_______________ SHARES
TRUBION PHARMACEUTICALS, INC.
COMMON STOCK (PAR VALUE $0.0001 PER SHARE)
UNDERWRITING AGREEMENT
______________, 2006
_______________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Pacific Growth Equities, LLC
Lazard Capital Markets, LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Trubion Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the several Underwriters named in Schedule I
hereto (the "Underwriters") _________ shares of its common stock, par value
$0.0001 per share (the "Firm Shares"). The Company also proposes to issue and
sell to the several Underwriters not more than an additional _________ shares of
its common stock, par value $0.0001 per share (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, par value $0.0001 per share, of the
Company to be outstanding after giving effect to the sales contemplated hereby
are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of 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." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock 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 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 preliminary prospectus together with the free writing
prospectuses, if any, each identified in Schedule II 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," "preliminary
prospectus," "Time of Sale Prospectus" and Prospectus shall include the
documents, if any, incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) 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) (i) The Registration Statement, when it became effective, did
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 required to
be stated therein or necessary to make the statements therein not misleading,
(ii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder, (iii) 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,
(iv) 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
(v) 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 (or any amendment or
supplement thereto), the Time of Sale Prospectus or the Prospectus (or any
amendment or supplement thereto) based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) 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
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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 on 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 II hereto, and electronic road shows, if any, 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) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company. The Company does not have any subsidiaries.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus under the captions "Capitalization" and
"Description of Capital Stock."
(g) The shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will not
contravene (i) any provision of applicable law or (ii) the certificate of
incorporation or bylaws of the Company or (iii) any agreement or other
instrument binding upon the Company or (iv) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company, except
in the case of clauses (i) and (iii) as would not, singly or in the aggregate,
have a material adverse effect on the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this
3
Agreement, except such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of the Shares.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company from that set forth in the Time of Sale Prospectus.
(k) There are no legal or governmental proceedings pending or to
the best knowledge of the Company after due inquiry threatened to which the
Company is a party or to which any of the properties of the Company is subject
(i) other than proceedings accurately described in all material respects in the
Time of Sale Prospectus and proceedings that would not have a material adverse
effect on the Company or on the power or ability of the Company to perform its
obligations under this Agreement or to consummate the transactions contemplated
by the Time of Sale Prospectus or (ii) that are required to be described in the
Registration Statement, the Time of Sale Prospectus or the Prospectus and are
not so described; and there are no statutes, regulations, contracts or other
documents to which the Company is subject or by which the Company is bound that
are required to be described in the Registration Statement, the Time of Sale
Prospectus or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(l) 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.
(m) The Company is not, and after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as described
in the Prospectus will not be, required to register as an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended.
(n) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations 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
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, singly or in the
aggregate, be reasonably likely to have a material adverse effect on the
Company.
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(o) 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, singly or in the aggregate, be reasonably likely to have a material
adverse effect on the Company.
(p) Except as described in the Time of Sale Prospectus, there are
no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
or to require the Company to include such securities with the Shares registered
pursuant to the Registration Statement, other than rights which have been
waived.
(q) Subsequent to the respective dates as of which information is
given in each of the Registration Statement, the Time of Sale Prospectus and the
Prospectus, (i) the Company has not incurred any material liability or
obligation, direct or contingent, nor entered into any material transaction;
(ii) the Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and (iii) there has
not been any material change in the capital stock, short-term debt or long-term
debt of the Company, except in each case as described in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus,
respectively.
(r) Except as described in the Time of Sale Prospectus, the
Company has good and marketable title to all personal property owned by it which
is material to the business of the Company, in each case free and clear of all
liens, encumbrances and defects, or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made
of such property by the Company; and any real property and buildings held under
lease by the Company are held by it under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company,
in each case except as described in the Time of Sale Prospectus. The Company
does not own any real property.
(s) Except as described in the Time of Sale Prospectus, the
Company owns or possesses, or can acquire on reasonable terms, all material
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names (collectively, "INTELLECTUAL PROPERTY") currently employed by it in
connection with the business now operated by it, and the Company has not
received any notice of claim of infringement of or conflict with asserted rights
of others with respect to any of the foregoing that, singly or in the aggregate,
if the subject of an
5
unfavorable decision, ruling or finding, would have a material adverse effect on
the Company.
(t) Except as described in the Time of Sale Prospectus, and except
for third party rights already obtained, there are no valid and enforceable
rights of third parties to such Intellectual Property that are necessary for the
manufacture, use, sale or offer for sale of the Company's current configuration
of its product candidates TRU-015 and TRU-016, as described in the Time of Sale
Prospectus.
(u) The Company is not subject to any judgment, order, writ,
injunction or decree of any court or any federal, state, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any arbitrator, nor has it entered into or is it a party
to any contract, which materially restricts or impairs its use of any
Intellectual Property.
(v) Except as described in the Time of Sale Prospectus, there are
no ongoing infringements or misappropriations by others of any Intellectual
Property owned or licensed by the Company in connection with the business now
operated by it or its product candidates, as described in the Time of Sale
Prospectus.
(w) No material labor dispute with the employees of the Company,
except as described in the Time of Sale Prospectus, or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that would be reasonably likely to have
a material adverse effect on the Company.
(x) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which it is engaged; the Company has not been
refused any insurance coverage sought or applied for; and 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 be reasonably likely to have a material adverse effect on the Company,
except as described in the Time of Sale Prospectus.
(y) Except as described in the Time of Sale Prospectus, the
Company possesses all certificates, authorizations and permits issued by the
appropriate federal, state or foreign governmental or regulatory authorities
necessary to conduct its business, including, without limitation, all necessary
U.S. Food and Drug Administration (the "FDA") and applicable foreign regulatory
agency approvals, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on
the Company, except as described in the Time of Sale Prospectus.
6
(z) The Company has operated its business and is currently in
compliance in all material respects with all applicable rules, regulations and
policies of the FDA and any applicable foreign regulatory organization.
(aa) The clinical trials and the human and animal studies described
in the Time of Sale Prospectus were and, if still pending, are being conducted
(to the Company's knowledge, after due inquiry, with respect to such studies
conducted by third parties) in accordance in all material respects with standard
medical and scientific research procedures and all applicable rules, regulations
and policies of the FDA, including current Good Clinical Practices and Good
Laboratory Practices, and all applicable foreign regulatory requirements and
standards.
(bb) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as described in the Time of Sale Prospectus, since the end
of the Company's most recent audited fiscal year, there has been (i) no material
weakness in the Company's internal control over financial reporting (whether or
not remediated) and (ii) no change in the Company's internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting.
(cc) Except as described in the Registration Statement containing
the Time of Sale Prospectus, the Company has not sold, issued or distributed any
shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S of, the
Securities Act, other than shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(dd) The Company has established and maintains disclosure controls
and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"). Such disclosure controls and procedures
are designed to ensure that material information relating to the Company is made
known to the Company's principal executive officer and its principal financial
officer by others within those entities, particularly during the periods in
which the periodic reports required under the Exchange Act are being prepared.
Such disclosure controls and procedures are effective in timely alerting the
Company's principal executive officer and principal financial officer to
material information required to be included in the Company's periodic reports
required under the Exchange Act.
7
(ee) There are no outstanding loans made by the Company to any
executive officer (as defined in Rule 3b-7 under the Exchange Act) or member of
the board of directors of the Company. The Company has not since the initial
filing of the Registration Statement with the Commission, taken any action
prohibited by Section 402 of the Xxxxxxxx-Xxxxx Act of 2002, as amended.
(ff) The Company has operated its business and currently is in
compliance in all material respects with all applicable federal, state and
foreign laws and all applicable rules, regulations and policies of any domestic
or foreign regulatory organization, except where the failure to be in compliance
would not, singly or in the aggregate, be reasonably likely to have a material
adverse effect on the Company.
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 I hereto
opposite its name at $______ a share (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 _________ Additional Shares
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 this Agreement. 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 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 I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
3. Terms of 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 initially at
$______ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that
8
represents a concession not in excess of $______ a share under the Public
Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession not in excess of $_____ a share to any Underwriter or to
certain other dealers.
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
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on ____________, 2006,
or at such other time on the same or such other date, not later than _________,
2006, as shall 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 against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, 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 _______, 2006, as shall be
designated in writing by you.
The Firm Shares and 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. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or an 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 obligations
of the Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than 4:00 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the securities of the Company by any "nationally recognized
statistical rating organization," as
9
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) 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
from that set forth in the Time of Sale Prospectus 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 set forth in Section 5(a)(i) above and 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 in
all material respects 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 Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, outside
counsel for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing under, and by virtue of, the laws of the jurisdiction of its
incorporation, and is in good standing under such laws; the Company has
the corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus; and the
Company is qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company;
(ii) the authorized capital stock of the Company as of
[June 30, 2006] was as set forth in each of the Time of Sale Prospectus
and the Prospectus under the "Actual" column under the caption
"Capitalization;"
(iii) the shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable;
(iv) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
10
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights pursuant
to the Company's Certificate of Incorporation or Bylaws, the Delaware
General Corporation Law, or, to such counsel's knowledge, pursuant to
any contract or written agreement;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement do
not contravene any provision of the Certificate of Incorporation or
Bylaws of the Company, any provision of any applicable federal or
Washington State law, rule or regulation or of the Delaware General
Corporation Law, or to such counsel's knowledge after inquiry, any
agreement or other instrument binding upon the Company that is [filed
as an exhibit to the Registration Statement] or, to such counsel's
knowledge after inquiry, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement;
(vii) the statements relating to legal matters, documents
or proceedings included in (A) the Time of Sale Prospectus and the
Prospectus under the captions "Risk Factors--Risks Related to our
Business--If we are unable to obtain, maintain and enforce our
proprietary rights, we may not be able to compete effectively or
operate profitably," "Risk Factors--Risks Related to our Business--We
cannot guarantee that our processes or product candidates will not
conflict with the rights of others," "Risk Factors--Risks Related to
our Business--We may incur substantial costs as a result of litigation
or other proceedings relating to patent and other intellectual property
rights," and "Business--Intellectual Property", "Management--Employee
Benefit Plans," "Management--Limitation on Liability and
Indemnification Matters," "Certain Relationships and Related Party
Transactions," "Description of Capital Stock," "Shares Eligible for
Future Sale," "Material United States Tax Considerations for Non-United
States Holders of Common Stock" and "Underwriters" and (B) the
Registration Statement in Items 14 and 15, in each case fairly
summarize in all material respects such matters, documents or
proceedings;
(viii) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company is
a party or to which any of the properties of the Company is subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other
11
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
(ix) the Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus will not be, required to
register as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(x) the Registration Statement was declared effective
under the Securities Act; any required filing of the Prospectus, and
any supplements thereto, pursuant to Rule 424(b) have been made in the
manner and within the time period required by Rule 424(b); and to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued, and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act.
In addition, the opinion shall include a statement from such counsel to
the effect that (i) such counsel has participated in conferences with certain
officers and other representatives of the Company, the representatives of the
Underwriters, counsel for the Underwriters and the independent public
accountants of the Company, at which conferences the contents of the
Registration Statement, the Time of Sale Prospectus and the Prospectus and
related matters were reviewed and discussed, and (ii) although such counsel does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement, the Time of Sale Prospectus
or the Prospectus, nothing has come to the attention of such counsel through
such review and discussion as described therein, that causes such counsel to
believe that the Registration Statement (except for the financial statements and
financial schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief), at the time it became
effective, or the Time of Sale Prospectus (except for the financial statements
and financial schedules and other financial and statistical data included
therein, as to which such counsel need not express any belief) as of the date of
this Agreement or as amended or supplemented, if applicable, as of the Closing
Date or the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to which
such counsel need not express any belief) as of its date or as amended or
supplemented, if applicable, as of the Closing Date contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In addition, the
opinion shall include a statement from such counsel that the Registration
Statement and the Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to which
such counsel need not express any belief) comply as to form in all material
12
respects to the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, special
intellectual property counsel for the Company, dated the Closing Date, in the
form set forth in Annex A hereto.
(e) The Underwriters shall have received on the Closing Date an
opinion of D Young & Co., European Union patent counsel for the Underwriters,
dated the Closing Date, in form and substance satisfactory to the Underwriters.
(f) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(iv), 5(c)(v),
5(c)(vii) (but only as to the statements in each of the Time of Sale Prospectus
and the Prospectus under "Description of Capital Stock" and "Underwriters") and
the last paragraph of Section 5(c)(x) above.
With respect to the last paragraph of Section 5(c)(x) above, Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, and Xxxxx Xxxx & Xxxxxxxx
may state that their opinions and beliefs are based upon their participation in
the preparation of the Registration Statement, the Time of Sale Prospectus and
the Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinions of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation and D Young & Co. described above in Sections 5(c), 5(d) and 5(e),
respectively, shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(g) 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
Ernst & Young 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.
(h) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and each officer, director and stockholder of the
Company and Wyeth 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.
13
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:
(a) To furnish to you, without charge, five signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in Section 6(e) or 6(f) below, as
many copies of the Time of Sale Prospectus, the Prospectus 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, and to file with the
Commission within the applicable period specified in Rule 424(b) under the
Securities Act any prospectus required to be filed pursuant to such Rule.
(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
Company or the Underwriters, it is necessary to amend or supplement the Time of
Sale Prospectus to comply
14
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 under which they were made, 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 Company or the
Underwriters the Prospectus (or in 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 Company or 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 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 earnings 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
15
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 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 delivery of the Shares to the Underwriters,
(iii) 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, (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 fees and expenses
in connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and 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 costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the Company, and the
travel and lodging expenses of the representatives and officers of the Company
and any such consultants, and the costs incurred in connection with the road
show (which shall include costs of lodging and transport and one-half of the
costs of any aircraft chartered in connection with the road show), (ix) the
document production charges and expenses associated with printing this Agreement
and (x) 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.
The Company also covenants with each Underwriter that, without the
prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
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
16
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 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 restrictions contained in the preceding paragraph shall not apply
to (a) the Shares to be sold hereunder, (b) the issuance and sale of shares of
Common Stock in a concurrent private placement to Wyeth in an amount equal to
20% of the number of shares sold in this offering, (c) the issuance of shares
of, or options to purchase shares of, Common Stock, to employees, officers,
directors, advisors or consultants of the Company pursuant to employee benefit
plans disclosed in the Prospectus or an employee benefit plan assumed by the
Company in a merger or acquisition transaction, (d) the filing of a registration
statement on Form S-8 for the registration of shares of Common Stock issued
pursuant to employee benefit plans disclosed in the Prospectus or an employee
benefit plan assumed by the Company in a merger or acquisition transaction or
(e) the issuance of shares of Common Stock or any securities convertible into or
exercisable or exchangeable for common stock in connection with a merger or
acquisition transaction; provided that prior to any issuance pursuant to clause
(b), (c) and (e), the Company shall cause each recipient of such shares or
options to execute and deliver to you a "lock-up" agreement substantially in the
form of Exhibit A hereto. Notwithstanding the foregoing, if (1) during the last
17 days of the 180-day restricted period the Company issues an earnings release
or material news or a material event relating to the Company occurs; or (2)
prior to the expiration of the 180-day restricted period, the Company announces
that it will release earnings results during the 16-day period beginning on the
last day of the 180-day period, 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 Company shall promptly notify Xxxxxx Xxxxxxx & Co.
Incorporated of any earnings release, news or event that may give rise to an
extension of the initial 180-day restricted period.
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,
17
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) of 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
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
18
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 Xxxxxx Xxxxxxx &
Co. Incorporated, 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 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, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one
19
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
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. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by 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 Nasdaq Global Market, the American Stock Exchange, 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
20
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.
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 I 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
21
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)
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.
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 in care of Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate Desk, with a
copy to the
22
Legal Department; and if to the Company shall be delivered, mailed or sent to
0000 0xx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000.
23
Very truly yours,
TRUBION PHARMACEUTICALS, INC.
By:
-------------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Pacific Growth Equities LLC
Lazard Capital Markets, LLC
Acting severally on behalf of themselves
and the several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------------
Name:
Title:
24
SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated......................
Banc of America Securities LLC.........................
Pacific Growth Equities, LLC...........................
Lazard Capital Markets, LLC............................
---------------------
Total:........................................
=====================
25
SCHEDULE II
TIME OF SALE PROSPECTUS
1. Preliminary Prospectus issued __________, 2006
2.
II-1
ANNEX A
FORM OF OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX,
SPECIAL INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY
1
EXHIBIT A
[FORM OF LOCK-UP LETTER]
_____________, 2006
Xxxxxx Xxxxxxx & Co. Incorporated
Banc of America Securities LLC
Pacific Growth Equities, LLC
Lazard Capital Markets, LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentleman:
The undersigned understands that a group of underwriters (the
"UNDERWRITERS"), for whom Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX XXXXXXX")
is acting as representative, proposes to enter into an Underwriting Agreement
(the "UNDERWRITING AGREEMENT") with Trubion Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters of shares (the "SHARES") of the common
stock, par value $0.001 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, from the date that all
officers, directors and 1% or greater security holders of the Company execute an
agreement similar to this agreement and ending 180 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.
Exhibit-1
The foregoing sentence shall not apply to transactions relating to (a)
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; or (b) transfers of shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock (i)
to an immediate family member or a trust formed for the benefit of an immediate
family member, (ii) by gift, will or intestacy, (iii) if the undersigned is a
corporation, partnership or other business entity (A) to another corporation,
partnership or other business entity that is a direct or indirect affiliate of
the undersigned or (B) as part of a distribution without consideration by the
undersigned to its equity holders on a pro rata basis, (iv) if the undersigned
is a trust, to a trustor or beneficiary of the trust or (v) in connection with
the "cashless" exercise of options to purchase shares of Common Stock for
purposes of exercising such options pursuant to employee benefit plans disclosed
in the Prospectus; provided that in the case of any transfer or distribution
pursuant to clause (b), (x) each donee or distributee shall sign and deliver a
lock-up letter substantially in the form of this letter and (y) 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 paragraph, "immediate family" means the spouse, domestic partner, lineal
descendants, father, mother, brother or sister of the transferor.
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 180 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.
If:
(1) during the last 17 days of the 180-day restricted period the
Company issues an earnings release or a release regarding other material news or
a material event relating to the Company; or
(2) prior to the expiration of the 180-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day restricted period;
Exhibit-2
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 undersigned shall not engage in any transaction that may be
restricted by this agreement during the 34-day period beginning on the last day
of the initial 180-day restricted period unless the undersigned requests and
receives prior written confirmation (which may be delivered by email, fax or
mail) from the Company or Xxxxxx Xxxxxxx that the restrictions imposed by this
agreement have expired.
In the event that Xxxxxx Xxxxxxx on behalf of the Underwriters releases
any shares of Common Stock from the restrictions set forth above, the same
percentage of shares of Common Stock held by the undersigned shall be
immediately and fully released; provided that Xxxxxx Xxxxxxx on behalf of the
Underwriters will not be obligated to release any shares of Common Stock held by
the undersigned unless and until more than 3% of the Company's total outstanding
shares of Common Stock have been released from such restrictions; provided
further that the undersigned will not be entitled to make any demand for or
exercise any right with respect to the registration of such released shares of
Common Stock until the expiration of this agreement. In the event that Xxxxxx
Xxxxxxx releases any shares of Common Stock from the restrictions set forth
above, it shall use its commercially reasonable efforts to notify the
undersigned within three business days that the same percentage of shares of
Common Stock held by the undersigned has been released; provided that the
failure to give such notice shall not give rise to any claim against or result
in liability to Xxxxxx Xxxxxxx or the Underwriters.
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. Notwithstanding anything to the contrary contained
herein, this agreement will terminate and the undersigned will be released from
all of its obligations hereunder if (a) the closing of the Public Offering shall
not have occurred on or before December 31, 2006, or (b) (i) if the Company
withdraws the registration statement registering the Shares, (iii) the Company
deregisters all of the Shares covered by such registration statement or (iii)
the Underwriting Agreement is executed but is terminated prior to payment for
and delivery of any Shares.
Exhibit-3
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.
Very truly yours,
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(Name)
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(Address)
Exhibit-4
