EXHIBIT 1.1
_______________ Shares(1)
Molecular Insight Pharmaceuticals, Inc.
Common Stock
($0.01 Par Value)
EQUITY UNDERWRITING AGREEMENT
________ __, 2007
RBC Capital Markets Corporation
Xxxxxxxxx & Company, Inc.
Xxxxxxxxxxx & Co., Inc.
X.X. Xxxxxxx & Sons, Inc.
As the Representatives of the several underwriters named in Schedule I hereto
c/o RBC Capital Markets
Xxx Xxxxxxx Xxxxx, 000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
c/x Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Molecular Insight Pharmaceuticals, Inc., a Massachusetts corporation (the
"Issuer"), proposes to sell to the several underwriters (the "Underwriters")
named in Schedule I hereto for whom you are acting as representatives (the
"Representatives") an aggregate of __________ shares of the Issuer's Common
Stock, $0.01 par value (the "Firm Securities"). The respective amounts of the
Firm Securities to be so purchased by the several Underwriters are set forth
opposite their names in Schedule I hereto. The Issuer also proposes to sell at
the Underwriters' option an aggregate of up to __________ additional shares of
the Issuer's Common Stock (the "Option Securities") as set forth below.
As the Representatives, you have advised the Issuer (a) that you are
authorized to enter into this Agreement on behalf of the several Underwriters,
and (b) that the several Underwriters are willing, acting severally and not
jointly, to purchase the numbers of Firm Securities set forth
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(1) Plus an option to purchase up to _______ additional shares to cover
over-allotments.
opposite their respective names in Schedule I, plus their pro rata portion of
the Option Securities if you elect to exercise the over-allotment option in
whole or in part for the accounts of the several Underwriters. The Firm
Securities and the Option Securities (to the extent the aforementioned option is
exercised) are herein collectively called the "Shares."
The Issuer has prepared a registration statement on Form S-1 (File No.
333-129570) with respect to the Shares pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder. As used in this Agreement, "Effective Time" means the
date and the time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; "Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities Act and any
prospectus filed with the Commission by the Issuer with the consent of the
Underwriters pursuant to Rule 424(a) of the Rules and Regulations; "Pricing
Prospectus" means the Preliminary Prospectus that was included in the
Registration Statement immediately prior to the Applicable Time (as defined
below); "Prospectus" means the prospectus in the form first used to confirm
sales of Shares; "Registration Statement" means such registration statement, as
amended at the Effective Time, including all information deemed to be a part of
the registration statement as of the Effective Time pursuant to Rule 430A of the
Rules and Regulations; "Free Writing Prospectus" means any "free writing
prospectus" as defined in Rule 405 under the Securities Act relating to the
Shares; and "Issuer Free Writing Prospectus" means any "issuer free writing
prospectus" as defined in Rule 433 under the Securities Act relating to the
Shares. If the Issuer has filed an abbreviated registration statement to
register additional Common Securities pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. For the purposes of this Agreement, the "Applicable
Time"(2) is ___:___ __m (Eastern time) on the date of this Agreement.
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer represents and warrants to each of the Underwriters as
follows:
(a) The Registration Statement has been filed with the Commission
under the Securities Act and has become effective under the Securities Act. No
stop order suspending the effectiveness of such registration statement is in
effect, and no proceedings for such purpose are pending before or, to the
knowledge of the Issuer, threatened by the Commission. The Commission has not
issued any order preventing or suspending the use of any Preliminary Prospectus
or any Issuer Free Writing Prospectus. Copies of such registration statement and
each of the amendments thereto have been delivered by the Issuer to you. The
Registration
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(2) Applicable Time is the time, shortly after the Shares are priced, when the
first sales are confirmed (whether orally or in writing).
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Statement conforms, and any further amendments or supplements to the
Registration Statement will conform, in all material respects to the
requirements of the Securities Act and the Rules and Regulations. The Prospectus
and the Pricing Prospectus each conforms and, as amended or supplemented, will
conform, in all material respects to the requirements of the Securities Act and
the Rules and Regulations. As of the Effective Date, the date hereof, the
Closing Date (as defined below) and each Option Closing Date (as defined below),
if any, the Registration Statement does not and will not, and any further
amendments to the Registration Statement will not, when they become effective,
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; as of its date and the date hereof, the Prospectus does not, and as
amended or supplemented on the Closing Date and each Option Closing Date, if
any, will not, contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the Pricing
Prospectus, as supplemented by the Issuer Free Writing Prospectuses and other
documents listed in Schedule II(a) hereto, taken together with the final pricing
information included on the cover page of the Prospectus (collectively, the
"Disclosure Package"), as of the Applicable Time did not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; each Issuer Free Writing Prospectus listed
on Schedule II(a) or Schedule II(b) hereto does not conflict with the
information contained in the Registration Statement; and each such Issuer Free
Writing Prospectus listed on Schedule II(b), as supplemented by and taken
together with the Disclosure Package as of the Applicable Time, did not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties set forth in this sentence do not apply
to statements or omissions in the Registration Statement, the Prospectus, the
Pricing Prospectus or any Issuer Free Writing Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Issuer by any Underwriter through the Representatives expressly
for use therein, such information being listed in Section 13 below. The Issuer
filed the Registration Statement with the Commission before using any Issuer
Free Writing Prospectus and each Issuer Free Writing Prospectus was preceded or
accompanied by the most recent Preliminary Prospectus satisfying the
requirements of Section 10 under the Securities Act, which Preliminary
Prospectus included an estimated price range.
(b) Each of the statements made by the Issuer in such documents within
the coverage of Rule 175(b) of the Rules and Regulations, including (but not
limited to) any projections, results of operations or statements with respect to
future available cash or future cash distributions of the Issuer or the
anticipated ratio of taxable income to distributions, was made or will be made
with a reasonable basis and in good faith. Notwithstanding the foregoing, this
representation and warranty shall not apply to any statements or omissions made
in reliance
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upon and in conformity with written information concerning the Underwriters
furnished to the Issuer by or on behalf of any Underwriter specifically for
inclusion in the Registration Statement, the Pricing Prospectus or the
Prospectus.
(c) This Agreement has been duly authorized, executed and delivered by
the Issuer, and constitutes a valid, legal, and binding obligation of the
Issuer, enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal or state securities laws and except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally, and subject to general
principles of equity. The Issuer has full power and authority to enter into this
Agreement and to authorize, issue and sell the Shares as contemplated by this
Agreement.
(d) The Issuer has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Massachusetts, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Prospectus and the Disclosure Package. The
subsidiary of the Issuer, as listed in Exhibit A hereto (the "Subsidiary"), has
been duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation. The Subsidiary is the
only Subsidiary, direct or indirect, of the Issuer. The Issuer and the
Subsidiary are duly qualified to transact business and are in good standing in
all jurisdictions in which the conduct of their business requires such
qualification; except where the failure to be so qualified or to be in good
standing would not have a material adverse effect on the condition (financial or
otherwise), properties, assets, liabilities, rights, operations, earnings,
business, management or prospects of the Issuer and the Subsidiary taken as a
whole, whether or not arising from transactions in the ordinary course of
business (a "Material Adverse Effect"). The outstanding shares of capital stock
of the Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are wholly owned by the Issuer free and clear of all
liens, encumbrances and equities and claims; and no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership interests in
the Subsidiary are outstanding.
(e) The outstanding shares of Common Stock of the Issuer have been
duly authorized and validly issued and are fully paid and non-assessable; the
Shares to be issued and sold by the Issuer have been duly authorized and when
issued and paid for as contemplated herein will be validly issued, fully paid
and non-assessable; and no preemptive rights of Shareholders exist with respect
to any of the Shares or the issue and sale thereof. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights, other than those which have been waived
or satisfied, for or relating to the registration of any shares of Common Stock.
(f) The information set forth under the caption "Capitalization" in
the Prospectus and the Disclosure Package is true and correct except for de
minimus discrepancies, if any, as a result of rounding. All of the Shares
conform to the description thereof contained in the Prospectus and the
Disclosure Package. The form of certificates for the Shares conforms to the
corporate law of the jurisdiction of the Issuer's incorporation. Immediately
after the issuance and sale of the Shares to the Underwriters, no shares of
Preferred Stock of the Issuer shall be
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issued and outstanding and no 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 Issuer shall have any existing or future right to acquire any shares of
Preferred Stock of the Issuer. No holders of securities of the Issuer have
rights to the registration of such securities under the Registration Statement
that have not been waived.
(g) The consolidated financial statements of the Issuer and the
Subsidiary, together with related notes and schedules as set forth in the
Registration Statement the Prospectus and the Disclosure Package, present fairly
the financial position and the results of operations and cash flows of the
Issuer and the consolidated Subsidiary, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been
prepared in accordance with U.S. generally accepted principles of accounting,
consistently applied throughout the periods involved, except as disclosed
therein, and all adjustments necessary for a fair presentation of results for
such periods have been made. No other financial statements or schedules are
required to be included in the Registration Statement or the Prospectus or the
Disclosure Package. The summary financial and statistical data included in the
Registration Statement, the Prospectus and the Disclosure Package presents
fairly the information shown therein and such data has been compiled on a basis
consistent with the financial statements presented therein and the books and
records of the Issuer. The statistical, industry-related and market-related data
included in the Registration Statement, the Prospectus and the Disclosure
Package are based on or derived from sources which the Issuer reasonably and in
good faith believes are reliable and accurate.
(h) The Issuer maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles 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.
(i) Deloitte & Touche LLP, which has certified certain financial
statements of the Issuer and delivered its opinion with respect to the audited
financial statements and schedules included in the Registration Statement and
the Prospectus, is (x) an independent registered public accounting firm with
respect to the Issuer within the meaning of the Securities Act and the Rules and
Regulations, (y) a registered public accounting firm (as defined in Section
2(a)(12) of the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act")), and (z)
not in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx
Act.
(j) There is no action, suit, claim, proceeding, regulation or
investigation (including, without limitation, any action, suit, proceeding,
regulation or investigation by the Food and Drug Administration (the "FDA") or
third party) pending or, to the knowledge of the Issuer, threatened against the
Issuer or the Subsidiary before any court or administrative agency or otherwise,
except as set forth in the Registration Statement, the Prospectus and the
Disclosure Package.
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(k) No labor problem or dispute with the employees of the Issuer or
the Subsidiary exists or, to the Issuer's knowledge, is threatened or imminent,
and the Issuer is not aware of any existing or imminent labor disturbance by the
employees of any of its or its Subsidiary' principal suppliers, contractors or
customers, that could have a Material Adverse Effect.
(l) The Issuer and the Subsidiary have good title to all of the
properties and assets reflected in the financial statements (or as described in
the Prospectus and the Disclosure Package) hereinabove described, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those reflected
in such financial statements (or as described in the Prospectus and the
Disclosure Package)or which are not material in amount. The Issuer and the
Subsidiary occupy their leased properties under valid and binding leases
conforming in all material respects to the description thereof set forth in the
Prospectus and the Disclosure Package, with such exceptions as are not material
and do no interfere with the use made of such property.
(m) The Issuer and the Subsidiary have filed all Federal, State, local
and foreign tax returns which have been required to be filed and have paid all
taxes indicated by said returns and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith and for which an adequate reserve for accrual has been established
in accordance with U.S. generally accepted accounting principles. All tax
liabilities have been adequately provided for in the financial statements of the
Issuer, and the Issuer does not know of any actual or proposed additional
material tax assessments.
(n) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, as it may be amended or supplemented,
there has not been any material adverse change or any development involving a
prospective material adverse change which has had or is reasonably likely to
have a Material Adverse Effect, whether or not occurring in the ordinary course
of business, and there has not been any material transaction entered into or any
material transaction that is probable of being entered into by the Issuer or the
Subsidiary, other than transactions in the ordinary course of business and
changes and transactions described in the Prospectus and the Disclosure Package.
The Issuer and the Subsidiary have no material contingent obligations that are
not disclosed in the Issuer's financial statements in the Registration Statement
and the Prospectus.
(o) Neither the Issuer nor the Subsidiary is or with the giving of
notice or lapse of time or both, will be, in violation of or in default under
its Articles of Incorporation ("Charter") or By-Laws or under any agreement,
lease, contract, indenture or other instrument or obligation to which it is a
party or by which it, or any of its properties, is bound and which default has
had or is reasonably likely to have a Material Adverse Effect. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a default
under, any contract, indenture, mortgage, deed of trust or other agreement or
instrument to which the Issuer or the Subsidiary is a party, or of the Charter
or By-Laws of the Issuer or any order, rule or regulation applicable to the
Issuer or the Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
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(p) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Issuer of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission,
the National Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public offering
by the Underwriters under state securities or Blue Sky laws) has been obtained
or made and is in full force and effect.
(q) The Issuer and each of the Subsidiary has all licenses,
certifications, permits, franchises, approvals, clearances and other regulatory
authorizations ("Permits") from governmental authorities and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule as are necessary to conduct its businesses and to own, lease
and operate its properties in the manner described in the Prospectus and the
Disclosure Package, except where the absence of such Permits or filings would
not, individually or in the aggregate, have a Material Adverse Effect. There is
no claim, proceeding or controversy, pending or, to the knowledge of the Issuer
or the Subsidiary, threatened, involving any of the Permits. The Issuer and each
of the Subsidiary has fulfilled and performed all of its material obligations
with respect to the Permits, and no event has occurred which allows, or after
notice or lapse of time would allow, the revocation, termination, modification
or other impairment of the rights of the Issuer or the Subsidiary under such
Permit. None of the Permits contains any restriction that is materially
burdensome on the Issuer or any of its Subsidiary.
(r) To the Issuer's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Issuer's officers,
directors or 5% or greater security holders, except as set forth in the
Registration Statement.
(s) Neither the Issuer, nor to the Issuer's knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action designed
to cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
shares of Common Stock to facilitate the sale or resale of the Shares. The
Issuer acknowledges that the Underwriters may engage in passive market making
transactions in the Shares on The Nasdaq Global Market in accordance with
Regulation M under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(t) Neither the Issuer nor the Subsidiary is an "investment company"
within the meaning of such term under the Investment Issuer Act of 1940, and the
rules and regulations of the Commission thereunder (collectively, the "1940
Act").
(u) The Issuer and the Subsidiary carry, or are covered by, insurance
in such amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar industries. All policies of insurance
insuring the Issuer or the Subsidiary or any of their respective businesses,
assets, employees, officers and directors are in full force and effect.
(v) The Issuer is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended,
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including the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Issuer would have any
liability; the Issuer has not incurred and does not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the "Code"); and each "pension plan" for which the Issuer would have
any liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
(w) Other than as contemplated by this Agreement, the Issuer has not
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.
(x) Other than the Subsidiary, the Issuer does not own, directly or
indirectly, any shares of capital stock and does not have any other equity or
ownership or proprietary interest in any corporation, partnership, association,
trust, limited liability company, joint venture or other entity.
(y) Except as would not, individually or in the aggregate, result in a
material adverse change: (a) neither the Issuer nor its Subsidiary is in
violation of, or subject to liability for, any federal, state, local or foreign
law, regulation, ordinance, statute, rule, common law or other requirement
relating to pollution or protection of human health, safety or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife or other natural resources, including
without limitation, applicable laws, regulations or liabilities, relating to
emissions, discharges, releases or threatened releases, exposure of or to
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products, asbestos, silica, mixed dust, mold
or other substance that may give rise to environmental liability (collectively,
"Materials of Environmental Concern"), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, handling
or presence of Materials of Environmental Concern (collectively, "Environmental
Laws"), which violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation of the
business of the Issuer or its Subsidiary under Environmental Laws or
noncompliance with terms and conditions thereof, nor the Issuer or its
Subsidiary received any written communication, whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the Issuer
or its Subsidiary is in violation of any Environmental Law; (b) there is no
claim, action or cause of action filed with a court or governmental authority,
no investigation, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys' fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern at any location owned, leased or operated or impacted by the Issuer or
its Subsidiary, now or in the past (collectively, "Environmental Claims"),
pending or, to the Issuer's knowledge, threatened against the Issuer or its
Subsidiary or any person or entity whose liability for any Environmental
8
Claim the Issuer or any of its Subsidiary has retained or assumed either
contractually or by operation of law; (c) to the Issuer's knowledge, there are
no past or present actions, or anticipated future actions activities,
circumstances, conditions, liens, events or incidents related to the Issuer or
its Subsidiary, including, without limitation, the release, emission, discharge,
presence or disposal of any Materials of Environmental Concern, that reasonably
could result in a violation of any Environmental Law or form the basis of a
potential Environmental Claim against the Issuer or its Subsidiary or against
any person or entity whose liability for any Environmental Claim the Issuer or
its Subsidiary has retained or assumed either contractually or by operation of
law; and (d) neither the Issuer or its Subsidiary is subject to any pending or,
to the Issuer's knowledge, threatened proceeding under Environmental Law.
(z) No payments or inducements have been made or given, directly or
indirectly, to any federal or local official or candidate for, any federal or
state office in the United States or foreign offices by the Issuer or any
Subsidiary or, to the knowledge of the Issuer, by any of their officers,
directors, employees, agents or any other person in connection with any
opportunity, contract, permit, certificate, consent, order, approval, waiver or
other authorization relating to the business of the Issuer or any Subsidiary in
violation of any law which violation is required to be disclosed in the
Prospectus.
(aa) The Issuer and the Subsidiary own, license, or otherwise have, in
all material respects, rights in all United States and foreign patents,
trademarks, service marks, tradenames, copyrights, trade secrets and other
proprietary rights necessary for the conduct of its respective business as
currently carried on as described in the Prospectus and the Disclosure Package
(collectively and together with any applications or registrations for the
foregoing, the "Intellectual Property"). Except as specifically described in the
Prospectus and the Disclosure Package, (i) no third parties have obtained rights
to any such Intellectual Property from the Issuer, other than licenses granted
in the ordinary course and those that would not have a Material Adverse Effect;
(ii) to the Issuer's knowledge, there is no infringement or misappropriation by
third parties of any such Intellectual Property; (iii) there is no pending or,
to the Issuer's knowledge, threatened action, suit, proceeding or claim by
others challenging the Issuer's or any Subsidiary's rights in or to any such
Intellectual Property, and the Issuer is unaware of any facts which would form a
basis for any such claim; (iv) there is no pending or, to the Issuer's
knowledge, threatened action, suit, proceeding or claim by others challenging
the validity, enforceability, or scope of any such Intellectual Property, and
the Issuer is unaware of any facts which would form a basis for any such claim;
(v) there is no prior, pending or, to the Issuer's knowledge, threatened action,
suit, proceeding or claim by others that the Issuer the Subsidiary, or the
Issuer's or its Subsidiary's products, product candidates, or services
infringes, misappropriates, or otherwise violates, or would infringe upon,
misappropriate or otherwise violate the development or commercialization of its
products, product candidates, or services described in the Prospectus and the
Disclosure Package, any patent, trademark, copyright, trade secret or other
proprietary right of others, and the Issuer is unaware of any facts which would
form a basis for any such claim; (vi) to the Issuer's knowledge there is no
patent or patent application that contains claims that cover or may cover any
Intellectual Property described in the Prospectus or the Disclosure Package as
being owned by or licensed to the Issuer or the Subsidiary or that is necessary
for the conduct of their businesses as currently or contemplated to be conducted
or that interferes with the issued or pending claims of any such Intellectual
9
Property; (vii) there is no prior art or public or commercial activity of which
the Issuer is aware that may render any patent held by the Issuer or the
Subsidiary invalid or any patent application held by the Issuer or the
Subsidiary unpatentable which has not been disclosed to the U.S. Patent and
Trademark Office; and (viii) to the Issuer's knowledge, neither Issuer nor its
Subsidiary have committed any act or omitted to undertake any act the effect of
such commission or omission would render the Intellectual Property invalid or
unenforceable in whole or in part. None of the technology employed by the Issuer
has been obtained or, to the Issuer's knowledge, is being used by the Issuer in
violation of the rights of any person or third party. The Issuer knows of no
infringement or misappropriation by others of Intellectual Property.
(bb) The conduct of business by the Issuer and the Subsidiary
complies, and at all times has complied, in all material respects with federal,
state, local and foreign laws, statutes, ordinances, rules, regulations,
decrees, orders, Permits and other similar items ("Laws") applicable to its
business, including, without limitation, (a) the rules and regulations of the
FDA, or any foreign, federal, state or local government or regulatory authority
performing functions similar to those performed by the FDA, (b) the U.S. Food,
Drug and Cosmetic Act and similar federal, state, local and foreign Laws, (c)
the Occupational Safety and Health Act, the Environmental Protection Act, the
Toxic Substance Control Act and similar federal, state, local and foreign Laws
applicable to hazardous or regulated substances and radioactive or biologic
materials, (d) the Comprehensive Drug Abuse Prevention and Control Act of 1970,
as amended, and (e) licensing and certification Laws covering any aspect of the
business of the Issuer or the Subsidiary. Neither the Issuer nor the Subsidiary
has received any notification asserting, or has knowledge of, any present or
past failure to comply with or violation of any such Laws.
(cc) Except to the extent disclosed in the Prospectus and the
Disclosure Package (or any amendment or supplement thereto), the clinical,
pre-clinical and other studies, tests and research conducted by the Issuer or
the Subsidiary, or to the Issuer's knowledge, on behalf of or sponsored by the
Issuer or the Subsidiary are, and at all times have been, conducted in
compliance, in all material respects, with all statutes, laws, rules and
regulations including, without limitation with the U.S. Food, Drug and Cosmetic
Act and the regulations and guidelines promulgated thereunder, including Title
21 of the Code of Federal Regulations, and other FDA regulations and guidelines
governing clinical studies, current good laboratory practices and good clinical
practices, the International Conference on Harmonisation Guidelines, the
protection of human subjects and applicable institutional review board and
independent ethics committee requirements, as well as other applicable federal,
state, local and foreign Laws and consistent with current clinical and
scientific research standards and procedures. To the Issuer's knowledge, the
published descriptions of the results of such studies, tests and research are
accurate and complete in all material respects and fairly present the data
derived from such studies, tests and research, and neither the Issuer nor the
Subsidiary has any knowledge of any other studies, tests or research the results
of which are inconsistent with or otherwise call into question the results
described or referred to in the Prospectus and the Disclosure Package. Except to
the extent disclosed in the Prospectus and the Disclosure Package (or any
amendment or supplement thereto), neither the Issuer nor the Subsidiary has
notified the FDA of any serious and unexpected adverse experiences or potential
significant risk to human subjects in connection with any clinical or
pre-clinical studies, tests or research that are described in the Prospectus and
the Disclosure Package or the results of which are referred to in the
Registration Statement and
10
the Prospectus, and neither the Issuer nor the Subsidiary has received any
notices or other correspondence from the FDA or any other governmental agency or
foreign government with respect to any clinical or pre-clinical studies, tests
or research that are described in the Prospectus and the Disclosure Package or
the results of which are referred to in the Registration Statement and the
Prospectus which require the termination or suspension of such studies, tests or
research Subsidiary.
(dd) To the Issuer's knowledge, there are no rulemaking or similar
proceedings before the FDA which affect or involve the Issuer or any of the
process or drug candidates that the Issuer has developed, is developing or
proposes to develop or uses or proposes to use, which if the subject of an
action unfavorable to the Issuer could reasonably be expected to have a Material
Adverse Effect.
(ee) The information contained in the Registration Statement and the
Prospectus regarding the Issuer's expectations, plans and intentions, and any
other information that constitutes "forward-looking" information within the
meaning of the Securities Act and the Exchange Act were made by the Issuer on a
reasonable basis and reflect the Issuer's good faith belief and/or estimate of
the matters described therein.
(ff) Any certificate signed by any officer of the Issuer and delivered
to the Representatives or counsel for the Underwriters in connection with the
offering of the Shares contemplated hereby shall be deemed a representation and
warranty by the Issuer to each Underwriter and shall be deemed to be a part of
this Section 1 and incorporated herein by this reference.
(gg) The Issuer is in material compliance with all applicable
provisions of the Xxxxxxxx-Xxxxx Act and is actively taking steps to ensure that
it will be in compliance with other provisions of the Xxxxxxxx-Xxxxx Act that
will become applicable to the Issuer.
(hh) The Issuer has established and maintains "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act;
the Issuer's "disclosure controls and procedures" are reasonably designed to
ensure that all information (both financial and non-financial) required to be
disclosed by the Issuer in the reports that it will file or furnish under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and regulations of the Commission, and that all
such information is accumulated and communicated to the Issuer's management as
appropriate to allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief Financial Officer of
the Issuer required under the Exchange Act with respect to such reports.
(ii) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Issuer to or for the benefit of any of the officers or
directors of the Issuer or any of their respective family members, except as
disclosed in the Prospectus and the Disclosure Package. The Issuer has not
directly or indirectly extended or maintained credit, arranged for the extension
of credit, or renewed an extension of credit, in the form of a personal loan to
or for any director or executive officer of the Issuer.
11
(jj) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operation - Critical Accounting Policies" in
the Registration Statement, the Prospectus and the Disclosure Package accurately
describes accounting policies which the Issuer believes are necessary to an
understanding of the financial condition and results of operations of the Issuer
and its consolidated Subsidiary.
(kk) Neither the Issuer nor any of its affiliates has, prior to the
date hereof, made any offer or sale of any securities which could be
"integrated" for purposes of the Securities Act or the rule and regulations
promulgated thereunder with the offer and sale of the Shares pursuant to the
Registration Statement. Except as disclosed in the Prospectus and the Disclosure
Package, neither the Issuer nor any of its affiliates has sold or issued any
security during the six-month period preceding the date of the Prospectus,
including but not limited to any sales pursuant to Rule 144A or Regulation D or
S under the Securities Act, other than shares of Common Stock issued pursuant to
employee benefit plans, qualified stock option plans or the employee
compensation plans or pursuant to outstanding options, rights or warrants, or as
described in the Prospectus and the Disclosure Package.
(ll) Neither the Issuer nor any of its affiliates is presently doing
business with the government of Cuba or, to the Issuer's knowledge, with any
person or affiliate located in Cuba.
(mm) Except with notice to the Representatives and compliance with
applicable laws, none of the Directed Stock (as defined below) distributed in
connection with the Directed Stock Program (as defined below) will be offered or
sold (a) outside of the United States, (b) with the specific intent to
unlawfully influence a customer or supplier of the Issuer to alter the
customer's or supplier's level or type of business with the Issuer or (c) to a
trade journalist or publication to write or publish favorable information about
the Issuer or its product candidates or future products.
(nn) The statements in the Prospectus under the captions "Risk Factors
- We do not have patent rights to the composition of Zemiva, and if we cannot
gain and exploit a period of marketing exclusivity under the FDCA, we may not be
able to successfully commercialize Zemiva or our other product candidates,"
"Business - Patents and Proprietary Rights" and "Business - Government
Regulation" are accurate in all material respects.
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SECURITIES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Issuer
agrees to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $_____ per share, the number of Firm
Securities set forth opposite the name of each Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Securities to be sold hereunder is to be made
in New York Clearing House funds by Federal (same day) against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made through the facilities of
the Depository Trust Issuer, New York, New York at 10:00
12
a.m., New York time, on the third business day after the date of this Agreement
or at such other time and date not later than five business days thereafter as
you and the Issuer shall agree upon, such time and date being herein referred to
as the "Closing Date." As used herein, "business day" means a day on which the
New York Stock Exchange is open for trading and on which banks in New York are
open for business and are not permitted by law or executive order to be closed.
The certificates for the Firm Securities will be delivered in such denominations
and in such registrations as the Representatives request in writing not later
than the second full business day prior to the Closing Date, and will be made
available for inspection by the Representatives at least one business day prior
to the Closing Date.
(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Issuer hereby grants an option to the several Underwriters to purchase the
Option Securities at the price per share as set forth in the first paragraph of
this Section. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as the
Representatives of the several Underwriters, to the Issuer setting forth the
number of Option Securities as to which the several Underwriters are exercising
the option, the names and denominations in which the Option Securities are to be
registered and the time and date at which such certificates are to be delivered.
The time and date at which certificates for Option Securities are to be
delivered shall be determined by the Representatives but shall not be earlier
than three nor later than 10 full business days after the exercise of such
option, nor in any event prior to the Closing Date (such time and date being
herein referred to as the "Option Closing Date"). If the date of exercise of the
option is three or more days before the Closing Date, the notice of exercise
shall set the Closing Date as the Option Closing Date. The number of Option
Securities to be purchased by each Underwriter shall be in the same proportion
to the total number of Option Securities being purchased as the number of Firm
Securities being purchased by such Underwriter bears to the total number of Firm
Securities, adjusted by you in such manner as to avoid fractional shares. The
option with respect to the Option Securities granted hereunder may be exercised
only to cover over-allotments in the sale of the Firm Securities by the
Underwriters. You, as the Representatives of the several Underwriters, may
cancel such option at any time prior to its expiration by giving written notice
of such cancellation to the Issuer. To the extent, if any, that the option is
exercised, payment for the Option Securities shall be made on the Option Closing
Date in Federal (same day funds) through the facilities of the Depository Trust
Issuer in New York, New York drawn to the order of the Issuer.
(d) It is understood that _____ shares of the Firm Shares ("Directed
Stock") will initially be reserved by the Underwriters for offer and sale to
employees and persons having relationships with the Issuer or its employees
("Directed Stock Participants") upon the terms and conditions set forth in the
Prospectus and in accordance with the rules and regulations of the National
Association of Securities Dealers ("Directed Stock Program"). Under no
circumstance will the Representatives or any Underwriter be liable to the Issuer
or to any Directed Stock Participant for any action taken or omitted to be taken
in good faith in connection with such Directed Stock Program. To the extent that
any shares of Directed Stock are not affirmatively reconfirmed for purchase by
any Directed Stock Participant on or immediately after the date of this
Agreement, such Directed Stock may be offered to the public as part of the
public offering
13
contemplated hereby. The Issuer agrees to pay all fees and disbursements
incurred by the Underwriters in connection with the Directed Stock Program and
any stamp duties or other taxes incurred by the Underwriters in connection with
the Directed Stock Program.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Securities as soon as the Representatives deem it advisable
to do so. The Firm Securities are to be initially offered to the public at the
initial public offering price set forth in the Prospectus. To the extent, if at
all, that any Option Securities are purchased pursuant to Section 2 hereof, the
Underwriters will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS.
(a) The Issuer covenants and agrees with the several Underwriters that
(i) if the Registration Statement has not already been declared effective by the
Commission, it will use its reasonable efforts to cause the Registration
Statement to become effective, or if the Registration has been declared
effective by the Commission, prepare and timely file with the Commission under
Rule 424(b) of the Rules and Regulations a Prospectus in a form approved by the
Representatives containing information previously omitted at the time of
effectiveness of the Registration Statement in reliance on Rule 430A of the
Rules and Regulations; (ii) not file any amendment to the Registration Statement
or supplement to the Prospectus, any Preliminary Prospectus or any Issuer Free
Writing Prospectus of which RBC Capital Markets Corporation and Xxxxxxxxx &
Company, Inc. shall not previously have been advised and furnished with a copy
or to which the Representatives shall have reasonably objected in writing or
which is not in compliance with the Rules and Regulations; and (iii) file on a
timely basis all reports and any definitive proxy or information statements
required to be filed by the Issuer with the Commission subsequent to the date of
the Prospectus and prior to the termination of the offering of the Shares by the
Underwriters.
(b) The Issuer has not distributed and without the prior consent of
each of RBC Capital Markets Corporation and Xxxxxxxxx & Company, Inc., it will
not distribute any prospectus or other offering material (including, without
limitation, any offer relating to the Shares that would constitute a Free
Writing Prospectus and content on the Issuer's website that may be deemed to be
a prospectus or other offering material) in connection with the offering and
sale of the Shares, other than the materials referred to in Section 1(a). Each
Underwriter represents and agrees that it has not made and, without the prior
consent of the Issuer, RBC Capital Markets Corporation and Xxxxxxxxx & Company,
Inc., it will not make, any offer relating to the Offered Securities that would
constitute an Issuer Free Writing Prospectus. Any such Issuer Free Writing
prospectus the use of which has been consented to by the Issuer RBC Capital
Markets Corporation and Xxxxxxxxx & Company, Inc. is listed on Schedule II(a) or
Schedule II(b) hereto. The Issuer has complied and will comply with the
requirements of Rule 433 under the
14
Securities Act applicable to any Issuer Free Writing Prospectus, including
timely filing with the Commission or retention where required and legending. The
Issuer represents that it has satisfied and agrees that it will satisfy the
conditions under Rule 433 under the Securities Act to avoid a requirement to
file with the Commission any electronic road show. The Issuer agrees that if at
any time following issuance of an Issuer Free Writing Prospectus any event
occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the Pricing
Prospectus or the Prospectus or would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances then prevailing, not
misleading, the Issuer will give prompt notice thereof to RBC Capital Markets
Corporation and Xxxxxxxxx & Company, Inc. and, if requested by RBC Capital
Markets Corporation or Xxxxxxxxx & Company, Inc., will prepare and furnish,
without charge (unless such statement or omission in an Issuer Free Writing
Prospectus was made in reliance upon and in conformity with information
furnished to the Issuer by an Underwriter expressly for use therein), to each
Underwriter an Issuer Free Writing Prospectus or other document which will
correct such conflict, statement or omission.
(c) The Issuer will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
securities of the Issuer.
(d) The Issuer will advise the Representatives promptly (i) when the
Registration Statement or any post-effective amendment thereto shall have become
effective; (ii) of receipt of any comments from the Commission; (iii) of any
request of the Commission for amendment of the Registration Statement or for
supplement to the Prospectus or for any additional information; and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the use of the Prospectus or of the institution of any
proceedings for that purpose. The Issuer will use its reasonable efforts to
prevent the issuance of any such stop order preventing or suspending the use of
the Prospectus and to obtain as soon as possible the lifting thereof, if issued.
(e) The Issuer will cooperate with the Representatives in endeavoring
to qualify the Shares for sale under the securities laws of such jurisdictions
as the Representatives may reasonably have designated in writing and will make
such applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Issuer shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Issuer will, from time to time, prepare and file such
statements, reports, and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Shares.
(f) The Issuer will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Issuer will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Securities Act, as many copies of the
Prospectus in final form, or as thereafter amended or supplemented, as the
Representatives
15
may reasonably request. The Issuer will deliver to the Representatives at or
before the Closing Date, four signed copies of the Registration Statement and
all amendments thereto including all exhibits filed therewith, and will deliver
to the Representatives such number of copies of the Registration Statement
(including such number of copies of the exhibits filed therewith that may
reasonably be requested) and of all amendments thereto, as the Representatives
may reasonably request.
(g) The Issuer will comply with the Securities Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution of the
Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, any event shall occur as a result of which, in the
judgment of the Issuer or in the reasonable opinion of the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectus is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Prospectus to comply with any law, the
Issuer promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Prospectus
will comply with the law.
(h) The Issuer will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earning statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of Section
11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(i) Prior to the Closing Date, the Issuer will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Issuer, a copy of any unaudited interim financial statements of the Issuer for
any period subsequent to the period covered by the most recent financial
statements appearing in the Registration Statement and the Prospectus.
(j) The Issuer will not, without the prior written consent of each of
RBC Corporation and Xxxxxxxxx & Company, Inc., from the date of execution of
this Agreement and continuing to and including the date 180 days after the date
of the Prospectus or, if (i) the Issuer issues an earnings release or material
news, or a material event relating to the Issuer occurs, during the last 17 days
of such 180-day period, or (ii) prior to the expiration of such 180-day period,
the Issuer announces that it will release earnings results during the 16-day
period beginning on the last day of the 180-day period, then, in each case, to
and including the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event
(such 180-day period, to the extent extended by the foregoing sentence, as
extended, the "Lock-Up Period), offer for sale, sell, contract to sell, pledge,
grant any option for the sale of, or otherwise issue or dispose of, directly or
indirectly (or publicly disclose the intention to make any such offer, sale,
pledge, grant, issuance or other disposition), any Common Stock or any
securities convertible into or exchangeable for, or any
16
options or rights to purchase or acquire, Common Stock, except, in each case,
for (A) the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement, (B) issuances of Common Stock upon the exercise of
options or warrants disclosed as outstanding in the Registration Statement and
the Prospectus, or (C) the issuance of employee stock options not exercisable
during the Lock-Up Period pursuant to stock option plans described in the
Registration Statement and the Prospectus. The Issuer agrees not to accelerate
the vesting of any option or warrant or the lapse of any repurchase right prior
to the expiration of the Lock-Up Period.
(k) The Issuer either has caused to be delivered to you or will cause
to be delivered to you prior to the effective date of the Registration Statement
a letter from (a) each of the Issuer's directors and officers, (b) such holders
of the outstanding shares of Common Stock identified on Exhibit ____ attached
hereto and (c) each Directed Stock Participant, in each case substantially in
the form of Exhibit B hereto or as otherwise modified with the consent of the
Representatives (each a "Lock-Up Agreement" and, collectively, the "Lock-Up
Agreements"), stating that such person agrees that he or she will not, without
your prior written consent, offer for sale, sell, contract to sell or otherwise
dispose of, as set forth in such letter, any shares of Common Stock or rights to
purchase Common Stock, except to the Underwriters pursuant to this Agreement,
for the Lock-Up Period. The Issuer will issue stop-transfer instructions to the
transfer agent for the Common Stock with respect to any transaction or
contemplated transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement and, prior to expiration of the Lock-Up Period,
will not waive the terms of any agreement with any holder of any Security of the
Issuer restricting the ability of such holder to offer for sale, sell, contract
to sell or otherwise dispose of any such Security or right to purchase any such
Security.
(l) The Issuer will use its reasonable efforts to list, subject to
notice of issuance, the Shares on The Nasdaq Global Market.
(m) The Issuer shall apply the net proceeds of its sale of the Shares
as described under the heading "Use of Proceeds" in the Prospectus and the
Disclosure Package and shall report with the Commission with respect to the sale
of the Shares and the application of the proceeds therefrom as may be required
in accordance with Rule 463 under the Securities Act.
(n) The Issuer shall not invest, or otherwise use the proceeds
received by the Issuer from its sale of the Shares in such a manner as would
require the Issuer or the Subsidiary to register as an investment company under
the 0000 Xxx.
(o) The Issuer will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Issuer, a registrar for the Common
Stock.
(p) The Issuer shall take or cause to be taken all necessary action to
qualify the Securities for sale under the securities laws of such jurisdictions
as you reasonably designate or as is necessary to effect the distribution of the
Directed Stock and to continue such qualifications in effect so long as required
for the distribution of the Securities, except that the Issuer shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in any state.
17
(q) The Issuer will comply with all applicable securities and other
applicable laws, rules and regulations, including, without limitation, all
applicable rules and regulations of the NASD and any applicable stock exchange,
in each jurisdiction in which Directed Stock is offered in connection with the
Directed Stock Program.
5. COSTS AND EXPENSES.
The Issuer will pay all costs, expenses and fees incident to the
performance of the obligations of the Issuer under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Issuer; the fees and disbursements of counsel for the Issuer; the cost of
printing and delivering to, or as requested by, the Underwriters copies of the
Registration Statement, Preliminary Prospectuses, the Pricing Prospectus, any
Issuer Free Writing Prospectus, the Prospectus, the Listing Application, the
Blue Sky Survey and any supplements or amendments thereto; the filing fees of
the Commission; the filing fees and expenses (including reasonable legal fees
and disbursements) incident to securing any required review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Shares; the Listing Fee of The Nasdaq Global Market; and the expenses,
including the fees and disbursements of counsel for the Underwriters up to a
maximum amount of $15,000, incurred in connection with the qualification of the
Shares under State securities or Blue Sky laws. The Issuer also agrees to pay
all costs and expenses of the Underwriters, including the fees and disbursements
of counsel for the Underwriters, incident to the offer and sale of Directed
Stock by the Underwriters to employees and persons having business relationships
with the Issuer and the Subsidiary.
The Issuer shall not, however, be required to pay for any of the
Underwriters expenses (other than those related to qualification under NASD
regulation and State securities or Blue Sky laws) except that, if this Agreement
shall not be consummated because the conditions in Section 6 hereof are not
satisfied, or because this Agreement is terminated by the Representatives
pursuant to Section 11 hereof, or by reason of any failure, refusal or inability
on the part of the Issuer to perform any undertaking or satisfy any condition of
this Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure to satisfy said condition or to comply with said
terms is due to the default or omission of any Underwriter, then the Issuer
shall reimburse the several Underwriters for reasonable out-of-pocket expenses,
including all fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder; but the Issuer shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm
Securities on the Closing Date and the Option Securities, if any, on the Option
Closing Date are subject to the accuracy, as of the Closing Date and the Option
Closing Date, if any, of the representations and warranties of the Issuer
contained herein, and to the performance by the Issuer of its covenants and
obligations hereunder and to the following additional conditions:
18
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. All material required to be
filed by the Issuer pursuant to Rule 433(d) under the Securities Act shall have
been filed with the Commission within the applicable time period prescribed for
such filing by Rule 433 under the Securities Act; if the Issuer has elected to
rely upon Rule 462(b) under the Securities Act, the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement. No stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been taken or, to the knowledge of
the Issuer, shall be contemplated by the Commission; no stop order suspending or
preventing the use of the Pricing Prospectus, Prospectus or any Issuer Free
Writing Prospectus shall have been initiated or, to the knowledge of the Issuer,
shall be contemplated by the Commission; all requests for additional information
on the part of the Commission shall have been complied with to your reasonable
satisfaction; and no injunction, restraining order, or order of any nature by a
Federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date and
each Option Closing Date, if any, the opinions of Xxxxx & Xxxxxxx LLP, counsel
for the Issuer dated the Closing Date or the Option Closing Date, if any,
addressed to the Underwriters substantially in the form set forth on Exhibit
_____ hereto.
(c) The Representatives shall have received from Xxxxxxx Xxxx &
Xxxxxxxxx LLP, counsel for the Underwriters, an opinion dated the Closing Date
and the Option Closing Date, if any, substantially in the form set forth on
Exhibit _____ hereto, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters.
(d) The Representatives shall have received at or prior to the Closing
Date from Xxxxxxx Xxxx & Xxxxxxxxx LLP a memorandum or summary, in form and
substance satisfactory to the Representatives, with respect to the qualification
for offering and sale by the Underwriters of the Shares under the State
securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably have designated to the Issuer.
(e) You shall have received, on each of the dates hereof, the Closing
Date and the Option Closing Date, if any, a letter of Deloitte & Touche LLP
dated the date hereof, the Closing Date or the Option Closing Date, if any, in
form and substance satisfactory to you, to the effect set forth on Exhibit ____
hereto,.
(f) The Representatives shall have received on the Closing Date and
the Option Closing Date, if any, a certificate or certificates of the Issuer's
Chief Executive Officer
19
and Chief Financial Officer to the effect that, as of the Closing Date or the
Option Closing Date, if any, each of them severally represents as follows:
(i) The Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registrations Statement has been issued, and no proceedings for such
purpose have been taken or are, to his knowledge, contemplated by the
Commission;
(ii) The representations and warranties of the Issuer contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, if any;
(iii) All filings required to have been made pursuant to Rules 424 or
430A under the Securities Act have been made;
(iv) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and
Prospectus did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances in which they were made, not misleading, and since the
effective date of the Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment of the
Prospectus which has not been so set forth in such supplement or amendment;
and
(v) Since the respective dates as of which information is given in the
Disclosure Package, (1) there has not been any material adverse change or
any development involving a prospective material adverse change, which has
had or is reasonably likely to have a Material Adverse Effect, whether or
not arising in the ordinary course of business; (2) neither the Issuer nor
any of its Subsidiary shall have sustained any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Disclosure Package, and (3) there shall not have been any change in the
capital stock (other than issuances of capital stock in the ordinary course
of business pursuant to the Issuer's employee benefit plans) or long-term
debt of the Issuer or the Subsidiary.
(g) The Issuer shall have furnished to the Representatives such
further certificates and documents confirming the representations and
warranties, covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.
(h) The Firm Securities and Option Securities, if any, shall have been
approved for designation upon notice of issuance on The Nasdaq Global Market.
(i) The Lockup Agreements described in Section 4(k) shall be in full
force and effect.
20
(j) The NASD shall not have raised any objection with respect to the
fairness or reasonableness of the underwriting, or other arrangements of the
transaction, contemplated hereby.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Representatives and to Xxxxxxx Xxxx &
Xxxxxxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Issuer of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Issuer and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE ISSUER.
The obligations of the Issuer to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
if any, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and in effect or proceedings therefor initiated or
threatened.
8. INDEMNIFICATION.
(a) The Issuer agrees:
(i) to indemnify and hold harmless each Underwriter and each person,
if any, who controls such Underwriter within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities to
which such Underwriter or any such controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement,
any Preliminary Prospectus, the Pricing Prospectus, the Prospectus or any
amendment or supplement thereto, (B) any Issuer Free Writing Prospectus or
any "issuer information" filed or required to be filed pursuant to Rule
433(d) under the Securities Act, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances in
which they were made, or (iii) any alleged act or failure to act by the
Underwriters in connection with, or relating in any manner to, the Directed
Stock Program, including, but not limited to, the failure of the Directed
Stock Participants to affirmatively reconfirm the Directed Stock for
purchase as of the date of this Agreement or to pay for and accept delivery
of the Directed Stock by the end
21
of the First Closing Date (provided, however, that the Issuer shall not be
liable under this clause (iii) for any loss, claim, damage, liability or
action that is finally judicially determined to have resulted from the
gross negligence or willful misconduct of the Underwriters in conducting
the Directed Stock Program); provided, however, that the Issuer will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement, or omission or alleged omission made in the Registration
Statement, any Preliminary Prospectus, Pricing Prospectus, the Prospectus,
or such amendment or supplement, or any Issuer Free Writing Prospectus or
any "issuer information" filed or required to be filed pursuant to Rule
433(d) under the Securities Act in reliance upon and in conformity with
written information furnished to the Issuer by or through the
Representatives specifically for use in the preparation thereof, such
information being listed in Section 15 below.
(ii) to reimburse each Underwriter and each such controlling person
upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding. In the event
that it is finally judicially determined that the Underwriters were not
entitled to receive payments for legal and other expenses pursuant to this
subparagraph, the Underwriters will promptly return all sums that had been
advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Issuer, each of its directors, each of its officers who have signed
the Registration Statement and each person, if any, who controls the Issuer
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Issuer or any such director,
officer, or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto, or in any Issuer Free Writing
Prospectus (ii) the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Issuer or
any such director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the
Prospectus or any amendment or supplement thereto, or in any Issuer Free Writing
Prospectus in reliance upon and in conformity with written information furnished
to the Issuer by or through the Representatives specifically for use in the
preparation thereof, such information being listed in Section 15 below.
22
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Subsection if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
fees and expenses of the counsel retained by the indemnified party in the event
(i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them or
(iii) the indemnifying party shall have failed to assume the defense and employ
counsel acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action.
It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for the reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a) and by the Issuer in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. In
addition, the indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (whether or not any indemnified party is
an actual or potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.
(d) If the indemnification provided for in this Section is unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
23
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer on the one hand and the
Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Issuer on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Issuer on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Issuer bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Issuer and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Subsection 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 which does not take account of the
equitable considerations referred to above in this Subsection. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Subsection shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Subsection, (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Subsection
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus, the Prospectus or any supplement
or amendment thereto, or any Issuer Free Writing Prospectus, each party against
whom contribution may be sought under this Section hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon him or it by any
other contributing party and consents to the service of such process and agrees
that any other contributing party may join him or it as an additional defendant
in any such proceeding in which such other contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section shall be paid by the indemnifying party to the indemnified party as such
losses, claims, damages, liabilities or
24
expenses are incurred. The indemnity and contribution agreements contained in
this Section and the representations and warranties of the Issuer set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Issuer, its directors or officers or any
persons controlling the Issuer, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter, or to the Issuer, its directors or officers, or any person
controlling the Issuer, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, if any, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Issuer), you, as the Representatives
of the Underwriters, shall use your reasonable efforts to procure within 36
hours thereafter one or more of the other Underwriters, or any others, to
purchase from the Issuer such amounts as may be agreed upon and upon the terms
set forth herein, the Firm Securities or Option Securities, as the case may be,
which the defaulting Underwriter or Underwriters failed to purchase. If during
such 36 hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Securities or Option
Securities, as the case may be, agreed to be purchased by the defaulting
Underwriter or Underwriters, then (a) if the aggregate number of shares with
respect to which such default shall occur does not exceed 10% of the Firm
Securities or Option Securities, as the case may be, covered hereby, the other
Underwriters shall be obligated, severally, in proportion to the respective
numbers of Firm Securities or Option Securities, as the case may be, which they
are obligated to purchase hereunder, to purchase the Firm Securities or Option
Securities, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Securities or Option Securities, as the case may be, with respect to which
such default shall occur exceeds 10% of the Firm Securities or Option
Securities, as the case may be, covered hereby, the Issuer or you as the
Representatives of the Underwriters will have the right, by written notice given
within the next 36-hour period to the parties to this Agreement, to terminate
this Agreement without liability on the part of the non-defaulting Underwriters
or of the Issuer except to the extent provided in Section 8 hereof. In the event
of a default by any Underwriter or Underwriters, as set forth in this Section,
the Closing Date or Option Closing Date, if any, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, or faxed and confirmed as
follows:
25
if to the Underwriters, to RBC Capital Markets Corporation
c/o RBC Capital Markets
Xxx Xxxxxxx Xxxxx, 000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxx Xxxxx
Syndicate Director
Fax: (000) 000-0000
if to the Issuer, to 000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Chairman
Fax: (___) _________
11. TERMINATION.
(a) This Agreement may be terminated by you at any time prior to the
Closing Date if any of the following has occurred: (i) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, any material adverse change or any development involving a
prospective material adverse change, which (A) in the absolute discretion of any
group of Underwriters (which may include RBC Capital Markets Corporation and
Xxxxxxxxx & Company, Inc.) that has agreed to purchase in the aggregate at least
50% of the Firm Securities, as long as each of RBC Capital Markets Corporation
and Xxxxxxxxx & Company, Inc. does not affirmatively assert that termination
should not occur, or (B) in the absolute discretion of RBC Capital Markets
Corporation and Xxxxxxxxx & Company, Inc. (whether or not the condition of
clause (A) is satisfied) has had or is reasonably likely to have a Material
Adverse Effect, (ii) any outbreak, attack, or escalation of hostilities or
declaration of war, national emergency, act of terrorism or other national or
international calamity or crisis or change in economic, financial or political
conditions if the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change on the financial markets of the United States would,
in (A) the reasonable opinion of any group of Underwriters (which may include
RBC Capital Markets Corporation and Xxxxxxxxx & Company, Inc.) that has agreed
to purchase in the aggregate at least 50% of the Firm Securities, as long as
each of RBC Capital Markets Corporation and Xxxxxxxxx & Company, Inc. does not
affirmatively assert that termination should not occur, or (B) in the reasonable
opinion of RBC Capital Markets Corporation and Xxxxxxxxx & Company, Inc.
(whether or not the condition of clause (A) is satisfied), make it impracticable
or inadvisable to market the Shares or to enforce contracts for the sale of the
Shares, or (iii) suspension of trading in securities generally on the New York
Stock Exchange or the American Stock Exchange or limitation on prices (other
than limitations on hours or numbers of days of trading) for securities on
either such Exchange, (iv) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects or
may materially and adversely affect the business or operations of the Issuer,
(v) declaration of a banking moratorium by United States or New York State
authorities, (vi) any downgrading, or placement on any watch list for possible
downgrading, in the rating of the Issuer's debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Exchange Act); (vii) the suspension of trading of the Issuer's
common stock by The Nasdaq Global Market, the
26
Commission, or any other governmental authority or, (viii) the taking of any
action by any governmental body or agency in respect of its monetary or fiscal
affairs which in your reasonable opinion has a material adverse effect on the
securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Issuer and Underwriters and their respective successors, executors,
administrators, heirs and assigns, and the officers, directors and controlling
persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign merely because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Issuer and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Issuer for
inclusion in any Preliminary Prospectus, Prospectus, Issuer Free Writing
Prospectus or the Registration Statement consists of the information set forth
in the second, ninth, tenth and eleventh paragraphs under the caption
"Underwriting" in, the Prospectus.
14. RESEARCH INDEPENDENCE.
In addition, the Issuer acknowledges that the Underwriters' research
analysts and research departments are required to be independent from their
respective investment banking divisions and are subject to certain regulations
and internal policies, and that such Underwriters' research analysts may hold
and make statements or investment recommendations and/or publish research
reports with respect to the Issuer and/or the offering that differ from the
views of its investment bankers. The Issuer hereby waives and releases, to the
fullest extent permitted by law, any claims that the Issuer may have against the
Underwriters with respect to any conflict of interest that may arise from the
fact that the views expressed by their independent research analysts and
research departments may be different from or inconsistent with the views or
advice communicated to the Issuer by such Underwriters' investment banking
divisions. The Issuer acknowledges that each of the Underwriters is a full
service securities firm and as such from time to time, subject to applicable
securities laws, may effect transactions for its own account or the account of
its customers and hold long or short position in debt or equity securities of
the companies which may be the subject to the transactions contemplated by this
Agreement.
15. NO FIDUCIARY DUTY
Notwithstanding any preexisting relationship, advisory or otherwise,
between the parties or any oral representations or assurances previously or
subsequently made by the underwriters, the Issuer acknowledges and agrees that:
(a) nothing herein shall create a fiduciary or agency relationship
between the Issuer and the Underwriters;
27
(b) the Underwriters are not acting as advisors, expert or otherwise,
to the Issuer in connection with this offering, sale of the Shares or any other
services the Underwriters may be deemed to be providing hereunder, including,
without limitation, with respect to the public offering price of the Shares;
(c) the relationship between the Issuer and the Underwriters is
entirely and solely commercial, based on arms-length negotiations;
(d) any duties and obligations that the Underwriters may have to the
Issuer shall be limited to those duties and obligations specifically stated
herein; and
(e) notwithstanding anything in this Underwriting Agreement to the
contrary, the Issuer acknowledges that the Underwriters may have financial
interests in the success of the Offering that are not limited to the difference
between the price to the public and the purchase price paid to the Issuer by the
Underwriters for the shares and the Underwriters have no obligation to disclose,
or account to the Issuer for, any of such additional financial interests.
The Issuer hereby waives and releases, to the fullest extent permitted
by law, any claims that the Issuer may have against the Underwriters with
respect to any breach or alleged breach of fiduciary duty.
16. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants in
this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Issuer or
its directors or officers and (c) delivery of and payment for the Shares under
this Agreement.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.
This Agreement may only be amended or modified in writing, signed by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit.
[remainder of page intentionally blank]
28
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Issuer and the several
Underwriters in accordance with its terms.
Very truly yours,
MOLECULAR INSIGHT PHARMACEUTICALS, INC.
By
-------------------------------------
Xxxxx Xxxxxx
Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
RBC CAPITAL MARKETS CORPORATION
XXXXXXXXX & COMPANY, INC.
XXXXXXXXXXX & CO., INC.
X.X. XXXXXXX & SONS, INC.
As the Representatives of the several Underwriters listed on Schedule I
By: RBC Capital Markets Corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
29
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of
Firm Securities
Underwriter to be Purchased
------------------------------- ---------------
RBC Capital Markets Corporation
Xxxxxxxxx & Company, Inc.
Xxxxxxxxxxx & Co., Inc.
X.X. Xxxxxxx & Sons, Inc.
---------------
Total
===============
SCHEDULE II(A)
Materials Other than the Pricing Prospectus that Comprise the
Pricing Disclosure Package:
SCHEDULE II(B)
Issuer Free Writing Prospectuses Not Included in the Pricing Disclosure Package
EXHIBIT A
Subsidiary
Biostream Therapeutics, Inc.
EXHIBIT B
Form of Lock-Up Agreement
______________, 2006
RBC Capital Markets Corporation
Xxxxxxxxx & Company, Inc.
Xxxxxxxxxxx & Co., Inc.
X.X. Xxxxxxx & Sons, Inc.
As Representatives of the Several Underwriters
c/o RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxxxxx & Company, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Molecular Insight Pharmaceuticals, Inc. (the "Company")
Ladies and Gentlemen:
The undersigned is, or will immediately prior to the Offering (as
defined below) be, an owner of record or the beneficial owner of certain shares
of common stock of the Company ("Common Stock") or securities convertible into
or exchangeable or exercisable for Common Stock. The Company proposes to carry
out an initial public offering of Common Stock (the "Offering") for which you
will act as the representatives of the underwriters. The undersigned recognizes
that the Offering will be of benefit to the undersigned and will benefit the
Company by, among other things, raising additional capital for its operations.
The undersigned acknowledges that you and the other underwriters are relying on
this letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that
the undersigned will not, without the prior written consent of each of RBC
Capital Markets Corporation and Xxxxxxxxx & Company, Inc. (which consent may be
withheld in its sole discretion), directly or indirectly, sell, offer, contract
or grant any option to sell (including, without limitation, any short sale),
pledge (including margin stock), transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange Act
of 1934, as amended, or otherwise dispose of or transfer, or commence the
offering of, any shares of Common Stock, options or warrants to acquire shares
of Common Stock, or securities exchangeable or exercisable for or convertible
into shares of Common Stock currently or hereafter owned either of record or
beneficially by the undersigned, or publicly announce an intention to do any of
the foregoing, for a
period commencing on the date hereof and continuing through the close of trading
on the date 180 days after the date of the final prospectus relating to the
Offering (the "Prospectus"). If (i) the Company issues an earnings release or
material news, or a material event relating to the Company occurs, during the
last 17 days of the lock-up period, or (ii) prior to the expiration of the
lock-up period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the lock-up period, then,
in each case, the restrictions imposed by this agreement shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event. The
foregoing sentences shall not apply to (i) the transfer of any or all of the
shares of Common Stock, stock options or warrants owned by the undersigned,
either during the undersigned's lifetime or on death, by gift, will or intestate
succession to any member of the immediate family of the undersigned or transfers
to a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of the undersigned's immediate family or (ii) sales,
dispositions or other transfers to members of the undersigned's family or
affiliates of the undersigned, including its partners (if a partnership) or its
members (if a limited liability company); provided, however, that in any
transfer made pursuant to clause (i) or (ii) it shall be a condition to such
transfer that the transferee executes and delivers to each of RBC Capital
Markets Corporation and Xxxxxxxxx & Company, Inc. an agreement stating that the
transferee is receiving and holding the Common Stock subject to the provisions
of this letter agreement, and there shall be no further transfer of such Common
Stock except in accordance with this letter.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any
registration rights relating to registration under the Securities Act of 1933,
as amended, of any Common Stock owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering. In
addition, during the period through the close of trading on the date 180 days
after the date of the Prospectus, as such 180-day period may be extended
pursuant to the second paragraph of this letter agreement, the undersigned will
not 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 without the prior written consent of each of RBC
Capital Markets Corporation and Xxxxxxxxx & Company, Inc. (which consent may be
withheld in its sole discretion).
This agreement is irrevocable and will be binding on the undersigned
and the respective successors, heirs, personal representatives and assigns of
the undersigned. This agreement shall automatically terminate upon the earliest
to occur, if any, of: (a) either RBC Capital Markets Corporation and Xxxxxxxxx &
Company, Inc., on the one hand, or the Company, on the other hand, advising the
other in writing, prior to the execution of the Underwriting Agreement, that it
has determined not to proceed with the Offering or (b) termination of the
Underwriting Agreement entered into between the Company, the underwriters and
certain of the Company's stockholders before the sale of any Common Stock to the
underwriters.
2
----------------------------------------
Printed Name of Holder
By:
------------------------------------
Signature
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Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of an entity)
3
