2,103,000 SHARES ADVANCED MAGNETICS, INC. COMMON STOCK , $0.01 PAR VALUE PER SHARE UNDERWRITING AGREEMENT
Exhibit
1.1
2,103,000
SHARES
ADVANCED
MAGNETICS, INC.
COMMON
STOCK , $0.01 PAR VALUE PER SHARE
December
7, 2006
December
7, 2006
To
the
Managers named in Schedule I hereto
for the Underwriters named in Schedule II hereto
ADVANCED
MAGNETICS, INC., a Delaware corporation (the “Company”),
proposes to issue and sell to the several underwriters named in Schedule II
hereto (the “Underwriters”),
for
whom you are acting as managers (the “Managers”), the number of shares of its
common stock, $0.01 par value per share, set forth in Schedule I hereto (the
“Firm
Shares”).
The
Company also proposes to issue and sell to the several Underwriters not more
than the number of additional shares of its common stock, $0.01 par value per
share, set forth in Schedule I hereto (the “Additional
Shares”)
if and
to the extent that you, as Managers of the offering, shall have determined
to
exercise, on behalf of the Underwriters, the right to purchase such shares
of
common stock granted to the Underwriters in Section 2 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as
the
“Shares.”
The
shares of common stock, $0.01 par value per share of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the “Common
Stock.”
If
the
firm or firms listed in Schedule II hereto include only the Managers listed
in
Schedule I hereto, then the terms “Underwriters” and “Managers” as used herein
shall each be deemed to refer to such firm or firms.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement, including a prospectus, (the file number of which is
set
forth in Schedule I hereto) on Form S-3, relating to the securities (the
“Shelf
Securities”),
including the Shares, to be issued from time to time by the Company. The
registration statement as amended to the date of this Agreement, including
the
information (if any) deemed to be part of the registration statement at the
time
of effectiveness pursuant to Rule 430A or Rule 430 B under the
Securities Act of 1933, as amended (the “Securities
Act”),
is
hereinafter referred to as the “Registration
Statement”,
and
the related prospectus covering the Shelf Securities dated August 11, 2006
in
the form first used to confirm sales of the Shares (or in the form first made
available to the Underwriters by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act) is hereinafter referred to as
the
“Basic
Prospectus.”
If
the
Company has filed or files an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) (the “Rule
462 Registration Statement”)
under
the Securities Act, then any reference herein to
the
term
“Registration Statement” shall be deemed to include such Rule 462 Registration
Statement.
The
Basic Prospectus, as supplemented by the prospectus supplement specifically
relating to the Shares in the form first used to confirm sales of the Shares
(or
in the form first made available to the Underwriters by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “Prospectus,”
and
the term “preliminary
prospectus”
means
any preliminary form of the Prospectus. For purposes of this Agreement,
“free
writing prospectus”
has
the
meaning set forth in Rule 405 under the Securities Act, “Time
of Sale Prospectus”
means
the Basic Prospectus, as supplemented by the preliminary prospectus supplement,
together with the free writing prospectuses, if any, each identified in Schedule
I hereto, and “broadly
available road show”
means
a
“bona fide electronic road show” as defined in Rule 433(h)(5) under the
Securities Act that has been made available without restriction to any person.
As used herein, the terms “Registration Statement,” “Basic Prospectus,”
“preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall
include the documents, if any, incorporated by reference therein. The terms
“supplement,”
“amendment,”
and
“amend”
as
used
herein with respect to the Registration Statement, the Basic Prospectus, the
Time of Sale Prospectus, any preliminary prospectus or free writing prospectus
shall include all documents subsequently filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”),
that
are deemed to be incorporated by reference therein.
1. Representations
and Warranties.
The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) Registration
Statement Effective; Eligibility. The
Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings
for
such purpose are pending before or threatened by the Commission.
(b) Compliance
with Form; Disclosure. (i)
Each
document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder,
(ii)
each part of the Registration Statement, when such part became effective, did
not contain, and each such part, as amended or supplemented, if applicable,
will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement as of the date hereof does
not
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein not
misleading, (iv) the Registration Statement and the Prospectus comply, and
as
amended or supplemented, if
2
applicable,
will comply in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (v) the
Time of Sale Prospectus does not, and at the time of each sale of the Shares
in
connection with the offering when the Prospectus is not yet available to
prospective purchasers and at the Closing Date (as defined in Section 4), the
Time of Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any 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, (vi) each broadly
available road show, if any, when considered together with the Time of Sale
Prospectus, does not contain any 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 and (vii) the
Prospectus does not contain and, as amended or supplemented, if applicable,
will
not contain any 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, except that the representations
and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement, the Time of Sale Prospectus or the Prospectus
based upon information relating to any Underwriter furnished to the Company
in
writing by such Underwriter through the Managers expressly for use
therein.
(c) Free
Writing Prospectuses. The
Company is not an “ineligible issuer” in connection with the offering pursuant
to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus
that the Company is required to file pursuant to Rule 433(d) under the
Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus that
the
Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or behalf of or used or referred to
by
the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations
of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule I hereto forming part of the Time of Sale Prospectus,
and
electronic road shows, if any, each furnished to you before first use, the
Company has not prepared, used or referred to, and will not, without your prior
consent, prepare, use or refer to, any free writing prospectus.
(d) Preliminary
Prospectuses. Each
preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424
under the Securities Act, complied when so filed in all material respects with
the Securities Act and the applicable rules and regulations of the Commission
thereunder.
3
(e) Due
Incorporation. The
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of Delaware, with the corporate power
and authority to own its properties and to conduct its business as currently
being carried on and as described in the Registration Statement, the Time of
Sale Prospectus and the Prospectus. The Company is duly qualified to transact
business as a foreign corporation and is in good standing under the laws of
each
other jurisdiction in which its ownership or leasing of property or the conduct
of its business requires such qualification, except where the failure to be
so
qualified and in good standing would not, individually or in the aggregate,
result in any material adverse effect upon, or change in, the general affairs,
business, operations, properties, financial condition, or results of operations
of the Company taken as a whole (a “Material
Adverse Effect”)
(f) Subsidiaries.
The
Company has no significant subsidiaries (as such term is defined in Rule 1-02(w)
of Regulation S-X promulgated by the Commission) and does not own any beneficial
interest, directly or indirectly, in any corporation, partnership, joint venture
or other business entity.
(g) Capitalization.
All
of
the issued and outstanding shares of capital stock of the Company, including
the
outstanding shares of Common Stock, have been duly authorized and validly issued
and are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of any
preemptive right or other rights to subscribe for or to purchase or acquire
any
securities of the Company that have not been waived in writing.
(h) The
Shares.
The
Shares have been duly and validly authorized by the Company and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will
have
been duly and validly issued and will be fully paid and nonassessable and will
not be subject to any statutory or contractual preemptive rights or other rights
to subscribe for or to purchase or acquire any shares of Common Stock of the
Company.
(i) No
Registration Rights.
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 or other securities of the Company
(j) Description
of Capital Stock.
The
capital stock of the Company, including the Shares, conforms as to legal matters
to the description thereof, if any, contained in the Registration Statement,
the
Time of Sale Prospectus and the Prospectus, and as of the date thereof, the
Company had authorized and
4
outstanding
capital stock as set forth therein. The certificates for the Shares are in
due
and proper form and the holders of the Shares will not be subject to personal
liability by reason of being such holders.
(k) Due
Authorization and Enforceability.
This
Agreement has been duly authorized, executed and delivered by the Company,
and
constitutes a valid, legal and binding obligation of the Company, enforceable
against the Company 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 applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally
and
subject to general principles of equity.
(l) No
Violation.
The
Company is not in breach or violation of or in default under (nor has any event
occurred which with notice, lapse of time or both would result in any breach
or
violation of, or constitute a default) (i) under the provisions of its charter
or bylaws or (ii) in the performance or observance of any term, covenant,
obligation, agreement or condition contained in any indenture, mortgage, deed
of
trust, bank loan or credit agreement or other evidence of indebtedness, or
any
license, lease, contract or other agreement or instrument to which the Company
is a party or by which it or any of its properties may be bound or affected,
or
(iii) any statute, law, rule, regulation, ordinance, judgment, order or decree
of any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any of
its
properties, as applicable (including, without limitation, those administered
by
the Food and Drug Administration of the U.S. Department of Health and Human
Services (the “FDA”)
or by
any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA), except, with
respect to clauses (ii) and (iii) above, to the extent any such contravention
would not result in a Material Adverse Effect.
(m) No
Conflict.
The
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions herein contemplated, including the issuance
and
sale by the Company of the Shares, will not conflict with or result in a breach
or violation of, or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach or violation
of or
constitute a default under) (i) the provisions of the charter or by-laws of
the
Company, (ii) any material indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company is a party or
by
which it or any of its properties may be bound or affected, or (iii) any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company.
5
(n) No
Consents Required.
No
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority, or approval of the stockholders of the
Company, is required in connection with the issuance and sale of the Shares
or
the consummation by the Company of the transactions contemplated hereby other
than (i) as may be required under the Securities Act, (ii) any necessary
qualification of the Shares under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered and (iii) under the rules
and regulations of the National Association of Securities Dealers, Inc.
(“NASD”)
or the
NASDAQ Global Market. The Company has full power and authority to enter into
this Agreement and to authorize, issue and sell the Shares as contemplated
by
this Agreement.
(o) Absence
of Material Changes.
Subsequent to the respective dates as of which information is given in the
Time
of Sale Prospectus, (i) the Company has not incurred any material liability
or
obligation, direct or contingent, or entered into any material transaction
not
in the ordinary course of business; (ii) the Company has not purchased any
of
the Company's outstanding capital stock, or declared, paid or otherwise made
any
dividend or distribution of any kind on the Company's capital stock; and (iii)
there has not been any change in the capital stock (other than a change in
the
number of outstanding shares of Common Stock due to the issuance of shares
upon
the exercise of outstanding options or warrants), or material change in the
short-term debt or long-term debt of the Company or any issue of options,
warrants, convertible securities or other rights to purchase the capital stock
(other than grants of stock options under the Company’s stock option plans
existing on the date hereof) of the Company, or any Material Adverse
Effect.
(p) Permits.
The
Company possesses all necessary licenses, authorizations, consents and approvals
and has made all necessary filings required under any federal, state, local
or
foreign law, regulation or rule (including, without limitation, those from
the
FDA, and any other foreign, federal, state or local government or regulatory
authorities performing functions similar to those performed by the FDA), in
order to conduct its business, except where such failure would not individually
or in the aggregate have a Material Adverse Effect. The Company is not in
violation of, or in default under, or has received notice of any proceedings
relating to revocation or modification of, any such license, authorization,
consent or approval, except
where such violation or default would not individually or in the aggregate
have
a Material Adverse Effect.
The
Company is in compliance with all applicable federal, state, local and foreign
laws, regulations, orders or decrees, except where noncompliance would not
individually or in the aggregate have a Material Adverse Effect.
6
(q) Legal
Proceedings.
There
are no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened or contemplated to which the Company is or would be a party or of
which any of its properties is or would be subject at law or in equity, before
or by any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority,
except (i) as described in the Registration Statement, the Prospectus, and
the
Time of Sale Prospectus, (ii) any such proceeding, which if resolved adversely
to the Company, would not result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect or (iii) any such
proceeding that would not prevent or materially and adversely affect the ability
of the Company to consummate the transactions contemplated hereby. The Time
of
Sale Prospectus contains in all material respects the same description of the
foregoing matters contained in the Prospectus.
(r) Statutes;
Contracts. There
are
no statutes or regulations applicable to the Company or contracts or other
documents of the Company which are required to be described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus or filed as exhibits
to
the Registration Statement by the Securities Act which have not been so
described or filed.
(s) Independent
Accountants. To
the
Company's knowledge, PricewaterhouseCoopers LLP, who have certified certain
of
the financial statements of the Company filed with the Commission as part of
any
of the Registration Statement, the Time of Sale Prospectus or the Prospectus,
or
incorporated by reference therein, was during the period covered by such
financial statements an independent public accounting firm within the meaning
of
the Securities Act.
(t) Financial
Statements. The
financial statements of the Company, together with the related schedules and
notes thereto, set forth or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as applicable, and present fairly in all material respects (i) the
financial condition of the Company, taken as a whole, as of the dates indicated
and (ii) the consolidated results of operations, stockholders’ equity and
changes in cash flows of the Company, taken as a whole, for the periods therein
specified; and such financial statements and related schedules and notes thereto
have been prepared in conformity with United States generally accepted
accounting principles, consistently applied throughout the periods involved
(except as otherwise stated therein and subject, in the case of unaudited
financial statements, to the absence of footnotes and normal year-end
adjustments). There are no other financial statements (historical or pro forma)
that
7
are
required to be included in the Registration Statement, the Time of Sale
Prospectus and the Prospectus; and the Company does not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations), not disclosed in the Registration Statement, the Time of
Sale Prospectus and the Prospectus; and all disclosures contained in the
Registration Statement, the Time of Sale Prospectus and the Prospectus regarding
“non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the Exchange Act
and
Item 10(e) of Regulation S-K under the Securities Act, to the extent applicable,
and present fairly the information shown therein and the Company’s basis for
using such measures.
(u) No
Material Adverse Change.
There
has not been any material adverse change, or to the Company’s knowledge, any
development involving a prospective material adverse change, in the business,
properties, management, financial condition or results of operations of the
Company taken as a whole, from that set forth in the Time of Sale Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of
this Agreement).
(v) Not
an Investment Company.
The
Company is not or, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus,
will
be required to register as an “investment company” as defined in the Investment
Company Act of 1940, as amended.
(w) Good
Title to Property. The
Company has good and valid title to all property (whether real or personal)
described in each of the Time of Sale Prospectus and the Prospectus as being
owned by it, in each case free and clear of all liens, claims, security
interests, other encumbrances or defects except such as are described in each
of
the Time of Sale Prospectus and the Prospectus and those that would not,
individually or in the aggregate materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company. All of the property described in each of the
Time
of Sale Prospectus and the Prospectus as being held under lease by the Company
is held thereby under valid, subsisting and enforceable leases, without any
liens, restrictions, encumbrances or claims, except those that, individually
or
in the aggregate, are not material and do not materially interfere with the
use
made and proposed to be made of such property by the Company.
(x) Intellectual
Property Rights. The
Company owns, or has obtained valid and enforceable licenses for, or other
rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in each of the Time of Sale Prospectus and
the
Prospectus as being owned or licensed by it
8
or
which
are necessary for the conduct of its business, except where the failure to
own,
license or have such rights would not, individually or in the aggregate, result
in a Material Adverse Effect (collectively, “Intellectual
Property”);
except as described in the Time of Sale Prospectus and the Prospectus (i) there
are no third parties who have or, to the Company’s knowledge, will be able to
establish rights to any Intellectual Property, except for the ownership rights
of the owners of the Intellectual Property which is licensed to the Company;
(ii) to the Company’s knowledge, there is no infringement by third parties of
any Intellectual Property; (iii) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others challenging
the Company’s rights in or to, or the validity, enforceability, or scope of, any
Intellectual Property owned by or licensed to the Company, and the Company
is
unaware of any facts which could form a reasonable basis for any such claim;
(iv) except as would not result in a Material Adverse Effect, there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others, and
the Company is unaware of any facts which could form a reasonable basis for
any
such claim; (v) to the Company’s knowledge, there is no patent or patent
application that contains claims that interfere with the issued or pending
claims of any of the Intellectual Property; and (vi) to the Company’s knowledge,
there is no prior art that may render any patent owned by the Company invalid,
nor is there any prior art known to the Company that may render any patent
application owned by the Company unpatentable.
(y) Taxes.
The
Company has timely filed all material federal, state, local and foreign income
and franchise tax returns (or timely filed applicable extensions therefore)
that
have been required to be filed and is not in default in the payment of any
taxes
which were payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company is contesting in good faith and for
which adequate reserves have been provided and reflected in the Company’s
financial statements included in the Registration Statement, the Time of Sale
Prospectus and the Prospectus. The Company has no tax deficiency that has been
or, to the knowledge of the Company, might be asserted or threatened against
it
that would result in a Material Adverse Effect.
(z) Insurance.
The
Company maintains insurance in such amounts and covering such risks as is
adequate for the conduct of its business and the value of its properties and
as
is customary for companies engaged in similar businesses in similar industries.
All such insurance is fully in force on the date hereof and will be fully in
force as of the Closing Date. The Company has no reason to believe that it
will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material Adverse
Effect.
9
(aa) Accounting
Controls. The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles 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.
(bb) Disclosure
Controls. The
Company has established, maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-14(c) and 15d-14(c) under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company is made known to the Company’s principal executive
officer and its principal financial officer by others within the Company,
particularly during the periods in which the periodic reports required under
the
Exchange Act are being prepared, (ii) have been evaluated for effectiveness
as
of the end of the last fiscal period covered by the Registration Statement;
and
(iii) such disclosure controls and procedures are effective to perform the
functions for which they were established. There are no material weaknesses
in
the design or operation of internal controls which could adversely affect the
Company’s ability to record, process, summarize, and report financial data to
management and the Board of Directors. The Company is not aware of any fraud,
whether or not material, that involves management or other employees who have
a
role in the Company’s internal controls; and since the date of the most recent
evaluation of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses.
(cc) Corrupt
Practices. Neither
the Company nor, to the Company’s knowledge, any other person associated with or
acting on behalf of the Company, including without limitation any director,
officer, agent or employee of the Company has, directly or indirectly, while
acting on behalf of the Company (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or
campaigns from corporate funds, (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended or (iv) made any other unlawful
payment.
(dd) No
Price Stabilization. Neither
the Company nor, to the Company’s knowledge, any of its officers, directors,
affiliates or controlling persons has taken or will take, directly or
indirectly, any action designed to cause
10
or
result
in, or which has constituted or which might reasonably be expected to constitute
the stabilization or manipulation of the price of any security of the Company
to
facilitate the sale or resale of the Shares.
(ee) No
Undisclosed Relationships. No
relationship, direct or indirect, exists between or among the Company on the
one
hand and the directors, officers, stockholders, customers or suppliers of the
Company on the other hand which is required to be described in the Registration
Statement, the Time of Sale Prospectus and the Prospectus which has not been
so
described.
(ff) Xxxxxxxx-Xxxxx
Act. The
Company, and to its knowledge after due inquiry, all of the Company’s directors
or officers, in their capacities as such, is in compliance in all material
respects with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act
of
2002 (the “Xxxxxxxx-Xxxxx
Act”)
and
any related rules and regulations promulgated by the Commission.
(gg) Brokers
Fees. The
Company is not a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
the Company or the Underwriters for a brokerage commission, finder’s fee or
other like payment in connection with the offering and sale of the Shares.
(hh) Exchange
Act Requirements. Company
has filed in a timely manner all reports required to be filed pursuant to
Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the preceding
12
months (except to the extent that Section 15(d) requires reports to be filed
pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall be
governed by the next clause of this sentence); and the Company has filed in
a
timely manner all reports required to be filed pursuant to Sections 13(d) and
13(g) of the Exchange Act since January 1, 2005, except where the failure to
timely file could not reasonably be expected individually or in the aggregate
to
have a Material Adverse Effect.
(ii) Ferumoxytol
Clinical Trials. Except
as
disclosed in the Time of Sale Prospectus, since April 2004, the FDA has not
notified the Company of any material deficiencies relating to the ferumoxytol
Phase III iron replacement therapy clinical trials.
(jj) Compliance
with Environmental Laws.
The
Company (i) is in compliance with any and all applicable foreign, federal,
state
and local laws, orders, rules, regulations, directives, decrees and judgments
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental
Laws”),
(ii)
has received all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and (iii) is in compliance
11
with
all
terms and conditions of any such permit, license or approval, except where
such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, individually or in the
aggregate, result in a Material Adverse Effect. There are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
result in a Material Adverse Effect.
(kk) No
Labor Disputes. The
Company is not engaged in any unfair labor practice; except for matters that
would not, individually or in the aggregate, result in a Material Adverse Effect
(i) there is (A) no unfair labor practice complaint pending or, to the Company’s
knowledge after due inquiry, threatened against the Company before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out
of
or under collective bargaining agreements is pending or threatened, (B) no
strike, labor dispute, slowdown or stoppage pending or, to the Company’s
knowledge after due inquiry, threatened against the Company and (C) no union
representation dispute currently existing concerning the employees of the
Company, and (ii) to the Company’s knowledge (A) no union organizing activities
are currently taking place concerning the employees of the Company and (B)
there
has been no violation of any federal, state, local or foreign law relating
to
discrimination in the hiring, promotion or pay of employees or any applicable
wage or hour laws concerning the employees of the Company.
(ll) ERISA.
The
Company is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
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 Company would have any
liability; the Company 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 Company 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.
(mm) NASDAQ.
Exchange Act Registration. The
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act and is listed for
12
trading
on the NASDAQ Global Market, and the Company has taken no action designed to,
or
likely to have the effect of, termination the registration of the Common Stock
under the Exchange Act or delisting the Common Stock from the NASDAQ Global
Market, nor has the Company received any notification that the Commission or
the
NASDAQ Global Market is contemplating terminating such registration or listing.
The Company has complied in all material respects with the applicable
requirements of the NASDAQ Global Market for maintenance of inclusion of the
Common Stock thereon. The Company has filed an application to include the Shares
on the NASDAQ Global Market.
(nn) NASD
Review. To
enable
the Underwriters to rely on Rule 2710(b)(7)(C)(i) of the NASD, the registration
of the Shares registered with the Commission could have been affected on Form
S-3 under the Securities Act pursuant to the standards for such Form S-3 in
effect prior to October 21, 1992.
(oo) Statistical
or Market-Related Data. Any
statistical, industry-related and market-related data included or incorporated
by reference in the Registration Statement, the Time of Sale Prospectus and
the
Prospectus, are based on or derived from sources that the Company reasonably
and
in good faith believes to be reliable and accurate, and such data agree with
the
sources from which they are derived.
(pp) Clinical
Studies. The
clinical, pre-clinical and other studies and tests conducted by or on behalf
of
or sponsored by the Company or in which the Company or products or product
candidates have participated that are described in each of the Time of Sale
Prospectus and the Prospectus were and, if still pending, are being conducted
in
accordance in all material respects with all statutes, laws, rules and
regulations, as applicable (including, without limitation, those administered
by
the FDA or by any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA) and with
standard medical and scientific research procedures. The descriptions in each
of
the Time of Sale Prospectus and the Prospectus of the results of such studies
and tests are accurate and complete in all material respects and fairly present
the published data derived from such studies and tests. The Company has not
received any notices or other correspondence from the FDA or any other foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA with respect to any ongoing
clinical or pre-clinical studies or tests requiring the termination, suspension
or material modification of such studies or tests, which such termination,
suspension or material modification would reasonably be expected to result
in a
Material Adverse Effect. The Company is in compliance with all applicable
federal, state, local and foreign laws, regulations, orders and decrees
governing its business as prescribed by the FDA, or any other federal, state
or
foreign agencies or bodies, including those bodies and agencies engaged in
the
13
regulation
of pharmaceuticals or biohazardous substances or materials, except where
noncompliance would not, singly or in the aggregate, result in a Material
Adverse Effect.
2. Agreements
to Sell and Purchase. The
Company hereby agrees to sell to the several Underwriters, and each Underwriter,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees, severally and not jointly,
to purchase from the Company the respective numbers of Firm Shares set forth
in
Schedule II hereto opposite its name at the purchase price set forth in
Schedule I hereto (the “Purchase
Price”).
On
the
basis of the representations and warranties contained in this Agreement,
and
subject to its terms and conditions, the Company agrees to sell to the
Underwriters the Additional Shares, and the Underwriters shall have the right
to
purchase, severally and not jointly, up to the number of Additional Shares
set
forth in Schedule I hereto at the Purchase Price. You may exercise this right
on
behalf of the Underwriters in whole or from time to time in part by giving
written notice not later than 30 days after the date of the Prospectus. Any
exercise notice shall specify the number of Additional Shares to be purchased
by
the Underwriters and the date on which such shares are to be purchased. Each
purchase date must be at least one business day (or, if such purchase date
is
later than the closing date for the Firm Shares, at least three business
days)
after the written notice is given and may not be earlier than the closing
date
for the Firm Shares nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4 hereof
solely for the purpose of covering over-allotments made in connection with
the
offering of the Firm Shares. On each day, if any, that Additional Shares
are to
be purchased (an “Option
Closing Date”),
each
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as
you may determine) that bears the same proportion to the total number of
Additional Shares to be purchased on such Option Closing Date as the number
of
Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
3. Public
Offering.
The
Company is advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the Shares
are
to be offered to the public upon the terms set forth in the
Prospectus.
4. Payment
and Delivery. Payment
for the Firm Shares shall be made to the Company in Federal or other funds
immediately available in New York
14
City
on
the closing date and time set forth in Schedule I hereto, or at such other
time
on the same or such other date, not later than the fifth business day
thereafter, as may be designated in writing by you.
The time
and date of such payment are hereinafter referred to as the “Closing
Date.”
Payment
for any
Additional Shares shall be made to the Company in Federal or other funds
immediately available in New York City on the date specified in the
corresponding notice described in Section 2 or at such other time on the
same or on such other date, in any event not later than the tenth business
day
thereafter, as may be designated in writing by you.
The
Firm Shares and the
Additional Shares shall be registered in such names and in such denominations
as
you shall request in writing not later than one full business day prior to
the
Closing Date or the applicable Option Closing Date, as the case may be, for
the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions
to the Underwriters’ Obligations.
The
several obligations of the Underwriters are subject to the following
conditions:
(a) Subsequent
to the execution and delivery of this Agreement and prior to the Closing Date
there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken
as a
whole, from that set forth in the Time of Sale Prospectus (excluding any
amendments or supplements thereto) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Time of Sale
Prospectus.
(b) The
Underwriters shall have received on the Closing Date a certificate, dated the
Closing Date and signed by an executive officer of the Company, to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company
has
complied with all of the agreements and satisfied all of the conditions on
its
part to be performed or satisfied hereunder on or before the Closing
Date.
The
officer signing and
delivering such certificate may rely upon the best of his or her knowledge
as to
proceedings threatened.
(c) The
Underwriters shall have received on the Closing Date an opinion of Xxxxxxxx
& Worcester LLP, outside counsel for the Company, dated the
15
Closing
Date, to the effect set forth in Exhibit A hereto.
The
opinion of counsel for the Company shall be rendered to the Underwriters at
the
request of the Company and shall so state therein.
(d) The
Underwriters shall have received on the Closing Date an opinion of Xxxxxxxx
& Sunstein LLP, special intellectual property counsel for the Company, dated
the Closing Date, in form and substance reasonably satisfactory to the
Underwriters.
(e) The
Underwriters shall have received on the Closing Date an opinion of Ropes &
Xxxx LLP, counsel for the Underwriters, dated the Closing Date, in form and
substance satisfactory to the Underwriters.
(f) The
Underwriters shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be,
in
form and substance satisfactory to the Underwriters, from Pricewaterhouse
Coopers LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement, the Time of Sale Prospectus
and the Prospectus; provided
that the
letter delivered on the Closing Date shall use a “cut-off date” not earlier than
the date hereof.
(g) The
“lock-up” agreements, each substantially in the form of Exhibit B hereto,
between you and certain shareholders, officers and directors of the Company
relating to sales and certain other dispositions of shares of Common Stock
or
certain other securities, delivered to you on or before the date hereof, shall
be in full force and effect on the Closing Date. With respect to the lock up
agreements of certain former directors, they shall be substantially in the
form
of Exhibit B hereto, except that the lock up period shall be 30 days instead
of
90 days with respect to such former directors and such former directors shall
be
permitted to sell or otherwise transfer an aggregate of 35,500 shares owned
or
controlled by such former directors.
The
several obligations
of the Underwriters to purchase Additional Shares hereunder are subject to
the
delivery to you on the applicable Option Closing Date of such documents as
you
may reasonably request with respect to the good standing of the Company, the
due
authorization and issuance of the Additional Shares to be sold on such Option
Closing Date and other matters related to the issuance of such Additional
Shares.
6. Covenants
of the Company.
The
Company covenants with each Underwriter as follows:
16
(a) To
furnish to you, without charge, a signed copy of the Registration Statement
(including exhibits thereto and documents incorporated by reference therein)
and
to deliver to each of the Underwriters during the period mentioned in
Section 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus,
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement as you
may
reasonably request.
(b) Before
amending or supplementing the Registration Statement, the Time of Sale
Prospectus or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object.
(c) To
furnish to you a copy of each proposed free writing prospectus to be prepared
by
or on behalf of, used by, or referred to by the Company and not to use or refer
to any proposed free writing prospectus to which you reasonably
object.
(d) Not
to
take any action that would result in an Underwriter or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of the
Underwriter that the Underwriter otherwise would not have been required to
file
thereunder.
(e) If
the
Time of Sale Prospectus is being used to solicit offers to buy the Shares at
a
time when the Prospectus is not yet available to prospective purchasers and
any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Time of Sale Prospectus in order to make the statements
therein, in the light of the circumstances, not misleading, or if any event
shall occur or condition exist as a result of which the Time of Sale Prospectus
conflicts with the information contained in the Registration Statement then
on
file, or if, in the opinion of counsel for the Underwriters, it is necessary
to
amend or supplement the Time of Sale Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own expense,
to the Underwriters and to any dealer upon request, either amendments or
supplements to the Time of Sale Prospectus so that the statements in the Time
of
Sale Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable
law.
(f) If,
during such period after the first date of the public offering of the Shares
as
in the opinion of counsel for the Underwriters the Prospectus (or in
17
lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
required by law to be delivered in connection with sales by an Underwriter
or
dealer, any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) under the Securities Act) is
delivered to a purchaser, not misleading, or if, in the opinion of counsel
for
the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission
and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names
and addresses you will furnish to the Company) to which Shares may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in
the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus (or in lieu thereof the notice referred to
in
Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading
or so that the Prospectus, as amended or supplemented, will comply with
applicable law.
(g) To
endeavor to qualify the Shares for offer and sale under the securities or Blue
Sky laws of such jurisdictions as you shall reasonably request.
(h) To
make
generally available to the Company’s security holders and to you as soon as
practicable an earning statement covering a period of at least twelve months
beginning with the first fiscal quarter of the Company occurring after the
date
of this Agreement which shall satisfy the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the Commission
thereunder.
(i) Whether
or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all expenses incident to
the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company’s counsel and the Company’s
accountants in connection with the registration and delivery of the Shares
under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company
and amendments and supplements to any of the foregoing, including the filing
fees payable to the Commission relating to the Shares (within the time required
by Rule 456 (b)(1), if applicable), all printing costs associated therewith,
and
the mailing and delivering of copies thereof to the Underwriters and dealers,
in
the quantities hereinabove specified, (ii) all costs and expenses related to
the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) the cost of printing or producing any
Blue
Sky or
18
Legal
Investment memorandum in connection with the offer and sale of the Shares under
state securities laws and all expenses in connection with the qualification
of
the Shares for offer and sale under state securities laws as provided in
Section 6(g) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, in an amount not to exceed $5,000, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Shares
by
the National Association of Securities Dealers, Inc., (v) all costs and expenses
incident to listing the Shares on the NASDAQ Global Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges
of
any transfer agent, registrar or depositary, (viii) the document production
charges and expenses associated with printing this Agreement and (ix) all other
costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is
understood, however, that except as provided in this Section, Section 8
entitled “Indemnity and Contribution” and the last paragraph of Section 10
below, the Underwriters will pay all of their costs and expenses, including
fees
and disbursements of their counsel, stock transfer taxes payable on resale
of
any of the Shares by them and any advertising expenses connected with any offers
they may make.
(j) If
the
third anniversary of the initial effective date of the Registration Statement
occurs before all the Shares have been sold by the Underwriters, prior to the
third anniversary to file a new shelf registration statement and to take any
other action necessary to permit the public offering of the Shares to continue
without interruption; references herein to the Registration Statement shall
include the new registration statement declared effective by the Commission;
The
Company also covenants with each Underwriter that, without the prior written
consent of the Manager identified in Schedule I with the authorization to
release this lock-up on behalf of the Underwriters, it will not, during the
restricted period set forth in Schedule I hereto, (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend,
or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (2) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (3) file any registration statement
(except for registration statements on Form S-8)
19
with
the
Commission relating to the offering of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
The
foregoing sentence shall not apply to (a) the Shares to be sold hereunder,
(b)
the issuance of employee stock options and other stock-based awards pursuant
to
stock option plans described in the Registration Statement (excluding the
exhibits thereto), Time of Sale Prospectus and Prospectus, or (c) the issuance
by the Company of shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof of which
the Underwriters have been advised in writing.
7. Covenants
of the Underwriters.
Each
Underwriter severally covenants with the Company
not to
take any action that would result in the Company being required to file with
the
Commission under Rule 433(d) a free writing prospectus prepared by or on behalf
of such Underwriter that otherwise would not be required to be filed by the
Company thereunder, but for the action of the Underwriter.
8. Indemnity
and Contribution. (a)
The
Company agrees to indemnify and hold harmless each Underwriter, each person,
if
any, who controls any Underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act and each affiliate
of any Underwriter within the meaning of Rule 405 under the Securities Act
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused
by
any untrue statement or alleged untrue statement of a material fact contained
in
the Registration Statement or any amendment thereof, any preliminary prospectus,
the Time of Sale Prospectus, any issuer free writing prospectus as defined
in
Rule 433(h) under the Securities Act, any Company information that the Company
has filed, or is required to file, pursuant to Rule 433(d) under the Securities
Act, or the Prospectus or any amendment or supplement thereto, or caused by
any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by
any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who sign the Registration Statement
and
each person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such
20
Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use in the Registration Statement, any preliminary prospectus, the Time
of
Sale Prospectus, any issuer free writing prospectus or the Prospectus or any
amendment or supplement thereto.
(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
Section 8(a) or 8(b), such person (the “indemnified
party”)
shall
promptly notify the person against whom such indemnity may be sought (the
“indemnifying
party”)
in
writing and the indemnifying party, upon request of the indemnified party,
shall
retain counsel reasonably satisfactory to the indemnified party to represent
the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay 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, but the fees and expenses of such counsel
shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (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. It is understood
that the indemnifying party shall not, in respect of the legal expenses of
any
indemnified party in connection with any proceeding or related proceedings
in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Manager authorized
to
appoint counsel under this Section set forth in Schedule I hereto, in the case
of parties indemnified pursuant to Section 8(a), and by the Company, 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. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding
21
in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party
from
all liability on claims that are the subject matter of such
proceeding.
(d) To
the
extent the indemnification provided for in Section 8(a) or 8(b) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as
a
result of such losses, claims, damages or liabilities (i) in such proportion
as
is appropriate to reflect the relative benefits received by the Company on
the
one hand and the Underwriters on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 8(d)(i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by
the Company and the total underwriting discounts and commissions received by
the
Underwriters bear to the aggregate initial public offering price of the Shares
set forth in the Prospectus. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission. The Underwriters’ respective obligations to
indemnify or contribute pursuant to this Section 8 are several in
proportion to the respective number of Shares they have purchased hereunder,
and
not joint.
(e) The
Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 were determined by pro
rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the
equitable considerations referred to in Section 8(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages
and
liabilities referred to in Section 8(d) shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim.
22
Notwithstanding
the provisions of this Section 8, no Underwriter shall be required to
provide indemnity for or contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The
indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter, any person controlling any Underwriter or any
affiliate of any Underwriter or by or on behalf of the Company, its officers
or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Shares.
9. Termination.
The
Underwriters may terminate this Agreement by notice given by you to the Company,
if after the execution and delivery of this Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited
on,
or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Market, the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading
of
any securities of the Company shall have been suspended on any exchange or
in
any over-the-counter market, (iii) a material disruption in securities
settlement, payment or clearance services in the United States shall have
occurred, (iv) any moratorium on commercial banking activities shall have been
declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to
proceed with the offer, sale or delivery of the Shares on the terms and in
the
manner contemplated in the Time of Sale Prospectus or the
Prospectus.
10. Effectiveness;
Defaulting Underwriters.
This
Agreement shall become effective upon the execution and delivery hereof by
the
parties hereto.
23
If,
on
the Closing Date or an Option Closing Date, as the case may be, any one or
more
of the Underwriters shall fail or refuse to purchase Shares that it has or
they
have agreed to purchase hereunder on such date, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed
or
refused to purchase is not more than one-tenth of the aggregate number of the
Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite
their respective names in Schedule II bears to the aggregate number of Firm
Shares set forth opposite the names of all such non-defaulting Underwriters,
or
in such other proportions as you may specify, to purchase the Shares which
such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided
that in
no event shall the number of Shares that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such
Firm Shares are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement, in
the
Time of Sale Prospectus, in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter
or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this
Agreement.
If
this
Agreement shall be terminated by the Underwriters, or any of them, because
of
any failure or refusal on the part of the Company to comply with the terms
or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
24
reasonably
incurred by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
11. Entire
Agreement.
(a)
This Agreement, together with any contemporaneous written agreements and any
prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Shares, represents the entire agreement between
the Company and the Underwriters with respect to the preparation of any
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct
of the offering, and the purchase and sale of the Shares.
(b) The
Company acknowledges that in connection with the offering of the Shares: (i)
the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary
duties to, the Company or any other person, (ii) the Underwriters owe the
Company only those duties and obligations set forth in this Agreement and prior
written agreements (to the extent not superseded by this Agreement), if any,
and
(iii) the Underwriters may have interests that differ from those of the Company.
The Company waives to the full extent permitted by applicable law any claims
it
may have against the Underwriters arising from an alleged breach of fiduciary
duty in connection with the offering of the Shares.
12. Counterparts.
This
Agreement may be signed in two or more counterparts, each of which shall be
an
original, with the same effect as if the signatures thereto and hereto were
upon
the same instrument.
13. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York.
14. Headings.
The
headings of the sections of this Agreement have been inserted for convenience
of
reference only and shall not be deemed a part of this Agreement.
25
15. Notices.
All
communications hereunder shall be in writing and effective only upon receipt
and
if to the Underwriters shall be delivered, mailed or sent to you at the address
set forth in Schedule I hereto; and if to the Company shall be delivered, mailed
or sent to the address set forth in Schedule I hereto.
|
Very
truly yours,
ADVANCED
MAGNETICS, INC.
|
||
|
By:
/s/
Xxxxx X.X. Xxxxxxx
|
||
|
Name:
Xxxxx X.X. Xxxxxxx
|
||
|
Title:
CEO and President
|
Accepted
as of the date hereof
Xxxxxx
Xxxxxxx & Co. Incorporated
Acting
severally on behalf of themselves
and
the
several Underwriters named
in
Schedule II hereto.
By:
Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/
XX
Xxxxx
Name:
XX
Xxxxx
Title:
Managing Director
26
SCHEDULE
I
|
Managers:
|
|
|
Manager
authorized to release lock-up under Section 6:
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
|
Manager
authorized to appoint counsel under Section 8(c):
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
|
Registration
Statement File No.:
|
333-136552
|
|
Time
of Sale Prospectus
|
1. Prospectus
dated August 11, 2006 relating to the Shelf Shares
2. the
preliminary prospectus supplement dated December 1, 2006 relating
to the
Shares
3. Term
Sheet attached as Exhibit
C.
|
|
Lock-up
Restricted Period:
|
90
days
|
|
Title
of Shares to be purchased:
|
Common
Stock, $0.01 par value per share
|
|
Number
of Firm Shares:
|
2,103,000
|
|
Number
of Additional Shares
|
315,450
|
|
Purchase
Price:
|
$58.59
a share
|
|
Initial
Public Offering Price
|
$62.00
a share
|
|
Selling
Concession:
|
$2.046
a share
|
|
Closing
Date and Time:
|
December
13, 2006 9:00 a.m.
|
|
Closing
Location:
|
Ropes
& Xxxx LLP
Xxx
Xxxxxxxxxxxxx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000-0000
|
|
Address
for Notices to Underwriters:
|
Xxxxxx
Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
I-1
|
Attention:
Equity Capital Markets Syndicate Desk
|
|
|
Address
for Notices to the Company:
|
Advanced
Magnetics, Inc.
000
XxxxxxxxxXxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
General Counsel
|
I-2
SCHEDULE
II
|
Underwriter
|
Number
of Firm Shares To
Be Purchased
|
|
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
1,051,500
|
|
|
UBS
Securities LLC
|
420,600
|
|
|
Xxxxxxxxx
& Company, Inc.
|
315,450
|
|
|
ThinkEquity
Partners LLC
|
315,450
|
|
|
Total:
|
2,103,000
|
II-1
EXHIBIT
A
Matters
to be Covered in the Opinion of Counsel to the Company
A-1
EXHIBIT
B
FORM
OF LOCK-UP LETTER
_____________,
2006
Xxxxxx
Xxxxxxx & Co. Incorporated
UBS
Securities LLC
Xxxxxxxxx
& Company, Inc.
ThinkEquity
Partners LLC
c/o Morgan
Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
Xxx
Xxxx,
XX 00000
Ladies
and Gentlemen:
The
undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
(“Xxxxxx
Xxxxxxx”)
proposes to enter into an Underwriting Agreement (the “Underwriting
Agreement”)
with
Advanced Magnetics, Inc., a Delaware corporation (the “Company”),
providing for the public offering (the “Public
Offering”)
by the
several Underwriters, including Xxxxxx Xxxxxxx (the “Underwriters”),
of
___ shares (the “Shares”)
of the
common stock, $0.01 par value per share, of the Company (the “Common
Stock”).
To
induce
the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned hereby agrees
that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof
and
ending 90 days after the date of the final prospectus relating to the Public
Offering (the “Prospectus”),
(1) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after
the
completion of the Public Offering, provided
that no
filing under Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”),
shall
be required or shall be voluntarily made in connection with subsequent sales
of
Common Stock or other securities acquired in such open market transactions,
(b)
transfers of shares of Common Stock or any security convertible into Common
Stock as a bona fide gift, (c) transfers of shares of Common Stock or any
security convertible into Common Stock to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided
that any such transfer shall not involve a disposition for value, or (d)
distributions of shares of Common
B-1
Stock
or
any security convertible into Common Stock to limited partners or stockholders
of the undersigned; provided
that in
the case of any transfer or distribution pursuant to clause (b), (c) or
(d), (i) each donee, distributee or trustee shall sign and deliver a lock-up
letter substantially in the form of this letter and (ii) no filing under
Section 16(a) of the Exchange Act, reporting a reduction in beneficial
ownership of shares of Common Stock, shall be required or shall be voluntarily
made during the restricted period referred to in the foregoing sentence. For
purposes of this Lock-Up Agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
In addition, the undersigned agrees that, without the prior written consent
of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into
or
exercisable or exchangeable for Common Stock. 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 the undersigned’s shares of Common
Stock except in compliance with the foregoing restrictions.
The
undersigned understands that the Company and the Underwriters are relying upon
this agreement in proceeding toward consummation of the Public Offering. The
undersigned further understands that this agreement is irrevocable and shall
be
binding upon the undersigned’s heirs, legal representatives, successors and
assigns.
Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions. Any Public Offering will only be made pursuant
to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
This
agreement shall automatically terminate if either (1) the Underwriting Agreement
has not been signed by December 12, 2006 or (ii) the Underwriting Agreement
is
terminated in accordance with its terms prior to the closing of the Public
Offering.
[Signature
Page Follows]
B-2
|
Very
truly yours,
|
|
|
(Name)
|
|
|
(Address)
|
B-3
EXHIBIT
C
Advanced
Magnetics, Inc.
$130,386,000
2,103,000
Shares of Common Stock
|
Issuer:
|
Advanced
Magnetics, Inc.
|
|
Symbol:
|
AMAG
(Nasdaq Global Market)
|
|
Size:
|
$130,386,000
|
|
Shares
offered:
|
2,103,000
shares of common stock offered by the Issuer
|
|
Greenshoe:
|
15%
(315,450 shares)
|
|
Price
to public:
|
$62
per share
|
|
Trade
date:
|
December
7, 2006
|
|
Closing
date:
|
December
13, 2006
|
|
CUSIP
No.:
|
00000X000
|
|
Underwriters:
|
Xxxxxx
Xxxxxxx & Co. Incorporated
UBS
Securities LLC
Xxxxxxxxx
& Company, Inc.
ThinkEquity
Partners LLC
|
A
copy of
the prospectus relating to this offering may be obtained by contacting Xxxxxx
Xxxxxxx & Co. Incorporated, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Prospectus Department or by e-mail to xxxxxxxxxx@xxxxxxxxxxxxx.xxx.
C-1
