Cypress Bioscience, Inc. 4,700,000 Shares Common Stock ($0.001 par value per Share) Underwriting Agreement
EXHIBIT 1.1
Cypress Bioscience, Inc.
4,700,000 Shares
Common Stock
($0.001 par value per Share)
($0.001 par value per Share)
May 30, 2007
May 30, 2007
UBS Securities LLC
CIBC World Markets Corp.
Xxxxxxxxx & Company, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
CIBC World Markets Corp.
Xxxxxxxxx & Company, Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Cypress Bioscience, Inc., 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 4,700,000
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 705,000 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. 333-124779) under the Act (the “registration statement”), including a
prospectus, which registration statement incorporates by reference documents which the Company has
filed, or will file, in accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the “Exchange Act”).
Amendments to such registration statement, if necessary or appropriate, have been similarly
prepared and filed with the Commission in accordance with the Act. Such registration statement, as
so amended, has become effective under the Act.
The term “Registration Statement,” as used herein, means the registration statement,
as amended at the time of such registration statement’s effectiveness for purposes of Section 11 of
the Act, as such section applies to the respective Underwriters (the “Effective Time”),
including (i) all documents filed as a part thereof or incorporated or deemed to be incorporated by
reference therein, (ii) any information contained or incorporated by reference in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, to the extent such information is
deemed, pursuant to Rule 430B or Rule 430C under the Act, to be part of the registration statement
at the Effective Time, and (iii) any registration statement filed to register the offer and sale of
Shares pursuant to Rule 462(b) under the Act.
The term “Basic Prospectus,” as used herein, means the basic prospectus (whether or
not in preliminary form) included in the Registration Statement and any basic prospectus
furnished to you by the Company and attached to or used with the Prospectus Supplement (as defined
below).
The term “Prospectus Supplement,” as used herein, means the final prospectus
supplement, relating to the Shares, filed by the Company with the Commission pursuant to Rule
424(b) under the Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act), in the form furnished by the Company to you for use by the
Underwriters and by dealers in connection with the offering of the Shares.
The term “Prospectus,” as used herein, means the Prospectus Supplement together with
the Basic Prospectus attached to or used with the Prospectus Supplement.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto. The Underwriters have not offered or sold and will not offer
or sell, without the Company’s consent, any Shares by means of any “free writing prospectus” (as
defined in Rule 405 under the Act) that is required to be filed by the Underwriters with the
Commission pursuant to Rule 433 under the Act, other than a Permitted Free Writing Prospectus.
“Disclosure Package,” as used herein, means any Basic Prospectus together with any
combination of one or more of the Permitted Free Writing Prospectuses, if any.
Any reference herein to the registration statement, the Registration Statement, any Basic
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus
shall be deemed to refer to and include the documents, if any, incorporated by reference, or deemed
to be incorporated by reference, therein (the “Incorporated Documents”), including, unless
the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated
Documents. Any reference herein to the terms “amend,” “amendment” or
“supplement” with respect to the Registration Statement, any Basic Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act on or after the initial
effective date of the Registration Statement, or the date of such Basic Prospectus, the Prospectus
Supplement, the Prospectus or such Permitted Free Writing Prospectus, as the case may be, and
deemed to be incorporated therein by reference.
As used in this Agreement, “business day” shall mean a day on which the New York Stock
Exchange (the “NYSE”) is open for trading. The terms “herein,” “hereof,” “hereto,”
“hereinafter” and similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or other subdivision of
this Agreement. The term “or,” as used herein, is not exclusive.
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
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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 $14.92 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 effectiveness of this Agreement 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 (the
“Over-Allotment 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 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. The Over-Allotment 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 Supplement, by written notice to the Company. Such notice
shall set forth the aggregate number of Additional Shares as to which the Over-Allotment Option is
being exercised and the date and time when the Additional Shares are to be delivered (any such date
and time being herein referred to as an “additional time of purchase”); provided,
however, that no additional time of purchase shall be earlier than the “time of purchase”
(as defined below) nor earlier than the second business day after the date on which the
Over-Allotment Option shall have been exercised nor later than the tenth business day after the
date on which the Over-Allotment 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 UBS 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 June 5, 2007 (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 and time of day 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.
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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, 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 heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act, will be filed with the Commission and become
effective under the Act no later than 10:00 P.M., New York City time, on the date of
determination of the public offering price for the Shares; no stop order of the Commission
preventing or suspending the use of any Basic Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing 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;
(b) the Registration Statement complied when it became effective, complies as of the
date hereof and, as amended or supplemented, at the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares, will comply, in all material respects,
with the requirements of the Act; the conditions to the use of Form S-3 in connection with
the offering and sale of the Shares as contemplated hereby have been satisfied; the
Registration Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Act (including, without limitation,
Rule 415(a)(5) under the Act); the Registration Statement did not, as of the Effective Time,
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; each Basic
Prospectus complied or will comply, as of its date and the date it was or will be filed with
the Commission, complies as of the date hereof (if filed with the Commission on or prior to
the date hereof) and, at the time of purchase, each additional time of purchase, if any, and
at all times during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, will comply, in all material respects, with the
requirements of the Act; on the date of the Basic Prospectus, and at no time during the
period that begins on the date the Company filed its Annual Report on Form 10-K for its
fiscal year ended December 31, 2006 with the Commission and ends at the time of purchase did
or will any Basic Prospectus, as then amended or supplemented, include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, and at no time during such period did or will any Basic Prospectus, as then
amended or supplemented, together with
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any combination of one or more of the then issued Permitted Free Writing Prospectuses,
if any, include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; each of the Prospectus Supplement and the Prospectus
will comply, as of the date that it is filed with the Commission, the date of the Prospectus
Supplement, the time of purchase, each additional time of purchase, if any, and at all times
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares, in all material respects, with the requirements of the Act (in the case of
the Prospectus, including, without limitation, Section 10(a) of the Act); at no time during
the period that begins on the earlier of the date of the Prospectus Supplement and the date
the Prospectus Supplement is filed with the Commission and ends at the later of the time of
purchase, the latest additional time of purchase, if any, and the end of the period during
which a prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in connection with any sale of
Shares did or will any Prospectus Supplement or the Prospectus, as then amended or
supplemented, include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; at no time during the period that begins on the
date of such Permitted Free Writing Prospectus and ends at the time of purchase did or will
any Permitted Free Writing Prospectus include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty in this Section 3(b)
with respect to any statement contained in the Registration Statement, the Prospectus or any
Permitted Free Writing 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 Prospectus
or such Permitted Free Writing Prospectus; each Incorporated Document, at the time such
document was filed, or will be filed, with the Commission or at the time such document
became or becomes effective, as applicable, complied or will comply, in all material
respects, with the requirements of the Exchange Act and did not or will not, as applicable,
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading;
(c) prior to the execution of this Agreement, the Company has not, directly or
indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of
the Act) or used any “prospectus” (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the Basic Prospectus and the Permitted
Free Writing Prospectuses, if any; the Company has not, directly or indirectly, prepared,
used or referred to any Permitted Free Writing Prospectus except in compliance with Rules
164 and 433 under the Act; assuming that such Permitted Free Writing Prospectus is sent or
given after the Registration Statement was filed with the Commission (and after such
Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d) under the Act,
filed with the Commission), the sending or giving, by any
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Underwriter, of any Permitted Free Writing Prospectus will satisfy the provisions of
Rule 164 and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule 164); the
conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule
433(b)(1) under the Act are satisfied, and the registration statement relating to the
offering of the Shares contemplated hereby, as initially filed with the Commission, includes
a prospectus that, other than by reason of Rule 433 or Rule 431 under the Act, satisfies the
requirements of Section 10 of the Act; neither the Company nor the Underwriters are
disqualified, by reason of subsection (f) or (g) of Rule 164 under the Act, from using, in
connection with the offer and sale of the Shares, “free writing prospectuses” (as defined in
Rule 405 under the Act) pursuant to Rules 164 and 433 under the Act; the Company is not an
“ineligible issuer” (as defined in Rule 405 under the Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the Act with respect to the
offering of the Shares contemplated by the Registration Statement, without taking into
account any determination by the Commission pursuant to Rule 405 under the Act that it is
not necessary under the circumstances that the Company be considered an “ineligible issuer”;
(d) to enable the Underwriters to rely on Rule 2710(b)(7)(C)(i) of the National
Association of Securities Dealers, Inc. (the “NASD”), the offer and sale of the
Shares could have been registered with the Commission on Form S-3 under the Act pursuant to
the standards for such Form S-3 in effect prior to October 21, 1992;
(e) the Company had, as of the dates for which such information is provided, an
authorized and outstanding capitalization as set forth in the Basic Prospectus and the
Registration Statement 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 entitled “Capitalization” (and any similar
sections or information, if any, contained in any Permitted Free Writing Prospectus or
Incorporated Document) (subject, in each case, to the issuance of shares of Common Stock
upon exercise of stock options and warrants disclosed as outstanding in the Registration
Statement (excluding the exhibits thereto), the Basic Prospectus and the Prospectus and the
grant of options under existing stock option plans described in the Registration Statement
(excluding the exhibits thereto), the Basic Prospectus and 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 applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or similar right;
the Shares are duly listed, and admitted and authorized for trading, subject to official
notice of issuance, on the Nasdaq Global Market (the “NASDAQ”);
(f) 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, the Basic Prospectus, the Prospectus and the Permitted Free
Writing Prospectuses, if any, to execute and deliver this Agreement and to
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issue, sell and deliver the Shares as contemplated herein;
(g) 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
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, either (i) have
a material adverse effect on the business, properties, financial condition, results of
operations or prospects of the Company, (ii) prevent or materially interfere with
consummation of the transactions contemplated hereby or (iii) result in the delisting of
shares of Common Stock from the NASDAQ (the occurrence of any such effect or any such
prevention or interference or any such result described in the foregoing clauses (i), (ii)
or (iii) being herein referred to as a “Material Adverse Effect”);
(h) the Company has no subsidiaries (as defined under the Act); the Company does not
own, directly or indirectly, any shares of stock or any other equity interests or long-term
debt securities of any corporation, firm, partnership, joint venture, association or other
entity except for securities reflected on the Company’s consolidated balance sheets under
“Cash and cash equivalents” and “Short-term investments” contained or incorporated by
reference in the Registration Statement, the Basic Prospectus and the Prospectus; complete
and correct copies of the charters and the bylaws of the Company and all amendments thereto
have been delivered to you or made available to you at the Commission’s XXXXX site, and no
changes therein will be made on or after the date hereof through and including the time of
purchase or, if later, any additional time of purchase;
(i) 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; the Shares, when issued and delivered against
payment therefor as provided herein, will be free of any restriction upon the voting or
transfer thereof pursuant to the Delaware General Corporation Law or the Company’s charter
or bylaws or any agreement or other instrument to which the Company is a party;
(j) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained or incorporated by reference in the
Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses, if any; and the certificates for the Shares are in due and proper form;
(k) this Agreement has been duly authorized, executed and delivered by the Company;
(l) the Company is not 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
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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) (A) its charter or bylaws, or (B)
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 it
is a party or by which it or any of its properties may be bound or affected, or (C) any
federal, state, local or foreign law, regulation or rule, or (D) any rule or regulation of
any self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the rules and regulations of the NASDAQ), or (E) any decree, judgment or
order applicable to it or any of its properties, except, with respect to clauses (B), (C)
and (D) above, such breaches, violations or defaults, which would not, individually or in
the aggregate, have a Material Adverse Effect;
(m) 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,
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) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company pursuant to) (A) the charter
or bylaws of the Company, or (B) 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 is a party or by its or its properties may be
bound or affected, or (C) any federal, state, local or foreign law, regulation or rule, or
(D) any rule or regulation of any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the rules and regulations of the
NASDAQ), or (E) any decree, judgment or order applicable to the Company or any of its
properties, except, in the case of clause (B), as would not, individually or in the
aggregate, have a Material Adverse Effect;
(n) 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 any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the NASDAQ), or approval of the stockholders 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 (or, with respect to any registration
statement to be filed hereunder pursuant to Rule 462(b) under the Act, will be effected in
accordance herewith), (ii) 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
(iii) under the Conduct Rules of the National Association of Securities Dealers, Inc. (the
“NASD”);
(o) except as described in the Registration Statement (excluding the exhibits thereto),
the Basic Prospectus 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
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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; other
than Xxx Xxxxxxxx, Xxxxxx Xxxxx and Organon N.V., in each case whose rights do not apply to
the Registration Statement or the offering contemplated thereby, 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;
(p) the Company has all necessary licenses, authorizations, consents and approvals and
has made all necessary filings required under any applicable law, regulation or rule, and
has obtained all necessary licenses, authorizations, consents and approvals from other
persons, in order to conduct its business; the Company is not in violation of, or in default
under, and has not 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,
except where such violation, default, revocation or modification would not, individually or
in the aggregate, have a Material Adverse Effect;
(q) there are no actions, suits, claims, investigations or proceedings pending or, to
the Company’s knowledge, threatened or contemplated to which the Company or any of its
directors or officers is or would be a party or of which any of its properties is or 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, or before or by any
self-regulatory organization or other non-governmental regulatory authority (including,
without limitation, the NASDAQ), except any such action, suit, claim, investigation or
proceeding which, if resolved adversely to the Company, would not, individually or in the
aggregate, have a Material Adverse Effect;
(r) Ernst & Young LLP, whose report on the financial statements of the Company is
included or incorporated by reference in the Registration Statement, the Basic Prospectus
and the Prospectus, are independent registered public accountants as required by the Act and
by the rules of the Public Company Accounting Oversight Board;
(s) the financial statements included or incorporated by reference in the Registration
Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses,
if any, together with the related notes and schedules, present fairly the financial position
of the Company as of the dates indicated and the results of operations, cash flows and
changes in stockholders’ equity of the Company for the periods specified and have been
prepared in compliance with the requirements of the Act and Exchange Act and in conformity
with U.S. generally accepted accounting principles applied on a consistent basis during the
periods involved; all pro forma financial statements or data included or incorporated by
reference in the Registration Statement,
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the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if
any, comply with the requirements of the Act and the Exchange Act, and the assumptions used
in the preparation of such pro forma financial statements and data are reasonable, the pro
forma adjustments used therein are appropriate to give effect to the transactions or
circumstances described therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and data; the other financial
and statistical data contained or incorporated by reference in the Registration Statement,
the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any,
are accurately and fairly 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 or incorporated by reference in
the Registration Statement, the Basic Prospectus or the Prospectus that are not included or
incorporated by reference as required; the Company does not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet obligations), not
described in the Registration Statement (excluding the exhibits thereto), the Basic
Prospectus and the Prospectus; and all disclosures contained or incorporated by reference in
the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free
Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable;
(t) except as disclosed in the Registration Statement (excluding the exhibits thereto),
the Basic Prospectus and the Prospectus, each stock option granted under any stock option
plan of the Company (each, a “Stock Plan”) was granted with a per share exercise
price no less than the fair market value per share of Common Stock on the grant date of such
option, which is determined under the Company’s stock option plans to be the closing sales
price for the Company’s stock on the last market trading day prior to the grant date, and no
such grant involved any “back-dating,” “forward-dating” or similar practice with respect to
the effective date of such grant; except as would not, individually or in the aggregate,
have a Material Adverse Effect, each such option (i) was granted in compliance with
applicable law and with the applicable Stock Plan(s), (ii) was duly approved by the board of
directors (or a duly authorized committee thereof) of the Company, and (iii) has been
properly accounted for in the Company’s financial statements in accordance with U.S.
generally accepted accounting principles and disclosed in the Company’s filings with the
Commission;
(u) subsequent to the respective dates as of which information is given in the
Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses, if any, in each case including to the extent any such information is updated
or superseded by any information contained in any Incorporated Document and excluding any
amendments or supplements to the foregoing made after the execution of this Agreement, 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, (ii) any transaction which is material to the Company,
(iii) any obligation or liability, direct or
- 10 -
contingent (including any off-balance sheet obligations), incurred by the Company,
which is material to the Company, (iv) any change in the capital stock or outstanding
indebtedness of the Company or (v) any dividend or distribution of any kind declared, paid
or made on the capital stock of the Company;
(v) 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 “officers” (within the meaning of Rule 16a-1(f) under the Exchange Act),
other than Xxxxxx X. Xxxxxxxx and Xxxx X. Xxxxxx;
(w) the Company is not, and at no time during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares will the Company be, and, after giving
effect to the offering and sale of the Shares and the application of the proceeds thereof,
the Company will not 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”);
(x) the Company has good and marketable title to all property (real and personal)
described in the Registration Statement, the Basic Prospectus, the Prospectus and the
Permitted Free Writing Prospectuses, if any, as being owned by it, free and clear of all
liens, claims, security interests or other encumbrances, other than any liens, claims,
security interests or other encumbrances that do not impair in any material respect the
Company’s use of such property; all the property described in the Registration Statement,
the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, as
being held under lease by the Company is held thereby under valid, subsisting and
enforceable leases;
(y) the Company owns, or has 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, the Basic Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses, if any, as being owned or licensed by it,
except where the failure to own, license or have such rights would not, individually or in
the aggregate, have a Material Adverse Effect (collectively, “Intellectual
Property”); except as would not, individually or in the aggregate, have a Material
Adverse Effect (i) to the Company’s knowledge, there are no third parties who have or will
be able to establish rights to any Intellectual Property, except for, and to the extent of,
the ownership rights of the owners of the Intellectual Property which the Registration
Statement (excluding the exhibits thereto), the Basic Prospectus and the Prospectus disclose
is licensed to the Company or that the Company has licensed to such third parties; (ii) to
the Company’s knowledge, there is no infringement by third parties of any Intellectual
Property; (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; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the
- 11 -
validity, enforceability or scope of any Intellectual Property; (v) to the Company’s
knowledge it does not and will not upon commercialization of any product or service
described in the Registration Statement, the Basic Prospectus, the Prospectus and the
Permitted Free Writing Prospectuses, if any, as under development, infringe or otherwise
violate any patent, trademark, tradename, service name, copyright, trade secret or other
proprietary rights of others, and there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the Company infringes or
otherwise violates, or would, upon the commercialization of any product or service described
in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free
Writing Prospectuses, if any, as under development, infringe or violate, any patent,
trademark, tradename, service name, copyright, trade secret or other proprietary rights of
others; (vi) the Company has complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company, and all such agreements are in full
force and effect; and (vii) to the Company’s knowledge, there is no fact with respect to the
patent applications comprising a part of the Intellectual Property that (A) would lead the
Company to conclude that such patents, when issued, would not be valid and enforceable in
accordance with applicable regulations or (B) would result in a third party having any
rights in any patents issuing from such patent applications (except, in the case of Forest
Laboratories and Xxxxxx Xxxxx, for those rights described in the Registration Statement, the
Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any);
(z) the Company is not 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 before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements is pending
or, to the Company’s knowledge, threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company’s knowledge, threatened against the Company and (C) no
union representation dispute currently existing concerning the employees of the Company,
(ii) to the Company’s knowledge, no union organizing activities are currently taking place
concerning the employees of the Company and (iii) 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;
(aa) the Company and its properties, assets and operations are in compliance with, and
the Company holds 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, present or, to the Company’s knowledge,
reasonably anticipated 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 under, or to interfere with or
- 12 -
prevent compliance by the Company with, Environmental Laws; except as would not,
individually or in the aggregate, have a Material Adverse Effect, the Company (i) is not the
subject of any investigation, (ii) has not received any notice or claim, (iii) is not a
party to or affected by any pending or, to the Company’s knowledge, threatened action, suit
or proceeding, (iv) is not bound by any judgment, decree or order or (v) has not 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);
(bb) in the ordinary course of its business, the Company conducts periodic reviews of
the effect of the Environmental Laws on its business, operations and properties, in the
course of which the Company identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required for cleanup,
closure of properties or compliance with the Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential liabilities to
third parties);
(cc) all tax returns required to be filed by the Company have been timely 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 timely paid, other than those being contested
in good faith and for which adequate reserves have been provided;
(dd) the Company maintains insurance covering its properties, operations, personnel and
business as the Company reasonably 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 its business; all such insurance is fully in force on
the date hereof and will be fully in force at the time of purchase and each additional time
of purchase, if any; the Company has no reason to believe that it will not be able to renew
any such insurance as and when such insurance expires;
(ee) 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 the
Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or referred to or
described in, or filed as an exhibit to, the Registration Statement or any Incorporated
Document, and no such termination or non-renewal has been threatened by the Company or, to
the Company’s knowledge, any other party to any
- 13 -
such contract or agreement;
(ff) the Company 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;
(gg) the Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 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 is made known to the Company’s
Chief Executive Officer and its Chief Financial Officer, and such disclosure controls and
procedures are effective at the reasonable assurance level to perform the functions for
which they were established; the Company’s independent auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all significant
deficiencies, if any, 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) all fraud, if any, whether or not material, that involves management or other employees
who have a role in the Company’s internal controls; all material weaknesses, if any, in
internal controls have been identified to the Company’s independent auditors; since the date
of the most recent evaluation of such disclosure controls and procedures and internal
controls, 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; the principal executive officers
(or their equivalents) and principal financial officers (or their equivalents) of the
Company have made all certifications required by the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx Act”) and any related rules and regulations promulgated by the
Commission, and the statements contained in each such certification are complete and
correct; the Company and the Company’s directors and officers are each in compliance in all
material respects with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and the
rules and regulations of the Commission and the NASDAQ promulgated thereunder;
(hh) each “forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained or incorporated by reference in the Registration
Statement, the Basic Prospectus, the Prospectus and the Permitted Free Writing Prospectuses,
if any, has been made or reaffirmed with a reasonable basis and in good faith;
(ii) all statistical or market-related data included or incorporated by reference
- 14 -
in the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted
Free Writing Prospectuses, if any, are based on or derived from sources that the Company
reasonably 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;
(jj) neither the Company nor, to the Company’s knowledge, any employee or agent of the
Company has made any payment of funds of the Company or received or retained any funds in
violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt
Practices Act of 1977), which payment, receipt or retention of funds is of a character
required to be disclosed in the Registration Statement, the Basic Prospectus or the
Prospectus;
(kk) the preclinical tests and clinical trials that are described in, or the results of
which are referred to in, the Registration Statement, the Basic Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses, if any, were and, if still pending, are being
conducted in all material respects in accordance with protocols filed with the appropriate
regulatory authorities for each such test or trial, as the case may be, and with standard
medical and scientific research procedures; each description of the results of such tests
and trials contained in the Registration Statement, the Basic Prospectus, the Prospectus and
the Permitted Free Writing Prospectuses, if any, fairly presents in all material respects
the data derived from such tests and trials, and the Company has no knowledge of any other
studies or tests not described in the Registration Statement, the Basic Prospectus, the
Prospectus and the Permitted Free Writing Prospectuses, if any, the results of which are
inconsistent with, or otherwise call into question, the results described or referred to in
the Registration Statement, the Basic Prospectus, the Prospectus and the Permitted Free
Writing Prospectuses, if any; the Company has not received any notices or other
correspondence from the Food and Drug Administration of the U.S. Department of Health and
Human Services or any committee thereof or from any other U.S. or foreign government or drug
or medical device regulatory agency (collectively, the “Regulatory Agencies”)
requiring the termination, suspension or modification of any clinical trials that are
described or referred to in the Registration Statement, the Basic Prospectus, the Prospectus
and the Permitted Free Writing Prospectuses, if any; and the Company has operated and
currently is in compliance in all material respects with all applicable rules, regulations
and policies of the Regulatory Agencies;
(ll) the issuance and sale of the Shares as contemplated hereby will not cause any
holder of any shares of capital stock, securities convertible into or exchangeable or
exercisable for capital stock or options, warrants or other rights to purchase capital stock
or any other securities of the Company to have any right to acquire any shares of preferred
stock of the Company;
(mm) the Company has not received any notice from the NASDAQ regarding the delisting of
the Common Stock from the NASDAQ;
(nn) except pursuant to this Agreement, the Company has not incurred any
- 15 -
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 Registration Statement;
(oo) neither the Company nor any of the Company’s directors or officers, or, to its
knowledge, 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 the
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares; and
(pp) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD participating in this offering and (ii) the Company or any of the
Company’s officers, directors or 5% or greater security holders or any beneficial owner of
the Company’s unregistered equity securities that were acquired at any time on or after the
180th day immediately preceding the date the Registration Statement was initially filed with
the Commission, except as disclosed in the Registration Statement (excluding the exhibits
thereto), the Basic Prospectus and the Prospectus.
In addition, any certificate signed by any officer of the Company and delivered to any
Underwriter 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, 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 reasonably designate and to maintain such
qualifications in effect so long as you may reasonably 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
(whether physically or through compliance with Rule 172 under the Act or any similar rule),
in connection with the sale of the Shares, a prospectus after the nine-month period referred
to in Section 10(a)(3) of the Act, or after the time a post-effective amendment to the
Registration Statement is required pursuant to
- 16 -
Item 512(a) of Regulation S-K under the Act, the Company will prepare, at its expense,
promptly upon request such amendment or 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 or Item 512(a) of Regulation S-K under the Act, as the case may be;
(c) if, at the time this Agreement is executed and delivered, it is necessary for a
post-effective amendment to the Registration Statement, or a Registration Statement under
Rule 462(b) under the Act, to be filed with the Commission and become effective before the
Shares may be sold, the Company will use its best efforts to cause such post-effective
amendment or such Registration Statement to be filed and become effective, and will pay any
applicable fees in accordance with the Act, as soon as possible; and the Company will advise
you promptly and, if requested by you, will confirm such advice in writing, (i) when such
post-effective amendment or such 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 in
accordance with such Rules);
(d) if, at any time during the period when a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares, the Registration Statement shall cease
to comply with the requirements of the Act with respect to eligibility for the use of the
form on which the Registration Statement was filed with the Commission, to (i) promptly
notify you, (ii) promptly file with the Commission a new registration statement under the
Act, relating to the Shares, or a post-effective amendment to the Registration Statement,
which new registration statement or post-effective amendment shall comply with the
requirements of the Act and shall be in a form satisfactory to you, (iii) use its best
efforts to cause such new registration statement or post-effective amendment to become
effective under the Act as soon as practicable, (iv) promptly notify you of such
effectiveness and (v) take all other action necessary or appropriate to permit the public
offering and sale of the Shares to continue as contemplated in the Prospectus; all
references herein to the Registration Statement shall be deemed to include each such new
registration statement or post-effective amendment, if any;
(e) if the third anniversary of the initial effective date of the Registration
Statement (within the meaning of Rule 415(a)(5) under the Act) shall occur at any time
during the period when a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, to (i) file with the Commission, prior to such third
anniversary, a new registration statement under the Act relating to the Shares, which new
registration statement shall comply with the requirements of the Act (including, without
limitation, Rule 415(a)(6) under the Act) and shall be in a form satisfactory to you; (ii)
use its best efforts to cause such new registration statement to become effective under the
Act as soon as practicable, but in any event within 180 days after such third anniversary
and promptly notify you of such effectiveness; the Company shall take all other action
necessary or appropriate to permit the public offering and sale of the Shares to continue
- 17 -
as contemplated in the Prospectus; all references herein to the Registration Statement
shall be deemed to include each such new registration statement, if any;
(f) until the end of the period during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule), to advise you promptly, confirming such advice in writing, of any request by
the Commission for amendments or supplements to the Registration Statement, the Basic
Prospectus, the Prospectus or any Permitted Free Writing 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; until the end of the period during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act or any
similar rule), to advise you promptly of any proposal to amend or supplement the
Registration Statement, the Basic Prospectus or the Prospectus, 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 reasonably object in writing;
(g) subject to Section 4(f) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act for so long as a prospectus is
required by the Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares; and to provide
you, for your review and comment, 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 file no
such report, statement or document to which you shall have objected in writing; and to
promptly notify you of such filing;
(h) to advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether physically or
through compliance with Rule 172 under the Act or any similar rule) in connection with any
sale of Shares, which event could require the making of any change in the Prospectus then
being used so that the Prospectus would not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and to advise the
Underwriters promptly if, during such period, it shall become necessary to amend or
supplement the Prospectus to cause the Prospectus to comply with the requirements of the
Act, and, in each case, during such time, subject to Section 4(f) 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 or to effect
such compliance;
- 18 -
(i) 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
August 9, 2008;
(j) if requested by you, to furnish to you a copy of the Registration Statement, as
initially filed with the Commission, and of all amendments thereto (including all exhibits
thereto and documents incorporated by reference therein) 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 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 latest available unaudited interim and monthly financial statements,
if any, of the Company which have been read by the Company’s independent registered public
accountants, as stated in their letter to be furnished pursuant to Section 6(e) hereof;
(l) 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 Supplement;
(m) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Basic Prospectus, the Prospectus Supplement,
the Prospectus, each Permitted Free Writing 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 (other than fees and expenses of the Underwriters’ counsel), word processing
and/or printing of this Agreement, 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 (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 legal fees and filing fees and other
disbursements of counsel to the Underwriters relating to NASD matters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares, (viii) the costs and
expenses of the Company relating to
- 19 -
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, and the cost of any aircraft chartered in connection with the road
show, and (ix) the performance of the Company’s other obligations hereunder (it being
understood that, except as provided in this Agreement, the Underwriters will pay all of
their own costs and expenses, including fees and expenses of their own counsel, and any
advertising expenses in connection with any offer they make);
(n) to comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under the
Act) and with Rule 433(g) under the Act;
(o) beginning on the date hereof and ending on, and including, the date that is 90 days
after the date of the Prospectus Supplement (the “Lock-Up Period”), without the
prior written consent of UBS, not to (i) issue, 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 establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the Commission promulgated thereunder, with
respect to, any Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or exercisable
for, or any warrants or other rights to purchase, the foregoing, (ii) file or cause to
become effective a registration statement under the Act relating to the offer and sale of
any Common Stock or any other securities of the Company that are substantially similar to
Common Stock, or any securities convertible into or exchangeable or exercisable for, or any
warrants or other rights to purchase, the foregoing, (iii) 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 other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or exercisable
for, or any warrants or other rights to purchase, the foregoing, whether any such
transaction is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise or (iv) publicly announce an intention to effect any transaction specified in
clause (i), (ii) or (iii), except, in each case, for (A) the registration of the offer and
sale of the Shares as contemplated by this Agreement, (B) issuances of Common Stock upon the
exercise of options or warrants disclosed as outstanding in the Registration Statement
(excluding the exhibits thereto), the Basic Prospectus and the Prospectus, (C) the issuance
of employee, director and consultant stock options not exercisable during the Lock-Up Period
pursuant to stock option plans described in the Registration Statement (excluding the
exhibits thereto), the Basic Prospectus and the Prospectus, (D) filing and causing to become
effective an S-8 or S-8s for shares of Common Stock included in the share reserve of the
Company’s stock option plans referred to in clause (C) pursuant to “evergreen” provisions
included in those plans, (E) filing and causing to become effective a registration statement
if required pursuant to registration rights outstanding on the date of this Agreement, (F)
any issuance of shares
- 20 -
of Common Stock that may be issued to Collegium Pharmaceutical, Inc. pursuant to
Section 4.4 of the Company’s Reformulation and New Product Agreement with Collegium dated
August 22, 2002 and (G) any issuance of shares of Common Stock, or securities convertible
into or exchangeable or exercisable for, shares of Common Stock, not to exceed, individually
or in the aggregate 2,000,000 shares of Common Stock and any filing and causing to become
effective of any related registration statement in connection with any licensing,
collaboration, acquisition or other strategic transaction so long as the recipients of the
shares or other securities agree in writing with the Underwriters to be bound by the terms
of this Section 4(o) with respect to those shares or other securities; provided,
however, that if (a) during the period that begins on the date that is fifteen (15)
calendar days plus three (3) business days before the last day of the Lock-Up Period and
ends on the last day of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (b) prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the sixteen (16) day period beginning on the last day of the Lock-Up Period,
then the restrictions imposed by this Section 4(o) shall continue to apply until the
expiration of the date that is fifteen (15) calendar days plus three (3) business days after
the date on which the issuance of the earnings release or the material news or material
event occurs; provided, however, that this sentence shall not apply if the research
published or distributed about the Company is issued in compliance with or pursuant to Rule
139 of the Act and the Company’s securities are “actively traded” as such term is defined in
Rule 10(c)(1) of Regulation M of the Exchange Act;
(p) prior to the time of purchase or any additional time of purchase, as the case may
be, to issue no press release or other communication directly or indirectly and hold no
press conferences with respect to the Company, the financial condition, results of
operations, business, properties, assets, or liabilities of the Company, or the offering of
the Shares, without your prior consent;
(q) not, at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the meaning of the
Act), or use any “prospectus” (within the meaning of the Act) in connection with the offer
or sale of the Shares, in each case other than the Prospectus and, only prior to the time
the Prospectus has been prepared and is available for use, the Basic Prospectus and the
Permitted Free Writing Prospectuses, if any;
(r) not to take, directly or indirectly, any action designed, or which will constitute,
or has constituted, or might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate the sale or resale
of the Shares;
(s) to use its best efforts to cause the Shares to be listed for quotation on the
NASDAQ and to maintain the listing of the Common Stock, including the Shares, for quotation
on the NASDAQ; and
(t) for so long as the Company is subject to the reporting requirements of
- 21 -
Section 13(g) or 15(d) of the Exchange Act, 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(m) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including the 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 Godward Kronish 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 UBS, 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 & Xxxxx, P.C., 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 UBS, substantially in the form set forth in Exhibit C hereto.
(c) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxxx Xxxxxx LLP, special counsel for the
Company with respect to regulatory matters, 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 UBS, in
the form set forth in Exhibit D hereto.
(d) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxxx X. Xxxxxxx, Vice President of Legal
Affairs of the Company, on behalf of the Company, addressed to the Underwriters, and dated
the time of purchase or the additional time of purchase, as the case may be, to the effect
that, to her knowledge, after reasonable inquiry, since February 4, 2004, all of the issued
and outstanding shares of capital stock issued by the Company have been duly authorized and
validly issued and are fully paid and non-assessable, with executed copies for each of the
other Underwriters, and in form and substance
- 22 -
satisfactory to UBS, in the form set forth in Exhibit E hereto.
(e) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, a certificate of Xxxxxxx Xxxxxxxx Xxxxxxx, Chief Financial
Officer of the Company, on behalf of the Company, addressed to the Underwriters, and dated
the time of purchase or the additional time of purchase, as the case may be, to the effect
that, to her knowledge after reasonable inquiry, prior to February 4, 2004, all of the
issued and outstanding shares of capital stock issued by the Company were duly authorized
and validly issued and fully paid and non-assessable], with executed copies for each of the
other Underwriters, and in form and substance satisfactory to UBS, in the form set forth in
Exhibit F hereto.
(f) You shall have received from Ernst & Young LLP letters dated, respectively, the
date of this Agreement, the date of the Prospectus Supplement, 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 reasonably satisfactory to UBS,
which letters shall cover, without limitation, the various financial disclosures contained
in the Registration Statement, the Basic Prospectus and the Prospectus.
(g) 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.
(h) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in writing.
(i) The Registration Statement and any registration statement required to be filed,
prior to the sale of the Shares, under the Act pursuant to Rule 462(b) shall have been filed
and shall have become effective under the Act. 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 (or such
earlier time as may be required under the Act).
(j) Prior to and at 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; (iii) none of the Basic
Prospectus or the Prospectus, and no amendment or supplement thereto, shall include an
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they are made,
not misleading; (iv) no Disclosure Package, and no amendment or supplement thereto, shall
include an untrue statement of a material fact or omit to state a material fact
- 23 -
necessary in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(k) 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, dated the time of purchase or the additional time of purchase, as the
case may be, in the form attached as Exhibit G hereto.
(l) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(v) hereof, and each such Lock-Up Agreement shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may be.
(m) The Company shall have furnished to you such other documents and certificates as to
the accuracy and completeness of any statement in the Registration Statement, the Basic
Prospectus, the Prospectus or any Permitted Free Writing Prospectus as of the time of
purchase and, if applicable, the additional time of purchase, as you may reasonably request.
(n) 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.
(o) The NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions, contemplated
hereby.
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, if (1) since the time of execution of this Agreement or the earlier
respective dates as of which information is given in the Registration Statement, the Basic
Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, there has been any
change or any development involving a prospective change in the business, properties, management,
financial condition or results of operations of the Company, the effect of which change or
development is, in the sole judgment of UBS, so material and adverse as to make it impractical 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, the Basic Prospectus, the Prospectus and the
Permitted Free Writing Prospectuses, if any, or (2) since the time of execution of this Agreement,
there shall have occurred: (A) a suspension or material limitation in trading in securities
generally on the NYSE, the American Stock Exchange or the NASDAQ; (B) a suspension or material
limitation in trading in the Company’s securities on the NASDAQ; (C) a general moratorium on
commercial banking
- 24 -
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; (D) 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 (E) 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 (D) or (E), in the sole judgment of
UBS, makes it impractical 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, the Basic
Prospectus, the Prospectus and the Permitted Free Writing Prospectuses, if any, or (3) 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: (A) any intended or potential downgrading or (B) 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 by any “nationally recognized statistical
rating organization,” as that term is defined in Rule 436(g)(2) under the Act.
If UBS 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 this
Agreement, the Company shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(m), 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 (including the Underwriters, if any, substituted in the manner set
forth below) 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
- 25 -
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 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.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, any person who controls any Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and any “affiliate” (within the
meaning of Rule 405 under the Act) of such Underwriter, 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 arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements 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, the Registration Statement or arises out of or is
based upon any omission or alleged omission to state a material fact in the Registration
Statement in connection with such information, which material fact was not contained in such
information and which material fact was
- 26 -
required to be stated in such Registration Statement or was necessary to make such
information not misleading or (ii) any untrue statement or alleged untrue statement of a
material fact included in any Prospectus (the term Prospectus for the purpose of this
Section 9 being deemed to include any Basic Prospectus, the Prospectus Supplement, the
Prospectus and any amendments or supplements to the foregoing), in any Permitted Free
Writing Prospectus, in any “issuer information” (as defined in Rule 433 under the Act) of
the Company or in any Prospectus together with any combination of one or more of the
Permitted Free Writing Prospectuses, if any, or arises out of or is based upon any omission
or alleged omission to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading,
except, with respect to such Prospectus or Permitted Free Writing Prospectus, 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 Prospectus or Permitted
Free Writing Prospectus or arises out of or is based upon any omission or alleged omission
to state a material fact in such Prospectus or Permitted Free Writing Prospectus in
connection with such information, which material fact was not contained in such information
and which material fact was necessary in order to make the statements in such information,
in the light of the circumstances under which they were made, not misleading.
(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 (i) 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 arises out of or is based upon any
omission or alleged omission to state a material fact in such Registration Statement in
connection with such information, which material fact was not contained in such information
and which material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) 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, a Prospectus or a Permitted Free Writing
Prospectus, or arises out of or is based upon any omission or alleged omission to state a
material fact in such Prospectus or Permitted Free Writing Prospectus in connection with
such information, which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such information, in the
light of the circumstances under which they were
- 27 -
made, not misleading.
(c) If any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be sought
against the Company or an Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection (a) or (b), respectively, of this Section 9, such indemnified party
shall promptly notify such indemnifying party in writing of the institution of such
Proceeding and such indemnifying party 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 indemnifying party shall not relieve such indemnifying party from any liability
which such indemnifying party may have to any indemnified party or otherwise except to the
extent that the indemnifying party is materially prejudiced thereby. The indemnified party
or parties 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 indemnified party or
parties unless the employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such Proceeding or the indemnifying
party 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, additional to or in conflict with those available to such indemnifying party (in which
case such indemnifying party shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by such indemnifying party and paid as incurred (it being
understood, however, that such indemnifying party 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 indemnifying party shall not be liable for any
settlement of any Proceeding effected without its written consent but, if settled with its
written consent, such indemnifying party agrees to indemnify and hold harmless the
indemnified party or parties 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 Section 9(c), 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, (iii) such indemnified party shall have
given the indemnifying party at least 30 days’ prior notice of its intention to settle and
(iv) such legal fees and expenses of counsel were reasonably incurred and are not reasonably
and in good faith in dispute. 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
- 28 -
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 or culpability or a
failure to act by or on behalf of such indemnified party.
(d) 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.
(e) 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 (d) 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.
- 29 -
(f) 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, any Basic Prospectus, the Prospectus or any Permitted Free Writing
Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in the fifth,
sixth, fourteenth, fifteenth, sixteenth, seventeenth, eighteenth, nineteenth and twentieth
paragraphs under the caption “Underwriting” in the Prospectus, only insofar as such statements
relate to the amount of selling concession and reallowance or to over-allotment and stabilization
activities that may be undertaken by the Underwriters, 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 or facsimile 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 0000 Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxx Xxxxx, XX 00000, Attention: Xxxxxxx Xxxxxxxx Xxxxxxx.
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 is
brought by any third party against any Underwriter or any indemnified party. Each Underwriter and
the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its
stockholders and affiliates) waive all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise)
- 30 -
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.
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, officers and affiliates 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. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters
are acting solely as underwriters in connection with the purchase and sale of the Company’s
securities. The Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to
the Company, its management, stockholders or creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby
expressly disclaim any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and
the Company hereby confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own independent judgments with
respect to any such transactions and that any opinions or views expressed by the Underwriters to
the Company regarding such transactions, including, but not limited to, any opinions or views with
respect to the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company and the Underwriters agree that the Underwriters are
acting as principal and not the agent or fiduciary of the Company and no Underwriter has assumed,
and no Underwriter will assume, any advisory responsibility in favor of the Company with respect to
the transactions contemplated hereby or the process leading thereto (irrespective of whether any
Underwriter has advised or is currently advising the Company on other matters). The Company hereby
waives and releases, to the fullest extent permitted by law, any claims that the Company may have
against the Underwriters with respect to any breach or alleged breach of any fiduciary, advisory or
similar duty to the Company in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions.
16. 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.
17. 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.
- 31 -
18. 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]
- 32 -
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, Cypress Bioscience, Inc. |
||||
| By: | /s/ Xxx Xxxxxxxx | |||
| Name: | Xxx Xxxxxxxx | |||
| Title: | Chief Executive Officer | |||
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
CIBC World Markets Corp.
Xxxxxxxxx & Company, Inc.
CIBC World Markets Corp.
Xxxxxxxxx & Company, Inc.
By: UBS Securities LLC
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxx Xxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | Executive Director | |||
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Shares | |||
UBS SECURITIES LLC |
1,880,000 | |||
CIBC WORLD MARKETS CORP |
1,410,000 | |||
XXXXXXXXX & COMPANY, INC |
1,410,000 | |||
Total |
4,700,000 | |||
SCHEDULE B
Issuer
Free Writing Prospectus dated May 30, 2007
Filed Pursuant to Rule 433
Registration No. 333-124779
(Relating to Prospectus dated July 6, 2005)
Filed Pursuant to Rule 433
Registration No. 333-124779
(Relating to Prospectus dated July 6, 2005)
| Common stock offered by Cypress |
4,700,000 shares of common stock. |
|
Upon completion of this offering, we will
have 36,995,131 shares of common stock
outstanding based on the actual number of
shares outstanding as of May 25, 2007. |
||
In addition, we have granted the
underwriters an option to purchase up to an
additional 705,000 shares of common
stock to cover over-allotments. Except as
otherwise indicated, all information in this
issuer free writing prospectus assumes no
exercise by the underwriters of this
over-allotment option. |
||
| Use of proceeds | We intend to use the net proceeds from this
offering to acquire, in-license or invest in
products, product candidates, technologies
and companies that are complementary to our
own, and, if we exercise our option to do so,
to co-promote milnacipran if milnacipran
receives United States Food and Drug
Administration, or FDA, approval, under our
agreement with Forest Laboratories, Inc., or
Forest Laboratories, and, if relevant, to
co-promote other products we may acquire or
in-license, and for working capital and
general corporate purposes. |
|
Purchasers
of shares of common stock in this offering will suffer immediate
dilution, defined as the difference between the purchase price per
share to the public in this offering and the pro forma net
tangible book value per share after this offering. |
||
| Description of capital stock | Our authorized capital stock consists of
60,000,000 shares of common stock, $.001 par
value, and 15,000,000 shares of preferred
stock, $.001 par value. The holders of
common stock are entitled to one vote for
each share held of record on all matters
submitted to a vote of the stockholders.
Subject to preferences that may be
applicable to any then outstanding shares of
preferred stock, the holders of common stock
are entitled to receive ratably such
dividends, if any, as may be declared by our
board of directors out of funds legally
available therefor. In the event of a
liquidation, dissolution or winding up of
us, holders of the common stock are entitled
to share ratably in all assets remaining
after payment of liabilities. Holders of
common stock have no preemptive rights and
no right to convert their common stock into
any other securities. There are no
redemption or sinking fund provisions
applicable to our common stock. All
outstanding shares of common stock are, and
all shares of common stock to be outstanding
upon completion of the offering will be,
fully paid and nonassessable. |
|
| Recent events | On May 22, 2007, we announced top-line
results from our second Phase III trial for
milnacipran, which was a 1,196 patient
randomized, three month, double-blind,
placebo-controlled pivotal Phase III study.
The results demonstrate statistically
significant therapeutic effects of
milnacipran as a treatment of fibromyalgia
syndrome, or FMS. At this time, we have
only been able to review initial top-line
results and further analyses will be
completed in the coming weeks to examine the
results in greater detail. For more
information regarding the top-line results
from our second Phase III trial for
milnacipran, please refer to our press
release filed as Exhibit 99.1 to our Current
Report on Form 8-K filed with the Securities
and Exchange Commission on May 23, 2007,
which press release is incorporated by
reference herein. |
| Disclosure updates | The
following statements update the description of our agreements with
Collegium Pharmaceutical, Inc., or Collegium, Forest Laboratories and
Xxxxxx Xxxxx Medicament, or Xxxxxx Xxxxx: Under our reformulation and
new product agreement with Collegium, Collegium may require that any
milestone payments we are required to make to Collegium be paid with
shares of our common stock. As part of our agreements with Forest
Laboratories and Xxxxxx Xxxxx, we have licensed any patents that may
issue from our patent applications related to Fibromyalgia Syndrome,
or FMS, and milnacipran to
Forest Laboratories and Xxxxxx Xxxxx. |
|
| Selected risk factors | You should carefully consider the following
factors as well as other information
contained in our Registration Statement on
Form S-3 filed with the Securities and
Exchange Commission on May 10, 2005,
including the related base prospectus and
the documents incorporated by reference
therein before deciding whether to
participate in the offering to which this
communication relates. |
|
There are limited data regarding milnacipran
as a treatment of FMS and it may not work
for FMS, or there may be safety issues with
its use in this patient population. |
||
There are limited data supporting the use of
milnacipran for the treatment of FMS and no
data, other than our recently completed
second phase III trial for FMS, supporting
the use of milnacipran for indications other
than FMS and depression. In September 2005,
we reported top line results from our first
Phase III clinical trial for patients with
FMS and our trial did not achieve
statistical significance on our primary
endpoint. Although milnacipran is currently
being sold by Xxxxxx Xxxxx outside North America as an
antidepressant, it has only been tested as a
treatment for FMS in our Phase II trial and
our two Phase III trials. We must conduct
and obtain favorable results in at least two
pivotal Phase III trials to support an
application for FDA approval of the product
candidate. Although we intend to submit a
New Drug Application using our first and
second Phase III clinical trials, the first
trial may not qualify as one of the
registration quality studies necessary to
support an application to the FDA. A more
detailed analysis of the results of our
second Phase III trial may demonstrate that
the results are not as favorable as we
initially believed or may lead us to
different conclusions regarding the
statistical significance of the data from
the second Phase III clinical trial. It is
also possible that our ongoing third Phase
III trial for milnacipran will not achieve
statistical significance or will otherwise
generate data that is unfavorable. We
experienced higher patient drop out rates in
our first and second Phase III trials than
in our Phase II trial for milnacipran. In
general, in clinical trials the goal is to
retain as many patients as possible so that
the results are more easily interpretable.
Milnacipran may not prove to be effective to
treat FMS in future clinical trials. In
addition, although we believe based on our
analysis of the data, that the effect was
durable, further studies may prove that any
positive effects from patients taking
milnacipran may not be durable.
Furthermore, even if we elect to pursue the
development of milnacipran for any other
Functional Somatic Syndromes, such as
Irritable Bowel Syndrome, it may not prove
to be effective. |
||
In addition, all or any of our clinical
trials may reveal that milnacipran is not
safe. The FDA has never approved a drug for
the treatment of FMS. If milnacipran is not
demonstrated to be a safe and effective
treatment for FMS to the satisfaction of the
FDA or other regulatory agencies, including
because we do not comply with the Special
Protocol Assessment, we will not receive
regulatory approval and our business would
be materially harmed. Furthermore, the
recent publicity related to safety issues in
the market may make approval of any drug by
the FDA more difficult. |
||
We have the right to co-promote milnacipran,
but we do not have the marketing, sales or
distribution experience or capabilities. |
||
Our ability to co-promote any product
developed under our agreement with Forest
Laboratories, including milnacipran, is
subject to our building our own marketing
and sales capabilities, and we currently do
not have the ability to directly sell,
market or distribute any product. In
addition, in the event our agreement with
Forest Laboratories is terminated or with
respect to any other product we may develop
that is not covered by our collaboration
with Forest Laboratories, we would have to
obtain the assistance of a |
pharmaceutical
company or other entity with a large
distribution system and a large direct sales
force or build a substantial marketing and
sales force with appropriate technical
expertise and supporting distribution
capabilities. We may not be able to enter
into such arrangements with third parties in
a timely manner or on acceptable terms or
establish sales, marketing and distribution
capabilities of our own. To the extent that
we enter into co-promotion or other
licensing arrangements, our product revenues
are likely to be lower than if we directly
marketed and sold our products, and any
revenues we receive will depend upon the
efforts of third parties, which efforts may
not be successful. |
||
We will need substantial additional funding
and may be unable to raise capital when
needed, which could force us to scale back
or discontinue the completion of any
proposed acquisitions or adversely affect
our ability to realize the expected benefits
of any completed acquisitions. |
||
We agreed to pay certain expenses in
connection with the second Phase III
clinical trial for milnacipran in FMS, which
under certain circumstances may not be
reimbursed by Forest Laboratories to us. In
addition, we will incur certain
non-reimbursable expenses in connection with
the development of milnacipran and may incur
expenses in connection with any co-promotion
for milnacipran we choose to undertake. We
are also incurring expenses in connection
with the evaluation of potential
acquisitions or other strategic transactions
and will incur additional expenses in the
event we close any such transactions or
enter into any co-promotion, in-licensing or
collaboration agreements in connection with
any such transactions. We do not have any
committed external sources of funding and we
will likely need to raise additional capital
through the sale of equity or debt. The
amount of capital we will require will
depend upon many factors, including but not
limited to, the evaluation and potential
closing of any strategic transactions and
the development strategy for milnacipran. If
we are unable to raise capital when we need
it, we may have to scale back or discontinue
the evaluation or completion of any proposed
acquisitions or strategic transaction(s). |
||
We have broad discretion in how we use the
net proceeds of this offering, and we may
not use these proceeds effectively or in
ways with which you agree. |
||
Our management will have broad discretion as
to the application of the net proceeds of
the offering to which this communication
relates and could use them for purposes
other than those contemplated at the time of
such offering. Our stockholders may not
agree with the manner in which our
management chooses to allocate and spend the
net proceeds. Moreover, our management may
use the net proceeds for corporate purposes
that may not increase the market price of
our common stock. |
||
We rely primarily on method of use patents to protect our proprietary technology for the
development of milnacipran, and our ability to compete may decrease or be eliminated if we are not
able to protect our proprietary technology. |
||
Our ability to compete may decrease or be eliminated if we are not able to protect our proprietary
technology. The composition of matter patent for milnacipran (U.S. Patent 4,478,836) expired in
June 2002. Accordingly, we rely on the patent for the method of synthesis of milnacipran (U.S.
Patent 5,034,541), which expires on December 27, 2009 and was assigned to Xxxxxx Xxxxx and licensed
to us and on patents on the method of use of milnacipran to treat symptoms of FMS (U.S. Patent
6,602,911, which we refer to as the ‘911 Patent), the method of use of milnacipran to treat pain (U.S. Patent 6,992,110) and the method of use of milnacipran to
treat symptoms of chronic fatigue syndrome (U.S. Patent 6,635,675) issued to us, to protect our
proprietary technology with respect to the development of milnacipran. The method of use patent
directly relevant to our current milnacipran product candidate is the ’911 patent; the other two
method of use patents may have future applicability. We have also filed additional patent
applications related to milnacipran and to the use of milnacipran for FMS (and other related pain
syndromes and disorders), although no patents have issued on these patent applications. Because
there is very limited patent protection for the composition of matter of milnacipran, other
companies may be able to sell milnacipran in competition with us and Forest Laboratories unless we
and Forest Laboratories are able to obtain additional protection through milnacipran-related
patents or additional use patents that may issue from our pending patent applications or other
regulatory exclusivity. It may be more difficult to establish infringement of methods of synthesis,
formulation or use patents as compared to a patent on a compound. If we or Forest Laboratories are
not able to obtain and enforce these patents, a competitor could use milnacipran for a treatment or
use not covered by any of our patents.
|
||
The validity of a U.S. patent depends, in part, on the novelty of the invention it discloses. The
pharmaceutical industry is characterized by constant investment in new drug discovery and
development, and this results in a steady stream of publications regarding the product of this
investment, any of which would act to defeat the novelty of later-discovered inventions. Issued
U.S. patents enjoy a presumption of validity that can only be overcome by clear and convincing
evidence. However, patents are nonetheless subject to challenge and can be invalidated if a court
determines, retrospectively, that despite the action of the Patent and Trademark Office in issuing
the patent, the corresponding patent application did not meet the statutory requirements. If a
competitor or other third party were to successfully challenge our patents, and claims in these
patents are narrowed or invalidated, our ability to protect the related product from competition
would be compromised. |
We also expect to rely on the United States Drug Price Competition and Patent Term Restoration Act,
commonly known as the Xxxxx-Xxxxxx Amendments, for protection of milnacipran and our other future
products. The Xxxxx-Xxxxxx Amendments provide data exclusivity for new molecular entities, such as
that in milnacipran. Once a drug containing a new molecule is approved by the FDA, the FDA cannot
accept an abbreviated NDA for a generic drug containing that molecule for five years, although the
FDA may accept and approve a drug containing the molecule pursuant to an NDA supported by
independent clinical data. Amendments have been proposed that would narrow the scope of
Xxxxx-Xxxxxx exclusivity and permit generic drugs to compete with our drug. After the Xxxxx-Xxxxxx
exclusivity period expires, assuming our patents are valid, we still expect to rely on our method
of use patents to protect our proprietary technology with respect to the development of
milnacipran. The patent positions of pharmaceutical companies are uncertain and may involve complex
legal and factual questions. We may incur significant expense in protecting our intellectual
property and defending or assessing claims with respect to intellectual property owned by others.
Any patent or other infringement litigation by or against us could result in significant expense to
us, including diversion of the resources of management.
|
||
Others may file patent applications or obtain patents on similar technology or compounds that
compete with milnacipran for the treatment of FMS. We cannot predict the breadth of claims that
will be allowed and issued in patent applications. Once patents have issued, we cannot predict how
the claims will be construed or enforced. We may infringe on intellectual property rights of others
without being aware of the infringement. If another party claims we are infringing their
technology, we could have to defend an expensive and time consuming lawsuit, pay a large sum if we
are found to be infringing, or be prohibited from selling or licensing our products unless we
obtain a license or redesign our product, which may not be possible.
|
||
We also rely on trade secrets and proprietary know-how to develop and maintain our competitive
position. Some of our current or former employees, consultants or scientific advisors, or current
or prospective corporate collaborators, may unintentionally or willfully disclose our confidential
information to competitors or use our proprietary technology for their own benefit. Furthermore,
enforcing a claim alleging the infringement of our trade secrets would be expensive and difficult
to prove, making the outcome uncertain. Our competitors may also independently develop similar
knowledge, methods and know-how or gain access to our proprietary information through some other
means.
|
This communication contains or incorporates by reference certain forward-looking statements that
describe our future plans, strategies, intentions, expectations, objectives, goals and prospects.
These forward-looking statements are or will be, as applicable, based largely on our expectations
and projections about future events and future trends affecting our business, and so are or will
be, as applicable, subject to risks and uncertainties that could cause actual results to differ
materially from those anticipated in the forward-looking statements. Our actual results of
operations and execution of our business strategy could differ materially from those expressed in,
or implied by, the forward-looking statements. We can give no assurances that any of the events
anticipated by the forward-looking statements will occur or, if any of them do, what impact they
will have on our results of operations and financial condition. Except as required by law, we
undertake no obligation to publicly revise our forward-looking statements to reflect events or
circumstances that arise after the date of this communication.
We have filed a registration statement (including a prospectus) with the SEC for the offering to
which this communication relates. Before you invest, you should read the prospectus in that
registration statement, including the documents incorporated by reference in that prospectus and
other documents we have filed with the SEC for more complete information about us and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, we, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus
if you request it from UBS Securities LLC, Prospectus Department, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000. You may also access the prospectus by
clicking on the following link:
xxxx://xxx.xxx.xxx/Xxxxxxxx/xxxxx/xxxx/000000/000000000000000000/x0000000x000x0.xxx
EXHIBIT A
Lock-Up Agreement
___________ ___, 2007
UBS Securities LLC
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
Together with the other Underwriters
named in Schedule A to the Underwriting Agreement
referred to herein
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This Lock-Up Agreement is being delivered to you in connection with the proposed Underwriting
Agreement (the “Underwriting Agreement”) to be entered into by Cypress Bioscience, Inc., a
Delaware corporation (the “Company”), and you and the other underwriters named in Schedule
A to the Underwriting Agreement, 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 (the “Lock-Up Period”) beginning on the date hereof and ending on, and
including, the date that is 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,
(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 (the “Exchange Act”) with respect to, any Common Stock or any other securities
of the Company that are substantially similar to Common Stock, or any securities convertible into
or exchangeable or exercisable for, or any warrants or other rights to purchase, the foregoing,
(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 other securities of the Company
that are substantially similar to Common Stock, or any securities convertible into or exchangeable
or exercisable for, or any warrants or other rights to purchase, the foregoing, whether any such
transaction is to 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 (a) the registration of the offer and sale of
Common Stock as contemplated by the Underwriting Agreement and the sale of
A-1
the Common Stock to the Underwriters (as defined in the Underwriting Agreement) in the Offering,
(b) bona fide gifts or dispositions to any irrevocable trust for the direct or indirect benefit of
the undersigned and/or the immediate family of the undersigned such gifts or dispositions not to
exceed 25,000 shares of Common Stock, (c) sales under any 10b5-1 plan previously identified to UBS
Securities LLC, not to exceed 25,000 shares per calendar month, or the extension or renewal of such
plans or (d) sales of Common Stock made with the aforementioned prior written consent of UBS
Securities LLC. For purposes of this paragraph, “immediate family” shall mean the undersigned and
the spouse, any lineal descendent, father, mother, brother or sister of the undersigned.
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 the Lock-Up Period, the undersigned will
not, without the prior written consent of UBS Securities LLC, make any demand for, or exercise any
right with respect to, the registration of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to purchase Common Stock
or any such securities.
Notwithstanding the above, if (a) during the period that begins on the date that is fifteen
(15) calendar days plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the sixteen (16) day
period beginning on the last day of the Lock-Up Period, then the restrictions imposed by this
Lock-Up Agreement shall continue to apply until the expiration of the date that is fifteen (15)
calendar days plus three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs; provided, however, that this sentence shall
not apply if the research published or distributed about the Company is issued in compliance with
or pursuant to Rule 139 of the Act and the Company’s securities are “actively traded” as such term
is defined in Rule 10(c)(1) of Regulation M of the Exchange Act
The undersigned hereby confirms that the undersigned has not, directly or indirectly, taken,
and hereby covenants that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of 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 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 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 GODWARD KRONISH LLP
1. 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 requisite corporate power to own or lease,
as the case may be, and to operate its properties and conduct its business as described in the
Prospectus Supplement.
2. The Company is duly qualified to do business as a foreign corporation and is in good
standing under the laws of California.
3. The authorized capital stock of the Company as of March 31, 2007, consisted of
15,000,000 shares of preferred stock, $.001 par value, and 60,000,000 shares of common stock, $.001
par value.
4. The Securities have been duly authorized and, when issued and paid for by the
Underwriters pursuant to the Agreement, will be validly issued, fully paid and nonassessable.
5. The holders of outstanding shares of capital stock of the Company are not entitled to
preemptive or, to our knowledge, rights of first refusal or other similar rights to subscribe for
the Securities.
6. To our knowledge, there is (i) no action, suit or proceeding by or before any court or
other governmental agency, authority or body or any arbitrator pending or overtly threatened
against the Company or its properties by a third party of a character required to be disclosed in
the Prospectus or the Disclosure Package that is not disclosed in the Prospectus or the Disclosure
Package as required by the Act and the rules thereunder, and (ii) no indenture, contract, lease,
mortgage, deed of trust, note agreement, loan or other agreement or instrument of a character
required to be filed as an exhibit to the Registration Statement, which is not filed as required by
the Act and the rules thereunder.
7. The statements (a) in the Company’s Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 30, 2007 under the heading “Description of Capital Stock”, and (b)
in the Prospectus Supplement under the heading “Material United States federal income and estate
tax consequences for non-United States holders”, insofar as such statements purport to summarize
legal matters, agreements or documents discussed therein, fairly present, to the extent required by
the Act and the rules thereunder, in all material respects, such legal matters, agreements or
documents.
8. The Registration Statement has become effective under the Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted or overtly threatened.
9. The Registration Statement, the Basic Prospectus and the Prospectus (other than the
financial statements and notes thereto or other financial or statistical data derived therefrom, as
to which we express no opinion) comply as to form in all material respects with the applicable
A-1
requirements of the Act and the rules thereunder; and each of the documents set forth on
Exhibit B hereto (other than the financial statements and notes thereto or other financial or
statistical data derived therefrom, as to which we express no opinion), at the time such document
was filed with the Commission, complied as to form in all material respects with the applicable
requirements of the Exchange Act and the rules thereunder.
10. The Agreement has been duly authorized by all necessary corporate action on the part of
the Company and has been duly executed and delivered by the Company.
11. The Company is not, and, after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the Prospectus, will not be, an
“investment company” as defined in the Investment Company Act of 1940, as amended.
12. No consent, approval, authorization or filing with or order of any U.S. Federal or
California court or governmental agency or body having jurisdiction over the Company, and no
consent, approval, authorization or filing pursuant to the Delaware General Corporation Law, is
required for the consummation by the Company of the transactions contemplated by the Agreement,
except such as have been obtained under the Act and except such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by
the Underwriters in the manner contemplated in the Agreement and in the Prospectus, or under the
bylaws, rules and regulations of the NASD.
13. The issuance and sale of the Securities pursuant to the Agreement will not result in a
breach or violation of (i) the charter or bylaws of the Company, (ii) the terms of any Material
Contract; or (iii) any statute, law, rule, or regulation which, in our experience is typically
applicable to transactions of the nature contemplated by the Agreement and is applicable to the
Company, or any order, writ, judgment, injunction, decree, or award that has been entered against
the Company and of which we are aware, except in the case of clause (ii) such breach or violation
of which would not materially and adversely affect the Company.
14. To our knowledge, except as set forth in the Prospectus, no holders of securities of the
Company have rights to require the registration under the Act of resales of such securities.
15. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424 or
Rule 430B under the Act has been made in the manner and within the time period required by such
Rule 424 and in compliance with Rule 430B under the Act.
In connection with the preparation of the Registration Statement, the Disclosure Package and
the Prospectus, we have participated in conferences with officers and other representatives of the
Company and with its independent registered public accounting firm, as well as with representatives
of the Underwriters and their counsel. At such conferences, the contents of the Registration
Statement, the Disclosure Package and the Prospectus and related matters were discussed. We have
not independently verified, and accordingly are not confirming and assume no responsibility for,
the accuracy, completeness or fairness of the statements contained in the Registration Statement,
the Disclosure Package or the Prospectus. On the basis of the foregoing, no facts have come to our
attention that have caused us to believe (i) that the Registration
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Statement (except as to the financial statements and schedules, related notes and other
financial data and statistical data derived therefrom, as to which we express no comment), at the
date and time that the Registration Statement is considered to have become effective as to the
Underwriters pursuant to Section 11(d) of the Act and Rule 430B(f) promulgated thereunder,
contained any 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 (ii) that the
Disclosure Package as of the Applicable Time, when taken together with the Pricing Information
(except as to the financial statements and schedules, related notes and other financial and
statistical data derived therefrom, as to which we express no comment) contained any untrue
statement of a material fact or omitted to state a material fact necessary, in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, or
(iii) that the Prospectus (except as to the financial statements and schedules, related notes and
other financial and statistical data derived therefrom, as to which we express no comment), as of
the date of the Prospectus Supplement, or as of the date hereof, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact necessary, in order to
make the statements therein, in light of the circumstances under which they were made, not
misleading. As used herein, (A) “Disclosure Package” means the Basic Prospectus together with the
Permitted Free Writing Prospectus listed on Annex A hereto, (B)
“Applicable Time” means ___ :00
___.m., New York City time, on May___, 2007, and (C) “Pricing Information” means (i) the number of
Shares offered for sale pursuant to the Prospectus and (ii) the public offering price per Share, in
the case of each of clause (C)(i) and clause (C)(ii), as reflected on the cover page of the
Prospectus Supplement.
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EXHIBIT C
FORM OF OPINION OF XXXXX & XXXXX P.C.
| 1. | The statements included or incorporated by reference in the Registration Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus attached hereto as Annex A relating to patents or proprietary rights (collectively, the “Intellectual Property Statements”), insofar as such Intellectual Property Statements constitute summaries of documents or legal proceedings or refer to matters of law or legal conclusions, are accurate and complete in all material respects and present fairly the information purported to be shown; nothing has come to our attention that causes us to believe that (i) the Intellectual Property Statements included or incorporated by reference in the Registration Statement, at the Effective Time, 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, (ii) the Intellectual Property Statements included or incorporated by reference in the Disclosure Package (as defined below), as of [___] [“A.M.” / “P.M.”], New York City time, on [___], included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) the Intellectual Property Statements included or incorporated by reference in the Prospectus, as of the date of the Prospectus Supplement or the date hereof, included or include an untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As used herein, “Disclosure Package” means the Basic Prospectus together with the Permitted Free Writing Prospectuses attached hereto as Annex A. | |
| 2. | To our knowledge, (i) there are no legal or governmental proceedings pending relating to patent rights, trade secrets, trademarks, service marks, copyrights or other proprietary information or materials of the Company, and (ii) no such proceedings are threatened or contemplated by governmental authorities or others. | |
| 3. | We do not know of any contracts or other documents, relating to the patents, trade secrets, trademarks, service marks or other proprietary information or materials of the Company that are of a character required to be described in the Registration Statement, the Basic Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement or any Incorporated Document which have not been so described or filed as required. | |
| 4. | To our knowledge, (i) the Company is not infringing or otherwise violating, and, upon the commercialization and sale of the products or services described in the Registration Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus attached hereto as Annex A (each, a “Permitted Free Writing Prospectus”) as under development, the Company would not infringe or otherwise violate, any patents, trade secrets, trademarks, service marks, copyrights or other proprietary information or materials of others, and we are unaware of any facts which would form a reasonable basis for a claim of any such infringement, and (ii) there are no infringements by others of any of the patents, |
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| trade secrets, trademarks, service marks, copyrights or other proprietary information or materials of the Company, and we are unaware of any facts which would form a reasonable basis for a claim of any such infringement. | ||
| 5. | To our knowledge, (i) the Company has clear title or valid license rights to the patents described in the Registration Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus as owned or licensed by the Company and (ii) except as disclosed in the Registration Statement, the Basic Prospectus and the Prospectus, there are no rights of third parties to such patents; we have no knowledge that the Company lacks or will be unable to obtain any rights or licenses to use all patents and other material intangible property and assets that are, or would be, necessary to conduct the business now conducted or proposed to be conducted by the Company as described in the Registration Statement, the Basic Prospectus, the Prospectus or any Permitted Free Writing Prospectus, except as disclosed in the Registration Statement (excluding the exhibits thereto), the Basic Prospectus and the Prospectus; and we are unaware of any facts which form a basis for a finding of unenforceability or invalidity of any of the patents and other material intellectual property and assets of the Company. | |
| 6. | We are not aware of any fact with respect to the patent applications of the Company presently on file that (i) would preclude the issuance of patents with respect to such applications, (ii) would lead us to conclude that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations or (iii) would result in a third party having any rights in any patents issuing from such patent applications. |
Capitalized terms used herein without definition shall have the respective meanings ascribed to
them in the Underwriting Agreement.
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EXHIBIT D
OPINION OF XXXXXX XXXXXX LLP
(1) The statements included or incorporated by reference in the Registration Statement, the Basic
Prospectus, the Prospectus or any Permitted Free Writing Prospectus attached hereto as Annex
A and dated as of ___ regarding (a) healthcare regulatory matters or (b) the receipt by the
Company of FDA approvals or clearances, and the applications for, or the submissions with the FDA
regarding, such approvals or clearances and in the Prospectus under the headings “Risk
factors—Risks Relating to our Business—There are limited data regarding milnacipran as a treatment
of FMS and it may not work for FMS, especially in light of the results from our first Phase III
clinical trial, or there may be safety issues with its use in this patient population,” “Risk
Factors—Risks Relating to our Business—We rely upon Xxxxxx Xxxxx as our exclusive supplier of the
compound used as the active ingredient in our milnacipran product candidate and if Xxxxxx Xxxxx
fails to supply us sufficient quantities of the active ingredient it may delay or prevent us from
developing and commercializing milnacipran,” “Risk Factor—Risks Relating to our Business—The FDA
approval of milnacipran or any future product candidate is uncertain and will involve the
commitment of substantial time and resources,” “Risk Factor—Risks Relating to our Business—If we
receive regulatory approval for milnacipran or any other future product candidate, we will be
subject to ongoing FDA obligations and continuing regulatory review, ” “Risk Factor—Risks Relating
to our Business—Even if our product candidates are approved, the market may not accept these
products,” “Risk Factor—Risks Related to Our Intellectual Property—We rely primarily on method of
use patents to protect our proprietary technology for the development of milnacipran, and our
ability to compete may decrease or be eliminated if we are not able to protect our proprietary
technology,” and “Prospectus supplement summary—Company Overview,” in the Company’s Quarterly
Report filed on Form 10-Q for the quarter ended March 31, 2007 under the headings “Risk
Factors—There are limited data regarding milnacipran as a treatment of FMS and it may not work for
FMS, especially in light of the results from our first Phase III clinical trial, or there may be
safety issues with its use in this patient population,” “Risk Factors—We rely upon Xxxxxx Xxxxx as
our exclusive supplier of the compound used as the active ingredient in our milnacipran product
candidate and if Xxxxxx Xxxxx fails to supply us sufficient quantities of the active ingredient it
may delay or prevent us from developing and commercializing milnacipran,” “Risk Factor—The FDA
approval of milnacipran or any future product candidate is uncertain and will involve the
commitment of substantial time and resources,” “Risk Factor—If we receive regulatory approval for
milnacipran or any other future product candidate, we will be subject to ongoing FDA obligations
and continuing regulatory review, ” “Risk Factor—Even if our product candidates are approved, the
market may not accept these products,” “Risk Factor—Risks Related to Our Intellectual Property—We
rely primarily on method of use patents to protect our proprietary technology for the development
of milnacipran, and our ability to compete may decrease or be eliminated if we are not able to
protect our proprietary technology,” and in the Company’s Annual Report filed on Form 10-K for the
fiscal year ended December 31, 2006 under the headings “Business—Company Overview,”
“Business—Milnacipran Development Status — Results of Phase II Trial,” “Business—Milnacipran
Development Status — Results of First Phase III Trial,” “Business—Patents, Trademarks and
Proprietary Technology” and “Business—Government Regulation”
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(collectively, the “Regulatory Statements”), insofar as such Regulatory Statements
constitute summaries of documents or legal proceedings or refer to matters of law or legal
conclusions, are accurate and complete in all material respects and present fairly the information
purported to be shown.
(2) Nothing has come to our attention in the course of such review and participation that causes
us to believe that (i) the Regulatory Statements included or incorporated by reference in the
Registration Statement, at the Effective Time, 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, (ii) the Regulatory Statements included or incorporated by reference in the
Disclosure Package (as defined below), as of [___] [“A.M.” / “P.M.”], New York City time, on [___],
included an untrue statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading or (iii) the Regulatory Statements included or incorporated by reference in the
Prospectus, as of the date of the Prospectus Supplement or the date hereof, included or include an
untrue statement of a material fact or omitted or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading. As used herein, “Disclosure Package” means the Basic Prospectus together with
the Permitted Free Writing Prospectuses attached hereto as Annex B.
Capitalized terms used herein without definition shall have the respective meanings ascribed to
them in the Underwriting Agreement.
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EXHIBIT E
OPINION OF VICE PRESIDENT OF LEGAL AFFAIRS
| 1. | I am an active member in good standing of the Bar of the State of California. | |
| 2. | To my knowledge after reasonably inquiry, since February 4, 2004, all of the issued and outstanding shares of Common Stock of the Company issued since that date were, when issued, fully paid and nonassessable and duly and validly authorized, except for any shares issued pursuant to any deferred payment arrangements, which were fully paid and nonassessable when such deferred payments were made in full. |
Capitalized terms used herein without definition shall have the respective meanings ascribed to
them in the Underwriting Agreement.
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EXHIBIT F
| 1. | To my knowledge after reasonable inquiry, prior to February 4, 2004, all of the issued and outstanding shares of Common Stock of the Company issued by the Company prior to that date were, when issued, fully paid and nonassessable and duly and validly authorized, except for any shares issued pursuant to any deferred payment arrangements, which were fully paid and nonassessable when such deferred payments were made in full. |
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EXHIBIT G
The undersigned, Xxx X. Xxxxxxxx, Chief Executive Officer of Cypress Bioscience, Inc., a
Delaware corporation (the “Company”), and Xxxxxxx Xxxxxxxx Xxxxxxx, Executive Vice
President, Chief Business Officer and Chief Financial Officer of the Company, on behalf of the
Company, do hereby certify, pursuant to Section 6(j) of that certain Underwriting Agreement dated
May ___, 2007(the “Underwriting Agreement”) between the Company and, on behalf of the
several Underwriters named therein, UBS Securities LLC, CIBC World Markets Corp. and Xxxxxxxxx &
Company, LLC, that as of ___:
(i) no stop order with respect to the effectiveness of the Registration Statement has been
issued under the Act, and no proceedings have been initiated under Section 8(d) or 8(e) of the Act;
(ii) the Registration Statement and all amendments thereto, or modifications thereof, if any,
do 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;
(iii) the Prospectus and all amendments or supplements thereto, or modifications thereof, if
any, do 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;
(iv) between the time of execution of the Underwriting Agreement and the date hereof, (A) no
material and adverse change or any development involving a prospective material and adverse change
(other than as specifically described in the Registration Statement and Prospectus), in the
business, properties, condition (financial or otherwise) or results of operations of the Company
has occurred or become known and (B) no transaction which is material and adverse to the Company
has been entered into by the Company;
(v) the representations and warranties of the Company as set forth in the Underwriting
Agreement are true and correct as of the date hereof and as if made on the date hereof; and
(vi) the Company has performed such of its obligations under the Underwriting Agreement as are
to be performed at or before the date hereof.
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
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