Cumberland Pharmaceuticals Inc. [___] Shares Common Stock (no par value per Share) Underwriting Agreement
EXHIBIT 1.1
[___] Shares
Common Stock
(no par value per Share)
(no par value per Share)
[_____], 2007
[_____], 2007
UBS Securities LLC
Xxxxxxxxx and Company, Inc.
Wachovia Capital Markets, LLC
Xxxxxx Xxxxxx & Co. Inc.
Xxxxxxxxx and Company, Inc.
Wachovia Capital Markets, LLC
Xxxxxx Xxxxxx & Co. Inc.
As Representatives of the several Underwriters
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:
Cumberland Pharmaceuticals Inc., a Tennessee 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 [___] shares
(the “Firm Shares”) of common stock, no 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
[___] 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-1 (File No. 333-142535) under the Act, including a prospectus, relating to the Shares.
Except where the context otherwise requires, “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,
(ii) any information contained 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 430A 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 Company has furnished to you, for use by the Underwriters and by dealers in connection
with the offering of the Shares, copies of one or more preliminary prospectuses relating to the
Shares. Except where the context otherwise requires, “Preliminary Prospectus,” as used
herein, means each such preliminary prospectus, in the form so furnished.
Except where the context otherwise requires, “Prospectus,” as used herein, means the
prospectus, 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), or, if no such filing is required, the final prospectus
included in the Registration Statement at the time it became effective under the Act, in each case
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.
“Permitted Free Writing Prospectuses,” as used herein, means the documents listed on
Schedule B attached hereto and each “road show” (as defined in Rule 433 under the Act), if
any, related to the offering of the Shares contemplated hereby that is a “written communication”
(as defined in Rule 405 under the Act) (each such road show, an “Electronic Road Show”).
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 Preliminary Prospectus together with
any combination of one or more of the Permitted Free Writing Prospectuses, if any.
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 has prepared and filed, in accordance with Section 12 of the “Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”)”], a registration statement (as amended, the “Exchange Act Registration
Statement”) on Form 8-A (File No. ___) under the Exchange Act to register, under Section
12(b) of the Exchange Act, the class of securities consisting of the Common Stock.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule A attached hereto, subject to adjustment in accordance with Section 8 hereof, in
each case at a purchase price of $[___] per Share. The Company is advised by you that the
Underwriters intend (i) to make a public offering of their respective portions of the Firm Shares
as soon after the effective date of the Registration Statement as in your judgment is advisable and
(ii) initially to offer the Firm Shares upon the terms set forth in the Prospectus. You may from
time to time increase or decrease the public offering price after the initial public offering to
such extent as you may determine.
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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, 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 [___], 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.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of Xxxxx Xxxxxxxxxx LLP at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, at 9:00 A.M., New York City time, on the date of the closing of the purchase
of the Firm Shares or the Additional Shares, as the case may be.
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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 Preliminary Prospectus or 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; the Exchange Act Registration Statement has become effective
as provided in Section 12 of the Exchange Act;
(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 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 Preliminary Prospectus complied, at the time it was filed with the Commission, and
complies as of the date hereof, in all material respects with the requirements of the Act;
at no time during the period that begins on the earlier of the date of such Preliminary
Prospectus and the date such Preliminary Prospectus was filed with the Commission and ends
at the time of purchase did or will any Preliminary 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 Preliminary Prospectus, as then amended or supplemented, together with 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; the Prospectus will comply, as of its date, the date that it is filed with
the Commission, 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 (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 and the date the Prospectus 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
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connection with any sale of Shares did or will 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, any Preliminary
Prospectus, 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, such Preliminary Prospectus, the Prospectus or such Permitted Free Writing
Prospectus;
(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 Preliminary Prospectuses 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 accompanied or preceded by the most recent Preliminary Prospectus that contains a price
range or the Prospectus, as the case may be, and that such Permitted Free Writing Prospectus
is so 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 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); each of the Preliminary
Prospectuses dated [___] is 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, including a price
range where required by rule; 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”; the parties hereto
agree and understand that the content of any and all “road shows” (as defined in Rule 433
under the Act) related to the offering of the Shares contemplated hereby is solely the
property of the Company; the Company has caused there to be made available at least one
version of a “bona fide electronic road show” (as defined in Rule 433 under the Act) in a
manner that, pursuant
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to Rule 433(d)(8)(ii) under the Act, causes the Company not to be required, pursuant to
Rule 433(d) under the Act, to file, with the Commission, any Electronic Road Show;
(d) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the sections of the Registration Statement, the Preliminary
Prospectuses and the Prospectus entitled “Capitalization” and “Description of capital stock”
(and any similar sections or information, if any, contained in any Permitted Free Writing
Prospectus), 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 sections of the Registration Statement, the Preliminary Prospectuses and the
Prospectus entitled “Capitalization” and “Description of capital stock” (and any similar
sections or information, if any, contained in any Permitted Free Writing Prospectus)
(subject, in each case, to the issuance of shares of Common Stock upon exercise of stock
options and warrants and upon conversion of the Company’s outstanding Series A Preferred
Stock disclosed as outstanding in the Registration Statement (excluding the exhibits
thereto), each Preliminary Prospectus and the Prospectus and the grant of options under
existing stock option plans described in the Registration Statement (excluding the exhibits
thereto), each Preliminary 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; prior to the time
of purchase, all outstanding shares of Series A Preferred Stock, no par value per share, of
the Company shall convert into shares of Common Stock in the manner described in the
Registration Statement (excluding the exhibits thereto), each Preliminary Prospectus and the
Prospectus; prior to the date hereof, the Company has duly effected and completed a
[x]-for-[x] stock split of the Common Stock in the manner described in the Registration
Statement (excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus;
and the [“Amended and Restated Certificate of Incorporation"] of the Company and the
[“Amended and Restated Bylaws"] of the Company, each in the form filed as an exhibit to the
Registration Statement, have been heretofore duly authorized and approved in accordance with
the Tennessee Business Corporation Act and shall become effective and in full force and
effect at or before the time of purchase; the Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and evidence of satisfactory
distribution, on the Nasdaq Global Market (the “NASDAQ”);
(e) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Tennessee, with full corporate power and
authority to own, lease and operate its properties and conduct its business as described in
the Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted
Free Writing Prospectuses, if any, to execute and deliver this Agreement and to issue, sell
and deliver the Shares as contemplated herein;
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(f) 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 and the Subsidiaries (as defined below) taken as a
whole, (ii) prevent or materially interfere with consummation of the transactions
contemplated hereby or (iii) prevent the shares of Common Stock from being accepted for
listing on, or 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) and (iii) being herein referred to as a
“Material Adverse Effect”);
(g) the Company has no subsidiaries (as defined under the Act) other than Cumberland
Emerging Technologies, Inc. (“CET”) and Cumberland Pharma Sales Corp.
(“Cumberland Pharma”) (collectively, the “Subsidiaries”); the Company owns
all of the issued and outstanding capital stock of Cumberland Pharma and, except as
disclosed in the Registration Statement, the Preliminary Prospectuses, the Prospectus and
the Permitted Free Writing Prospectuses, if any, of CET; other than the capital stock of the
Subsidiaries, 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; complete and correct copies of the charters and
the bylaws of the Company and each Subsidiary and all amendments thereto have been delivered
to you, and, except as set forth in the exhibits to the Registration Statement, no changes
therein will be made on or after the date hereof through and including the time of purchase
or, if later, any additional time of purchase; each Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the jurisdiction
of its incorporation, with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any; each Subsidiary is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have a Material
Adverse Effect; all of the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable, have been
issued in compliance with all applicable securities laws, were not issued in violation of
any preemptive right, resale right, right of first refusal or similar right and are owned by
the Company subject to no security interest, other encumbrance or adverse claims; and no
options, warrants or other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligation into shares of capital stock or ownership interests
in the Subsidiaries are outstanding;
(h) 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,
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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 Tennessee Business Corporation Act or the
Company’s charter or bylaws or any agreement or other instrument to which the Company is a
party;
(i) the capital stock of the Company, including the Shares, conforms in all material
respects to each description thereof, if any, contained in the Registration Statement, the
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any; and the certificates for the Shares are in due and proper form;
(j) this Agreement has been duly authorized, executed and delivered by the Company;
(k) neither the Company nor any of the Subsidiaries is in breach or violation of or in
default under (nor has any event occurred which, with notice, lapse of time or both, would
result in any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (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;
(l) 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 or any Subsidiary pursuant
to) (A) the charter or bylaws of the Company or any of the Subsidiaries, 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 or any of the Subsidiaries is a party or by which any of them or any of their
respective 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 the Subsidiaries or any of their respective properties;
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(m) 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 shareholders of the Company,
is required in connection with the issuance and sale of the Shares or the consummation by
the Company of the transactions contemplated hereby, other than (i) registration of the
Shares under the Act, which has been effected (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”);
(n) except as described in the Registration Statement (excluding the exhibits thereto),
each Preliminary 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 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; 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;
(o) each of the Company and the Subsidiaries 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 their respective businesses;
neither the Company nor any of the Subsidiaries is in violation of, or in default under, or
has received notice of any proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or any of the
Subsidiaries, except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(p) 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 the
Subsidiaries or any of their respective directors or officers is or would be a party or of
which any of their respective 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
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proceeding which, if resolved adversely to the Company or any Subsidiary, would not,
individually or in the aggregate, have a Material Adverse Effect;
(q) KPMG, LLP, whose report on the consolidated financial statements of the Company and
the Subsidiaries is included in the Registration Statement, the Preliminary Prospectuses and
the Prospectus, are independent registered public accountants as required by the Act and by
the rules of the Public Company Accounting Oversight Board;
(r) the financial statements included in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, together
with the related notes and schedules, present fairly the consolidated financial position of
the Company and the Subsidiaries as of the dates indicated and the consolidated results of
operations, cash flows and changes in shareholders’ 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 in the Registration Statement, the Preliminary Prospectuses, 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 in the Registration
Statement, the Preliminary Prospectuses, 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 in the Registration
Statement, any Preliminary Prospectus or the Prospectus that are not included as required;
the Company and the Subsidiaries do 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), each Preliminary Prospectus and the
Prospectus; and all disclosures contained in the Registration Statement, the Preliminary
Prospectuses, 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;
(s) except as disclosed in the Registration Statement (excluding the exhibits thereto),
each Pre-Pricing Prospectus and the Prospectus, each stock option granted under any stock
option plan of the Company or any Subsidiary (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, 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
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applicable Stock Plan(s), (ii) was duly approved by the board of directors (or a duly
authorized committee thereof) of the Company or such Subsidiary, as applicable, 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;
(t) subsequent to the respective dates as of which information is given in the
Registration Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, in each case 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 and the Subsidiaries taken as a whole, (ii) any transaction which is material to the
Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the Company or any
Subsidiary, which is material to the Company and the Subsidiaries taken as a whole, (iv) any
change in the capital stock or outstanding indebtedness of the Company or any Subsidiaries
or (v) any dividend or distribution of any kind declared, paid or made on the capital stock
of the Company or any Subsidiary;
(u) 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 (i) each
of its directors and “officers” (within the meaning of Rule 16a-1(f) under the Exchange Act
and (ii) of securityholders of the Company holding in the aggregate at least [___] of the
outstanding shares of Common Stock (treating, for all purposes of this Section 3(u), all
options or warrants or other securities exercisable or exchangeable for Common Stock as
having been exercised, exchanged or converted (as the case may be) and all securities
convertible into Common Stock as having been converted;
(v) neither the Company nor any Subsidiary is, 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 either of
them be, and, after giving effect to the offering and sale of the Shares and the application
of the proceeds thereof, neither of them will be, an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended (the “Investment Company Act”);
(w) the Company and each of the Subsidiaries have good and marketable title to all
property (real and personal) described the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, as being
owned by any of them, free and clear of all liens, claims, security interests or other
encumbrances; all the property described in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, as being
held under lease by the Company or a Subsidiary is held thereby under valid,
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subsisting and enforceable leases;
(x) except as disclosed in the Registration Statement, the Preliminary Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, with regard to product
candidates held by CET, as to which we either own the rights or have options to license such
product candidates, the Company and the Subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions, patent applications,
patents, trademarks (both registered and unregistered), tradenames, service names,
copyrights, trade secrets and other proprietary information described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, as being owned or licensed by them or which are necessary for the
conduct of their respective businesses as currently conducted or as proposed to be conducted
(including the commercialization of products or services described in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, as under development), 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”); (i) there are no third parties who have or,
to the Company’s knowledge, 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), each Preliminary
Prospectus and the Prospectus disclose is licensed to the Company; (ii) 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, and the Company is unaware of any
facts which could form a reasonable basis for any such action, suit, proceeding or claim;
(iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity, enforceability or scope of any Intellectual
Property, and the Company is unaware of any facts which could form a reasonable basis for
any such action, suit, proceeding or claim; (v) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the Company or any
Subsidiary infringes or otherwise violates, or would, upon the commercialization of any
product or service described in the Registration Statement, the Preliminary Prospectuses,
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, and the Company is unaware of any facts which could
form a reasonable basis for any such action, suit, proceeding or claim; (vi) the Company and
the Subsidiaries have complied with the terms of each agreement pursuant to which
Intellectual Property has been licensed to the Company or any Subsidiary, and all such
agreements are in full force and effect; (vii) there is no patent or patent application that
contains claims that interfere with the issued or pending claims of any of the Intellectual
Property or that challenges the validity, enforceability or scope of any of the Intellectual
Property; (viii) to the best of the Company’s knowlege, there is no prior art that may
render any patent application within the Intellectual Property unpatentable that has not
been disclosed to the U.S. Patent and Trademark Office; and (ix) the product candidates
described in the Registration Statement, the Preliminary Prospectuses, the Prospectus and
- 12 -
the Permitted Free Writing Prospectuses, if any, as under development by the Company or
any Subsidiary fall within the scope of the claims of one or more patents owned by, or
exclusively licensed to, the Company or any Subsidiary;
(y) neither the Company nor any of the Subsidiaries is engaged in any unfair labor
practice; except for matters which would not, individually or in the aggregate, have a
Material Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to
the Company’s knowledge, threatened against the Company or any of the Subsidiaries 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 or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the employees of the Company or any of
the Subsidiaries, (ii) to the Company’s knowledge, no union organizing activities are
currently taking place concerning the employees of the Company or any of the Subsidiaries
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 or any of the Subsidiaries;
(z) the Company and the Subsidiaries and their respective properties, assets and
operations are in compliance with, and the Company and each of the Subsidiaries hold all
permits, authorizations and approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse Effect; there
are no past, 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 or
any Subsidiary under, or to interfere with or prevent compliance by the Company or any
Subsidiary with, Environmental Laws; except as would not, individually or in the aggregate,
have a Material Adverse Effect, neither the Company nor any of the Subsidiaries (i) is the
subject of any investigation, (ii) has received any notice or claim, (iii) is a party to or
affected by any pending or, to the Company’s knowledge, threatened action, suit or
proceeding, (iv) is bound by any judgment, decree or order or (v) has entered into any
agreement, in each case relating to any alleged violation of any Environmental Law or any
actual or alleged release or threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, “Environmental Law” means any federal,
state, local or foreign law, statute, ordinance, rule, regulation, order, decree, judgment,
injunction, permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the environment or
natural resources, including those relating to the distribution, processing, generation,
treatment, storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “Hazardous Materials” means any material
(including, without limitation, pollutants, contaminants, hazardous or toxic substances or
wastes) that is regulated by or
- 13 -
may give rise to liability under any Environmental Law);
(aa) all tax returns required to be filed by the Company or any of the Subsidiaries
have been timely filed, or the Company has filed timely extensions for the filing of such
returns, 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;
(bb) the Company and each of the Subsidiaries maintain insurance covering their
respective properties, operations, personnel and businesses 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 the
Subsidiaries and their respective businesses; 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; neither the Company nor any Subsidiary has reason to believe that it will
not be able to renew any such insurance as and when such insurance expires;
(cc) neither the Company nor any Subsidiary has sent or received any communication
regarding termination of, or intent not to renew, any of the contracts or agreements
referred to or described in any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, or referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has been threatened by the
Company or any Subsidiary or, to the Company’s knowledge, any other party to any such
contract or agreement;
(dd) the Company and each of the Subsidiaries maintain 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;
(ee) 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); such
disclosure controls and procedures are designed to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to the Company’s
Chief Executive Officer and its Chief Financial Officer by others within those entities, and
such disclosure controls and procedures are effective to perform the functions for which
they were established; the Company’s independent auditors and the Audit Committee of the
Board of Directors of the Company have been
- 14 -
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; and the Company has taken all necessary actions to ensure that, upon
and at all times after the filing of the Registration Statement, the Company and the
Subsidiaries and their respective officers and directors, in their capacities as such, will
be in compliance in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and the rules and regulations
promulgated thereunder;
(ff) each “forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained in the Registration Statement, the Preliminary
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if any, has been
made or reaffirmed with a reasonable basis and in good faith;
(gg) all statistical or market-related data included in the Registration Statement, the
Preliminary Prospectuses, 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;
(hh) neither the Company nor any of the Subsidiaries nor, to the Company’s knowledge,
any employee or agent of the Company or any Subsidiary has made any payment of funds of the
Company or any Subsidiary 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, any Preliminary Prospectus or the Prospectus;
(ii) no Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such Subsidiary’s capital
stock, from repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the Company or
any other Subsidiary of the Company, except as described in the Registration Statement
(excluding the exhibits thereto), each Preliminary Prospectus and the Prospectus;
- 15 -
(jj) the preclinical tests and clinical trials that are described in, or the results of
which are referred to in, the Registration Statement, the Preliminary Prospectuses, 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 Preliminary Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, is accurate and complete in
all material respects and fairly presents the data derived from such tests and trials, and
the Company and the Subsidiaries have no knowledge of any other studies or tests the results
of which are inconsistent with, or otherwise call into question, the results described or
referred to in the Registration Statement, the Preliminary Prospectuses, the Prospectus and
the Permitted Free Writing Prospectuses, if any; neither the Company nor any Subsidiaries
has 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
Preliminary Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any; and the Company and the Subsidiaries have each operated and currently are in compliance
in all material respects with all applicable rules, regulations and policies of the
Regulatory Agencies;
(kk) 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;
(ll) the Company has not received any notice from the NASDAQ regarding the delisting of
the Common Stock from the NASDAQ;
(mm) except pursuant to this Agreement, neither the Company nor any of the Subsidiaries
has incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or by the Registration Statement;
(nn) neither the Company nor any of the Subsidiaries nor any of their respective
directors, officers, affiliates or controlling persons has taken, directly or indirectly,
any action designed, or which has constituted or might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares; and
- 16 -
(oo) to the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD 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 Preliminary
Prospectuses and the Prospectus.
In addition, any certificate signed by any officer of the Company or any of the Subsidiaries
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 designate and to maintain such qualifications in
effect so long as you may request for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign corporation
or to consent to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares); and to promptly
advise you of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for offer or sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as the Underwriters may reasonably request for
the purposes contemplated by the Act; in case any Underwriter is required to deliver
(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, 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;
(c) if, at the time this Agreement is executed and delivered, it is necessary or
appropriate 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
- 17 -
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) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to the Registration Statement or the Exchange Act
Registration Statement, any Preliminary 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; to advise you promptly of any proposal
to amend or supplement the Registration Statement or the Exchange Act Registration
Statement, any Preliminary 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 object in writing;
(e) subject to Section 4(d) 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;
(f) 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(d) hereof, to prepare and
furnish, at the Company’s expense, to the Underwriters promptly such amendments or
supplements to such Prospectus as may be necessary to reflect any such change or to effect
such compliance;
- 18 -
(g) 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
[___];
(h) to furnish to you 5 copies of the Registration Statement, as initially filed with
the Commission, and of all amendments thereto (including all exhibits thereto) and
sufficient copies of the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(i) 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 consolidated financial
statements, if any, of the Company and the Subsidiaries which have been read by the
Company’s independent registered public accountants, as stated in their letter to be
furnished pursuant to Section 6(c) hereof;
(j) 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 and to file such reports with the Commission
with respect to the sale of the Shares and the application of the proceeds therefrom as may
be required by Rule 463 under the Act;
(k) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Preliminary Prospectus, 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, 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 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
- 19 -
Shares, (viii) the costs and expenses of the Company relating to presentations or
meetings undertaken in connection with the marketing of the offering and sale of the Shares
to prospective investors and the Underwriters’ sales forces, including, without limitation,
expenses associated with the production of road show slides and graphics, fees and expenses
of any consultants (whose engagement must be approved by the Company in advance) 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, (ix) the costs and expenses of qualifying the Shares for
inclusion in the book-entry settlement system of the DTC, (x) the preparation and filing of
the Exchange Act Registration Statement, including any amendments thereto, and (xi) the
performance of the Company’s other obligations hereunder; except as otherwise provided in
this Agreement (including, without limitation, as provided in Sections 5, 7 and 9 hereof),
the Underwriters shall pay their own costs and expenses in connection with the offering of
the Shares contemplated hereby, including the costs and expenses of their counsel and of any
“tombstone advertisement” made by the Underwriters with respect to the offering of the
Shares;
(l) 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;
(m) beginning on the date hereof and ending on, and including, the date that is 180
days after the date of the Prospectus (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), each Preliminary Prospectus and the Prospectus, (C) the
issuance of employee stock options not exercisable during the Lock-Up Period pursuant to
stock option plans described in the
- 20 -
Registration Statement (excluding the exhibits thereto), each Preliminary Prospectus
and the Prospectus, and (D) the filing of one or more registration statements relating to
stock option plans or other stock compensation plans of the Company but not the sale under
such plans; 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(m) 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;
(n) 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 or any Subsidiary, the financial condition,
results of operations, business, properties, assets, or liabilities of the Company or any
Subsidiary, or the offering of the Shares, without your prior consent;
(o) 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;
(p) not to, and to cause the Subsidiaries 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;
(q) to use its best efforts to cause the Common Stock, including the Shares, to be
listed on the NASDAQ and to maintain such listing; and
(r) 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(k) hereof,
reimburse the Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel; provided, however, that the Company shall have no obligation to
reimburse the Underwriters for out-of-pocket expenses pursuant to this Section 5 in the event that
(i) this Agreement is terminated by the Underwriters pursuant to clause (2)(A), (2)(C), (2)(D) or
(2)(E) of Section 7 hereof and (ii) the Company completes, within 180 days of
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the effective date of such termination, a public offering of the Common Stock on substantially
similar terms (excluding the price per Share) as contemplated by the Registration Statement in
connection with which UBS Securities LLC acts as sole book-running managing underwriter.
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 Xxxxx and Xxxxx 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 and Xxxxx LLP, 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, in the form set forth in Exhibit C hereto.
(c) You shall have received from KPMG, LLP letters dated, respectively, the date of
this Agreement, the date of the Prospectus, 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 satisfactory to UBS, which letters shall cover,
without limitation, the various financial disclosures contained in the Registration
Statement, the Preliminary Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any.
(d) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as the case may
be, in form and substance reasonably satisfactory to UBS.
(e) No Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in writing.
(f) The Registration Statement, the Exchange Act 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
or the Exchange Act, as the case may be. If Rule 430A under the Act is used, the Prospectus
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
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date of this Agreement (or such earlier time as may be required under the Act).
(g) 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
Preliminary Prospectuses 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
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.
(h) 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 D hereto.
(i) You shall have received each of the signed Lock-Up Agreements referred to in
Section 3(u) 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.
(j) 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, any
Preliminary 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.
(k) The Shares shall have been approved for listing 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.
(l) 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
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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
Preliminary Prospectuses, 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 and the Subsidiaries taken
as a whole, 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 Preliminary Prospectuses, 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 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 Preliminary Prospectuses, 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 or any Subsidiary by any “nationally recognized statistical rating organization,” as
that term is defined in Rule 436(g)(2) under the Act.
If UBS 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(k), 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.
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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 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.
- 25 -
9. Indemnity and Contribution.
The Company agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors, officers and “affiliates” (within the meaning of Rule 405 under the
Act), and any person who controls any Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or claim (including
the reasonable cost of investigation) which, jointly or severally, any such Underwriter or
any such person may incur under the Act, the Exchange Act, the common law or otherwise,
insofar as such loss, damage, expense, liability or claim arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or 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 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 Preliminary Prospectus, 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.
- 26 -
(a) 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 made, not misleading.
(b) 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 0 or (a), 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. 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
- 27 -
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(b), then the indemnifying
party agrees that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have fully reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days’ prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such
Proceeding and does not include an admission of fault or culpability or a failure to act by
or on behalf of such indemnified party.
(c) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections 0 and (a) 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
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statement of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, damages, expenses, liabilities
and claims referred to in this subsection shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to
contribute pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company,
its directors or officers or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any termination
of this Agreement or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any Proceeding
against it and, in the case of the Company, against any of the Company’s officers or
directors in connection with the issuance and sale of the Shares, or in connection with the
Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free
Writing Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in the last
paragraph on the cover page of the Prospectus and the statements set forth in the seventh,
thirteenth, fourteenth, fifteenth, sixteenth and seventeenth 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.
- 29 -
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 Xxxx Xxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: Xx. X.X. Xxxxxx, Chairman and Chief Executive
Officer.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect thereto. The Company
hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by any third party against 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 shareholders and affiliates) waive all right
to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a
final judgment in any such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company and may be enforced in any other courts to the jurisdiction
of which the Company is or may be subject, by suit upon such judgment.
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, shareholders 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
- 30 -
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.
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]
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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, | ||||||
| Cumberland Pharmaceuticals Inc. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Accepted and agreed to as of the date
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
first above written, on behalf of
themselves and the other several
Underwriters named in Schedule A
UBS Securities LLC
Xxxxxxxxx and Company, Inc.
Wachovia Capital Markets, LLC
Xxxxxx Xxxxxx & Co. Inc.
Xxxxxxxxx and Company, Inc.
Wachovia Capital Markets, LLC
Xxxxxx Xxxxxx & Co. Inc.
By: UBS Securities LLC
By: |
||||
| Name: | ||||
| Title: | ||||
By: |
||||
| Name: | ||||
| Title: |
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Shares | |||
UBS SECURITIES LLC |
[____] | |||
XXXXXXXXX AND COMPANY, INC |
[____] | |||
WACHOVIA CAPITAL MARKETS, LLC |
[____] | |||
XXXXXX XXXXXX & CO. INC |
[____] | |||
Total |
[____] | |||
SCHEDULE B
Permitted Free Writing Prospectuses
[ ]
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 Cumberland Pharmaceuticals
Inc., a Tennessee 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, no par value 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 180 days after the date of the final prospectus 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 to (a) the registration of the offer and sale of
Common Stock as contemplated by the Underwriting Agreement and the sale of the Common
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Stock to the Underwriters (as defined in the Underwriting Agreement) in the Offering, (b) bona fide
gifts, provided the recipient thereof agrees in writing with the Underwriters to be bound by the
terms of this Lock-Up Agreement or (c) dispositions to any trust for the direct or indirect benefit
of the undersigned and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Agreement. 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.
In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and similar rights that the undersigned may have in
connection with the Offering or with any issuance or sale by the Company of any equity or other
securities before the Offering, except for any such rights as have been heretofore duly
exercised.1
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.2
* * *
| 1 | This paragraph has been deleted in its entirety for lock-ups being signed by all stockholders except for holders of the Company’s preferred stock. The lock-up to be signed by the preferred stockholders will continue to include a waiver, but only with regard to registration rights. | |
| 2 | This paragraph has been deleted from all lock-ups. |
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 D
OFFICERS’ CERTIFICATE
Each of the undersigned, X.X. Xxxxxx, Chief Executive Officer of Cumberland Pharmaceuticals
Inc., a Tennessee corporation (the “Company”), and Xxxxx X. Xxxxxxxx, Director, Finance and
Accounting, of the Company, on behalf of the Company, does hereby certify pursuant to Section 6(h)
of that certain Underwriting Agreement dated [pricing date] (the “Underwriting Agreement”)
between the Company and, on behalf of the several Underwriters named therein, UBS Securities LLC,
Xxxxxxxxx and Company, Inc., Wachovia Capital Markets, LLC and Xxxxxx Xxxxxx & Co. Inc., that as of
[closing date]:
| 1. | He has reviewed the Registration Statement, each Preliminary Prospectus, the Prospectus and each Permitted Free Writing Prospectus. |
| 2. | 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. |
| 3. | The Company has performed all of its obligations under the Underwriting Agreement as are to be performed at or before the date hereof. |
| 4. | The conditions set forth in paragraph (g) of Section 6 of the Underwriting Agreement have been met. |
Capitalized terms used herein without definition shall have the respective meanings ascribed
to them in the Underwriting Agreement.
In Witness Whereof, the undersigned have hereunto set their hands on this [date].
| Name: X.X. Xxxxxx | ||||
| Title: Chief Executive Officer | ||||
| Name: Xxxxx X. Xxxxxxxx | ||||
| Title: Director, Finance and Accounting |
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