6,800,000 Shares and 1,020,000 Over-Allotment Shares Novavax, Inc. Common Stock, par value $0.01 per share PURCHASE AGREEMENT
Exhibit 1.1
6,800,000 Shares
and
1,020,000 Over-Allotment Shares
and
1,020,000 Over-Allotment Shares
Novavax, Inc.
Common Stock, par value $0.01 per share
November 20, 2009
XXXXX XXXXXXX & CO.
XXXXXX CAPITAL MARKETS LLC
As Representatives of the several
Underwriters named in Schedule I
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
XXXXXX CAPITAL MARKETS LLC
As Representatives of the several
Underwriters named in Schedule I
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Novavax, Inc., a Delaware corporation (the “Company”), proposes to sell to the several
Underwriters named in Schedule I hereto (the “Underwriters”) an aggregate of 7,820,000 shares (the
“Firm Shares”) of Common Stock, $0.01 par value per share (the “Common Stock”), of the Company.
The Firm Shares consist of 6,800,000 authorized but unissued shares of Common Stock to be issued and
sold by the Company. The Company has also granted to the several Underwriters an option to
purchase up to 1,020,000 additional shares of Common Stock on the terms and for the purposes set forth
in Section 3 hereof (the “Option Shares”). The Firm Shares and any Option Shares purchased
pursuant to this Purchase Agreement are herein collectively called the “Securities.”
The Company hereby confirms its agreement with respect to the sale of the Securities to the
several Underwriters, for whom you are acting as representatives (the “Representatives”).
1. Registration Statement and Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (File
No. 333-138893) under the Securities Act of 1933, as amended (the “Securities Act” or the “Act”)
and the rules and regulations of the Commission thereunder (the “Rules and Regulations”), and such
amendments to such registration statement as may have been required to the date of this Agreement.
Such registration statement was declared effective by the Commission on December 11, 2006. Such
registration statement, at any given time, including amendments thereto to such time, the exhibits
and any schedules thereto at such time, the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act at
such time and the documents and information otherwise deemed to be a part thereof or included
therein by Rule 430B under the
Securities Act (the “Rule 430B Information”) or otherwise pursuant
to the Rules and Regulations at such time, is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective is herein called the “Original
Registration Statement.” Any registration statement filed by the Company pursuant to Rule 462(b)
under the Securities Act is called the “Rule 462(b) Registration Statement” and, from and after the
date and time of filing of the Rule 462(b) Registration Statement, the term “Registration
Statement” shall include the Rule 462(b) Registration Statement.
The prospectus in the form in which it appeared in the Original Registration Statement is
herein called the “Base Prospectus.” Each preliminary prospectus supplement, if any, to the Base
Prospectus (including the Base Prospectus as so supplemented), that describes the Securities and
the offering thereof, that omitted the Rule 430B Information and that was used prior to the filing
of the final prospectus supplement referred to in the following sentence is herein called a
“Preliminary Prospectus.” Promptly after execution and delivery of this Agreement, the Company will
prepare and file with the Commission a final prospectus supplement to the Base Prospectus relating
to the Securities and the offering thereof in accordance with the provisions Rule 430B and Rule
424(b) of the Rules and Regulations. Such final supplemental form of prospectus (including the
Base Prospectus as so supplemented), in the form filed with the Commission pursuant to Rule 424(b)
is herein called the “Prospectus.” Any reference herein to the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such
prospectus.
For purposes of this Agreement, all references to the Registration Statement, the Rule 462(b)
Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”). All
references in this Agreement to financial statements and schedules and other information which is
“described,” “contained,” “included” or “stated” in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules and other information
which is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part
of or included in the Registration Statement, the Base Prospectus, any Preliminary Prospectus or
the Prospectus, as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to mean and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and which is deemed to be
incorporated therein by reference therein or otherwise deemed by the Rules and Regulations to be a
part thereof.
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2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, the several Underwriters as
follows:
(i) The Registration Statement and any Rule 462(b) Registration Statement were
initially declared effective by the Commission under the Securities Act on December 11,
2006. The Company has complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in
effect and no proceedings for such purpose have been instituted or are pending or, to the
best knowledge of the Company, are contemplated or threatened by the Commission.
(ii) Each part of the Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendment thereto, at the time such part became effective (including
each deemed effective date with respect to the Underwriters pursuant to Rule 430B or
otherwise under the Securities Act), at all other subsequent times until the expiration of
the Prospectus Delivery Period (as defined below), and at the First Closing Date and Second
Closing Date (as hereinafter defined), and the Prospectus (or any amendment or supplement to
the Prospectus), at the time of filing or the time of first use within the meaning of the
Rules and Regulations, at all subsequent times until expiration of the Prospectus Delivery
Period, and at the First Closing Date and Second Closing Date complied and will comply in
all material respects with the applicable requirements and provisions of the Securities Act,
the Rules and Regulations and the Exchange Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date, or the time of first use within the meaning of the Rules and
Regulations, at all subsequent times until the expiration of the Prospectus Delivery Period,
and at the First Closing Date and Second Closing Date, did not and will not contain any
untrue statement of a material fact or 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. The representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from the Registration
Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto,
or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in
conformity with written information relating to an Underwriter furnished to the Company by
you or by any Underwriter through you, specifically for use in the preparation thereof; it
being understood and agreed that the only information furnished by an Underwriter consists
of the information described as such in Section 6(f).
(iii) Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to
the Time of Sale and set forth on Schedule II, the information set forth on Schedule III,
and the Statutory Prospectus, all considered together (collectively, the “Time of Sale
Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing Prospectus,
when considered together with the Time of Sale Disclosure Package,
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includes or included as of the Time of Sale any untrue statement of a material fact or
omits or omitted as of the Time of Sale to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from
any Statutory Prospectus or any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by you or by any Underwriter through you
specifically for use therein; it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 6(f).
As used in this paragraph and elsewhere in this Agreement:
(1) “Time of Sale” means 5:00 p.m. (Eastern time) on the date of this
Agreement.
(2) “Statutory Prospectus” as of any time means the Preliminary Prospectus that
is included in the Registration Statement immediately prior to that time. For
purposes of this definition, 430B Information contained in a form of prospectus that
is deemed retroactively to be a part of the Registration Statement shall be
considered to be included in the Statutory Prospectus as of the actual time that
form of prospectus is filed with the Commission pursuant to Rule 424(b) under the
Securities Act.
(3) “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company, or
(B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act
because it contains a description of the Securities or of the offering that does not
reflect the final terms, or is a “bona fide electronic roadshow,” as defined in Rule
433 of the Rules and Regulations, in each case 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) under the Securities Act.
(4) “Issuer General Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule II to this Agreement.
(5) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
(iv) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the Prospectus Delivery Period or until any earlier date that the
Company notified or notifies the Representatives as described in Section 4(a)(iii)(B), did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement, any Statutory
Prospectus or the Prospectus. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity with
written information
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furnished to the Company by you or by any Underwriter through you
specifically for use therein; it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 6(f).
(B) (1) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2) under the Securities Act) of the Securities and (2) at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the
Securities Act, including the Company in the preceding three years not having been convicted
of a felony or misdemeanor or having been made the subject of a judicial or administrative
decree or order as described in Rule 405 (without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the Company be considered an
ineligible issuer), nor an “excluded issuer” as defined in Rule 164 under the Securities
Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all
subsequent times through the Prospectus Delivery Period, all other conditions to use thereof
as set forth in Rules 164 and 433 under the Securities Act.
(v) The financial statements of the Company, together with the related notes, set forth
or incorporated by reference in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus comply in all material respects with the requirements of the
Securities Act and the Exchange Act and fairly present the financial condition of the
Company and its consolidated subsidiaries as of the dates indicated and the results of
operations and changes in cash flows for the periods therein specified in conformity with
generally accepted accounting principles in the United States consistently applied
throughout the periods involved; the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein; all non-GAAP
financial information included in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus complies with the requirements of Regulation G and Item 10 of
Regulation S-K under the Act; and, except as disclosed in the Time of Sale Disclosure
Package and the Prospectus, there are no material off-balance sheet arrangements (as defined
in Regulation S-K under the Act, Item 303(a)(4)(ii)) or any other relationships with
unconsolidated entities or other persons, that may have a material current or, to the
Company’s knowledge, material future effect on the Company’s financial condition, results of
operations, liquidity, capital expenditures, capital resources or significant components of
revenue or expenses. No other financial statements or schedules are required to be included
in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus. To
the Company’s knowledge, Xxxxx Xxxxxxxx LLP, which has expressed its opinion with respect to
the financial statements and schedules filed as a part of the Registration Statement and
included in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, is (x) an independent public accounting firm within the meaning of the Act and
the Rules and Regulations, (y) a registered public accounting firm (as defined in Section
2(a)(12) of the Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”)) and (z) not in
violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act.
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(vi) The Company has been duly organized and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation. The Company has full
corporate power and authority to own its properties and conduct its business as currently
being carried on and as described in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, and is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which the failure to so
qualify would have a material adverse effect upon the business, prospects, management,
properties, operations, condition (financial or otherwise) or results of operations of the
Company, taken as a whole (“Material Adverse Effect”).
(vii) Except as contemplated in the Time of Sale Disclosure Package and in the
Prospectus, subsequent to the respective dates as of which information is given in the Time
of Sale Disclosure Package, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions, or declared or
paid any dividends or made any distribution of any kind with respect to its capital stock;
and there has not been any change in the capital stock (other than a change in the number of
outstanding shares of Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants), or any material change in the short-term or long-term
debt, or any issuance of options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any material adverse change in the general
affairs, condition (financial or otherwise), business, prospects, management, properties,
operations or results of operations of the Company, taken as a whole (“Material Adverse
Change”) or any development which could reasonably be expected to result in any Material
Adverse Change.
(viii) Except as set forth in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding (a) to which the Company is a party or (b)
which has as the subject thereof any officer or director of the Company, any employee
benefit plan sponsored by the Company or any property or assets owned or leased by the
Company before or by any court or Governmental Authority (as defined below), or any
arbitrator, which, individually or in the aggregate, might result in any Material Adverse
Change, or would materially and adversely affect the ability of the Company to perform its
obligations under this Agreement or which are otherwise material in the context of the sale
of the Securities. There are no current or, to the knowledge of the Company, pending,
legal, governmental or regulatory actions, suits or proceedings (x) to which the Company is
subject or (y) which has as the subject thereof any officer or director of the Company, any
employee plan sponsored by the Company or any property or assets owned or leased by the
Company, that are required to be described in the Registration Statement, Time of Sale
Disclosure Package and Prospectus by the Act or by the Rules and Regulations and that have
not been so described.
(ix) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus or required to be filed as exhibits to the Registration
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Statement by the Securities Act or by the Rules and Regulations that have not been so
described or filed.
(x) This Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance
with its terms, except as rights to indemnity hereunder may be limited by federal or state
securities laws and except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and subject to
general principles of equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated will not (A) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company pursuant to any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the Company is
subject, (B) result in any violation of the provisions of the Company’s charter or by-laws
or (C) result in the violation of any law or statute or any judgment, order, rule,
regulation or decree of any court or arbitrator or federal, state, local or foreign
governmental agency or regulatory authority having jurisdiction over the Company or any of
its properties or assets (each, a “Governmental Authority”), except in the cases of clauses
(A) and (C), any breach, violation, default, lien, charge, encumbrance that would not,
individually or in the aggregate, have a Material Adverse Effect on the Company or the
transactions contemplated by this Agreement. No consent, approval, authorization or order
of, or registration or filing with any Governmental Authority is required for the execution,
delivery and performance of this Agreement or for the consummation of the transactions
contemplated hereby, including the issuance or sale of the Securities by the Company, except
such as may be required under the Act, the rules of the Financial Industry Regulatory
Authority (“FINRA”) or state securities or blue sky laws; and the Company has full power and
authority to enter into this Agreement and to consummate the transactions contemplated
hereby, including the authorization, issuance and sale of the Securities as contemplated by
this Agreement.
(xi) All of the issued and outstanding shares of capital stock of the Company,
including the outstanding shares of Common Stock, is duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state and
foreign securities laws, were not issued in violation of or subject to any preemptive rights
or other rights to subscribe for or purchase securities that have not been waived in writing
(a copy of which has been delivered to counsel to the Representatives), and the holders
thereof are not subject to personal liability by reason of being such holders; the
Securities which may be sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable, and the holders thereof will
not be subject to personal liability by reason of being such holders; and the capital stock
of the Company, including the Common Stock, conforms to the description thereof in the
Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus.
Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure
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Package and in the Prospectus, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares
of Common Stock pursuant to the Company’s charter, by-laws or any agreement or other
instrument to which the Company is a party or by which the Company is bound. Except as
disclosed in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, neither the filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company (collectively
“Registration Rights”), and any person to whom the Company has granted Registration Rights
has agreed not to exercise such rights until after expiration of the Lock-Up Period (as
defined below). All of the issued and outstanding shares of capital stock of each of the
Company’s subsidiaries have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise described in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus, the Company owns of record and
beneficially, free and clear of any security interests, claims, liens, proxies, equities or
other encumbrances, all of the issued and outstanding shares of such stock. Except as
described in the Registration Statement, in the Time of Sale Disclosure Package and in the
Prospectus, there are no options, warrants, agreements, contracts or other rights in
existence to purchase or acquire from the Company any shares of the capital stock of the
Company. The authorized and outstanding capitalization of the Company is as described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus. The Common Stock
(including the Securities) conforms in all material respects to the description thereof
contained in the Time of Sale Disclosure Package and the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Time of Sale Disclosure Package and the
Prospectus accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(xii) The Company holds, and is operating in compliance in all material respects with,
all franchises, grants, authorizations, licenses, permits, easements, consents, certificates
and orders of any Governmental Authority or self-regulatory body (including, without
limitation, those administered by the Food and Drug Administration of the U.S. Department of
Health and Human Services (the “FDA”) or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those performed by the
FDA) required for the conduct of its business as currently conducted and as contemplated in
the Prospectus and all such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders are valid and in full force and effect; and
the Company has not received notice of any revocation or modification of any such franchise,
grant, authorization, license, permit, easement, consent, certification or order or has
reason to believe that any such franchise, grant, authorization, license, permit, easement,
consent, certification or order will not be renewed in the ordinary course, except such
revocations, modifications and non-renewals as would not have a Material Adverse Effect; and
the Company is in compliance in all material respects with all applicable federal, state,
local and foreign laws, regulations, orders and decrees.
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(xiii) The clinical trials conducted by or on behalf of or sponsored by the Company or
in which the Company or its product candidates have participated that are described in the
Time of Sale Disclosure Package and Prospectus or the results of which are referred to in
the Time of Sale Disclosure Package or Prospectus were and, if still pending, are being
conducted in all material respects in accordance with medical and scientific research
procedures that the Company reasonably believes are appropriate. The descriptions in the
Time of Sale Disclosure Package and Prospectus of the results of such clinical trials are
accurate and fairly present the data derived from such clinical trials, and the Company has
no knowledge of any studies or tests performed by or on behalf of the Company the results of
which are materially inconsistent with or otherwise materially call into question the
results described or referred to in the Time of Sale Disclosure Package and Prospectus.
Except to the extent disclosed in the Time of Sale Disclosure Package and the Prospectus,
the Company has not received any notices or other correspondence from the FDA or any other
governmental agency requiring the termination, suspension or material modification of any
clinical trials that are described in the Time of Sale Disclosure Package or Prospectus or
the results of which are referred to in the Time of Sale Disclosure Package or Prospectus.
(xiv) The Company has good and marketable title to all property (whether real or
personal) described in the Registration Statement, in the Time of Sale Disclosure Package
and in the Prospectus as being owned by them, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects except such as are described in
the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus,
except as would not have a Material Adverse Effect. The property held under lease by the
Company is held by it under valid, subsisting and enforceable leases with only such
exceptions with respect to any particular lease as do not interfere in any material respect
with the conduct of the business of the Company as currently conducted.
(xv) The Company owns, possesses, or can acquire on reasonable terms, all Intellectual
Property necessary for the conduct of the Company’s business as now conducted or as
described in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus to be conducted, except as such failure to own, possess, or acquire such rights
would not result in a Material Adverse Effect. Furthermore, (A) to the knowledge of the
Company, there is no infringement, misappropriation or violation by third parties of any
such Intellectual Property, except as such infringement, misappropriation or violation would
not result in a Material Adverse Effect; (B) there is no pending or, to the knowledge of the
Company, threatened, action, suit, proceeding or claim by others, for which the Company has
been served or notified, challenging the Company’s rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable basis for
any such claim; (C) the Intellectual Property owned by the Company, and to the knowledge of
the Company, the Intellectual Property licensed to the Company has not been adjudged invalid
or unenforceable, in whole or in part, and there is no pending or threatened action, suit,
proceeding or claim by others, for which the Company has been served or notified,
challenging the validity or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (D) there is no
pending or threatened action, suit, proceeding or claim by others, for
which the Company has been served or notified, that the Company infringes,
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misappropriates or otherwise violates any Intellectual Property or other proprietary rights
of others, the Company has not received any written notice of such claim and the Company is
unaware of any other fact which would form a reasonable basis for any such claim; and (E) to
the Company’s knowledge, no employee of the Company is in or has ever been in violation of
any term of any employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or
any restrictive covenant to or with a former employer where the basis of such violation
relates to such employee’s employment with the Company or actions undertaken by the employee
while employed with the Company, except as such violation would not result in a Material
Adverse Effect. “Intellectual Property” shall mean all patents, patent applications, trade
and service marks, trade and service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, domain names, technology, know-how and other intellectual
property.
(xvi) The Company is not in violation of its charter, by-laws or other organizational
documents, or in breach of or otherwise in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default in the performance of any
material obligation, agreement or condition contained in any bond, debenture, note,
indenture, loan agreement or any other material contract, lease or other instrument to which
it is subject or by which any of them may be bound, or to which any of the material property
or assets of the Company is subject.
(xvii) The Company has timely filed all material federal, state, local and foreign
income and franchise tax returns required to be filed and is not in default in the payment
of any taxes which were payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company is contesting in good faith. There is no pending
dispute with any taxing authority relating to any of such returns, and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the properties or assets
of the Company for which there is not an adequate reserve reflected in the Company’s
financial statements included in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.
(xviii) The Company has not distributed and will not distribute any prospectus or other
offering material in connection with the offering and sale of the Securities other than any
Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus or other
materials permitted by the Securities Act to be distributed by the Company; provided,
however, that, except as set forth on Schedule II, the Company has not made and will not
make any offer relating to the Securities that would constitute a “free writing prospectus”
as defined in Rule 405 under the Securities Act, except in accordance with the provisions of
Section 4(a)(xvii) of this Agreement.
(xix) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and
is included or approved for listing on the NASDAQ Global Market (“NASDAQ GM”) and the
Company has taken no action designed to, or 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 GM nor has the Company received any
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notification that the Commission or the NASDAQ GM is contemplating terminating such
registration or listing. The Company has complied in all material respects with the
applicable requirements of the NASDAQ GM for maintenance of inclusion of the Common Stock
thereon, except that, as of November 2, 2009, the Compensation Committee of the Board of
Directors consists of only two members, both of whom are independent. The Compensation
Committee of the Board of Directors has not taken any action since November 2, 2009 and will
not take any action until such a third independent member is appointed to such committee.
The Company has filed an application to include the Securities on the NASDAQ GM. Except as
previously disclosed to counsel for the Underwriters or as set forth in the Time of Sale
Disclosure Package and the Prospectus, to the knowledge of the Company, no beneficial owners
of the Company’s capital stock or subordinated debt who, together with their associated
persons and affiliates, hold in the aggregate 10% or more of such capital stock or
subordinated debt, have any direct or indirect association or affiliate with a FINRA member.
(xx) The Company has no “significant subsidiaries” as such term is defined in Section
1.02 of Regulation S-X of the Commission.
(xxi) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted
accounting principles in the United States 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 disclosed in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus, the Company’s internal control over financial
reporting is effective and none of the Company, its board of directors and audit committee
is aware of any “material weaknesses” (as defined by the Public Company Accounting Oversight
Board) in its internal control over financial reporting, or any fraud, whether or not
material, that involves management or other employees of the Company who have a significant
role in the Company’s internal controls; and since the end of the latest audited fiscal
year, there has been no change in the Company’s internal control over financial reporting
(whether or not remediated) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting. The Company has
disclosed all “significant deficiencies” (as defined by the Public Company Accounting
Oversight Board) to the Underwriters. The Company’s board of directors has, subject to the
exceptions, cure periods and the phase in periods specified in the applicable stock exchange
rules (“Exchange Rules”), validly appointed an audit committee to oversee internal
accounting controls whose composition satisfies the applicable requirements of the Exchange
Rules and the Company’s board of directors and/or the audit committee has adopted a charter
that satisfies the requirements of the Exchange Rules.
(xxii) Other than as contemplated by this Agreement, (i) the Company has not incurred
any liability for any finder’s or broker’s fee or agent’s commission in
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connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, and (ii) no Person (as such term is defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act) has the right to act as an underwriter or as a
financial advisor to the Company in connection with the Offering.
(xxiii) The Company carries, or is covered by, insurance from insurers with
appropriately rated claims paying abilities in such amounts and covering such risks as is
adequate for the conduct of its business as currently conducted and the value of its
properties and as is customary for companies engaged in similar businesses in similar
industries; all policies of insurance and any fidelity or surety bonds insuring the Company
or its business, assets, employees, officers and directors are in full force and effect; the
Company is in compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company under any such policy or instrument as to which
any insurance company is denying liability or defending under a reservation of rights
clause; the Company has not been refused any insurance coverage sought or applied for; and
the Company has no 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 as currently conducted at a
cost that would not have a Material Adverse Effect.
(xxiv) The Company is not and, after giving effect to the offering and sale of the
Securities, will not be an “investment company,” as such term is defined in the Investment
Company Act of 1940, as amended.
(xxv) The conditions for use of Form S-3, set forth in the General Instructions
thereto, have been satisfied. The Company satisfies the pre-1992 eligibility requirements
for the use of a registration statement on Form S-3 in connection with the Offering
contemplated thereby (the pre-1992 eligibility requirements for the use of the registration
statement on Form S-3 include (i) having a non-affiliate, public common equity float of at
least $150 million or a non-affiliate, public common equity float of at least $100 million
and annual trading volume of at least three million shares and (ii) having been subject to
the Exchange Act reporting requirements for a period of 36 months). No approval of the
shareholders of the Company under the rules and regulations of Nasdaq (including Rule 5635
of the Nasdaq Global Marketplace Rules) is required for the Company to issue and deliver to
the Purchasers the Stock.
(xxvi) The documents incorporated by reference in the Time of Sale Disclosure Package
and 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 requirements of the Securities Act or
the Exchange Act, as applicable, and were filed on a timely basis with the Commission and
none of such documents contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not
misleading; any further documents so filed and incorporated by reference in the Time of
Sale Disclosure Package or in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the Exchange
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Act, and will not contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(xxvii) The Company is in compliance with all applicable
provisions of the Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission
thereunder.
(xxviii) The Company has established and maintains disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and
procedures are effective in ensuring that material information relating to the Company,
including its subsidiaries, is made known to the principal executive officer and the
principal financial officer. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus.
(xxix) Each of the Company, its affiliates and any of their respective officers,
directors, supervisors, managers, agents, or employees, has not violated, its participation
in the offering will not violate, each of the following laws: (a) anti-bribery laws,
including but not limited to, any applicable law, rule, or regulation of any locality,
including but not limited to any law, rule, or regulation promulgated to implement the OECD
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of
1977, as amended, or any other law, rule or regulation of similar purposes and scope, or (b)
anti-money laundering laws, including but not limited to, applicable federal, state,
international, foreign or other laws, regulations or government guidance regarding
anti-money laundering, including, without limitation, Title 18 US. Code section 1956 and
1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering
principles or procedures by an intergovernmental group or organization, such as the
Financial Action Task Force on Money Laundering, of which the United States is a member and
with which designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or regulation
pursuant to the authority of any of the foregoing, or any orders or licenses issued
thereunder.
(xxx) 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 Time of Sale Disclosure
Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(xxxi) Neither the Company nor, to the knowledge of the Company, any director, officer
or employee of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury.
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(xxxii) To the Company’s knowledge, no transaction has occurred between or among the
Company, on the one hand, and any of the Company’s officers, directors or 5% stockholders or
any affiliate or affiliates of any such officer, director or 5% stockholders that is
required to be described that is not so described in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus. The Company has not, directly or indirectly,
extended or maintained credit, or arranged for the extension of credit, or renewed an
extension of credit, in the form of a personal loan to or for any of its directors or
executive officers in violation of applicable laws, including Section 402 of the
Xxxxxxxx-Xxxxx Act.
(xxxiii) Except as disclosed in the Time of Disclosure Package and the Prospectus, to
the best of its knowledge, the Company is not in violation of any statute, any rule,
regulation, decision or order of any Governmental Authority or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “Environmental Laws”), does not own or operate any real
property on which are present contaminants in concentrations requiring clean up under any
Environmental Laws, is not liable for any costs of clean up required under Environmental
Laws at any off-site disposal site, and is not subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would individually
or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim.
(xxxiv) (i) To the knowledge of the Company, no “prohibited transaction” as defined
under Section 406 of ERISA or Section 4975 of the Code and not exempt under ERISA Section
408 and the regulations and published interpretations thereunder has occurred with respect
to any Employee Benefit Plan. At no time has the Company or any ERISA Affiliate maintained,
sponsored, participated in, contributed to or has or had any liability or obligation in
respect of any Employee Benefit Plan subject to Part 3 of Subtitle B of Title I of ERISA,
Title IV of ERISA, or Section 412 of the Code or any “multiemployer plan” as defined in
Section 3(37) of ERISA or any multiple employer plan for which the Company or any ERISA
Affiliate has incurred or could incur liability under Section 4063 or 4064 of ERISA. No
Employee Benefit Plan provides or promises, or at any time provided or promised, retiree
health, life insurance, or other retiree welfare benefits except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law.
Each Employee Benefit Plan is and has been operated in material compliance with its terms
and all applicable laws, including but not limited to ERISA and the Code and, to the
knowledge of the Company, no event has occurred (including a “reportable event” as such term
is defined in Section 4043 of ERISA) and no condition exists that would subject the Company
or any ERISA Affiliate to any material tax, fine, lien, penalty or liability imposed by
ERISA, the Code or other applicable law. Each Employee Benefit Plan intended to be
qualified under Code Section 401(a) and has a favorable determination or opinion letter from
the IRS upon which it can
rely, and any such determination or opinion letter remains in effect and has not been
revoked; to the knowledge of the Company, nothing has occurred since the date of any such
determination or opinion letter that is reasonably likely to adversely affect such
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qualification; (ii) with respect to each Foreign Benefit Plan, such Foreign Benefit Plan (A)
if intended to qualify for special tax treatment, meets, in all material respects, the
requirements for such treatment, and (B) if required to be funded, is funded to the extent
required by applicable law, and with respect to all other Foreign Benefit Plans, adequate
reserves therefore have been established on the accounting statements of the Company; (iii)
the Company does not have any obligations under any collective bargaining agreement with any
union and, to the Company’s knowledge, no organization efforts are underway with respect to
Company employees. As used in this Agreement, “Code” means the Internal Revenue Code of
1986, as amended; “Employee Benefit Plan” means any “employee benefit plan” within the
meaning of Section 3(3) of ERISA, including, without limitation, all stock purchase, stock
option, stock-based severance, employment, change-in-control, medical, disability, fringe
benefit, bonus, incentive, deferred compensation, employee loan and all other employee
benefit plans, agreements, programs, policies or other arrangements, whether or not subject
to ERISA, under which (A) any current or former employee, director or independent contractor
of the Company has any present or future right to benefits and which are contributed to,
sponsored by or maintained by the Company or (B) the Company has had or has any present or
future obligation or liability; “ERISA” means the Employee Retirement Income Security Act of
1974, as amended; “ERISA Affiliate” means any member of the company’s controlled group as
defined in Code Section 414(b), (c), (m) or (o); and “Foreign Benefit Plan” means any
Employee Benefit Plan established, maintained or contributed to outside of the United States
of America or which covers any employee working or residing outside of the United States.
(xxxv) Except as disclosed in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus, the Company has not granted rights to develop, manufacture,
produce, assemble, distribute, license, market or sell its products to any other person and
is not bound by any agreement that affects the exclusive right of the Company to develop,
manufacture, produce, assemble, distribute, license, market or sell its products.
(xxxvi) No labor problem or dispute with the employees of the Company exists or is
threatened or imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, contractors or customers,
that could have a Material Adverse Effect.
(xxxvii) Any third-party statistical and market-related data included in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus are based on
or derived from sources that the Company believes to be reliable and accurate in all
material respects.
(b) Any certificate signed by any officer of the Company and delivered to you or to counsel
for the Underwriters shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby.
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3. Purchase, Sale and Delivery of Securities.
(a) 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 issue and sell the Firm
Shares to the several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set forth opposite the name of such Underwriter
in Schedule I hereto. The purchase price for each Firm Share shall be $3.30 per share. The
obligation of each Underwriter to the Company shall be to purchase from the Company that number of
Firm Shares (to be adjusted by the Representatives to avoid fractional shares) which represents the
same proportion of the number of Firm Shares to be sold by the Company pursuant to this Agreement
as the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto
represents to the total number of Firm Shares to be purchased by all Underwriters pursuant to this
Agreement. In making this Agreement, each Underwriter is contracting severally and not jointly;
except as provided in paragraph (c) of this Section 3 and in Section 8 hereof, the agreement of
each Underwriter is to purchase only the respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company, at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center,
800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually acceptable, at
9:00 a.m. Central time on the third (or if the Securities are priced, as contemplated by Rule
15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as you and the Company determine pursuant
to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being herein referred to
as the “First Closing Date.” Delivery of the Firm Shares shall be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the Representatives.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants to the several
Underwriters an option to purchase all or any portion of the Option Shares at the same purchase
price as the Firm Shares, for use solely in covering any over-allotments made by the Underwriters
in the sale and distribution of the Firm Shares. The option granted hereunder may be exercised in
whole or in part at any time (but not more than once) prior to 3:00 p.m. New York time on December
8, 2009 upon notice (confirmed in writing) by the Representatives to the Company setting forth the
aggregate number of Option Shares as to which the several Underwriters are exercising the option,
the names and denominations in which the certificates for the Option Shares are to be registered
and the date and time, as determined by you, when the Option Shares are to be delivered, such time
and date being herein referred to as the “Second Closing” and “Second Closing Date”, respectively;
provided, however, that the Second Closing Date shall not be earlier than the First Closing Date
nor earlier than the second business day after the date on which the option shall have been
exercised. The number of Option Shares to be purchased by each Underwriter shall be the same
percentage of the total number of Option Shares to be purchased by the several Underwriters as the
number of Firm Shares to be purchased by such Underwriter is of the total number of Firm Shares to
be purchased by the several Underwriters, as adjusted by the
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Representatives in such manner as the Representatives deem advisable to avoid fractional
shares. No Option Shares shall be sold and delivered unless the Firm Shares previously have been,
or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the accounts of the several
Underwriters against payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800
Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually acceptable at 9:00
a.m., Central time, on the Second Closing Date. Delivery of the Option Shares shall be made by
credit through full fast transfer to the accounts at The Depository Trust Company designated by the
Representatives.
(c) It is understood that you, individually and not as Representatives of the several
Underwriters, may (but shall not be obligated to) make payment to the Company, on behalf of any
Underwriter for the Securities to be purchased by such Underwriter. Any such payment by you shall
not relieve any such Underwriter of any of its obligations hereunder. Nothing herein contained
shall constitute any of the Underwriters an unincorporated association or partner with the Company.
4. Covenants.
(a) The Company covenants and agrees with the several Underwriters as follows:
(i) During the period beginning on the date hereof and ending on the later of the
Second Closing Date or such date, as in the opinion of counsel for the Underwriters, the
Prospectus is no longer required by law to be delivered (assuming the absence of Rule 172
under the Securities Act), in connection with sales by an Underwriter or dealer (the
“Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement
including any Rule 462(b) Registration Statement), the Time of Sale Disclosure Package or
the Prospectus, the Company shall furnish to the Representatives for review a copy of each
such proposed amendment or supplement, and the Company shall not file any such proposed
amendment or supplement to which the Representatives or counsel to the Underwriters
reasonably object. Subject to this Section 4(a)(i), immediately following execution of this
Agreement, the Company will prepare the Prospectus containing the Rule 430B Information and
other selling terms of the Securities, the plan of distribution thereof and such other
information as may be required by the Securities Act or the Rules and Regulations or as the
Representatives and the Company may deem appropriate, and if requested by the
Representatives, an Issuer Free Writing Prospectus containing the selling terms of the
Securities and such other information as the Company and the Representatives may deem
appropriate, and will file or transmit for filing with the Commission, in accordance with
Rule 424(b) or Rule 433, as the case may be, copies of the Prospectus and each Issuer Free
Writing Prospectus.
(ii) After the date of this Agreement, the Company shall promptly advise the
Representatives in writing (A) of the receipt of any comments of, or requests for
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additional or supplemental information from, the Commission, (B) of the time and date
of any filing of any post-effective amendment to the Registration Statement or any amendment
or supplement to any Preliminary Prospectus, the Time of Sale Disclosure Package or the
Prospectus, (C) of the time and date that any post-effective amendment to the Registration
Statement becomes effective, (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending its use or the use of any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus, or (E) of any proceedings to remove, suspend or terminate from listing or
quotation the Common Stock from any securities exchange upon which it is listed for trading
or included or designated for quotation, or of the threatening or initiation of any
proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will
use its reasonable efforts to confirm that any filings made by the Company under Rule
424(b), Rule 433 or Rule 462 were received in a timely manner by the Commission (without
reliance on Rule 424(b)(8) or Rule 164(b)).
(iii) (A) During the Prospectus Delivery Period, the Company will comply as far as it
is able with all requirements imposed upon it by the Securities Act, as now and hereafter
amended, and by the Rules and Regulations, as from time to time in force, and by the
Exchange Act so far as necessary to permit the continuance of sales of or dealings in the
Securities as contemplated by the provisions hereof, the Time of Sale Disclosure Package and
the Prospectus. If during such period any event occurs as a result of which the Prospectus
(or if the Prospectus is not yet available to prospective purchasers, the Time of Sale
Disclosure Package) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary or appropriate in
the opinion of the Company or its counsel or the Representatives or counsel to the
Underwriters to amend the Registration Statement or supplement the Prospectus (or, if the
Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) to comply with the Securities Act or to file under the Exchange Act any document
which would be deemed to be incorporated by reference in the Prospectus in order to comply
with the Securities Act or the Exchange Act, the Company will promptly notify you and will
amend the Registration Statement or supplement the Prospectus (or, if the Prospectus is not
yet available to prospective purchasers, the Time of Sale Disclosure Package) or file such
document (at the expense of the Company) so as to correct such statement or omission or
effect such compliance.
(B) 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 would conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
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prevailing at that subsequent time, not misleading, the Company has promptly notified or
promptly will notify the Representatives 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.
(C) If immediately prior to the third anniversary of the initial effective date of the
Registration Statement, any of the Securities remain unsold by the Underwriters, the Company
will prior to that third anniversary file, if it has not already done so, a new shelf
registration statement relating to the Securities, in a form satisfactory to the
Representatives, will use its best efforts to cause such registration statement to be
declared effective within 180 days after that third anniversary, and will take all other
action necessary or appropriate to permit the public offering and sale of the Securities to
continue as contemplated in the expired registration statement relating to the Securities.
References herein to the Registration Statement shall include such new shelf registration
statement.
(iv) The Company shall take or cause to be taken all necessary action to qualify the
Securities for sale under the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required for the
distribution of the Securities, except that the Company shall not be required in connection
therewith to qualify as a foreign corporation or to execute a general consent to service of
process in any state.
(v) The Company will furnish, at its own expense, to the Underwriters and counsel for
the Underwriters copies of the Registration Statement (which will include three complete
manually signed copies of the Registration Statement and all consents and exhibits filed
therewith), and to the Underwriters and any dealer each Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus, and all
amendments and supplements to such documents, in each case as soon as available and in such
quantities as you may from time to time reasonably request.
(vi) During a period of three years commencing with the date hereof, the Company will
furnish to the Representatives, and to each Underwriter who may so request in writing,
copies of all periodic and special reports furnished to the stockholders of the Company and
all information, documents and reports filed with the Commission, the FINRA or any
securities exchange (other than any such information, documents and reports that are filed
with the Commission electronically via XXXXX or any successor system).
(vii) The Company will make generally available to its security holders as soon as
practicable, but in no event later than 15 months after the end of the Company’s current
fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period
that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Rules and Regulations, which obligation shall be deemed satisfied upon the Company’s filing
of its Annual Report on Form 10-K for the year ending December 31, 2009 with the Commission
via XXXXX or any successor system.
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(viii) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or cause to be paid (A) all expenses
(including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants and counsel
but, except as otherwise provided below, not including fees of the Underwriters’ counsel) in
connection with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus and any
amendment thereof or supplement thereto, and the printing, delivery, and shipping of this
Agreement and other underwriting documents, if applicable, Blue Sky Memoranda (covering the
states and other applicable jurisdictions), (C) all filing fees and fees and disbursements
of the Underwriters’ counsel incurred in connection with the qualification of the Securities
for offering and sale by the Underwriters or by dealers under the securities or blue sky
laws of the states and other jurisdictions which you shall designate, (D) the fees and
expenses of the transfer agent or registrar, (E) the filing fees and fees and disbursements
of Underwriters’ counsel incident to any required review and approval by FINRA, if any, of
the terms of the sale of the Securities, if any, (F) listing fees, if any, (G) the cost and
expenses of the Company relating to investor presentations or any “roadshow” undertaken in
connection with marketing of the Securities, (H) the reasonable fees, disbursements and
expenses of counsel to the Underwriters, and (I) all other costs and expenses of the Company
incident to the performance of its obligations hereunder that are not otherwise specifically
provided for herein, provided however, that the reasonable costs and out-of-pocket expenses
incurred by the Underwriters in connection with the Offering,
including fees and expenses related to travel, marketing, roadshows and legal counsel, shall
be itemized on an invoice and shall not exceed $100,000 in the aggregate without the prior
written consent of the Company. If this Agreement is terminated by the Representatives
pursuant to Section 9 hereof or if the sale of the Securities provided for herein is
not consummated by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its or their part to be performed, or because any other condition
of the Underwriters’ obligations hereunder required to be fulfilled by the Company is not
fulfilled, the Company will reimburse the several Underwriters for all accountable
out-of-pocket disbursements (including but not limited to reasonable fees and disbursements
of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges)
incurred by the Underwriters in connection with their investigation, preparing to market and
marketing the Securities or in contemplation of performing their obligations hereunder.
(ix) The Company will apply the net proceeds from the sale of the Securities to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the
Prospectus.
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(x) The Company will not, without the prior written consent of Xxxxx Xxxxxxx & Co.,
from the date of execution of this Agreement and continuing to and including the date that
is ninety (90) days after the date of the Prospectus (the “Lock-Up Period”), (A) offer,
pledge, announce the intention to sell, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or
any securities convertible into or exercisable or exchangeable for Common Stock, other than
in the ordinary course of business pursuant to the Company’s 2005 Stock Incentive Plan or
(B) enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such transaction
described in clause (A) or (B) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, except to the Underwriters pursuant to this
Agreement. The Company agrees not to accelerate the vesting of any option or warrant or the
lapse of any repurchase right prior to the expiration of the Lock-Up Period. If (1) during
the last 17 days of the Lock-Up Period, (a) the Company issues an earnings release, (b) the
Company publicly announces material news or (c) a material event relating to the Company
occurs; or (2) 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, then the restrictions in this Agreement, unless otherwise waived by Xxxxx
Xxxxxxx & Co. in writing, shall continue to apply until the expiration of the date that is
18 calendar days after the date on which (a) the Company issues the earnings release, (b)
the Company publicly announces material news or (c) a material event relating to the Company
occurs. The Company will provide the Representatives, any co-managers and each shareholder
subject to the Lock-Up Agreement (as defined below) with prior notice of any such
announcement that gives rise to the extension of the Lock-Up Period.
(xi) The Company has caused to be delivered to you prior to the date of this Agreement
a letter, in the form of Exhibit A hereto (the “Lock-Up Agreement”), from each of
the Company’s directors and officers. The Company will enforce the terms of each Lock-Up
Agreement and issue stop-transfer instructions to the transfer agent for the Common Stock
with respect to any transaction or contemplated transaction that would constitute a breach
of or default under the applicable Lock-Up Agreement.
(xii) The Company has not taken and will not take, directly or indirectly, any action
designed to or which might reasonably be expected to cause or result in, or which has
constituted, the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities
(xiii) The Company will not incur any liability for any finder’s or broker’s fee or
agent’s commission in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(xiv) During the Prospectus Delivery Period, the Company will file on a timely basis
with the Commission such periodic and special reports as required by the Rules and
Regulations.
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(xv) The Company will maintain such controls and other procedures, including without
limitation those required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the
applicable regulations thereunder, that are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, including without limitation, controls and procedures designed
to ensure that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and its principal financial officer,
or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure, to ensure that material information relating to Company is made known
to them by others within those entities.
(xvi) The Company will comply with all applicable provisions of the Xxxxxxxx-Xxxxx Act.
(xvii) The Company represents and agrees that, unless it obtains the prior written
consent of Xxxxx Xxxxxxx & Co., and each Underwriter severally represents and agrees that,
unless it obtains the prior written consent of the Company and Xxxxx Xxxxxxx & Co., it has
not made and will not make any offer relating to the Securities that would constitute an
“issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or that
would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the
Securities Act, required to be filed with the Commission; provided that the prior written
consent of the parties hereto shall be deemed to have been given in respect of the free
writing prospectuses included in Schedule II. Any such free writing prospectus consented to
by the Company and Xxxxx Xxxxxxx & Co. is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or agrees that it will
treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely Commission filing
where required, legending and record keeping.
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to the performance by
the Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no
stop order suspending the effectiveness of the Registration Statement or any part
-22-
thereof, any Rule 462(b) Registration Statement, or any amendment thereof, nor suspending or
preventing the use of the Time of Sale Disclosure Package, the Prospectus or any Issuer Free
Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall
have been initiated or threatened; any request of the Commission for additional information (to be
included in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any
Issuer Free Writing Prospectus or otherwise) shall have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue statement of a material fact which, in
your opinion, is material or omits to state a material fact which, in your opinion, is required to
be stated therein or necessary to make the statements therein not misleading, or (ii) the Time of
Sale Disclosure Package or the Prospectus, or any amendment thereof or supplement thereto, or any
Issuer Free Writing Prospectus contains an untrue statement of fact which, in your opinion, is
material, or omits to state a fact which, in your opinion, is material and is required to be stated
therein, or necessary to make the statements therein, in light of the circumstances under which
they are made, not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, the Company shall not have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any dividends or made
any distribution of any kind with respect to its capital stock; and there shall not have been any
change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock of the Company, or
any Material Adverse Change or any development involving a prospective Material Adverse Change
(whether or not arising in the ordinary course of business), or any loss by strike, fire, flood,
earthquake, accident or other calamity, whether or not covered by insurance, incurred by the
Company, the effect of which, in any such case described above, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and in the manner
contemplated in the Time of Sale Disclosure Package and in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as Representatives of the
several Underwriters, the opinion and negative assurances statement of Xxxxxxx Xxxxx LLP, counsel
for the Company, dated such Closing Date and addressed to you in substantially the form attached
hereto as Exhibit B.
(e) On each Closing Date, there shall have been furnished to you, the opinion and negative
assurances statement of Xxxxxx Godward Kronish LLP, intellectual property counsel for the Company,
dated the Closing Date and addressed to you the in form attached hereto as Exhibit C.
(f) On each Closing Date, there shall have been furnished to you, as Representatives of the
several Underwriters, such opinion or opinions and negative assurances statement from Proskauer
Rose LLP, counsel for the several Underwriters, dated such Closing Date
-23-
and addressed to you, with respect to the formation of the Company, the validity of the
Securities, the Registration Statement, the Time of Sale Disclosure Package, the Prospectus and
other related matters as you reasonably may request, and such counsel shall have received such
papers and information as they request to enable them to pass upon such matters.
(g) On the date hereof and on each Closing Date you, as Representatives of the several
Underwriters, shall have received a letter of Xxxxx Xxxxxxxx LLP, dated such Closing Date and
addressed to you, confirming that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating, as
of the date of such letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the date hereof or more than five days prior to the
date of such letter), the conclusions and findings of said firm with respect to the financial
information and other matters (of the type ordinarily included in accountants’ “comfort letters” to
underwriters) covered by its letter delivered to you concurrently with the execution of this
Agreement, and the effect of the letter so to be delivered on such Closing Date shall be to confirm
the conclusions and findings set forth in such prior letter.
(h) On each Closing Date, there shall have been furnished to you, as Representatives of the
Underwriters, a certificate, dated such Closing Date and addressed to you, signed by the chief
executive officer and by the chief financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct in all material respects, except those that are qualified by materiality, Material
Adverse Effect or Material Adverse Change, which representations and warranties shall be
true and correct in all respects, as if made at and as of such Closing Date, and the Company
has complied in all material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Time of Sale Disclosure Package and the
Prospectus), and
(A) each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto (including any documents filed under
-24-
the Exchange Act and deemed to be incorporated by reference into the
Prospectus) contain, and contained, when such part of the Registration Statement (or
such amendment) became effective, all statements and information required to be
included therein, each part of the Registration Statement, or any amendment thereof,
does not contain, and did not contain, when such part of the Registration Statement
(or such amendment) became effective, any untrue statement of a material fact or
omit to state, and did not omit to state when such part of the Registration
Statement (or such amendment) became effective, any material fact required to be
stated therein or necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented, does not include and did not include as of
its date, or the time of first use within the meaning of the Rules and Regulations,
any untrue statement of a material fact or omit to state and did not omit to state
as of its date, or the time of first use within the meaning of the Rules and
Regulations, a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, include, nor included as of the Time of Sale any untrue
statement of a material fact or omits, or omitted as of the Time of Sale, to state
any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading,
(C) since the Time of Sale, there has occurred no event required to be set
forth in an amended or supplemented prospectus which has not been so set forth, and
there has been no document required to be filed under the Exchange Act that upon
such filing would be deemed to be incorporated by reference into the Time of Sale
Disclosure Package or into the Prospectus that has not been so filed,
(D) subsequent to the respective dates as of which information is given in the
Time of Sale Disclosure Package and in the Prospectus, the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business, or declared or paid
any dividends or made any distribution of any kind with respect to its capital
stock, and except as disclosed in the Time of Sale Disclosure Package and in the
Prospectus, there has not been any change in the capital stock (other than a change
in the number of outstanding shares of Common Stock due to the issuance of shares
upon the exercise of outstanding options or warrants), or any material change in the
short-term or long-term debt, or any issuance of options, warrants, convertible
securities or other rights to purchase the capital stock, of the Company, or any
Material Adverse Change or any development which could reasonably be expected to
result in any Material Adverse Change (whether or not arising in the ordinary course
of business), or any loss by strike, fire, flood, earthquake, accident or other
calamity, whether or not covered by insurance, incurred by the Company, and
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(E) except as stated in the Time of Sale Disclosure Package and in the
Prospectus, there is not pending, or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company is a party before
or by any court or Governmental Authority or body, or any arbitrator, which could
reasonably be expected to result in any Material Adverse Change.
(i) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(j) The Company shall have furnished to you and counsel for the Underwriters such additional
documents, certificates and evidence as you or they may have reasonably requested.
(k) The Securities to be delivered on such Closing Date have been approved for listing on the
NASDAQ GM, subject to official notice of issuance.
All such opinions, certificates, letters and other documents will be in compliance with the
provisions hereof only if they are satisfactory in form and substance to you and counsel for the
Underwriters. The Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become subject, under the
Act or otherwise (including in settlement of any litigation if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, including the 430A Information and any
other information deemed to be a part of the Registration Statement at the time of effectiveness
and at any subsequent time pursuant to the Rules and Regulations, if applicable, any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement
thereto, any Issuer Free Writing Prospectus or in any materials or information provided to
investors by, or with the approval of, the Company in connection with the marketing of the offering
of the Common Stock (“Marketing Materials”), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any such amendment or supplement, any Issuer Free Writing
Prospectus or in any Marketing Materials, in
-26-
reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you, specifically for
use in the preparation thereof; it being understood and agreed that the only information furnished
by an Underwriter consists of the information described as such in Section 6(f).
(b) Each Underwriter will, severally and not jointly, indemnify and hold harmless the Company,
its affiliates, directors and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Act and Section 20 of the Exchange Act, from and against any losses,
claims, damages or liabilities to which the Company may become subject, under the Act or otherwise
(including in settlement of any litigation, if such settlement is effected with the written consent
of such Underwriter), insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Registration Statement,
any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any such
amendment or supplement, or any Issuer Free Writing Prospectus in reliance upon and in conformity
with written information furnished to the Company by you, or by such Underwriter through you,
specifically for use in the preparation thereof (it being understood and agreed that the only
information furnished by an Underwriter consists of the information described as such in Section
6(f)), and will reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred. Notwithstanding the provisions of this Section
6(b), in no event shall any indemnity by any Underwriter under this Section 6(b) exceed the total
compensation received by such Underwriter in connection with the Offering.
(c) Promptly after receipt by an indemnified party under subsection (a), (b) or (c) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially prejudiced by such failure
(through the forfeiture of substantive rights or defenses). In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of the indemnifying party’s election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified party under such
subsection for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation; provided,
however, that if, in the sole judgment of the Representatives, it is advisable for the Underwriters
to be represented as a group by separate counsel, the Representatives shall have the right to
employ a single counsel (in
-27-
addition to local counsel) to represent the Representatives and all Underwriters who may be
subject to liability arising from any claim in respect of which indemnity may be sought by the
Underwriters under subsection (a) or (b) of this Section 6, in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or parties and
reimbursed to the Underwriters as incurred. An indemnifying party shall not be obligated under any
settlement agreement relating to any action under this Section 6 to which it has not agreed in
writing. In addition, no indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld or delayed), effect any
settlement of any pending or threatened proceeding unless such settlement includes an unconditional
release of such indemnified party for all liability on claims that are the subject matter of such
proceeding and does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section 6 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a), (b) or (c) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c) above, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to information supplied
by the Company or the Underwriters and the parties’ relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if contributions pursuant to
this subsection (d) were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of this subsection (d).
The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with investigating or
defending against any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent
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misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 6 shall be in addition to any liability that the respective
Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each
director of the Company (including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company), to each officer of the Company who has
signed the Registration Statement and to each person, if any, who controls the Company within the
meaning of the Act.
(f) The Underwriters severally confirm and the Company acknowledges that the statements with
respect to the public offering of the Securities by the Underwriters set forth in the third,
twelfth and thirteenth paragraphs under the caption “Underwriting” in the Time of Sale Disclosure
Package and in the Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically
for inclusion in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, including but not
limited to the agreements of the several Underwriters, the Company contained in Section 6 hereof,
shall remain operative and in full force and effect regardless of any investigation made by or on
behalf of any Underwriter or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons, and shall survive delivery of, and payment for, the Securities
to and by the Underwriters hereunder.
8. Substitution of Underwriters.
(a) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased does
not aggregate more than 10% of the total amount of Firm Shares set forth in Schedule I hereto, the
remaining Underwriters shall be obligated to take up and pay for (in proportion to their respective
underwriting obligations hereunder as set forth in Schedule II hereto except as may otherwise be
determined by you) the Firm Shares that the withdrawing or defaulting Underwriters agreed but
failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay for the amount of Firm
Shares agreed by such Underwriter or Underwriters to be purchased hereunder, upon tender of such
Firm Shares in accordance with the terms hereof, and the amount of Firm Shares not purchased
aggregates more than 10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other persons are not made
within 36 hours thereafter, this Agreement shall terminate. In the event
-29-
of any such termination, the Company shall be under any liability to any Underwriter (except
to the extent provided in Section 4(a)(viii) and Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the amount of Firm Shares agreed by such Underwriter to be purchased
hereunder) be under any liability to the Company (except to the extent provided in Section 6
hereof).
If Firm Shares to which a default relates are to be purchased by the non-defaulting
Underwriters or by any other party or parties, the Representatives or the Company shall have the
right to postpone the First Closing Date for not more than seven (7) business days in order that
the necessary changes in the Registration Statement, in the Time of Sale Disclosure Package, in the
Prospectus or in any other documents, as well as any other arrangements, may be effected. As used
herein, the term “Underwriter” includes any person substituted for an Underwriter under this
Section 8.
9. Termination of this Agreement.
(a) You, as Representatives of the several Underwriters, shall have the right to terminate
this Agreement by giving notice to the Company as hereinafter specified at any time at or prior to
the First Closing Date, and the option referred to in Section 3(b), if exercised, may be cancelled
at any time prior to the Second Closing Date, if (i) the Company shall have failed, refused or been
unable, at or prior to such Closing Date, to perform any agreement on its or their part to be
performed hereunder, (ii) any condition of the Underwriters’ obligations hereunder is not
fulfilled, (iii) trading in the Company’s Common Stock shall have been suspended by the Commission
or The NASDAQ Stock Market or trading in securities generally on the NASDAQ Stock Market or the
New York Stock Exchange shall have been suspended, (iv) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been required, on the
NASDAQ Stock Market or the New York Stock Exchange, by such Exchange or by order of the Commission
or any other Governmental Authority having jurisdiction, (v) a banking moratorium shall have been
declared by federal or state authorities, or (vi) there shall have occurred any attack on, outbreak
or escalation of hostilities or act of terrorism involving the United States, any declaration by
the United States of a national emergency or war, any change in financial markets, any substantial
change or development involving a prospective substantial change in United States or international
political, financial or economic conditions, or any other calamity or crisis that, in your
judgment, is material and adverse and makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination shall be without
liability of any party to any other party except that the provisions of Section 4(a)(viii) and
Section 6 hereof shall at all times be effective and shall survive such termination.
(b) If you elect to terminate this Agreement as provided in this Section, the Company and its
counsel shall be notified promptly by you by telephone, confirmed by letter.
(c) If the Company shall fail at the First Closing Date to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of any Underwriter or, except as provided in Section 4(a)(viii) and Section 6
hereof, any non-defaulting party.
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No action taken pursuant to this Section shall relieve the Company
so defaulting from liability, if any, in respect of such default.
10. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered to the Representatives c/o Xxxxx
Xxxxxxx & Co., U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
General Counsel except that notices given to an Underwriter pursuant to Section 6 hereof shall be
sent to such Underwriter at the address stated in the Underwriters’ Questionnaire furnished by such
Underwriter in connection with this offering; if to the Company, shall be mailed or delivered to it
at Novavax, Inc., 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxxxx
Xxxxxxxx, Chief Financial Officer, with a copy to Xxxxxxx Xxxxx LLP, 0000 Xxxxxx Xxxxxx,
00xx xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxxx X. Xxxxxx, or to such
other address as the person to be notified may have requested in writing. Any party to this
Agreement may change such address for notices by sending to the parties to this Agreement written
notice of a new address for such purpose.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this Agreement is
intended or shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision herein contained.
The term “successors and assigns” as herein used shall not include any purchaser, as such
purchaser, of any of the Securities from any of the several Underwriters.
12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Representatives have been retained solely to act as an underwriter in connection with the sale of
the Securities and that no fiduciary, advisory or agency relationship between the Company and the
Representatives have been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Representatives have advised or are advising the Company on
other matters; (b) the price and other terms of the Securities set forth in this Agreement were
established by the Company following discussions and arms-length negotiations with the
Representatives 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 Representatives and their affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the Company and that the
Representatives have no obligation to disclose such interest and transactions to the Company by
virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the
Representatives are acting, in respect of the transactions contemplated by this Agreement, solely
for the benefit of the Representatives and the other Underwriters, and not on behalf of the
Company; (e) it, he or she waives to the fullest extent permitted by law, any claims it may have
against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty in
respect of any of the transactions contemplated by this Agreement and agrees that the
Representatives shall have no liability (whether direct or indirect) to the Company in respect of
such a fiduciary duty claim on behalf of the Company, including stockholders, employees or
creditors of the Company.
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13. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
14. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
15. General Provisions. 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. This Agreement may not
be amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
[Signature Page Follows]
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Please sign and return to the Company the enclosed duplicates of this letter whereupon this
letter will become a binding agreement between the Company and the several Underwriters in
accordance with its terms.
| Very truly yours, Novavax, Inc. |
||||
| By | /s/ Xxxxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxxxx X. Xxxxxxxx | |||
| Title: | CFO | |||
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
| Xxxxx Xxxxxxx & Co. |
||||
| By | /s/ Stuart Duty | |||
| Name: Stuart Duty | ||||
| Title: Managing Director | ||||
