EXHIBIT 1.1
Underwriting Agreement dated October 29, 2003
GERON CORPORATION
5,000,000 Shares
Common Stock
($0.001 par value per Share)
UNDERWRITING AGREEMENT
October 29, 2003
UNDERWRITING AGREEMENT
October 29, 2003
UBS Securities LLC
XX Xxxxx Securities Corporation
Lazard Freres & Co. LLC
Xxxxxxx & Company, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Geron Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in Schedule A annexed
hereto (the "Underwriters"), for whom you are acting as representatives, an
aggregate of 5,000,000 shares (the "Firm Shares") of common stock, $0.001 par
value per share (the "Common Stock"), of the Company. In addition, solely for
the purpose of covering over-allotments, the Company proposes to grant to the
Underwriters the option to purchase from the Company up to an additional 750,000
shares of Common Stock (the "Additional Shares"). The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(File No. 333-81596) under the Act (the "registration statement"). Amendments to
such registration statement, if necessary or appropriate, have been similarly
prepared and filed with the Commission. Such registration statement, as so
amended, has been declared by the Commission to be effective under the Act. The
Company has filed with the Commission a Prepricing Prospectus (as defined and
referred to below) pursuant to Rule 424(b) under the Act, describing the Shares
and the offering thereof, in such form as has been provided to or discussed
with, and approved by, the Underwriters. The Company will next file with the
Commission pursuant to Rule 424(b) under the Act a final prospectus supplement
to the Basic Prospectus (as defined below), describing the Shares and the
offering thereof, in such form as has been provided to or discussed with, and
approved, by the Underwriters.
The term "Registration Statement" as used in this Agreement
means the registration statement, as amended at the time it became effective and
as supplemented or amended prior to the execution of this Agreement, including
(i) all financial schedules and exhibits thereto and (ii) all documents
incorporated by reference or deemed to be incorporated by reference therein. If
an abbreviated registration statement is prepared and filed with the Commission
in accordance with Rule 462(b) under the Act (an "Abbreviated Registration
Statement"), the term "Registration Statement" shall also include the
Abbreviated Registration
Statement. The term "Basic Prospectus" as used in this Agreement means the basic
prospectus dated as of February 14, 2002 and filed with the Commission pursuant
to Rule 424(b) for use in connection with the offer and/or sale of Shares
pursuant to this Agreement. The term "Prepricing Prospectus" as used in this
Agreement means any form of preliminary prospectus used in connection with the
marketing of the Shares, including the preliminary prospectus consisting of the
preliminary prospectus supplement dated as of October 15, 2003 and filed with
the Commission on October 15, 2003 pursuant to Rule 424 under the Act, and the
Basic Prospectus, in each case as any of the foregoing may be amended or
supplemented by the Company. The term "Prospectus Supplement" as used in this
Agreement means any final prospectus supplement specifically relating to the
Shares, in the form filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Act. The term "Prospectus" as used in this
Agreement means the Basic Prospectus together with any Prospectus Supplement
except that if such Basic Prospectus is amended or supplemented on or prior to
the date on which any Prospectus Supplement was first filed pursuant to Rule
424, the term "Prospectus" shall refer to the Basic Prospectus as so amended or
supplemented and as supplemented by the Prospectus Supplement. Any reference
herein to the registration statement, the Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement or the
Prospectus shall be deemed to refer to and include (i) the documents
incorporated by reference therein pursuant to Form S-3 (the "Incorporated
Documents") and (ii) the copy of such Registration Statement, the Basic
Prospectus, any Prepricing Prospectus, any Prospectus Supplement, the Prospectus
or the Incorporated Documents, as applicable, filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX"). Any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement, any Prepricing Prospectus, any Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act") after the
effective date of the Registration Statement, or the date of the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8
hereof, in each case at a purchase price of $11.28 per Share. The Company is
advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
-2-
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by UBS
Securities LLC ("UBS") on behalf of the several Underwriters at any time and
from time to time on or before the thirtieth day following the date of the
Prospectus, by written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the option is being exercised
and the date and time when the Additional Shares are to be delivered (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company by Federal Funds wire transfer against
delivery of the certificates for the Firm Shares to you through the facilities
of The Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on November 3, 2003 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are to be made is
hereinafter sometimes called "the time of purchase." Electronic transfer of the
Firm Shares shall be made to you at the time of purchase in such names and in
such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Electronic transfer of the Additional
Shares shall be made to you at the additional time of purchase in such names and
in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices of Xxxxx
Xxxxxxxxxx LLP at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00
A.M., New York City time, on the date of the closing of the purchase of the Firm
Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) the Registration Statement has been declared
effective under the Act; no stop order of the Commission preventing or
suspending the use of the Basic Prospectus, any Prepricing Prospectus,
any Prospectus Supplement or the Prospectus or the effectiveness of the
Registration Statement has been issued and no proceedings for such
purpose have been instituted or, to the Company's knowledge, are
contemplated by the Commission; the Company is eligible to use Form
S-3; such registration statement at
-3-
the date of this Agreement meets, and the offering of the Shares
complies with, the requirements of Rule 415 under the Act. The
Registration Statement complied when it became effective, complies and,
at the time of purchase, any additional time of purchase and at any
time at which the Prospectus is delivered in connection with the sale
of any Shares, will comply, and the Basic Prospectus, any Prepricing
Prospectus, any Prospectus Supplement and the Prospectus conformed as
of its date, conform and, at the time of purchase, any additional time
of purchase and at any time at which the Prospectus is delivered in
connection with the sale of any Shares, will conform in all material
respects with the requirements of the Act (including said Rule 415);
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the conditions to the use
of Form S-3 have been satisfied; and the Registration Statement did not
at the time of effectiveness, and, together with the Prospectus, does
not and, at the time of purchase, any additional time of purchase and
at any time at which the Prospectus is delivered in connection with the
sale of any Shares, will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the most
recent Prepricing Prospectus and the Prospectus did not as of its date,
does not and, at the time of purchase, any additional time of purchase
and at any time at which the Prospectus is delivered in connection with
the sale of any Shares, will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no warranty or representation with
respect to any statement contained in the Registration Statement, the
most recent Prepricing Prospectus or the Prospectus in reliance upon
and in conformity with information concerning an Underwriter and
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use in the Registration Statement, the most
recent Prepricing Prospectus or the Prospectus; the documents
incorporated by reference in the most recent Prepricing Prospectus, the
Registration Statement and the Prospectus, at the time they became
effective or were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act and did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Company has not distributed and will not distribute
any offering material in connection with the offering or sale of the
Shares other than any Prepricing Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has
an authorized and outstanding capitalization as set forth in the
section of the Prospectus Supplement entitled "Capitalization," and, as
of the time of purchase and any additional time of purchase, as the
case may be, the Company shall have an authorized and outstanding
capitalization as set forth in the section of the Prospectus Supplement
entitled "Capitalization," (subject, in each case, to the issuance of
shares of Common Stock pursuant to this Agreement, upon exercise of
stock options and warrants disclosed as outstanding in the Registration
Statement or the Prospectus, the grant of options under existing stock
option plans described in the Registration Statement or the Prospectus
or
-4-
the issuance of shares of Common Stock under the employee stock
purchase plan described in the Registration Statement or the
Prospectus); all of the issued and outstanding shares of capital stock,
including the Common Stock, of the Company have been duly authorized
and validly issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and
were not issued in violation of any preemptive right, resale right,
right of first refusal or similar right;
(c) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with full corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus, to execute and
deliver this Agreement and to issue, sell and deliver the Shares as
contemplated herein;
(d) the Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where
the ownership or leasing of its properties or the con duct of its
business requires such qualification (the only such jurisdiction being
the State of California), except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have
a material adverse effect on the business, properties, financial
condition, results of operation or prospects of the Company and the
Subsidiary (as hereinafter defined) taken as a whole (a "Material
Adverse Effect");
(e) the Company has no subsidiaries (as defined under
the Act) other than Geron Bio-Med Limited, a United Kingdom company,
(the "Subsidiary"); the Company owns all of the issued and outstanding
capital stock of the Subsidiary; other than the Subsidiary, the Company
does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, joint venture, association or
other entity, except for such securities or interests that do not,
individually or in the aggregate, exceed a value to be carried on the
Company's balance sheet of $500,000, provided that, except as disclosed
in the Registration Statement and Prospectus, the Company does not
"control" (as such term is defined in the Act) any such entities;
complete and correct copies of the certificates of incorporation and
the bylaws of the Company and the Subsidiary and all amendments thereto
have been delivered to you, and, except as set forth in the exhibits to
the Registration Statement, no changes therein will be made on or
before the time of purchase or, if later, the additional time of
purchase; the Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus;
the Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect; all of the outstanding
shares of capital stock of the Subsidiary have been duly authorized and
validly issued, are fully paid and non-assessable and are owned by the
Company subject to no security interest, other encumbrance or adverse
claims; no options, warrants or other rights to purchase,
-5-
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiary are outstanding; and the assets, operations and liabilities
of the Subsidiary are not material to the consolidated financial
position or operations of the Company and the Subsidiary, taken as a
whole;
(f) the Shares have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-assessable
and free of statutory and contractual preemptive rights, resale rights,
rights of first refusal and similar rights which have not been waived
or satisfied;
(g) the capital stock of the Company, including the
Shares, conforms to the description thereof contained in the
Registration Statement and the Prospectus, and the certificates for the
Shares are in due and proper form, and the holders of the Shares will
not be subject to personal liability by reason of being such holders;
(h) this Agreement has been duly authorized, executed
and delivered by the Company;
(i) neither the Company nor the Subsidiary is in
breach or violation of or in default under (nor has any event occurred
which with notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a part of
such indebtedness under) (i) its respective charter or bylaws, or (ii)
any indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which the Company or the Subsidiary is
a party or by which any of them or any of their properties may be bound
or affected other than, in the case of clause (ii) for those breaches,
violations or default that would not, individually or in the aggregate,
have a Material Adverse Effect, and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and
the consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or constitute a
default under) (x) the charter or bylaws of the Company or the
Subsidiary, (y) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company
or the Subsidiary is a party or by which any of them or any of their
respective properties may be bound or affected, or (z) any federal,
state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or the Subsidiary, other than, in
the case of clause (y) for those breaches, violations or default that
would not, individually or in the aggregate, have a Material Adverse
Effect;
(j) no approval, authorization, consent or order of
or filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or of or with
the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ"), or approval of the
-6-
shareholders of the Company, is required in connection with the
issuance and sale of the Shares or the consummation by the Company of
the transactions contemplated hereby other than (i) registration of the
Shares under the Act, which has been effected, (ii) filings with the
Commission pursuant to Rule 424(b) under the Act, (iii) filings with
the Commission on Form 8-K with respect to the Underwriting Agreement,
(iv) and any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Shares are being offered
by the Underwriters or (v) under the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD") (including
any listing applications, and consents to be received thereunder, and
notices required by the Nasdaq National Market in the ordinary course
of the offering of the Shares);
(k) except as expressly set forth in the Registration
Statement and the Prospectus, (i) no person has the right, contractual
or otherwise, to cause the Company to issue or sell to it any shares of
Common Stock or shares of any other capital stock or other equity
interests of the Company, (ii) no person has any preemptive rights,
resale rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock of or other
equity interests in the Company and (iii) no person has the right to
act as an underwriter or as a financial advisor to the Company in
connection with the offer and sale of the Shares, in the case of each
of the foregoing clauses (i), (ii) and (iii), whether as a result of
the filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Company to register under
the Act any shares of Common Stock or shares of any other capital stock
of or other equity interests in the Company, or to include any such
shares or interests in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiary has all
necessary licenses, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule, and has obtained all necessary
licenses, authorizations, consents and approvals from other persons, in
order to conduct its respective business, except for such licenses,
authorizations, consents and approvals the failure of which to obtain
would not, individually or in the aggregate, have a Material Adverse
Effect; neither the Company nor the Subsidiary is in violation of, or
in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization, consent
or approval or any federal, state, local or foreign law, regulation or
rule or any decree, order or judgment applicable to the Company or the
Subsidiary, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a
Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions or off-balance sheet
arrangements (as defined in Item 303 of Regulation S-K under the Act),
contracts, licenses, agreements, leases or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
-7-
(n) except as described in the Registration Statement
or the Prospectus, there are no actions, suits, claims, investigations
or proceedings pending or threatened or contemplated to which the
Company or the Subsidiary or any of their respective directors or
officers is or (in the case of threatened or contemplated actions,
suits, claims, investigations or proceedings) would be a party or of
which any of their respective properties is or (in the case of
threatened or contemplated actions, suits, claims, investigations or
proceedings) would be subject at law or in equity, before or by any
federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, except any such action, suit, claim,
investigation or proceeding which would not result in a judgment,
decree or order having, individually or in the aggregate, a Material
Adverse Effect or preventing consummation of the transactions
contemplated hereby;
(o) Ernst & Young LLP, whose report on the
consolidated financial statements of the Company and the Subsidiary is
included the Registration Statement and the Prospectus, are independent
public accountants as required by the Act and by Rule 3600T of the
Public Company Accounting Oversight Board;
(p) the financial statements included in the
Registration Statement and the Prospectus, together with the related
notes and schedules, present fairly the consolidated financial position
of the Company and the Subsidiary as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiary for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data
set forth in the Registration Statement and the Prospectus are
accurately presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be
included in the Registration Statement and the Prospectus (including,
without limitation, as required by Rules 3-12 or 3-05 or Article 11 of
Regulation S-X under the Act) that are not included as required; the
Company and the Subsidiary do not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations or any "variable interest entities" within the meaning of
Financial Accounting Standards Board Interpretation No. 46), not
disclosed in the Registration Statement and the Prospectus; and all
disclosures contained in the Registration Statement or the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by the
rules and regulations of the Commission) comply with Regulation G of
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively, the "Exchange Act") and Item 10
of Regulation S-K under the Act, to the extent applicable;
(q) except as expressly disclosed in the Registration
Statement or Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management,
financial condition or results of operations of the Company and the
Subsidiary taken as a whole, (ii) any transaction which is material to
the Company and
-8-
the Subsidiary taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by
the Company or the Subsidiary, which is material to the Company and the
Subsidiary taken as a whole, (iv) any change in the capital stock or
outstanding indebtedness of the Company or the Subsidiary (other than
those changes in outstanding capitalization as provided for in Section
3(b) above) or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company;
(r) the Company has obtained for the benefit of the
Underwriters the agreement (a "Lock-Up Agreement"), in the form set
forth as Exhibit A hereto, of each of its directors and executive
officers;
(s) neither the Company nor the Subsidiary is and,
after giving effect to the offering and sale of the Shares, neither of
them will be, an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(t) the Company and the Subsidiary have good and
marketable title to all property (real and personal) described the
Registration Statement or in the Prospectus as being owned by each of
them, free and clear of all liens, claims, security interests or other
encumbrances, other than those liens, claims, security interests or
other encumbrances that would not, individually or in the aggregate,
have a Material Adverse Effect; all the property described in the
Registration Statement and the Prospectus as being held under lease by
the Company or the Subsidiary is held thereby under valid, subsisting
and enforceable leases other than as would not, individually or in the
aggregate, have a Material Adverse Effect;
(u) the Company and the Subsidiary own, or have
obtained valid and enforceable licenses for or other rights to use, the
inventions, patent applications, patents, trademarks (both registered
and unregistered), tradenames, service names, copyrights, trade secrets
and other proprietary information described in the Registration
Statement or the Prospectus as being owned or licensed by them
(collectively, "Intellectual Property");
(v) except as disclosed in the Registration Statement
or Prospectus or as would not, individually or in the aggregate, have a
Material Adverse Effect,
(i) there are no third parties who have, or,
to the Company's knowledge after due inquiry, will be
able to establish, conflicting rights to any
Intellectual Property rights);
(ii) to the Company's knowledge, there is no
infringement by third parties of any Intellectual
Property owned by or exclusively licensed to the
Company;
(iii) there is no pending or, to the
Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the
Company's rights in or to any Intellectual Property,
and the Company is unaware of any facts which would
form valid grounds for any such action,
-9-
suit, proceeding or claim;
(iv) there is no pending or, to the
Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the
validity, scope or enforceability of any Intellectual
Property, and the Company is unaware of any facts
which would form valid grounds for any such action,
suit, proceeding or claim;
(v) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or
claim by others that the Company or the Subsidiary
infringes or otherwise violates any patent,
trademark, tradename, service name, copyright, trade
secret or other proprietary rights of others, and the
Company is unaware of any facts which would form
valid grounds for any such action, suit, proceeding
or claim upon commercialization of the product
candidates described in the Prospectus;
(vi) to the Company's knowledge, none of the
issued or pending claims of any of the Intellectual
Property is the subject of an interference proceeding
in the U.S. Patent and Trademark Office or a similar
proceeding in the patent agency of another country,
or has been suspended pending declaration of such an
interference; and
(vii) to the Company's knowledge, the
Company is in compliance with its duty of disclosure
under 37 CFR 1.56.
(w) neither the Company nor the Subsidiary is engaged
in any unfair labor practice; except for matters which would not,
individually or in the aggregate, have a Material Adverse Effect, (i)
there is (A) no unfair labor practice complaint pending or, to the
Company's knowledge, threatened against the Company or the Subsidiary
before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining
agreements is pending or threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the Company's knowledge, threatened
against the Company or the Subsidiary and (C) no union representation
dispute currently existing concerning the employees of the Company or
the Subsidiary, and (ii) to the Company's knowledge, (A) no union
organizing activities are currently taking place concerning the
employees of the Company or the Subsidiary and (B) there has been no
violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 ("ERISA") or the rules and
regulations promulgated thereunder concerning the employees of the
Company or the Subsidiary;
(x) the Company and the Subsidiary and their
properties, assets and operations are in compliance with, and hold all
permits, authorizations and approvals required under, Environmental
Laws (as defined below), except to the extent that failure to so comply
or to hold such permits, authorizations or approvals would not,
individually or in the aggregate, have a Material Adverse Effect; there
are no past or present, and the
-10-
Company does not anticipate any future, events, conditions,
circumstances, activities, practices, actions, omissions or plans that
could reasonably be expected to give rise to any material costs or
liabilities to the Company or the Subsidiary under, or to interfere
with, or prevent, compliance by the Company or the Subsidiary in any
material respect with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor the Subsidiary (i) is the subject of any
investigation, (ii) has received any notice or claim, (iii) is a party
to or affected by any pending or threatened action, suit or proceeding,
(iv) is bound by any judgment, decree or order or (v) has entered into
any agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened
release or cleanup at any location of any Hazardous Materials (as
defined below) (as used herein, "Environmental Law" means any federal,
state, local or foreign law, statute, ordinance, rule, regulation,
order, decree, judgment, injunction, permit, license, authorization or
other binding requirement, or common law, relating to health, safety or
the protection, cleanup or restoration of the environment or natural
resources, including those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other
handling or release or threatened release of Hazardous Materials, and
"Hazardous Materials" means any material (including, without
limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or may give rise to liability under any
Environmental Law);
(y) all tax returns required to be filed by the
Company and the Subsidiary have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have
been paid, other than those being contested in good faith and for which
adequate reserves have been provided;
(z) the Company maintains insurance covering its
properties, operations, personnel and businesses and those of the
Subsidiary as the Company deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in
accordance with customary industry practice to protect the Company and
the Subsidiary and their businesses; all such insurance is fully in
force on the date hereof and will be fully in force at the time of
purchase and any additional time of purchase, except as would not,
individually or in the aggregate, have a Material Adverse Effect;
(aa) neither the Company nor the Subsidiary has
sustained since the date of the last audited financial statements
included in the Registration Statement and the Prospectus any material
loss or interference with its respective business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree;
(bb) the Company has not sent or received any
communication regarding termination of, or intent not to renew, any of
the contracts or agreements referred to or described in, or filed as an
exhibit to, the Registration Statement, and no such termination or
non-renewal has been threatened by the Company or, to the Company's
knowledge, any other party to any such contract or agreement, except
for any
-11-
such agreements the non-renewal or termination of which would not,
individually or in the aggregate, have a Material Adverse Effect;
(cc) the Company and the Subsidiary maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(dd) the Company has established and maintains and
evaluates "disclosure controls and procedures" (as such term is defined
in Rule 13a-14 and 15d-14 under the Exchange Act) and "internal control
over financial reporting" (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to the
Company, including its consolidated subsidiary, is made known to the
Company's Chief Executive Officer and its Chief Financial Officer by
others within those entities, and such disclosure controls and
procedures are effective to perform the functions for which they were
established; the Company's auditors and the Audit Committee of the
Board of Directors of the Company have been advised of: (i) any
significant deficiencies in the design or operation of internal
controls which could adversely affect the Company's ability to record,
process, summarize, and report financial data; and (ii) any fraud,
whether or not material, that involves management or other employees
who have a role in the Company's internal controls; any material
weaknesses in internal controls have been identified for the Company's
auditors; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses;
(ee) the Company has provided you true, correct and
complete copies of all documentation pertaining to any extension of
credit in the form of a personal loan made, directly or indirectly, by
the Company or any Subsidiary to any director or executive officer of
the Company, or to any family member or affiliate of any director or
executive officer of the Company; and on or after July 30, 2002, the
Company has not, directly or indirectly, including through the
Subsidiary: (i) extended credit, arranged to extend credit, or renewed
any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family
member or affiliate of any director or executive officer of the
Company; or (ii) made any material modification, including any renewal
thereof, to any term of any personal loan to any director or executive
officer of the Company, or any family member or affiliate of any
director or executive officer, which loan was outstanding on July 30,
2002;
(ff) all statistical or market-related data included
in the Registration
-12-
Statement or the Prospectus are based on or derived from sources that
the Company believes to be reliable and accurate, and the Company has
obtained the written consent to the use of such data from such sources
to the extent required;
(gg) except pursuant to this Agreement, neither the
Company nor the Subsidiary has incurred any liability for any finder's
or broker's fee or agent's commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby or by the Prospectus;
(hh) neither the Company nor the Subsidiary nor any
of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or
which has constituted or might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares; and
(ii) to the Company's knowledge, there are no
affiliations or associations between any member of the NASD and any of
the Company's officers, directors or 5% or greater securityholders,
except as set forth in the Registration Statement and the Prospectus.
In addition, any certificate signed by any officer of the
Company addressed to the Underwriters or counsel for the Underwriters in
connection with the offering of the Shares shall be deemed to be a
representation and warranty by the Company or Subsidiary, as the case may be, as
to matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby
agrees:
(a) to furnish such information as may be required
and otherwise to cooperate in qualifying the Shares for offering and
sale under the securities or blue sky laws of such states or other
jurisdictions as you may designate and to maintain such qualifications
in effect so long as you may request for the distribution of the
Shares; provided, however, that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of
process under the laws of any such jurisdiction (except service of
process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for
offer or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose;
(b) to make available to the Underwriters in New York
City, as soon as practicable after this Agreement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may reasonably request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare, at its expense, promptly upon written request
such amendment or
-13-
amendments to the Registration Statement and the Prospectus as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and
delivered, it is necessary for any post-effective amendment to the
Registration Statement to be declared effective before the Shares may
be sold, the Company will endeavor to cause the Registration Statement
or such post-effective amendment to become effective as soon as
possible, and the Company will advise you promptly and, if requested by
you, will confirm such advice in writing, (i) when the post-effective
amendment to the Registration Statement has become effective, and (ii)
if Rule 430A under the Act is used, when the Prospectus is filed with
the Commission pursuant to Rule 424(b) under the Act (which the Company
agrees to file in a timely manner under such Rule);
(d) to advise you promptly, confirming such advice in
writing, of any request by the Commission for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order, suspending the
effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting
or removal of such order as soon as possible; to advise you promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus, including by filing any documents that would be
incorporated therein by reference, and to provide you and Underwriters'
counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no
such amendment or supplement to which you shall object in writing;
(e) to file promptly all reports and any definitive
proxy or information statement required to be filed by the Company with
the Commission in order to comply with the Exchange Act subsequent to
the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Shares; and to provide you with a copy of such reports and statements
and other documents to be filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act during such period a reasonable amount
of time prior to any proposed filing, and to promptly notify you of
such filing;
(f) if necessary or appropriate, to file a
registration statement pursuant to Rule 462(b) under the Act and pay
the applicable fees in accordance with the Act;
(g) to advise the Underwriters promptly of the
happening of any event within the time during which a prospectus
relating to the Shares is required to be delivered under the Act which
would require the making of any change in the Prospectus then being
used so that the Prospectus would not include an untrue statement of
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
are made, not misleading, and, during such time, subject to Section
4(d) hereof, to prepare and furnish, at the Company's expense, to the
Underwriters promptly such amendments or supplements to such Prospectus
as may be necessary to reflect any such change;
-14-
(h) to make generally available to its security
holders, and to deliver to you, an earnings statement of the Company
(which will satisfy the provisions of Section 11(a) of the Act)
covering a period of twelve months beginning after the effective date
of the Registration Statement (as defined in Rule 158(c) under the Act)
as soon as is reasonably practicable after the termination of such
twelve-month period but in any case not later than March 1, 2005;
(i) to furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report
(including a consolidated balance sheet and statements of income,
shareholders' equity and cash flow of the Company and the Subsidiary
for such fiscal year, accompanied by a copy of the certificate or
report thereon of nationally recognized independent certified public
accountants duly registered with the Public Company Oversight
Accounting Board);
(j) to furnish to you five copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
copies of the foregoing (other than exhibits) for distribution of a
copy to each of the other Underwriters;
(k) to furnish to you promptly and, upon written
request, to each of the other Underwriters for a period of five years
from the date of this Agreement (i) copies of any reports, proxy
statements, or other communications which the Company shall send to its
stockholders or shall from time to time publish or publicly
disseminate, (ii) copies of all annual, quarterly and current reports
filed with the Commission on Forms 10-K, 10-Q or 8-K, or such other
similar forms as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on
which any class of securities of the Company is listed and (iv) such
other information as you may reasonably request regarding the Company
or the Subsidiary;
(l) to furnish to you upon request as early as
practicable prior to the time of purchase and any additional time of
purchase, as the case may be, but not later than two business days
prior thereto, a copy of the any unaudited financial statements of the
Company and the Subsidiary which have been read by the Company's
independent certified public accountants, as stated in their letter to
be furnished pursuant to Section 6(c) hereof;
(m) to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption "Use of proceeds" in
the Prospectus;
(n) to pay all costs, expenses, fees and taxes in
connection with (i) the preparation and filing of the Registration
Statement, the Basic Prospectus, each Prepricing Prospectus, each
Prospectus Supplement, the Prospectus and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to
the Underwriters and to dealers (including costs of mailing and
shipment), (ii) the registration, issue, sale and delivery of the
Shares including any stock or transfer taxes and stamp or similar
duties payable upon the sale, issuance or delivery of the Shares to the
Underwriters, (iii) the producing, word processing and/or printing of
this Agreement,
-15-
any Agreement Among Underwriters, any dealer agreements, any Powers of
Attorney and any closing documents (including compilations thereof) and
the reproduction and/or printing and furnishing of copies of each
thereof to the Underwriters and (except closing documents) to dealers
(including costs of mailing and shipment), (iv) the qualification of
the Shares for offering and sale under state or foreign laws and the
determination of their eligibility for investment under state or
foreign law as aforesaid (including the reasonable legal fees and
filing fees and other disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any
listing of the Shares on any securities exchange or qualification of
the Shares for quotation on the NASDAQ and any registration thereof
under the Exchange Act, (vi) any filing for review of the public
offering of the Shares by the NASD, including the reasonable legal fees
and filing fees and other disbursements of counsel to the Underwriters,
(vii) the fees and disbursements of any transfer agent or registrar for
the Shares, (viii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing
of the offering and sale of the Shares to prospective investors and the
Underwriters' sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road
show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants, (ix) the performance
of the Company's other obligations hereunder; with respect to the cost
of any aircraft chartered in connection with the road show, the Company
shall be solely responsible for the costs, expenses, fees and taxes
relating to such aircraft ("Charter Costs") up to $25,000, provided
that should the Charter Costs exceed $25,000, the Company shall be
responsible for 50% of such additional Charter Costs and the
Underwriters shall be responsible for 50% of such additional Charter
Costs, provided further that the Underwriters' responsibility for
payment of Charter Costs shall not exceed $30,000 (the "Underwriter
Limit"), and all Charter Costs in excess of the Underwriter Limit shall
be borne by the Company;
(o) not to sell, offer to sell, contract or agree to
sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, any Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or
any other securities of the Company that are substantially similar to
Common Stock (collectively, "Company Securities"), or file or cause to
be declared effective a registration statement under the Act relating
to the offer and sale of any shares of Company Securities for a period
of 90 days after the date hereof (the "Lock-Up Period"), without the
prior written consent of UBS, except for (i) the registration of the
Shares and the sales to the Underwriters pursuant to this Agreement,
(ii) issuances of Common Stock upon the exercise of options or warrants
disclosed as outstanding in the Registration Statement or the
Prospectus, (iii) the issuance of employee stock options not
exercisable during the Lock-Up Period pursuant to stock option plans
described in the Registration Statement or the Prospectus, (iv) the
sale of stock to employees pursuant to the Company's Employee Stock
Purchase Plan, (v) issuance of shares of Common Stock under the
Company's share purchase rights plan and (vi) the effectiveness of the
Company's pending registration statements on Form S-3 that were filed
before the date
-16-
hereof and shares issued under such registration statements; provided
that after the thirtieth (30th) day of the Lock-Up Period the Company
may, without the prior written consent of UBS, offer, contract or agree
to sell or grant an option to purchase Company Securities during the
Lock-Up Period if (i) no Company Securities are issued, sold, or
delivered and no option to purchase is exercisable until after the
Lock-Up Period and (ii) the offer, contract, agreement, or grant is
made as part of a strategic acquisition, partnering, or collaboration
agreement or in consideration for a license to the Company of
intellectual property or to a contract provider of goods or services to
the Company in compensation for such goods or services, and (iii) the
Company informs the Underwriters of any contract, agreement, or grant
promptly after it becomes legally binding on the Company.;
(p) to use its best efforts to cause the Common Stock
to be listed for quotation on the NASDAQ and to maintain such listing;
and
(q) to maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for
the Common Stock.
5. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to the fifth paragraph of Section 8 hereof or the default by one or
more of the Underwriters in its or their respective obligations hereunder, the
Company shall, in addition to paying the amounts described in Section 4(n)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof, at
the time of purchase and, if applicable, at the additional time of purchase, the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Company shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an
opinion of Xxxxxx & Xxxxxxx LLP, counsel for the Company, addressed to
the Underwriters, and dated the time of purchase or the additional time
of purchase, as the case may be, with executed copies for each of the
other Underwriters, and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in the form set forth in
Exhibit B hereto.
(b) The Company shall furnish to you at the time of
purchase and, if applicable, at the additional time of purchase, an
opinion of Xxxxx X. Xxxx, Ph.D., X.X., special counsel for the Company
with respect to patents and proprietary rights, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the
other Underwriters, and in form and substance satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, in the form set forth in
Exhibit C hereto.
(c) You shall have received from Ernst & Young LLP
comfort letters
-17-
dated, respectively, the date of this Agreement, the time of purchase
and, if applicable, the additional time of purchase, and addressed to
the Underwriters (with executed copies for each of the Underwriters) in
the forms heretofore approved by UBS.
(d) You shall have received at the time of purchase
and, if applicable, at the additional time of purchase, the favorable
opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, dated
the time of purchase or the additional time of purchase, as the case
may be, in form and substance reasonably satisfactory to UBS.
(e) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus, including documents deemed to
be incorporated by reference therein, shall have been filed to which
you object in writing.
(f) The Prospectus Supplement shall have been filed
with the Commission pursuant to Rule 424(b) under the Act at or before
5:30 P.M., New York City time, on the second full business day after
the date of this Agreement and any registration statement pursuant to
Rule 462(b) under the Act required in connection with the offering and
sale of the Shares shall have been filed and become effective no later
than 10:00 P.M., New York City time, on the date of this Agreement.
(g) Prior to the time of purchase, and, if
applicable, the additional time of purchase, (i) no stop order with
respect to the effectiveness of the Registration Statement shall have
been issued under the Act or proceedings initiated under Section 8(d)
or 8(e) of the Act; (ii) the Registration Statement and all amendments
thereto shall not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto shall not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading.
(h) Between the time of execution of this Agreement
and the time of purchase or the additional time of purchase, as the
case may be, (A) no material adverse change or any development
involving a prospective material adverse change in the business,
properties, management, financial condition or results of operations of
the Company and the Subsidiary taken as a whole shall occur or become
known and (B) no transaction which is material and adverse to the
Company has been entered into by the Company or the Subsidiary.
(i) The Company will, at the time of purchase and, if
applicable, at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial
Officer in the form attached as Exhibit D hereto.
(j) You shall have received signed Lock-up Agreements
referred to in Section 3(r) hereof.
(k) The Company shall have furnished to you such
other documents and certificates as to the accuracy and completeness of
any statement in the Registration
-18-
Statement and the Prospectus as of the time of purchase and, if
applicable, the additional time of purchase, as you may reasonably
request.
(l) The Shares shall have been approved for quotation
on the NASDAQ, subject only to notice of issuance at or prior to the
time of purchase or the additional time of purchase, as the case may
be.
7. Effective Date of Agreement; Termination. This Agreement
shall become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of UBS or any group of
Underwriters (which may include UBS) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if (x) since the time of execution of
this Agreement or the earlier respective dates as of which information is given
in the Registration Statement and the Prospectus, there has been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiary taken as a whole, which would,
in UBS' judgment or in the judgment of such group of Underwriters, make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus, or (y) since of execution of this Agreement, there
shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on NASDAQ; (iii) a general moratorium on commercial banking
activities declared by either federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) an outbreak or escalation of hostilities or
acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war; or (v) any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
UBS' judgment or in the judgment of such group of Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares on the terms and in the manner contemplated in the Registration
Statement and the Prospectus, or (z) since the time of execution of this
Agreement, there shall have occurred any downgrading, or any notice or
announcement shall have been given or made of (i) any intended or potential
downgrading or (ii) any watch, review or possible change that does not indicate
an affirmation or improvement in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary by any "nationally recognized
statistical rating organization," as that term is defined in Rule 436(g)(2)
under the Act.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly in writing.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement, or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of
-19-
this Agreement, the Company shall not be under any obligation or liability under
this Agreement (except to the extent provided in Sections 4(n), 5 and 9 hereof),
and the Underwriters shall be under no obligation or liability to the Company
under this Agreement (except to the extent provided in Section 9 hereof) or to
one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections
6 and 7 hereof, if any Underwriter shall default in its obligation to take up
and pay for the Firm Shares to be purchased by it hereunder (otherwise than for
a failure of a condition set forth in Section 6 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term "Underwriter" as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 8 with like effect
as if such substituted Underwriter had originally been named in Schedule A
hereto.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
-20-
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold
harmless each Underwriter, its partners, directors and officers, and
any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, any such Underwriter or any
such person may incur under the Act, the Exchange Act, the common law
or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus
(the term Prospectus for the purpose of this Section 9 being deemed to
include any Prepricing Prospectus or the Prospectus, as any of the
foregoing may be amended or supplemented by the Company), or arises out
of or is based upon any omission or alleged omission to state a
material fact required to be stated in either such Registration
Statement or such Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in,
and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to
the Company expressly for use in, such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company in Section 3
hereof or the failure by the Company to perform when and as required
any agreement or covenant contained herein or (iii) any untrue
statement or alleged untrue statement of any material fact contained in
any audio or visual materials provided by the Company or based upon
written information furnished by or on behalf of the Company including,
without limitation, slides, videos, films or tape recordings used in
connection with the marketing of the Shares.
If any action, suit or proceeding (each, a
"Proceeding") is brought against an Underwriter or any such person in
respect of which indemnity may be sought against the Company pursuant
to the foregoing paragraph, such Underwriter or such person shall
promptly notify the Company in writing of the institution of such
Proceeding and the Company shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Company shall not relieve
the Company from any liability which the Company may have to any
Underwriter or any such person or otherwise, except to the extent the
Company shall not have otherwise learned of such Proceeding and such
failure results in the forfeiture by the Company of substantial rights
or defenses. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
of such person unless the employment of such counsel shall have been
authorized in writing by the Company in
-21-
connection with the defense of such Proceeding or the Company shall not
have, within a reasonable period of time in light of the circumstances,
employed counsel to have charge of the defense of such Proceeding or
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in
which case the Company shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but
the Company may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of
the Company), in any of which events such fees and expenses shall be
borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such
Proceeding). The Company shall not be liable for any settlement of any
Proceeding effected without its written consent but, if settled with
the written consent of the Company, the Company agrees to indemnify and
hold harmless any Underwriter and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have fully reimbursed
the indemnified party in accordance with such request prior to the date
of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention
to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened Proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Company, its directors and officers, and
any person who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such
person may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in, and in conformity with
information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use
in, the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
-22-
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company or such
person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the
defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses; provided, however, that the omission to so notify
such Underwriter shall not relieve such Underwriter from any liability
which such Underwriter may have to the Company or any such person or
otherwise, except to the extent the Company shall not have otherwise
learned of such Proceeding and such failure results in the forfeiture
by the Company of substantial rights or defenses. The Company or such
person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall
have been authorized in writing by such Underwriter in connection with
the defense of such Proceeding or such Underwriter shall not have,
within a reasonable period of time in light of the circumstances,
employed counsel to defend such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in
conflict with those available to such Underwriter (in which case such
Underwriter shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of
such Underwriter), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of
more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same
jurisdiction representing the indemnified parties who are parties to
such Proceeding). No Underwriter shall be liable for any settlement of
any such Proceeding effected without the written consent of such
Underwriter but, if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the
Company and any such person from and against any loss or liability by
reason of such settlement. Notwithstanding the foregoing sentence, if
at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then
the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if
(i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at
least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened Proceeding in
respect of which any
-23-
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
Proceeding.
(c) If the indemnification provided for in this
Section 9 is unavailable to an indemnified party under subsections (a)
and (b) of this Section 9 or insufficient to hold an indemnified party
harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, damages, expenses, liabilities or
claims (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 hand from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in
such losses, damages, expenses, liabilities or claims, 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 respective proportions as the total
proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company, and
the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the
Shares. The relative fault of the Company on the one hand and of the
Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage
which such Underwriter has otherwise been required to pay by reason of
such untrue statement 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
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
-24-
(e) The indemnity and contribution agreements
contained in this Section 9 and the covenants, warranties and
representations of the Company contained in this Agreement shall remain
in full force and effect regardless of any investigation made by or on
behalf of any Underwriter, its partners, directors or officers or any
person (including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and
shall survive any termination of this Agreement or the issuance and
delivery of the Shares. The Company and each Underwriter agree promptly
to notify each other of the commencement of any Proceeding against it
and, in the case of the Company, against any of the Company's officers
or directors in connection with the issuance and sale of the Shares, or
in connection with the Registration Statement or the Prospectus.
10. Information Furnished by the Underwriters. The statements
set forth in the fifth, seventh, eighth, ninth, tenth and eleventh paragraphs
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Company, shall be sufficient in all respects
if delivered or sent to the Company at the offices of the Company at 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000, Attention: Chief Financial Officer.
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction, service
and venue in any court in which any Claim arising out of or in any way relating
to this Agreement is brought by any third party against UBS or any indemnified
party. Each of UBS and the Company (on its behalf and, to the extent permitted
by applicable law, on behalf of its stockholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
-25-
14. Parties at Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters and the Company and
to the extent provided in Section 9 hereof the controlling persons, partners,
directors and officers referred to in such Section, and their respective
successors, assigns, heirs, personal representatives and executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
16. Successors and Assigns. This Agreement shall be binding
upon the Underwriters and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
17. Miscellaneous. UBS, an indirect, wholly owned subsidiary
of UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS AG. Because UBS is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are
not insured by the Federal Deposit Insurance Corporation, are not guaranteed by
a branch or agency, and are not otherwise an obligation or responsibility of a
branch or agency.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
-26-
If the foregoing correctly sets forth the understanding
between the Company and the several Underwriters, please so indicate in the
space provided below for that purpose, whereupon this agreement and your
acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
Very truly yours,
GERON CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: CFO
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
XX XXXXX SECURITIES CORPORATION
LAZARD FRERES & CO. LLC
XXXXXXX & COMPANY, INC.
as Managing Underwriters
By: UBS SECURITIES LLC
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Director
SCHEDULE A
Number of
Underwriter Firm Shares
----------------------------------------------- -----------
UBS Securities LLC............................. 2,425,000
XX Xxxxx Securities Corporation................ 970,000
Lazard Freres & Co. LLC........................ 727,500
Xxxxxxx & Company, Inc......................... 727,500
Leerink Xxxxx & Company........................ 50,000
Xxxxxx & Xxxxxxx, Inc.......................... 50,000
Xxxxxxxxxxx Xxxxxxxx Xxxxxx LLC ............... 50,000
---------
Total..................................... 5,000,000
=========
EXHIBIT A
Geron Corporation
Common Stock
($0.001 Par Value)
[Date]
UBS Securities LLC
XX Xxxxx Securities Corporation
Lazard Freres & Co. LLC
Xxxxxxx & Company, Inc.
As Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in
connection with the proposed Underwriting Agreement (the "Underwriting
Agreement") to be entered into by Geron Corporation (the "Company") and you, as
Representatives of the several Underwriters named therein, with respect to the
public offering (the "Offering") of common stock, par value $0.001 per share, of
the Company (the "Common Stock").
In order to induce you to enter into the Underwriting
Agreement, the undersigned agrees that for a period from the date hereof until
the expiration of 90 days after the date of the final prospectus supplement
relating to the Offering the undersigned will not, without the prior written
consent of UBS Securities LLC ("UBS"), (i) sell, offer to sell, contract or
agree to sell, hypothecate, pledge, grant any option to purchase or otherwise
dispose of or agree to dispose of, directly or indirectly, or file (or
participate in the filing of) a registration statement with the Securities and
Exchange Commission (the "Commission") in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
with respect to, any Common Stock of the Company or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, whether any such transaction is to
A-1
be settled by delivery of Common Stock or such other securities, in cash or
otherwise, or (iii) publicly announce an intention to effect any transaction
specified in clause (i) or (ii). The foregoing sentence shall not apply to (a)
the registration of or sale to the Underwriters of any Common Stock pursuant to
the Offering and the Underwriting Agreement, (b) bona fide gifts, provided the
recipient thereof agrees in writing with the Underwriters to be bound by the
terms of this Lock-Up Letter Agreement and confirms that he, she or it has been
in compliance with the terms of this Lock-Up Letter Agreement or (c)
dispositions to any trust for the direct or indirect benefit of the undersigned
and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Letter
Agreement and confirms that it has been in compliance with the terms of this
Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the
undersigned may have to require registration of Common Stock in connection with
the filing of a registration statement relating to the Offering. The undersigned
further agrees that, for a period from the date hereof until the expiration of
90 days after the date of the final prospectus supplement relating to the
Offering, the undersigned will not, without the prior written consent of UBS,
make any demand for, or exercise any right with respect to, the registration of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock.
* * *
A-2
If (i) the Company notifies you in writing that it does not
intend to proceed with the Offering, (ii) the registration statement filed with
the Securities and Exchange Commission with respect to the Offering is withdrawn
or (iii) for any reason the Underwriting Agreement shall be terminated prior to
the time of purchase (as defined in the Underwriting Agreement), this Lock-Up
Letter Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
Yours very truly,
___________________________
Name:
A-3
EXHIBIT B
OPINION OF XXXXXX & XXXXXXX LLP
1. The Company is a corporation under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Registration Statement and the
Prospectus.
2. Such counsel confirms that the Company is validly existing and in good
standing under the laws of the State of Delaware and is qualified to do
business in the States of California.
3. The execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company.
4. The Shares to be issued and sold by the Company pursuant to this
Agreement have been duly authorized by all necessary corporate action
of the Company and, when issued to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable and free of preemptive rights arising
from the Company's certificate of incorporation and bylaws, the
Delaware General Corporation Law ("DGCL") or the Material Agreements
(as defined below), other than those which have been waived.
5. The outstanding shares of Common Stock have been duly authorized by all
necessary corporate action of the Company, validly issued, and are
fully paid and non-assessable. None of such shares of Common Stock was
issued in violation of preemptive or similar rights arising from the
Company's certificate of incorporation or bylaws or the DGCL. As of
September 30, 2003, the authorized capital stock of the Company
consisted of 100,000,000 shares of Common Stock, par value $0.001 per
share and 3,000,000 shares of preferred stock, par value $0.001 per
share. With the Underwriters' consent, based solely on certificates
from the transfer agent and registrar of the Company, such counsel
confirms that the Company had 33,340,615 shares of Common Stock
outstanding as of September 30, 2003.
6. The form of certificate used to evidence the Common Stock complies in
all material respects with the applicable requirements of the DGCL and
the Nasdaq National Market.
7. The Registration Statement as of the date it was declared effective,
and the Prospectus, as of its date, complied as to form in all material
respects with the requirements for registration statements on Form S-3
under the Act and the rules and regulations of the Commission
thereunder; it being understood, however, that such counsel expresses
no opinion with respect to Regulation S-T or the financial statements,
schedules, or other financial data, included in, incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus. To such counsel's knowledge, there are no documents to be
filed as exhibits to the Registration Statement that were not so filed.
8. Each of the reports and proxy statements incorporated by reference in
the Registration Statement and the Prospectus, as of its respective
filing date, complied as to form in all material respects with the
applicable requirements for reports on Forms 10-K, 10-Q, and 8-K, and
proxy statements under Regulation 14A, as the case may be, under the
Exchange Act and
B-1
the rules and regulations of the Commission thereunder, it being
understood, however, that such counsel expresses no opinion with
respect to Regulation S-T or the financial statements, schedules or
other financial data, or exhibits included or incorporated by reference
in, or omitted from, such reports and proxy statements.
9. The statements in the Basic Prospectus under the caption "Description
of Common Stock," excluding the statements (a) regarding the number of
shares outstanding, (b) that all outstanding shares of Common Stock are
fully paid and nonassessable (which is addressed elsewhere herein) and
(c) that the Common Stock has no preemptive or other subscription
rights, insofar as they purport to constitute a summary of the terms of
the Common Stock, are accurate descriptions or summaries in all
material respects.
10. The Registration Statement has become effective under the Act. No stop
order suspending the effectiveness of the Registration Statement has
been issued under the Act and no proceedings therefor have been
initiated by the Commission. Any required filing of any Prepricing
Prospectus and any Prospectus Supplement pursuant to Rule 424 under the
Act has been made in accordance with Rule 424 and Rule 430A under the
Act.
11. The execution and delivery of this Agreement and the issuance and sale
of the Shares by the Company to the Underwriters pursuant to this
Agreement on the date hereof do not:
(i) violate the Company's certificate of incorporation
and bylaws;
(ii) violate any federal or California statute, rule or
regulation or the DGCL or the court or administrative orders, writs,
judgments or decrees specifically directed to the Company that were
identified to us by an officer of the Company as material to the
Company and listed on an exhibit to such opinion;
(iii) result in the breach of or a default under any of the
agreements (a) listed as exhibits 4 or 10 to the Company's Form 10-K
for the year ended December 31, 2002, and the Forms 10-Q for the
quarters ended March 31, 2003 and June 30, 2003 or (b) attached as
exhibits to the current reports on Form 8-K filed by the Company on
April 8, 2003 and April 9, 2003, May 27, 2003 and June 4, 2003 (the
"Material Agreements"), other than any such breach or default that has
been waived; or
(iv) require any consents, approvals, or authorizations to
be obtained by the Company, or any registrations, declarations or
filings to be made by the Company, in each case, under any federal or
California statute, rule or regulation applicable to the Company or the
DGCL, that have not been obtained or made, except such as may be
required under state securities laws in connection with the purchase
and distribution of such Shares by the Underwriters.
12. The Company is not, and immediately after giving effect to the sale of
the Shares in accordance with this Agreement and the application of the
proceeds as described in the Prospectus Supplement under the caption
"Use of proceeds," will not be required to be registered as an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
B-2
13. To such counsel's knowledge, there are no legal proceedings required to
be described in the Registration Statement and the Prospectus that are
not described as required.
14. The statements in the Prospectus under the captions "Certain Provisions
of Delaware Law and of the Company's Charter and Bylaws," "Risk Factors
- Our undesignated preferred stock may inhibit potential acquisition
bids; this may adversely affect the market price for our common stock
and the voting rights of holder of common stock," and "Risk Factors -
Provisions in our share purchase rights plan, charter and bylaws, and
provisions of Delaware law, may inhibit potential acquisition bids for
us, which may prevent holders of our common stock from benefiting from
what they believe may be the positive aspects of acquisitions and
takeovers" and in the Company's proxy statement on Schedule 14A filed
with the Commission on April 15, 2003 under the caption "Certain
Transactions - Promissory Notes," insofar as they purport to describe
or summarize certain provisions of the agreements, statutes or
regulations, referred to therein, are accurate descriptions or
summaries in all material respects.
15. To such counsel's knowledge, the Company is not a party to any
agreement that would require the registration of shares owned by any
person or entity under the Registration Statement.
16. Such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
the Prospectus were discussed and, although such counsel is not passing
upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement
or the Prospectus (except as and to the extent stated in paragraphs 9
and 14 above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes such counsel to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at the
time of purchase or the additional time of purchase, as the case may
be, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading (it being understood that such counsel
need not express any belief with respect to the financial statements,
schedules, or other financial data included or incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus or the Incorporated Documents).
B-3
EXHIBIT C
OPINION OF XXXXX X. XXXX, PH.D., X.X.
1. Such counsel serves as counsel to the Company with respect to patents
and intellectual property rights.
2. To such counsel's knowledge, the statements in the Registration
Statement and the Prospectus relating to patents and proprietary rights
(collectively, the "Intellectual Property Information"), at the time
such Registration Statement became effective, as of the date of the
Prospectus and at the time of purchase or the additional time of
purchase, as the case may be, are accurate and complete statements or
summaries of the matters therein set forth and present fairly the
information therein set forth; nothing has come to such counsel's
attention that causes such counsel to believe that the Intellectual
Property Information in the Registration Statement at the time such
Registration Statement became effective contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement thereto, at the
date of such Prospectus or such supplement and at the time of purchase
or the additional time of purchase, as the case may be, contained an
untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3. To such counsel's knowledge, except as described in the Registration
Statement or the Prospectus or as would not, individually or in the
aggregate, result in a material adverse effect on the business,
properties, financial condition, results of operation or prospects of
the Company taken as a whole (a "Material Adverse Effect"), (i) there
are no legal or governmental proceedings pending relating to patent
rights, trade secrets, trademarks, service marks or other proprietary
information or materials of the Company, and (ii) no such proceedings
are threatened or contemplated by governmental authorities or others.
4. Such counsel does not know of any contracts or other documents,
relating to the Company's patents, trade secrets, trademarks, service
marks or other proprietary intellectual property rights, of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which have not been so described or filed.
5. To such counsel's knowledge, except as described in the Registration
Statement or the Prospectus or as would not result in a Material
Adverse Effect, (i) the Company does not and, upon commercialization of
the product candidates described in the Prospectus, will not infringe
or otherwise violate any patents, trade secrets, trademarks, service
marks or other proprietary intellectual property rights of others, and
(ii) there are no infringements by others of any of the Company's
patents, trade secrets, trademarks, service marks or other proprietary
intellectual property rights which in such counsel's judgment would
affect materially the use thereof by the Company.
C-1
6. Except as described in the Registration Statement or the Prospectus or
as would not result in a Material Adverse Effect, (i) such counsel has
no knowledge of any facts which would preclude the Company from having
rights to the patents as described in the Registration Statement and
the Prospectus; (ii) such counsel has no knowledge of any patents or
other intellectual property which would be necessary for the Company to
conduct the business now conducted or proposed to be conducted by the
Company as described in the Registration Statement and the Prospectus
and for which the Company does not have and will not be able to obtain
sufficient rights to conduct such business; and (iii) such counsel is
unaware of any facts which provide valid grounds for finding any of the
Company's patents and other intellectual property invalid or
unenforceable in all material respects.
7. Except as described in the Registration Statement or the Prospectus or
as would not result in a Material Adverse Effect, such counsel is not
aware of any material fact with respect to the patent applications of
the Company presently on file that (i) would preclude the issuance of
all pending claims contained in any application or (ii) would lead such
counsel to conclude that all claims of such patents, if and when
issued, would be invalid and unenforceable.
C-2
EXHIBIT D
OFFICERS' CERTIFICATE
1. I have reviewed the Registration Statement and the Prospectus.
2. To the best of my knowledge, the representations and warranties of the
Company as set forth in this Agreement are true and correct as of the
time of purchase and, if applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement
as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (g) and (h) of Section 6 of this
Agreement have been met.
5. The financial statements and other financial information included in
the Registration Statement and the Prospectus fairly present the
financial condition, results of operations and cash flows of the
Company as of, and for, the periods presented in the Registration
Statement.
D-1
