under U.S. law.
(xx) The statistical and market related data included in the Registration
Statement, the General Disclosure Package and the Prospectus are based on or derived from
sources that the Company
13
believes to be reliable and accurate in all material respects, and such data agree in all
material respects with the sources from which they are derived.
(yy) The operations of the Company are and have been conducted at all times in
compliance in all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator involving the
Company with respect to the Money Laundering Laws is pending, or to the Company’s knowledge,
threatened.
(zz) Neither the Company nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered by OFAC.
(aaa) Neither the Company nor, to the Company’s knowledge, any of its affiliates
(within the meaning of FINRA Rule 5121(f) directly or indirectly controls, is controlled by,
or is under common control with, or is an associated person (within the meaning of Article
I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
(bbb) To enable the Underwriters to rely on FINRA Rule 5110(b)(7)(C)(i), as of the
date hereof, the registration of the Stock with the Commission could have been effected on
Form S-3 under the Securities Act pursuant to the standards for such Form S-3 in effect
prior to October 21, 1992.
Any certificate signed by or on behalf of the Company and delivered to the Representative or to
counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to
each Underwriter as to the matters covered thereby.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters, and the Underwriters
agree, severally and not jointly, to purchase from the Company the respective numbers of shares of
Firm Stock set forth opposite the names of the Underwriters in Schedule I hereto.
The purchase price per share to be paid by the Underwriters to the Company for the Stock will
be $3.78 per share (the “Purchase Price”).
The Company will deliver the Firm Stock to the Representative for the respective accounts of
the several Underwriters through the facilities of The Depository Trust Company, issued in such
names and in such denominations as the Representative may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York time, on the second (2nd) full
business day preceding the Closing Date, against payment of the aggregate Purchase Price therefor
by wire transfer in federal (same day) funds to an account at a bank acceptable to the
Representative payable to the order of the Company at the offices of Xxxxxxx Procter LLP, The New
York Times Building, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further condition of the
obligations of each Underwriter hereunder. The time and date of the delivery and closing shall be
at 10:00 A.M., New York time, on May 4, 2011, in accordance with Rule 15c6-1 of the Exchange Act.
The time and date of such payment and delivery are herein referred to as the “Closing
Date”. The Closing Date and the location of delivery of, and the form of payment for, the Firm
Stock may be varied by agreement between the Company and Xxxxx.
14
For the purpose of covering any over-allotments in connection with the distribution and sale
of the Firm Stock as contemplated by the Prospectus, the Underwriters may purchase all or less than
all of the Optional Stock, provided that such shares of Optional Stock shall be purchased from the
Company for the account of each Underwriter in the same proportion as the number of shares of Firm
Stock set forth opposite such Underwriter’s name on Schedule I bears to the total number of
shares of Firm Stock (subject to adjustment by Xxxxx to eliminate fractions). The price per share
to be paid for the Optional Stock shall be the Purchase Price. The Company agrees to sell to the
Underwriters the number of shares of Optional Stock specified in the written notice delivered by
Xxxxx to the Company described below and the Underwriters agree, severally and not jointly, to
purchase such shares of Optional Stock. The option granted hereby may be exercised as to all or
any part of the Optional Stock (subject to the proviso in the first sentence of this paragraph) at
any time, and from time to time, not more than thirty (30) days subsequent to the date of this
Agreement. No Optional Stock shall be sold and delivered unless the Firm Stock previously has
been, or simultaneously is, sold and delivered. The right to purchase the Optional Stock or any
portion thereof may be surrendered and terminated at any time prior to the exercise of such right
upon notice by Xxxxx to the Company.
The option granted hereby may be exercised by written notice being given to the Company by
Xxxxx setting forth the number of shares of the Optional Stock to be purchased by the Underwriters
and the date and time for delivery of and payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be the Closing Date, but not earlier) is
herein called the “Option Closing Date” and shall in no event be earlier than two (2)
business days nor later than five (5) business days after written notice is given. The Option
Closing Date and the Closing Date are herein called the “Closing Dates.”
The Company will deliver the Optional Stock to the Representative for the respective accounts
of the several Underwriters through the facilities of The Depository Trust Company or, at the
election of the Representative, issued in such names and in such denominations as the
Representative may direct by notice in writing to the Company given at or prior to 12:00 Noon, New
York time, on the second (2nd) full business day preceding the Option Closing Date against payment
of the aggregate Purchase Price therefor by wire transfer in federal (same day) funds to an account
at a bank acceptable to Xxxxx payable to the order of the Company at the offices of Xxxxxxx Procter
LLP, The New York Times Building, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of each Underwriter hereunder. The Option Closing Date and the
location of delivery of, and the form of payment for, the Optional Stock may be varied by agreement
between the Company and Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the terms and conditions set
forth in the Prospectus.
4. Further Agreements Of The Company. The Company agrees with the
several Underwriters:
(a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form
approved by the Representative and file such Rule 462(b) Registration Statement with the
Commission by 10:00 P.M., New York time, on the date hereof, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Rules and Regulations; to prepare the Prospectus in a form approved by the
Representative containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rules 430A, 430B or 430C of the Rules and Regulations
and to file such Prospectus pursuant to Rule 424(b) of the Rules and Regulations not later
than the second business (2nd) day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by Rule 430A of the Rules
and Regulations; prior to the expiration of the Prospectus Delivery Period (as defined
below), to notify the Representative promptly of the Company’s intention to file or prepare
any supplement or amendment to any Registration Statement or to the
15
Prospectus and to make no amendment or supplement to the Registration Statements, the
General Disclosure Package or to the Prospectus to which the Representative shall reasonably
object by notice to the Company after a reasonable period to review; prior to the expiration
of the Prospectus Delivery Period, to advise the Representative, promptly after it receives
notice thereof, of the time when any amendment to any Registration Statement has been filed
or becomes effective or any supplement to the General Disclosure Package or the Prospectus
or any amended Prospectus has been filed and to furnish the Underwriters with copies
thereof; to file promptly all material required to be filed by the Company with the
Commission pursuant to Rules 433(d) or 163(b)(2) of the Rules and Regulations, as the case
may be; to file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) of the
Rules and Regulations) is required in connection with the offering or sale of the Stock (the
“Prospectus Delivery Period”); prior to the expiration of the Prospectus Delivery
Period, to advise the Representative, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of
the suspension of the qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the Registration Statements, the
General Disclosure Package or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus or
suspending any such qualification, and promptly to use its reasonable best efforts to obtain
the withdrawal of such order.
(b) The Company represents and agrees that, unless it obtains the prior consent of
the Representative, and each Underwriter represents and agrees that, unless it obtains the
prior consent of the Company and the Representative, it has not made and will not, other
than the Final Term Sheet (defined below), if any, prepared and filed pursuant to
Section 4(c) hereof, make any offer relating to the Stock that would constitute a
“free writing prospectus” as defined in Rule 405 of the Rules and Regulations unless the
prior written consent of the Representative has been received (each, a “Permitted Free
Writing Prospectus”); provided that the prior written consent of the Representative
hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses
included in Schedule II hereto. The Company represents that it has treated and
agrees that it will treat each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, comply with the requirements of Rules 164 and 433 of the Rules and Regulations
applicable to any Issuer Free Writing Prospectus, including the requirements relating to
timely filing with the Commission, legending and record keeping and will not take any action
that would result in an Underwriter or the Company being required to file with the
Commission pursuant to Rule 433(d) of the Rules and Regulations a free writing prospectus
prepared by or on behalf of such Underwriter that such Underwriter otherwise would not have
been required to file thereunder. The Company consents to the use by any Underwriter of a
free writing prospectus that (a) is not an “issuer free writing prospectus” as defined in
Rule 433 of the Rules and Regulations, and (b) contains only (i) information describing the
preliminary terms of the Stock or its offering and (ii) information that described the final
terms of the Stock or its offering and that is included in the Final Term Sheet, if any,
contemplated in Section 4(c) below.
(c) At the request of the Representative, the Company will prepare a final term
sheet (the “Final Term Sheet”) reflecting the final terms of the Stock, in form and
substance satisfactory to the Representative, and shall file such Final Term Sheet as an
Issuer Free Writing Prospectus pursuant to Rule 433 of the Rules and Regulations prior to
the close of business two (2) business days after the date hereof; provided that the Company
shall provide the Representative with
16
copies on any such Final Term Sheet within a reasonable amount of time prior to such
proposed filing and will not use or file any such document to which the Representative or
counsel to the Underwriters shall reasonably object.
(d) If at any time prior to the date when a prospectus relating to the Stock is
required to be delivered (or in lieu thereof, the notice referred to in Rule 173(a) of the
Rules and Regulations) any event occurs or condition exists as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of a material
fact, or omit to state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made when the Prospectus is delivered (or in lieu
thereof, the notice referred to in Rule 173(a) of the Rules and Regulations), not
misleading, or if it is necessary at any time to amend or supplement any Registration
Statement or the Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus to comply with the Securities Act or the Exchange Act, the
Company will promptly notify the Representative thereof and upon its request will prepare an
appropriate amendment or supplement or upon its request make an appropriate filing pursuant
to Section 13 or 14 of the Exchange Act in form and substance reasonably satisfactory to the
Representative which will correct such statement or omission or effect such compliance and
will use its reasonable best efforts to have any amendment to any Registration Statement
declared effective as soon as possible. The Company will furnish without charge to each
Underwriter and to any dealer in securities as many copies as the Representative may from
time to time reasonably request of such amendment or supplement. In case any Underwriter is
required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a)
of the Rules and Regulations) relating to the Stock, the Company upon the request of the
Representative will prepare promptly an amended or supplemented Prospectus as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the Securities
Act and deliver to such Underwriter as many copies as such Underwriter may reasonably
request of such amended or supplemented Prospectus complying with Section 10(a)(3) of the
Securities Act.
(e) If the General Disclosure Package is being used to solicit offers to buy the
Stock at a time when the Prospectus is not yet available to prospective purchasers and any
event shall occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Underwriters, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to make the statements therein
not conflict with the information contained or incorporated by reference in the Registration
Statement then on file and not superseded or modified, or if it is necessary at any time to
amend or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and furnish to the
Underwriters and any dealers an appropriate amendment or supplement to the General
Disclosure Package or (ii) prepare and file with the Commission an appropriate filing under
the Exchange Act which shall be incorporated by reference in the General Disclosure Package
so that the General Disclosure Package as so amended or supplemented will not, in the light
of the circumstances under which they were made, be misleading or conflict with the
Registration Statement then on file, or so that the General Disclosure Package will comply
with law.
(f) If at any time following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof and not
superseded or modified or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading, the Company has promptly
17
notified or will promptly notify the Representative so that any use of the Issuer Free
Writing Prospectus may cease until it is amended or supplemented and has promptly amended or
will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or omission. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing Prospectus in
reliance upon, and in conformity with, written information furnished to the Company through
the Representative by or on behalf of any Underwriter specifically for inclusion therein,
which information the parties hereto agree is limited to the Underwriters’ Information (as
defined in Section 17).
(g) To the extent not available on the Commission’s Electronic Data Gathering,
Analysis and Retrieval system or any successor system (“XXXXX”), to furnish promptly
to the Representative and to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission, and of each amendment
thereto filed with the Commission, including all consents and exhibits filed therewith.
(h) To the extent not available on XXXXX, to deliver promptly to the
Representative in New York City such number of the following documents as the Representative
shall reasonably request: (i) conformed copies of the Registration Statements as originally
filed with the Commission (in each case excluding exhibits), (ii) each Preliminary
Prospectus, (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of
the documents referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (h) to be
made not later than 10:00 A.M., New York time, on the business day following the execution
and delivery of this Agreement), (v) conformed copies of any amendment to the Registration
Statement (excluding exhibits), (vi) any amendment or supplement to the General Disclosure
Package or the Prospectus after the date hereof (the delivery of the documents referred to
in clauses (v) and (vi) of this paragraph (h) to be made not later than 10:00 A.M., New York
City time, on the business day following the date of such amendment or supplement) and (vii)
any document incorporated by reference in the General Disclosure Package or the Prospectus
(excluding exhibits thereto) (the delivery of the documents referred to in clause (vii) of
this paragraph (h) to be made not later than 10:00 A.M., New York City time, on the business
day following the date of such document).
(i) To make generally available to its stockholders as soon as practicable, but in
any event not later than eighteen (18) months after the effective date of each Registration
Statement (as defined in Rule 158(c) of the Rules and Regulations), an earnings statement of
the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(j) To take promptly from time to time such actions as the Representative may
reasonably request to qualify the Stock for offering and sale under the securities or Blue
Sky laws of such jurisdictions (domestic or foreign) as the Representative may designate and
to continue such qualifications in effect, and to comply with such laws, for so long as
required to permit the offer and sale of Stock in such jurisdictions; provided that the
Company shall not be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service of process in any
jurisdiction.
(k) Upon request, during the period of five (5) years from the date hereof, to the
extent not available on XXXXX, to deliver to each of the Underwriters, (i) as soon as they
are available, copies of all reports or other communications furnished to stockholders
generally, and (ii) as soon as they are available, copies of any reports and financial
statements furnished or filed with the Commission or any national securities exchange on
which the Common Stock is listed. However, so long as the Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is
timely filing reports with the Commission on XXXXX, it is not required to furnish such
reports or statements to the Underwriters.
18
(l) That the Company will not, for a period of ninety (90) days from the date of
this Agreement, (the “Lock-Up Period”) without the prior written consent of Xxxxx,
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, other than (1) the Company’s sale of the Stock hereunder, (2)
the issuance of Common Stock, options to acquire Common Stock or other equity awards
pursuant to the Company’s share option plan, restricted share unit plan and employee stock
purchase plan as such other plans and arrangements as are in existence on the date hereof
and described in the Prospectus, (3) the issuance of Common Stock pursuant to the valid
exercises, vesting or settlements of options, warrants or rights outstanding on the date
hereof and (4) the issuance of Common Stock or warrants to purchase Common Stock in
connection with sponsored research, collaboration, technology licensing, development, or
other strategic transactions, which in the aggregate shall not exceed 2% of the outstanding
common stock of the Company as of the date of this Agreement. The Company will cause each
person and entity listed in Exhibit B to furnish to the Representative, prior to the
Closing Date, a letter, substantially in the form of Exhibit A hereto. The Company
also agrees that during such period, other than for the sale of the Stock hereunder, the
Company will not file any registration statement, preliminary prospectus or prospectus, or
any amendment or supplement thereto, under the Securities Act for any such transaction or
which registers, or offers for sale, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for a registration statement on Form
S-8 relating to employee benefit plans or a registration statement relating to the offer and
sale of securities of the Company described in the General Disclosure Package. The Company
hereby agrees that (i) if it issues an earnings release or material news, or if a material
event relating to the Company occurs, during the last seventeen (17) days of the Lock-Up
Period, or (ii) if prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the sixteen (16)-day period beginning on the last
day of the Lock-Up Period, the restrictions imposed by this paragraph (l) or the letter
shall continue to apply until the expiration of the eighteen (18)-day period beginning on
the issuance of the earnings release or the occurrence of the material news or material
event. The Company will provide the Representative with prior notice (in accordance with
Section 14 herein) of any such announcement that gives rise to an extension of the
Lock-Up Period, subject to the Representative’s agreement to hold such information in
confidence prior to public disclosure of the same.
(m) To supply the Representative with copies of all correspondence to and from,
and all documents issued to and by, the Commission in connection with the registration of
the Stock under the Securities Act or any of the Registration Statements, any Preliminary
Prospectus or the Prospectus, or any amendment or supplement thereto or document
incorporated by reference therein.
(n) Prior to each of the Closing Dates, to furnish to the Representative, as soon
as they have been prepared, copies of any unaudited interim consolidated financial
statements of the Company for any periods subsequent to the periods covered by the financial
statements appearing in the Registration Statements and the Prospectus.
(o) Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with respect to the
Company, its condition, financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of which the
Representative is notified), without the prior consent of the Representative, unless in the
judgment of the Company and its counsel, and after notification to the Representative, such
press release or communication is required by law.
(p) Until Xxxxx shall have notified the Company of the completion of the resale of
the Stock, that the Company will not, and will use its reasonable best efforts to cause its
affiliated
19
purchasers (as defined in Regulation M under the Exchange Act) not to, either alone or with
one or more other persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt to induce any person
to purchase any Stock; and not to, and to use its reasonable best efforts to cause its
affiliated purchasers not to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
(q) To use its reasonable efforts not to take any action prior the latest of the
Closing Dates which would require the Prospectus to be amended or supplemented pursuant to
Section 4(d).
(r) To maintain, at its expense, a registrar and transfer agent for the Stock.
(s) To apply the net proceeds from the sale of the Stock as set forth in the
Registration Statement, the General Disclosure Package and the Prospectus under the heading
“Use of Proceeds,” and, except as disclosed in the General Disclosure Package, not to use
any of the proceeds from the sale of the Stock hereunder to repay any outstanding debt owed
to any affiliate of any Underwriter.
(t) To use its reasonable efforts to list, subject to notice of issuance, and to
maintain the listing of the Stock on the NASDAQ Global Market.
(u) To use its reasonable efforts to do and perform all things required to be done
or performed under this Agreement by the Company prior to each Closing Date and to satisfy
all conditions precedent to the delivery of the Stock.
(v) Upon request of any Underwriter, to furnish, or cause to be furnished, to such
Underwriter an electronic version of the Company’s corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the on-line offering of
the Stock (the “License”); provided, however that the License shall be used solely
for the purpose described above, is granted without any fee and may not be assigned or
transferred.
5. Payment of Expenses. The Company agrees to pay, or reimburse if paid by any
Underwriter, whether or not the transactions contemplated hereby are consummated or this Agreement
is terminated: (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock and any taxes payable in that connection; (b) the costs incident to the
registration of the Stock under the Securities Act; (c) the costs incident to the preparation,
printing and distribution of the Registration Statements, the Base Prospectus, any Preliminary
Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus, any
amendments, supplements and exhibits thereto or any document incorporated by reference therein and
the costs of printing, reproducing and distributing, the “Agreement Among Underwriters” between the
Representative and the Underwriters, the Master Selected Dealers’ Agreement, the Underwriters’
Questionnaire, this Agreement and any closing documents by mail, telex or other means of
communications; (d) the fees and expenses, if any, (including related fees and expenses of counsel
for the Underwriters) incurred in connection with securing any required review by FINRA of the
terms of the sale of the Stock and any filings made with FINRA; (e) any applicable listing or other
fees; (f) the fees and expenses (including related fees and expenses of counsel to the
Underwriters) of qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(j) and of preparing, printing and distributing wrappers, Blue Sky
Memoranda and Legal Investment Surveys; (g) the cost of preparing and printing stock certificates;
(h) all fees and expenses of the registrar and transfer agent of the Stock; (i) the fees,
disbursements and expenses of counsel to the Underwriters; (j) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses associated with the
preparation or dissemination of any electronic road show, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Company, travel and lodging expenses of
the officers of the Company and such consultants, and (k) all other costs and expenses incident to
the offering of the Stock or the performance of the obligations of the Company under this
20
Agreement (including, without limitation, the fees and expenses of the Company’s counsel and the
Company’s independent accountants); provided that the Company shall not be liable for and shall not
be obligated to pay any such fees, costs, expenses or disbursements to the Underwriters for
out-of-pocket expenses (including fees, costs, expenses or disbursements for the Underwriters’
counsel) in excess of $150,000 in the aggregate; and provided further that, except to the extent
otherwise provided in this Section 5 and in Sections 9 and 10, the
Underwriters shall pay their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the resale of any Stock by them and the expenses of advertising any
offering of the Stock made by the Underwriters
6. Conditions of Underwriters’ Obligations. The respective obligations of the
several Underwriters hereunder, and the closing of the sale of the Stock, are subject to the
accuracy, when made and as of the Applicable Time and on the Closing Date, of the representations
and warranties of the Company contained herein, to the accuracy of the statements of the Company
made in any certificates pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and conditions:
(a) The Registration Statements have become effective under the Securities Act,
and no stop order suspending the effectiveness of any Registration Statement or any part
thereof, preventing or suspending the use of any Base Prospectus, any Preliminary
Prospectus, the Prospectus or any Permitted Free Writing Prospectus or any part thereof
shall have been issued and no proceedings for that purpose or pursuant to Section 8A under
the Securities Act shall have been initiated or threatened by the Commission, and all
requests for additional information on the part of the Commission (to be included or
incorporated by reference in the Registration Statements or the Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the Representative; the Rule
462(b) Registration Statement, if any, each Issuer Free Writing Prospectus and the
Prospectus shall have been filed with, the Commission within the applicable time period
prescribed for such filing by, and in compliance with, the Rules and Regulations and in
accordance with Section 4(a), and the Rule 462(b) Registration Statement, if any,
shall have become effective immediately upon its filing with the Commission; and FINRA shall
have raised no objection to the fairness and reasonableness of the terms of this Agreement
or the transactions contemplated hereby.
(b) None of the Underwriters shall have discovered and disclosed to the Company on
or prior to the Closing Date that any Registration Statement or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel for the
Underwriters, is material or omits to state any fact which, in the opinion of such counsel,
is material and is required to be stated therein or is necessary to make the statements
therein not misleading, or that the General Disclosure Package, any Issuer Free Writing
Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which, in the opinion of such counsel, is material or omits to state any
fact which, in the opinion of such counsel, is material and is necessary in order to make
the statements, in the light of the circumstances in which they were made, not misleading.
(c) All corporate proceedings incident to the authorization, form and validity of
each of this Agreement, the Stock, the Registration Statements, the General Disclosure
Package, each Issuer Free Writing Prospectus and the Prospectus and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such matters.
(d) Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. shall have furnished to the
Representative such counsel’s written opinion and negative assurance statement, as counsel
to the Company, addressed to the Underwriters and dated the Closing Date, in form and
substance reasonably satisfactory to the Representative and set forth on Exhibit C
hereto.
21
(e) The Representative shall have received from Xxxxxxx Procter LLP, counsel for
the Underwriters, such counsel’s written opinion and negative assurance statement, dated the
Closing Date, with respect to such matters as the Underwriters may reasonably require, and
the Company shall have furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(f) At the time of the execution of this Agreement, the Representative shall have
received from Ernst & Young LLP a letter, addressed to the Underwriters, executed and dated
such date, in form and substance satisfactory to the Representative (i) confirming that they
are an independent registered accounting firm with respect to the Company within the meaning
of the Securities Act and the Rules and Regulations and PCAOB and (ii) stating the
conclusions and findings of such firm, of the type ordinarily included in accountants’
“comfort letters” to underwriters, with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration Statements,
the General Disclosure Package and the Prospectus.
(g) On the effective date of any post-effective amendment to any Registration
Statement and on the Closing Date, the Representative shall have received a letter (the
“bring-down letter”) from Ernst & Young LLP addressed to the Underwriters and dated
the Closing Date confirming, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of which specified
financial information is given in the General Disclosure Package and the Prospectus, as the
case may be, as of a date not more than three (3) business days prior to the date of the
bring-down letter), the conclusions and findings of such firm, of the type ordinarily
included in accountants’ “comfort letters” to underwriters, with respect to the financial
information and other matters covered by its letter delivered to the Representative
concurrently with the execution of this Agreement pursuant to paragraph (f) of this
Section 6.
(h) The Company shall have furnished to the Representative a certificate, dated
the Closing Date, of its Chief Executive Officer and its Chief Financial Officer stating
that (i) such officers have carefully examined the Registration Statement, the General
Disclosure Package, any Permitted Free Writing Prospectus and the Prospectus and, in their
opinion, the Registration Statements and each amendment thereto, at the Applicable Time, as
of the date of this Agreement and as of the Closing Date did not include any untrue
statement of a material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the General
Disclosure Package, as of the Applicable Time and as of the Closing Date, any Permitted Free
Writing Prospectus as of its date and as of the Closing Date, the Prospectus and each
amendment or supplement thereto, as of the respective date thereof and as of the Closing
Date, did not include any untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading, (ii) since the effective date of the
Initial Registration Statement, no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statements, the General Disclosure Package or
the Prospectus that has not been so set forth therein, (iii) to their knowledge, as of the
Closing Date, the representations and warranties of the Company in this Agreement are true
and correct and the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date, and (iv)
there has not been, subsequent to the date of the most recent audited financial statements
included or incorporated by reference in the General Disclosure Package, any material
adverse change in the financial position or results of operations of the Company or any of
its subsidiaries, or any change or development that, singularly or in the aggregate, would
involve a material adverse change or a prospective material adverse change, in or affecting
the condition (financial or otherwise), results of operations, business, assets or prospects
of the Company and its subsidiaries taken as a whole, except as set forth in the Prospectus.
22
(i) Since the date of the latest audited financial statements included in the
General Disclosure Package or incorporated by reference in the General Disclosure Package as
of the date hereof, (i) the Company and its subsidiaries shall not have sustained any loss
or interference with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth in the General Disclosure Package, and (ii) there
shall not have been any change in the capital stock (other than stock option and warrant
exercises and stock repurchases in the ordinary course of business) or long-term debt of the
Company or any of its subsidiaries, or any change, or any development involving a
prospective change, in or affecting the business, general affairs, management, financial
position, stockholders’ equity or results of operations of the Company or any of its
subsidiaries, otherwise than as set forth in the General Disclosure Package, the effect of
which, in any such case described in clause (i) or (ii) of this paragraph (i) is, in the
judgment of the Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Stock on the terms and in the manner
contemplated in the General Disclosure Package.
(j) No action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body which would
prevent the issuance or sale of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company or any of its
subsidiaries; and no injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued which would prevent
the issuance or sale of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company or any of its
subsidiaries.
(k) Subsequent to the execution and delivery of this Agreement there shall not
have occurred any of the following: (i) trading in securities generally on the NASDAQ
Global Market or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially limited, or minimum or
maximum prices or maximum range for prices shall have been established on any such exchange
or such market by the Commission, by such exchange or market or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the
United States shall have become engaged in hostilities, or the subject of an act of
terrorism, or there shall have been an outbreak of or escalation in hostilities involving
the United States, or there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be such) as to make it, in
the judgment of the Representative, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in the General Disclosure
Package and the Prospectus.
(l) The Company shall have filed a Notification: Listing of Additional Shares with
the NASDAQ Global Market and shall have received no objection thereto from the NASDAQ Global
Market.
(m) Cowen shall have received on and as of the Closing Date satisfactory evidence
of the good standing of the Company in the State of Delaware and existence as a foreign
corporation in the State of Washington, in each case in writing or any standard form of
telecommunication from the appropriate Governmental Authorities of such jurisdictions.
(n) Cowen shall have received the written agreements, substantially in the form of
Exhibit A hereto, of the persons and entities listed in Exhibit B to this
Agreement.
23
(o) The Company shall have furnished to the Underwriters a Secretary’s Certificate
of the Company, in form and substance reasonably satisfactory to counsel for the
Underwriters.
(p) On or prior to the Closing Date, the Company shall have furnished to Cowen
such further certificates and documents as Cowen may reasonably request.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are in form and
substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its directors,
officers, managers, members, employees, representatives and agents and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,”
and each an “Underwriter Indemnified Party”) against any loss, claim, damage,
expense or liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Underwriter Indemnified Party may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage, expense,
liability, action, investigation or proceeding arises out of or is based upon (A) any untrue
statement or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” that is used in
connection with the offering and sale of the Stock by, or with the approval of, the Company
filed or required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any
Registration Statement or the Prospectus, or in any amendment or supplement thereto or
document incorporated by reference therein, or (B) the omission or alleged omission to
state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer
information” that is used in connection with the offering and sale of the Stock by, or with
the approval of, the Company filed or required to be filed pursuant to Rule 433(d) of the
Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or
supplement thereto or document incorporated by reference therein, a material fact required
to be stated therein or necessary to make the statements therein in light of (other than in
the case of any Registration Statement) the circumstances under which they are made not
misleading, and shall reimburse each Underwriter Indemnified Party promptly upon demand for
any legal fees or other expenses reasonably incurred by that Underwriter Indemnified Party
in connection with investigating, or preparing to defend, or defending against, or appearing
as a third party witness in respect of, or otherwise incurred in connection with, any such
loss, claim, damage, expense, liability, action, investigation or proceeding, as such fees
and expenses are incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, expense or liability arises out
of or is based upon an untrue statement or alleged untrue statement in, or omission or
alleged omission from any Preliminary Prospectus, any Registration Statement or the
Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company through the Representative by or on behalf of any Underwriter specifically for use
therein, which information the parties hereto agree is limited to the Underwriters’
Information (as defined in Section 17).
The indemnity agreement in this Section 7(a) is not exclusive and is in addition to
each other liability which the Company might have under this Agreement or otherwise, and
shall not limit any rights or remedies which may otherwise be available under this
Agreement, at law or in equity to any Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless
the Company and its directors, its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section
24
20 of the Exchange Act (collectively the “Company Indemnified Parties” and each a
“Company Indemnified Party”) against any loss, claim, damage, expense or liability
whatsoever (or any action, investigation or proceeding in respect thereof), joint or
several, to which such Company Indemnified Party may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
“issuer information” filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, a material fact required to be stated therein or necessary to make the statements
therein in light of (other than in the case of any Registration Statement) the circumstances
under which they are made not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the Company through
the Representative by or on behalf of that Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriters’ Information as defined
in Section 17, and shall reimburse the Company Indemnified Parties promptly on
demand for any legal or other expenses reasonably incurred by such party in connection with
investigating or preparing to defend or defending against or appearing as third party
witness in connection with any such loss, claim, damage, liability, action, investigation or
proceeding, as such fees and expenses are incurred. This indemnity agreement is not
exclusive and will be in addition to any liability which the Underwriters might otherwise
have and shall not limit any rights or remedies which may otherwise be available under this
Agreement, at law or in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
such indemnifying party in writing of the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 7 except to the extent it has been materially
prejudiced by such failure; and, provided, further, that the failure to notify an
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
of such action with counsel reasonably satisfactory to the indemnified party (which counsel
shall not, except with the written consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such action, except as provided herein, the
indemnifying party shall not be liable to the indemnified party under Section 7 for
any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense of such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense of such action but the fees and expenses of
such counsel (other than reasonable costs of investigation) shall be at the expense of such
indemnified party unless (i) the employment thereof has been specifically authorized in
writing by the Company in the case of a claim for indemnification under Section 7(a)
or Cowen in the case of a claim for indemnification under Section 7(b), (ii) such
indemnified party shall have been advised by its counsel that there may be one or more legal
defenses available to it which are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party has failed
25
to assume the defense of such action and employ counsel reasonably satisfactory to the
indemnified party within a reasonable period of time after notice of the commencement of the
action or the indemnifying party does not diligently defend the action after assumption of
the defense, in which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of (or, in the case of
a failure to diligently defend the action after assumption of the defense, to continue to
defend) such action on behalf of such indemnified party and the indemnifying party shall be
responsible for legal or other expenses subsequently incurred by such indemnified party in
connection with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one separate firm
of attorneys at any time for all such indemnified parties (in addition to any local
counsel), which firm shall be designated in writing by Cowen if the indemnified parties
under this Section 7 consist of any Underwriter Indemnified Party or by the Company
if the indemnified parties under this Section 7 consist of any Company Indemnified
Parties. Subject to this Section 7(c), the amount payable by an indemnifying party
under Section 7 shall include, but not be limited to, (x) reasonable legal fees and
expenses of counsel to the indemnified party and any other expenses in investigating, or
preparing to defend or defending against, or appearing as a third party witness in respect
of, or otherwise incurred in connection with, any action, investigation, proceeding or
claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying
party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of judgment with respect to any pending or threatened
action or any claim whatsoever, in respect of which indemnification or contribution could be
sought under this Section 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party in form and substance reasonably
satisfactory to such indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. Subject to the provisions of the
following sentence, no indemnifying party shall be liable for settlement of any pending or
threatened action or any claim whatsoever that is effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled with its
written consent, if its consent has been unreasonably withheld or delayed or if there be a
judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b), then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid, payable or otherwise incurred by such indemnified
party as a result of such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof), as incurred, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Stock, or (ii) if the
allocation provided by clause (i) of this Section 7(d) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) of this Section 7(d) but also the relative fault
of the Company on the one hand and the Underwriters on the other with respect to the
statements, omissions, acts or failures to act which resulted in such loss, claim, damage,
expense or liability (or any action, investigation or proceeding in respect thereof) as well
as any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the offering of
the Stock purchased under
26
this Agreement (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters with respect to the
Stock purchased under this Agreement, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such untrue
statement, omission, act or failure to act; provided that the parties hereto agree that the
written information furnished to the Company through the Representative by or on behalf of
the Underwriters for use in the Preliminary Prospectus, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriters’
Information as defined in Section 17.
(e) The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to Section 7(d) above were to be determined by pro rata
allocation or by any other method of allocation which does not take into account the
equitable considerations referred to Section 7(d) above. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage, expense, liability, action,
investigation or proceeding referred to in Section 7(d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating, preparing to defend or
defending against or appearing as a third party witness in respect of, or otherwise incurred
in connection with, any such loss, claim, damage, expense, liability, action, investigation
or proceeding. Notwithstanding the provisions of this Section 7, no Underwriters
shall be required to contribute any amount in excess of the total underwriting discounts and
commissions received by such Underwriter with respect to the offering of the Stock exceeds
the amount of any damages which the Underwriter has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement, omission or alleged omission, act or
alleged act or failure to act or alleged failure to act. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Underwriters’ obligations to contribute as provided in this
Section 7 are several in proportion to their respective underwriting obligations and
not joint.
8. Termination. The obligations of the Underwriters hereunder may be terminated
by Cowen, in its absolute discretion by notice given to the Company prior to delivery of and
payment for the Firm Stock if, prior to that time, any of the events described in Sections
6(i) or 6(k) have occurred, or if the Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement.
9. Reimbursement of Underwriters’ Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated pursuant to
Section 8 or 10, (b) the Company shall fail to tender the Stock for delivery to the
Underwriters for any reason not permitted under this Agreement, (c) the Underwriters shall decline
to purchase the Stock for any reason permitted under this Agreement, (d) the sale of the Stock is
not consummated because any condition to the obligations of the Underwriters set forth herein is
not satisfied or (e) the sale of the Stock is not consummated because of (i) the refusal, inability
or failure on the part of the Company to perform any agreement herein or (ii) refusal to satisfy
any condition or to comply with the provisions hereof, then in addition to the payment of amounts
in accordance with Section 5, the Company shall reimburse the Underwriters for the fees and
expenses of Underwriters’ counsel and for such other out-of-pocket expenses as shall have been
reasonably incurred by them in connection with this Agreement and the proposed purchase of the
Stock, including, without limitation, travel and lodging expenses of the Underwriters, and upon
demand the Company shall pay the full amount thereof to Cowen, provided that in no event shall the
Company be
27
obligated to reimburse the Underwriters pursuant to clauses (a), (c) or (d) in an amount in excess
of $150,000 in the aggregate. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Underwriters, the Company shall not be obligated to reimburse
any defaulting Underwriter on account of expenses to the extent incurred by such defaulting
Underwriter provided that the foregoing shall not limit any reimbursement obligation of the Company
to any non-defaulting Underwriter under this Section 9.
10. Substitution of Underwriters. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder on the Closing Date and
the aggregate number of shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed ten percent (10%) of the total number of shares to be purchased by all
Underwriters on the Closing Date, the other Underwriters shall be obligated severally, in
proportion to their respective commitments set forth on Schedule I hereto, to purchase the
shares which such defaulting Underwriter or Underwriters agreed but failed to purchase on the
Closing Date. If any Underwriter or Underwriters shall so default and the aggregate number of
shares with respect to which such default or defaults occur is more than ten percent (10%) of the
total number of shares to be purchased by all Underwriters on the Closing Date and arrangements
satisfactory to the Representative and the Company for the purchase of such shares by other persons
are not made within forty-eight (48) hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required hereby or agree to take
up all or part of the shares of Stock of a defaulting Underwriter or Underwriters on the Closing
Date as provided in this Section 10, (i) the Company shall have the right to postpone the
Closing Date for a period of not more than five (5) full business days in order that the Company
may effect whatever changes may thereby be made necessary in the Registration Statements or the
Prospectus, or in any other documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statements or supplements to the Prospectus which may thereby be
made necessary, and (ii) the respective numbers of shares to be purchased by the remaining
Underwriters or substituted Underwriters shall be taken as the basis of their underwriting
obligation for all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters for damages
occasioned by its default hereunder. Any termination of this Agreement pursuant to this
Section 10 shall be without liability on the part of any non-defaulting Underwriter or the
Company, except that the representations, warranties, covenants, indemnities, agreements and other
statements set forth in Section 2, the obligations with respect to expenses to be paid or
reimbursed to non-defaulting Underwrtiers pursuant to Sections 5 and 9 and the
provisions of Section 7 and Sections 11 through 21, inclusive, shall not
terminate and shall remain in full force and effect.
11. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) each Underwriter’s responsibility to the Company is solely contractual in nature, the
Representative has been retained solely to act as an underwriter in connection with the sale
of the Stock and no fiduciary, advisory or agency relationship between the Company and the
Representative has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Representative has advised or is advising the Company
on other matters;
(b) the price of the Stock set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Representative, and the Company
is capable of evaluating and understanding, and understands and accepts, the terms, risks
and conditions of the transactions contemplated by this Agreement;
(c) it has been advised that the Representative and its affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the Company and
that the Representative has no obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship; and
28
(d) it waives, to the fullest extent permitted by law, any claims it may have against the
Representative for breach of fiduciary duty or alleged breach of fiduciary duty and agrees
that the Representative shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim
on behalf of or in right of the Company, including stockholders, employees or creditors of
the Company.
12. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the Company and their
respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, other than the persons mentioned in the preceding sentence,
any legal or equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions hereof being intended
to be and being for the sole and exclusive benefit of such persons and for the benefit of no other
person; except that the representations, warranties, covenants, agreements and indemnities of the
Company contained in this Agreement shall also be for the benefit of the Underwriter Indemnified
Parties, and the indemnities of the several Underwriters shall be for the benefit of the Company
Indemnified Parties. It is understood that each Underwriter’s responsibility to the Company is
solely contractual in nature and the Underwriters do not owe the Company, or any other party, any
fiduciary duty as a result of this Agreement. No purchaser of any of the Stock from any
Underwriter shall be deemed to be a successor or assign by reason merely of such purchase.
13. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other statements of the Company
and the several Underwriters, as set forth in this Agreement or made by them respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock. Notwithstanding any termination of this Agreement,
including without limitation any termination pursuant to Section 8 or Section 10,
the indemnities, covenants, agreements, representations, warranties and other statements forth in
Sections 2, 5, 7 and 9 and Sections 11 through 21,
inclusive, of this Agreement shall not terminate and shall remain in full force and effect at all
times.
14. Notices. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex, email or
facsimile transmission to Xxxxx and Company, LLC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Head of Equity Capital Markets, Fax: 000-000-0000 with a copy to the
General Counsel, Fax: 000-000-0000, with a copy (which shall not constitute notice
hereunder) to Xxxxxxx Procter LLP, The New York Times Building, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, Esq., Fax: 000-000-0000; and
(b) if to the Company, shall be delivered or sent by mail, telex, email or
facsimile transmission to Oncothyreon Inc., 0000 Xxxxxx Xxx., Xxxxx 000, Xxxxxxx, Xxxxxxxxxx
00000, Attention: Chief Executive Officer, Fax: 000-000-0000, with a copy (which shall not
constitute notice hereunder) to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., 000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxxx, Esq., Fax:
000-000-0000;
provided, however, that any notice to an Underwriter pursuant to Section 7 shall be
delivered or sent by mail, or facsimile transmission to such Underwriter at its address set forth
in its acceptance telex to the Representative, which address will be supplied to any other party
hereto by the Representative upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof, except that any such statement, request, notice
or agreement delivered or sent by email shall take effect at the time of confirmation of receipt
thereof by the recipient thereof.
15. Definition of Certain Terms. For purposes of this Agreement, (a)
“business day” means any day on which the NASDAQ Global Market is open for trading and (b)
“subsidiary” has the meaning set forth in Rule 405 of the Rules and Regulations.
29
16. Governing Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, including without limitation
Section 5-1401 of the New York General Obligations. The Company irrevocably (a) submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City
of New York for the purpose of any suit, action or other proceeding arising out of this Agreement
or the transactions contemplated by this Agreement, the Registration Statements and any Preliminary
Prospectus or the Prospectus, (b) agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined by any such court, (c) waives to the fullest extent
permitted by applicable law, any immunity from the jurisdiction of any such court or from any legal
process, (d) agrees not to commence any such suit, action or proceeding other than in such courts,
and (e) waives, to the fullest extent permitted by applicable law, any claim that any such suit,
action or proceeding is brought in an inconvenient forum.
17. Underwriters’ Information. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the “Underwriters’ Information” consists solely of the
information in the eighth through fifteenth paragraphs under the heading “Underwriting”.
18. Authority of the Representative. In connection with this Agreement, the
Representative will act for and on behalf of the several Underwriters, and any action taken under
this Agreement by the Representative, will be binding on all the Underwriters.
19. Partial Unenforceability. The invalidity or unenforceability of any section,
paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of
any other section, paragraph, clause or provision hereof. If any section, paragraph, clause or
provision of this Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
20. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include one another. The
section headings in this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a writing signed by the
Company and the Representative.
21. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
[Signature page follows.]
30
If the foregoing is in accordance with your understanding of the agreement between the Company
and the several Underwriters, kindly indicate your acceptance in the space provided for that
purpose below.
| Very truly yours, ONCOTHYREON INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| Accepted as of the date first above written: Xxxxx and Company, LLC Acting on its own behalf and as Representative of the several Underwriters referred to in the foregoing Agreement. |
||||
| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | Managing Director | |||
31
SCHEDULE I
Underwriters
| Number of Shares of | Number of Shares of | |||||||
| Firm Stock to be | Optional Stock to be | |||||||
| Name | Purchased | Purchased | ||||||
Xxxxx and Company, LLC |
7,750,000 | 1,162,500 | ||||||
Wedbush Securities Inc. |
2,250,000 | 337,500 | ||||||
Total |
10,000,000 | 1,500,000 | ||||||
32
SCHEDULE II
General Use Free Writing Prospectuses
None.
33
SCHEDULE III
Pricing Information
Firm Stock to be Sold: 10,000,000 shares
Offering Price: $4.00 per share
Underwriting Discounts and Commissions: 5.5%
Estimated Net Proceeds to the Company (after underwriting discounts and commissions, but
before transaction expenses): $37.8 million
1
EXHIBIT A
Form of Lock-Up Agreement
[___], 2011
Cowen and Company, LLC
As Representative of the several Underwriters
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Oncothyreon Inc.
Dear Sirs:
This agreement (this “Agreement”) is being delivered to you in connection with the proposed
Underwriting Agreement (the “Underwriting Agreement”) between Oncothyreon Inc., a Delaware
corporation (the “Company”) and Xxxxx and Company, LLC (“Cowen”), as representative of a group of
underwriters (collectively, the “Underwriters”), to be named therein, and the other parties thereto
(if any), relating to the proposed public offering of shares of the common stock, par value $0.0001
per share (the “Common Stock”), of the Company.
In order to induce you and the other Underwriters to enter into the Underwriting Agreement, and in
light of the benefits that the offering of the Common Stock will confer upon the undersigned in its
capacity as a security holder and/or an officer, director or employee of the Company, and for good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each Underwriter that, during the period beginning on and including the
date hereof through and including the date that is the 90th day after the date of the Underwriting
Agreement (the “Lock-Up Period”), the undersigned will not, without the prior written consent of
Cowen, directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of, or announce the intention to otherwise dispose of, any shares of Common Stock
(including, without limitation, Common Stock which may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations promulgated under the Securities Exchange
Act of 1934, as the same may be amended or supplemented from time to time (the “Exchange Act”)
(such shares, the “Beneficially Owned Shares”)) or securities convertible into or exercisable or
exchangeable for Common Stock, (ii) enter into any swap, hedge or similar agreement or arrangement
that transfers in whole or in part, the economic risk of ownership of the Beneficially Owned Shares
or securities convertible into or exercisable or exchangeable for Common Stock, whether now owned
or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or (iii) engage in any short selling of the Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock. If (i) the Company
issues an earnings release or material news or a material event relating to the Company occurs
during the last 17 days of the Lock-Up Period, or (ii) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-Up Period, the Lock-Up Period shall be extended and the
restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of the material news or
material event. The undersigned hereby agrees that, prior to engaging in any transaction or taking
any other action that is restricted under the terms of this Agreement during the period from the
date hereof to and including the 34th day following the expiration of the initial
Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
Lock-Up Period (as such may have been extended pursuant to the terms of this Agreement) has
expired.
2
The restrictions set forth in the immediately preceding paragraph shall not apply to (i) any
transfers made by the undersigned (a) as a bona fide gift to any member of the immediate family (as
defined below) of the undersigned or to a trust the beneficiaries of which are exclusively the
undersigned or members of the undersigned’s immediate family, (b) by will or intestate succession
upon the death of the undersigned or (c) as a bona fide gift to a charity or educational
institution, provided, however, that it shall be a condition to the transfer that (A) other than in
the case of a bona fide gift to a charity or educational institution, the transferee executes and
delivers to Cowen, acting on behalf of the Underwriters, not later than one business day prior to
such transfer, a written agreement, in substantially the form of this Agreement (it being
understood that any references to “immediate family” in the agreement executed by such transferee
shall expressly refer only to the immediate family of the undersigned and not to the immediate
family of the transferee) and otherwise satisfactory in form and substance to Cowen, and (B) if the
undersigned is required to file a report under Section 16(a) of the Exchange Act, reporting a
reduction in beneficial ownership of shares of Common Stock or Beneficially Owned Shares or any
securities convertible into or exercisable or exchangeable for Common Stock or Beneficially Owned
Shares during the Lock-Up Period (as the same may be extended as described above), the undersigned
shall include a statement in such report to the effect that, in the case of any such transfer, such
transfer is being made as a gift or by will or intestate succession, (ii) transactions relating to
shares of Common Stock or other securities acquired in open market transactions after the
completion of the proposed public offering, provided that no filing under Section 16(a) of the
Exchange Act, or the rules promulgated thereunder, shall be required or shall be voluntarily made
in connection with subsequent sales of Common Stock or other securities acquired in such open
market transactions, (iii) the transfer of shares of Common Stock or any securities convertible
into Common Stock upon a vesting event of the Company’s securities or upon the exercise of options
or warrants to purchase the Company’s securities, in each case on a “cashless” or “net exercise”
basis or to cover tax withholding obligations of the undersigned in connection with such vesting or
exercise, provided no filing under Section 16(a) of the Exchange Act reporting a disposition of
shares of Common Stock shall be required or shall be voluntarily made in connection with such
vesting or exercise, (iv) the establishment of a trading plan pursuant to Rule 10b5-1 under the
Exchange Act for the transfer of shares of Common Stock, provided that such plan does not provide
for the transfer of Common Stock during the Lock-Up Period and no public announcement or filing
under the Exchange Act regarding the establishment of such plan shall be required of or voluntarily
made by or on behalf of the undersigned or the Company and (v) the transfer of shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common Stock that occurs
by operation of law, such as pursuant to a qualified domestic order or in connection with a divorce
settlement. For purposes of this paragraph, “immediate family” shall mean a spouse, domestic
partner, sibling, parent, stepparent, grandparent, child, stepchild, grandchild or other lineal
descendant (including by adoption), father-in-law, mother-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of the undersigned.
The undersigned further agrees that (i) it will not, during the Lock-Up Period (as the same may be
extended as described above), make any demand or request for or exercise any right with respect to
the registration under the Securities Act of 1933, as amended, of any shares of Common Stock or
other Beneficially Owned Shares or any securities convertible into or exercisable or exchangeable
for Common Stock or other Beneficially Owned Shares, and (ii) the Company may, with respect to any
Common Stock or other Beneficially Owned Shares or any securities convertible into or exercisable
or exchangeable for Common Stock or other Beneficially Owned Shares owned or held (of record or
beneficially) by the undersigned, cause the transfer agent or other registrar to enter stop
transfer instructions and implement stop transfer procedures with respect to such securities during
the Lock-Up Period (as the same may be extended as described above).
The undersigned hereby represents and warrants that the undersigned has full power and authority to
enter into this Agreement and that this Agreement has been duly executed and delivered by the
undersigned and is a valid and binding agreement of the undersigned. This Agreement and all
authority herein conferred
3
are irrevocable and shall survive the death or incapacity of the undersigned and shall be binding
upon the heirs, personal representatives, successors and assigns of the undersigned.
It is understood that, if (A) the Company notifies Cowen that it does not intend to proceed with
the proposed public offering of Common Stock, (B) the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated prior to payment for
and delivery of the shares of Common Stock to be sold thereunder, or (C) the proposed public
offering of Common Stock shall not have been completed by May 31, 2011, this Agreement shall
immediately be terminated and the undersigned shall be released from all obligations under this
Agreement.
[Signature page follows.]
4
The undersigned acknowledges and agrees that whether or not any public offering of Common Stock
actually occurs depends on a number of factors, including market conditions.
| Very truly yours, |
||||
| (Name — Please Print) | ||||
| (Signature) | ||||
| (Name of Signatory if an entity — Please Print) | ||||
| (Title of Signatory if an entity — Please Print) | ||||
Address: |
||
5
EXHIBIT B
Officers, Directors, and Stockholders Executing Lock-Up Agreements
Xxxxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx
X. Xxxxxxx Stoughton
Xxxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxx Xxxxxxxxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxxx
1
EXHIBIT C
Form of Company Counsel Legal Opinion and Negative Assurance Statement
1
