19,000,000 Shares ARIAD Pharmaceuticals, Inc. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Execution Copy
19,000,000 Shares
ARIAD Pharmaceuticals, Inc.
Common Stock
August 4, 2009
Xxxxxxxxxxx & Co. Inc.
as Representative of the several
Underwriters named in Schedule I hereto
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Representative of the several
Underwriters named in Schedule I hereto
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to sell to you, Xxxxxxxxxxx & Co. Inc., and the other
underwriters named on Schedule I to this Agreement (the “Underwriters”), for whom you are acting as
Representative (the “Representative”), an aggregate of
19,000,000 shares (the “Firm Shares”) of the
Company’s common stock, $0.001 par value per share (the “Common Stock”). In addition, the Company
proposes to grant to the Underwriters an option to purchase up to an
additional 2,850,000 shares
(the “Company Option Shares”) of Common Stock from the Company for the purpose of covering over
allotments in connection with the sale of the Firm Shares. The Firm Shares and the Option Shares
are collectively called the “Shares.”
The Company has prepared and filed in conformity with the requirements of the Securities Act
of 1933, as amended (the “Securities Act”), and the published rules and regulations thereunder (the
“Rules”) adopted by the Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-3 declared effective by the Commission on February 6, 2007 (No. 333-140333),
including a related prospectus dated February 16, 2007 (the “Base Prospectus”) relating to Common
Stock that may be sold from time to time by the Company in accordance with Rule 415 of the
Securities Act, and such amendments thereof as may have been required to the date of this
Agreement. Copies of such Registration Statement (including all amendments thereof and all
documents deemed incorporated by reference therein) and of the related Base Prospectus have
heretofore been delivered by the Company or are otherwise available to you.
The term “Registration Statement” as used in this Agreement means the registration statement,
including all exhibits, financial schedules and all documents and information deemed to be part of
the Registration Statement by incorporation by reference or otherwise, as amended from time to
time, including the information (if any) contained in the form of final prospectus
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filed with the Commission pursuant to Rule 424(b) of the Rules and deemed to be part thereof
at the time of effectiveness pursuant to Rule 430A of the Rules.
If the Company has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules (the “462(b) Registration Statement”), then any reference
herein to the Registration Statement shall also be deemed to include such 462(b) Registration
Statement. The term “Preliminary Prospectus” means the Base Prospectus and any preliminary
prospectus supplement used or filed with the Commission pursuant to Rule 424 of the Rules, in the
form provided to the Underwriters by the Company for use in connection with the offering of the
Shares. The term “Prospectus” means the Base Prospectus, any Preliminary Prospectus and any
amendments or further supplements to such prospectus, and including, without limitation, the final
prospectus supplement, filed pursuant to and within the limits described in Rule 424(b) with the
Commission in connection with the proposed sale of the Shares contemplated by this Agreement
through the date of such prospectus supplement. The term “Effective Date” shall mean each date that
the Registration Statement and any post-effective amendment or amendments thereto became or become
effective. Unless otherwise stated herein, any reference herein to the Registration Statement, any
Preliminary Prospectus, the Statutory Prospectus (as hereinafter defined) and the Prospectus shall
be deemed to refer to and include the documents incorporated by reference therein, including
pursuant to Item 12 of Form S-3 under the Securities Act, which were filed under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) on or before the date hereof or are so filed
hereafter. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to
the Registration Statement, any Preliminary Prospectus, the Statutory Prospectus or the Prospectus
shall be deemed to refer to and include any such document filed or to be filed under the Exchange
Act after the date of the Registration Statement, any such Preliminary Prospectus, the Statutory
Prospectus or Prospectus, as the case may be, and deemed to be incorporated therein by reference.
The Company understands that the Underwriters propose to make a public offering of the Shares,
as set forth in and pursuant to the Statutory Prospectus and the Prospectus, as soon after the
Effective Date and the date of this Agreement as the Representative deems advisable. The Company
hereby confirms that the Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus, and each Issuer Free Writing Prospectus (as hereinafter
defined) and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the Underwriters).
1. Sale, Purchase, Delivery and Payment for the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price
of $1.645 per share (the “Initial Price”), the number of Firm Shares set forth opposite the name of
such Underwriter under the column “Number of Firm Shares to be Purchased” on Schedule I to this
Agreement, subject to adjustment in accordance with Section 9 hereof.
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(b) The Company hereby grants to the several Underwriters an option to purchase, severally and
not jointly, all or any part of the Option Shares at the Initial Price. The number of Option
Shares to be purchased by each Underwriter shall be the same percentage (adjusted by the
Representative to eliminate fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option may be exercised
only to cover over-allotments in the sales of the Firm Shares by the Underwriters and may be
exercised in whole or in part (but not more than once) at any time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date (as defined below), and
from time to time thereafter within 30 days after the date of this Agreement, in each case upon
written, facsimile or telegraphic notice, or verbal or telephonic notice confirmed by written,
facsimile or telegraphic notice, by the Representative to the Company no later than 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date or at least two business
days before the Option Shares Closing Date (as defined below), as the case may be, setting forth
the number of Option Shares to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
(c) Payment of the purchase price for, and delivery of certificates for, the Firm Shares shall
be made at the offices of Xxxxxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., New York City time, on the third business day following the date of this Agreement or
at such time on such other date, not later than ten (10) business days after the date of this
Agreement, as shall be agreed upon by the Company and the Representative (such time and date of
delivery and payment are called the “Firm Shares Closing Date”). In addition, in the event that
any or all of the Option Shares are purchased by the Representative, payment of the purchase price,
and delivery of the certificates, for such Option Shares shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative and the Company, on
each date of delivery as specified in the notice from the Representative to the Company (such time
and date of delivery and payment are called the “Option Shares Closing Date”). The Firm Shares
Closing Date and any Option Shares Closing Date are called, individually, a “Closing Date” and,
together, the “Closing Dates.”
(d) Payment shall be made to the Company by wire transfer of immediately available funds or by
certified or official bank check or checks payable in New York Clearing House (same day) funds
drawn to the order of the Company, against delivery of the certificates to the Representative for
the respective accounts of the Underwriters for the Shares to be purchased by them.
(e) Certificates evidencing the Shares shall be registered in such names and shall be in such
denominations as the Representative shall request at least two full business days before the Firm
Shares Closing Date or, in the case of Option Shares, on the day of notice of exercise of the
option as described in Section 1(b) and shall be delivered by or on behalf of the Company to the
Representative through the facilities of the Depository Trust Company (“DTC”) for the account of
the Underwriters. The Company will cause the certificates representing the Shares to be made
available for checking and packaging, at such place as is designated by the Representative, on the
full business day before the Firm Shares Closing Date (or the Option Shares Closing Date in the
case of the Option Shares).
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2. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter as of the date hereof, as of the Firm Shares Closing Date and as of each Option
Shares Closing Date (if any), as follows:
(a) The Company meets the requirements for use of Form S-3 under the Securities Act including
the transaction requirements set forth in General Instruction 1.B.1 of such form. The Company filed
with the Commission the Registration Statement on such Form, including a Base Prospectus, for
registration under the Securities Act of the offering and sale of the Shares, and the Company has
prepared and used a Preliminary Prospectus in connection with the offer and sale of the Shares.
When the Registration Statement or any amendment thereof or supplement thereto was or is declared
effective and as of the date of the most recent amendment to the Registration Statement, it (i)
complied or will comply, in all material respects, with the requirements of the Securities Act and
the Rules and the Exchange Act and the rules and regulations of the Commission thereunder and (ii)
did not or will not, contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein not
misleading. When any Preliminary Prospectus or Prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any amendment thereto or pursuant to Rule
424 of the Rules) and when any amendment thereof or supplement thereto was first filed with the
Commission, such Preliminary Prospectus or Prospectus as amended or supplemented complied in all
material respects with the applicable provisions of the Securities Act and the Rules and did not as
of the date thereof, does not, together with the Pricing Information (as defined below), as of the
date hereof, and will not, together with the Pricing Information, as of the Closing Date, contain
any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. If applicable, each Preliminary Prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T. Notwithstanding the foregoing, none of the representations
and warranties in this paragraph 2(a) shall apply to statements in, or omissions from, the
Registration Statement, any Preliminary Prospectus or the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by the Underwriters
specifically for use in the Registration Statement, any Preliminary Prospectus or the Prospectus.
With respect to the preceding sentence, the Company acknowledges that the only information
furnished in writing by the Underwriters for use in the Registration Statement, any Preliminary
Prospectus or the Prospectus is the statements contained in the first paragraph, the fourth sentence of the fourth paragraph, the eleventh paragraph, the fifteenth paragraph and the
sixteenth paragraph under the caption “Underwriting” in the Prospectus (collectively, the
“Underwriting Information”).
(b) As of the Applicable Time (as hereinafter defined), neither (i) the Statutory Prospectus
(as hereinafter defined) together with the Pricing Information (collectively, the “General
Disclosure Package”), nor (ii) any individual Issuer Free Writing Prospectus when considered
together with the General Disclosure Package, included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to
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statements in or omissions in the General Disclosure Package made in reliance upon and in
conformity with the Underwriter Information.
Each Issuer Free Writing Prospectus, including any electronic road show (including without
limitation any “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities
Act) (each, a “Road Show”) (i) is identified in Schedule III hereto and (ii) complied when issued,
and complies, in all material respects with the requirements of the Securities Act and the Rules
and the Exchange Act and the rules and regulations of the Commission thereunder.
As used in this Section and elsewhere in this Agreement:
“Applicable Time” means 9:00 a.m. (Eastern time) on the date of this Underwriting Agreement.
“Statutory Prospectus” as of any time means the Preliminary Prospectus relating to the Shares
immediately prior to the Applicable Time, including any document incorporated by reference therein.
“Issuer Free Writing Prospectus” means each “free writing prospectus” (as defined in Rule 405
of the Rules) prepared by or on behalf of the Company or used or referred to by the Company in
connection with the offering of the Shares, including, without limitation, each Road Show.
“Pricing Information” means the information set forth in Schedule IV hereto.
(c) The Registration Statement is effective under the Securities Act and no stop order
preventing or suspending the effectiveness of the Registration Statement or suspending or
preventing the use of any Preliminary Prospectus, the Prospectus or any “free writing prospectus”,
as defined in Rule 405 under the Rules, has been issued by the Commission and, to the knowledge of
the Company, no proceedings for that purpose have been instituted or are threatened under the
Securities Act. Any required filing of any Preliminary Prospectus and/or the Prospectus and any
supplement thereto pursuant to Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b). Any material required to be filed by the
Company pursuant to Rule 433(d) of the Rules has been or will be made in the manner and within the
time period required by such Rules.
(d) The documents incorporated by reference in the Registration Statement, any Preliminary
Prospectus and the Prospectus, at the time they became effective or were filed with the Commission,
as the case may be, complied in all material respects with the requirements of the Securities Act
and the Rules or the Exchange Act and the rules and regulations of the Commission thereunder, as
applicable, and none of such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the Registration Statement, any
Preliminary Prospectus and the Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will
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conform in all material respects to the requirements of the Securities Act and the Rules or
the Exchange Act and the rules and regulations of the Commission thereunder, as applicable, and
will not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading.
(e) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the Shares or until any earlier date
that the Company notified or notifies the Representative as described in the next sentence, did
not, does not and will not include any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof that has not been
superseded or modified, the Statutory Prospectus or the Prospectus.
If at any time following issuance of an Issuer Free Writing Prospectus there occurred or
occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted
or would conflict with the information contained in the Registration Statement, the Statutory
Prospectus or the Prospectus or included or would include an untrue statement of a material fact or
omitted or would omit to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances prevailing at the subsequent
time, not misleading, the Company has promptly notified or will promptly notify the Representative
and has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free
Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.
(f) None of the Company, its directors or its officers has distributed nor will distribute
prior to the later of (i) the Firm Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in connection with the offering
and sale of the Shares other than any Preliminary Prospectus, the Prospectus, the Registration
Statement and other materials, if any, permitted by the Securities Act and consistent with Section
5(d) below.
(g) At the earliest time after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the
Rules) of the Shares and (ii) at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules, including (but not limited to) the Company or any
other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor
or having been made the subject of a judicial or administrative decree or order as described in
Rule 405 of the Rules.
(h) The Company and each of its subsidiaries (as defined in Rule 405 of the Rules) has been
duly organized and is validly existing as corporations or other legal entities in good standing (or
the foreign equivalent thereof) under the laws of their respective jurisdictions of organization.
The Company and each of its subsidiaries is duly qualified to do business and is in good standing
as foreign corporations or other legal entities in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses require such
qualification and have all power and authority (corporate or other) necessary to own or hold
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their respective properties and to conduct the businesses in which each is engaged, except
where the failure to so qualify or have such power or authority (i) would not have, singularly or
in the aggregate, a material adverse effect on the condition (financial or otherwise), results of
operations, assets, business or prospects of the Company and its subsidiaries taken as a whole, or
(ii) impair in any material respect the ability of the Company to perform its obligations under
this Agreement or to consummate any transactions contemplated by the Agreement, the General
Disclosure Package or the Prospectus (any such effect as described in clauses (i) or (ii), a
“Material Adverse Effect”). The Company owns or controls, directly or indirectly, only the
following corporations, partnerships, limited liability partnerships, limited liability companies,
associations or other entities: (i) ARIAD Corporation, a Delaware corporation; (ii) ARIAD Pharma,
S.A., a Greece company; and (iii) ARIAD Pharma, Ltd., a United Kingdom company.
(i) The Company has the full right, power and authority to enter into this Agreement, and to
perform and to discharge its obligations hereunder; and this Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms, except as rights to indemnity and contribution
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.
(j) The Shares to be issued and sold by the Company to the Underwriters hereunder have been
duly and validly authorized and, when issued and delivered against payment therefor as provided
herein, will be duly and validly issued, fully paid and non-assessable and free of any preemptive
or similar rights and will conform to the description thereof contained in the General Disclosure
Package and the Prospectus.
(k) The Company has an authorized capitalization as set forth in the Statutory Prospectus, and
all of the issued shares of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, have been issued in compliance with federal and state
securities laws, and conform to the description thereof contained in the General Disclosure Package
and the Prospectus. As of December 31, 2008, there were 71,365,339 shares of Common Stock issued
and outstanding, no shares of Preferred Stock, par value $0.001 of the Company issued and
outstanding, and 7,895,428 shares of Common Stock were issuable upon the exercise of all options,
warrants and convertible securities outstanding as of such date. Since such date, the Company has
not issued any securities, other than Common Stock of the Company issued pursuant to the exercise
of stock options previously outstanding under the Company’s stock plans or, the issuance of
restricted Common Stock under the Company’s stock plans, the issuance of Common Stock pursuant to
employee stock purchase plans, the issuance of Common Stock to certain shareholders of the
Company’s former majority-owned subsidiary, ARIAD Gene Therapeutics, Inc. (“AGTI”), in connection
with the merger of AGTI with and into the Company and the issuance of Common Stock, warrants to
purchase Common Stock, and shares of Common Stock issuable upon exercise of such warrants to
certain purchasers pursuant to the Subscription Agreements entered into in connection with the
Company’s registered offering in February 2009. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of the Company’s capital stock have been
duly authorized and validly issued and were issued in compliance with federal and
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state securities laws. The exercise price of each option to purchase Common Stock is no less
than the fair market value of a share of Common Stock as determined on the date of grant of such
option. All grants of options to purchase Common Stock were validly issued and properly approved
by the Board of Directors of the Company in material compliance with the terms of the plans under
which such options were issued and were recorded on the Company’s financial statements in
accordance with generally accepted accounting principles in the United States (“GAAP”), and no such
grants involved any “back dating”, “forward dating,” “spring loading” or similar practices with
respect to the effective date of grant. The Common Stock and the Shares conform in all material
respects to all statements in relation thereto contained in the Registration Statement and the
Statutory Prospectus and the Prospectus. None of the outstanding shares of Common Stock was issued
in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. There are no authorized or outstanding shares of capital
stock, options, warrants, preemptive rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock
of the Company or any of its subsidiaries other than those described above or accurately described
in the General Disclosure Package. The description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted thereunder, as described
in the General Disclosure Package and the Prospectus, accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options and rights.
(l) All the outstanding shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and, except to the extent set
forth in the General Disclosure Package or the Prospectus, are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or any other claim of any third
party, except as set forth in the security agreements, dated March 12, 2003 by and between the
Company and certain subsidiaries and Citizens Bank of Massachusetts.
(m) The execution, delivery and performance of this Agreement by the Company, the issue and
sale of the Shares by the Company and the consummation of the transactions contemplated hereby will
not (with or without notice or lapse of time or both) conflict with or result in a breach or
violation of any of the terms or provisions of, constitute a default or Debt Repayment Triggering
Event (as defined below) under, give rise to any right of termination or other right or the
cancellation or acceleration of any right or obligation or loss of a benefit under, or give rise to
the creation or imposition of any lien, encumbrance, security interest, claim or charge upon any
property or assets of the Company or any subsidiary pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws (or analogous governing
instruments, as applicable) of the Company or any of its subsidiaries or any law, statute, rule,
regulation, judgment, order or decree of any court or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or any of their properties
or assets. A “Debt Repayment Triggering Event” means any event or condition that gives, or with the
giving of notice or lapse of time would give the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such
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holder’s behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.
(n) Except for the registration of the Shares under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be required under the Exchange
Act and applicable state or foreign securities laws, the Financial Industry Regulatory Authority
(“FINRA”) and the Nasdaq Global Market (“Nasdaq GM”) in connection with the offering and sale of
the Shares by the Company, no consent, approval, authorization or order of, or filing,
qualification or registration with, any court or governmental agency or body, foreign or domestic,
which has not been made, obtained or taken and is not in full force and effect, is required for the
execution, delivery and performance of this Agreement by the Company, the offer or sale of the
Shares or the consummation of the transactions contemplated hereby.
(o) Deloitte & Touche LLP (the “Auditor”), who have audited certain financial statements and
related schedules included or incorporated by reference in the Registration Statement, the General
Disclosure Package and the Prospectus, and have audited the Company’s internal control over
financial reporting, is an independent registered public accounting firm as required by the
Securities Act and the Rules and Regulations and the Public Company Accounting Oversight Board
(United States). Except as pre-approved in accordance with the requirements set forth in Section
10A of the Exchange Act, Deloitte & Touche LLP has not been engaged by the Company to perform any
“prohibited activities” (as defined in Section 10A of the Exchange Act).
(p) The financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package, the Prospectus and in the Registration
Statement fairly present in all material respects the financial position and the results of
operations, changes in stockholders’ equity, and cash flows of the Company and its consolidated
subsidiaries and other consolidated entities at the respective dates or for the respective periods
therein specified. Such statements and related notes and schedules have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved except as may be set forth
in the related notes included or incorporated by reference in the General Disclosure Package and
except that unaudited financial statements may not contain footnotes as required by GAAP. The
financial statements, together with the related notes and schedules, included or incorporated by
reference in the General Disclosure Package and the Prospectus comply in all material respects with
the Securities Act, the Exchange Act, and the Rules and Regulations and the rules and regulations
under the Exchange Act. No other financial statements or supporting schedules or exhibits are
required by the Securities Act or the Rules and Regulations to be described, or included or
incorporated by reference in the Registration Statement, the General Disclosure Package or the
Prospectus. There is no pro forma or as adjusted financial information which is required to be
included in the Registration Statement, the General Disclosure Package, or the Prospectus or a
document incorporated by reference therein in accordance with the Securities Act and the Rules and
Regulations which has not been included or incorporated as so required. Except as described in the
Statutory Prospectus and the Prospectus, there are no material off-balance sheet arrangements (as
defined in Item 303 of Regulation S-K) that have or are reasonably likely to have a material
current or future effect on the Company’s financial condition, revenues or expenses, changes in
financial condition, results of operations, liquidity, capital expenditures or capital resources.
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(q) Neither the Company nor any of its subsidiaries has sustained, since the date of the
latest audited financial statements included or incorporated by reference in the General Disclosure
Package, any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the General Disclosure
Package; and, since such date, there has not been any change in the capital stock (other than the
issuance of Common Stock issued pursuant to the exercise of stock options under the Company’s stock
plans, the issuance of restricted Common Stock under the Company’s stock plans, the issuance of
Common Stock pursuant to employee stock purchase plans, the issuance of Common Stock to certain
shareholders of AGTI in connection with the merger of AGTI with and into the Company and the
issuance of Common Stock, warrants to purchase Common Stock, and shares of Common Stock issuable
upon exercise of such warrants to certain purchasers pursuant to the Subscription Agreements
entered into in connection with the Company’s registered offering in February 2009) or long-term
debt of the Company or any of its subsidiaries, or any material adverse changes, or any development
involving a prospective material adverse change, in or affecting the business, assets, general
affairs, management, financial position, prospects, stockholders’ equity or results of operations
of the Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated
in the General Disclosure Package. Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as disclosed therein, neither the Company nor its
subsidiaries has (A) entered into any material transaction not in the ordinary course of business
or (B) declared or paid any dividend or made any distribution on any shares of its stock or
redeemed, repurchased or otherwise acquired or agreed to redeem, repurchase or otherwise acquire
any shares of its capital stock.
(r) Except as set forth in the General Disclosure Package, there is no legal or governmental
action, suit, claim or proceeding pending to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of its subsidiaries is the subject
which is required to be described in the Registration Statement, the General Disclosure Package or
the Prospectus or a document incorporated by reference therein and is not described therein, or
which, singularly or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could have a Material Adverse Effect or prevent the consummation of the transactions
contemplated hereby; and to the best of the Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(s) Neither the Company nor any of its subsidiaries is in (i) violation of its charter or
by-laws (or analogous governing instrument, as applicable), (ii) default in any respect, and no
event has occurred which, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is subject or (iii)
violation in any respect of any law, ordinance, governmental rule, regulation or court order,
decree or judgment to which it or its property or assets may be subject except, in the case of
clauses (ii) and (iii) of this paragraph (s), for any violations or defaults which, singularly or
in the aggregate, would not have a Material Adverse Effect.
10
(t) The clinical trials conducted by or on behalf of or sponsored by the Company or in which
the Company or its product candidates have participated that are described in the General
Disclosure Package and Prospectus or the results of which are referred to in the General Disclosure
Package or Prospectus were and, if still pending, are being conducted (and with respect to such
clinical trials being conducted on behalf of the Company, are, to the Company’s knowledge, being
conducted) in all material respects in accordance with medical and scientific research procedures
that the Company reasonably believes are appropriate. The descriptions in the General Disclosure
Package and Prospectus of the results of such clinical trials are accurate and fairly present the
data derived from such clinical trials, and the Company has no knowledge of any studies or tests
performed by or on behalf of the Company the results of which are materially inconsistent with or
otherwise materially call into question the results described or referred to in the General
Disclosure Package and Prospectus. Except to the extent disclosed in the General Disclosure Package
and the Prospectus, the Company has not received any notices or other correspondence from the
United States Food and Drug Administration (“FDA”) or any other governmental agency requiring the
termination, suspension or modification of any clinical trials that are described in the General
Disclosure Package or Prospectus or the results of which are referred to in the General Disclosure
Package or Prospectus.
(u) The Company and each of its subsidiaries possesses all licenses, certificates,
authorizations and permits issued by, and have made all declarations and filings with, the
appropriate local, state, federal or foreign regulatory agencies or bodies which are necessary or
desirable for the ownership of their respective properties or the conduct of their respective
businesses as described in the General Disclosure Package and the Prospectus (collectively, the
“Governmental Permits”) except where any failures to possess or make the same, singularly or in the
aggregate, would not have a Material Adverse Effect. The Company and its subsidiaries are in
compliance with all such Governmental Permits; all such Governmental Permits are valid and in full
force and effect, except where the validity or failure to be in full force and effect would not,
singularly or in the aggregate, have a Material Adverse Effect. All such Governmental Permits are
free and clear of any restriction or condition that are in addition to, or materially different
from, those normally applicable to similar licenses, certificates, authorizations and permits.
Neither the Company nor any subsidiary has received notification of any revocation or modification
(or proceedings related thereto) of any such Governmental Permit and the Company has no reason to
believe that any such Governmental Permit will not be renewed.
(v) Neither the Company nor any of its subsidiaries is or, after giving effect to the offering
of the Shares and the application of the proceeds thereof as described in the General Disclosure
Package and the Prospectus, will become an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(w) Neither the Company, its subsidiaries nor any of the Company’s or its subsidiaries’
officers, directors or affiliates has taken or will take, directly or indirectly, any action
designed or intended to stabilize or manipulate the price of any security of the Company, or which
caused or resulted in, or which might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
11
(x) The Company and its subsidiaries own or possess the right to use all material patents,
trademarks, trademark registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, software, databases, know-how, Internet domain names, trade
secrets and other unpatented and/or unpatentable proprietary or confidential information, systems
or procedures, and other intellectual property (collectively, “Intellectual Property”) necessary to
carry on their respective businesses as currently conducted, and as proposed to be conducted and
described in the General Disclosure Package and the Prospectus, and, except as described in the
General Disclosure Package and the Prospectus, the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and its subsidiaries
with respect to the foregoing except for those that could not have a Material Adverse Effect. The
Intellectual Property licenses described in the General Disclosure Package and the Prospectus are
valid, binding upon, and enforceable by or against the parties thereto in accordance to its terms.
The Company and each of its subsidiaries has complied in all material respects with, and is not in
breach nor has received any asserted or threatened claim of breach of, any Intellectual Property
license, except for any such breach that would not, singularly or in the aggregate, have a Material
Adverse Effect, and the Company has no knowledge of any breach or anticipated breach by any other
person to any Intellectual Property license. The Company’s and each of its subsidiary’s businesses
as now conducted and as proposed to be conducted does not and will not infringe or conflict with
any valid patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other Intellectual Property or franchise right of any person. The Company has received no claim
alleging the infringement by the Company or any of its subsidiaries of any patent, trademark,
service xxxx, trade name, copyright, trade secret, license in or other intellectual property right
or franchise right of any person. The Company and each of its subsidiaries has taken all reasonable
steps to protect, maintain and safeguard its rights in all Intellectual Property, including the
execution of appropriate nondisclosure and confidentiality agreements. The consummation of the
transactions contemplated by this Agreement will not result in the loss or impairment of or payment
of any additional amounts with respect to, nor require the consent of any other person in respect
of, the Company’s or any of its subsidiaries’ right to own, use, or hold for use any of the
Intellectual Property as owned, used or held for use in the conduct of its business as currently
conducted. The Company and each subsidiary has at all times complied with all applicable laws
relating to privacy, data protection, and the collection and use of personal information collected,
used, or held for use by the Company or any subsidiary in the conduct of the Company’s or any
subsidiary’s business. No claims have been asserted or, to the Company’s knowledge, threatened
against the Company or any subsidiary alleging a violation of any person’s privacy or personal
information or data rights and the consummation of the transactions contemplated hereby will not
breach or otherwise cause any violation of any law related to privacy, data protection, or the
collection and use of personal information collected, used, or held for use by the Company or any
of its subsidiaries in the conduct of the Company’s or any of its subsidiaries’ businesses. The
Company and each of its subsidiaries take reasonable measures to ensure that such information is
protected against unauthorized access, use, modification, or other misuse.
(y) The Company and each of its subsidiaries has good and marketable title in fee simple to,
or have valid rights to lease or otherwise use, all items of real or personal property which are
material to the business of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, security interests, claims and defects that do not,
singularly or in the aggregate, materially affect the value of such property and do not interfere
12
with the use made and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the General Disclosure Package and the Prospectus, are in full force
and effect, and neither the Company nor any subsidiary has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(z) No labor disturbance by the employees of the Company or any of its subsidiaries exists or,
to the best of the Company’s knowledge, is threatened, and the Company is not aware of any existing
or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal
suppliers, manufacturers, customers or contractors, that could reasonably be expected, singularly
or in the aggregate, to have a Material Adverse Effect. The Company is not aware that any key
employee or significant group of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary. The Company is not aware of any threatened or
pending litigation between the Company or its subsidiaries and any of its executive officers which,
if adversely determined, could have a Material Adverse Effect.
(aa) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to
time (the “Code”)) or “accumulated funding deficiency” (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the
thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or
could reasonably be expected to occur with respect to any employee benefit plan of the Company or
any of its subsidiaries which could, singularly or in the aggregate, have a Material Adverse
Effect. Each employee benefit plan of the Company or any of its subsidiaries is in compliance in
all material respects with applicable law, including ERISA and the Code. The Company and its
subsidiaries have not incurred and could not reasonably be expected to incur liability under Title
IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in
ERISA). Each pension plan for which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has
occurred, whether by action or by failure to act, which could, singularly or in the aggregate,
cause the loss of such qualification.
(bb) The Company and its subsidiaries are in compliance with all foreign, federal, state and
local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous
or toxic substances or waste and protection of health and safety or the environment which are
applicable to their businesses (“Environmental Laws”), except where the failure to comply would
not, singularly or in the aggregate, have a Material Adverse Effect. There has been no storage,
generation, transportation, handling, treatment, disposal, discharge, emission, or other release of
any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries (or, to the Company’s knowledge, any other entity for whose acts
or omissions the Company or any of its subsidiaries is or may
13
otherwise be liable) upon any of the property now or previously owned or leased by the Company
or any of its subsidiaries, or upon any other property, in violation of any law, statute,
ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law,
statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or liability which would not have,
singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect;
and there has been no disposal, discharge, emission or other release of any kind onto such property
or into the environment surrounding such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge, except for any such disposal,
discharge, emission, or other release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material Adverse Effect. In the ordinary
course of business, the Company and its subsidiaries conducts periodic reviews of the effect of
Environmental Laws on their business and assets, in the course of which they identify and evaluate
associated costs and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with Environmental Laws or
Governmental Permits issued thereunder, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such reviews, the Company and its
subsidiaries have reasonably concluded that such associated costs and liabilities would not have,
singularly or in the aggregate, a Material Adverse Effect.
(cc) The Company and its subsidiaries, each (i) has timely filed all necessary federal, state,
local and foreign tax returns, and all such returns were true, complete and correct, (ii) has paid
all federal, state, local and foreign taxes, assessments, governmental or other charges due and
payable for which it is liable, including, without limitation, all sales and use taxes and all
taxes which the Company or any of its subsidiaries is obligated to withhold from amounts owing to
employees, creditors and third parties, and (iii) does not have any tax deficiency or claims
outstanding or assessed or, to the best of its knowledge, proposed against any of them, except
those, in each of the cases described in clauses (i), (ii) and (iii) of this paragraph (cc), that
would not, singularly or in the aggregate, have a Material Adverse Effect. There are no tax audits
or investigations pending, which if adversely determined would have a Material Adverse Effect. The
Company and its subsidiaries, each has not engaged in any transaction which is a corporate tax
shelter or which could be characterized as such by the Internal Revenue Service or any other taxing
authority. The accruals and reserves on the books and records of the Company and its subsidiaries
in respect of tax liabilities for any taxable period not yet finally determined are adequate to
meet any assessments and related liabilities for any such period, and since December 31, 2008, the
Company and its subsidiaries each has not incurred any liability for taxes other than in the
ordinary course.
(dd) The Company and each of its subsidiaries carries, or is covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of their respective businesses and
the value of their respective properties and as is customary for companies engaged in similar
businesses in similar industries. The Company has no reason to believe that it or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to
conduct its business as now conducted and at a cost that would not result in a Material Adverse
Effect. Neither the Company nor any of its subsidiaries has been denied any insurance coverage that
they have sought or for which they have applied.
14
(ee) The Company and its subsidiaries each maintains a system of internal accounting and other
controls sufficient to provide reasonable assurances 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 GAAP 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. Except as described in the General Disclosure Package, since the end of the Company’s
most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (B) 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.
(ff) The minute books of the Company and each of its subsidiaries that would be a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the Exchange Act (such a
significant subsidiary of the Company, a “Significant Subsidiary”) have been made available to the
Underwriters and counsel for the Underwriters, and such books (i) contain a complete summary of all
meetings and actions of the board of directors (including each board committee) and shareholders of
the Company (or analogous governing bodies and interest holders, as applicable), and each of its
Significant Subsidiaries since the time of its respective incorporation or organization through the
date of the latest meeting and action, and (ii) accurately in all material respects reflect all
transactions referred to in such minutes.
(gg) There is no franchise, lease, contract, agreement or document required by the Securities
Act or by the Rules and Regulations to be described in the General Disclosure Package and in the
Prospectus or a document incorporated by reference therein or to be filed as an exhibit to the
Registration Statement or a document incorporated by reference therein which is not described or
filed therein as required; and all descriptions of any such franchises, leases, contracts,
agreements or documents contained in the Registration Statement or in a document incorporated by
reference therein are accurate and complete descriptions of such documents in all material
respects. Other than as described in the General Disclosure Package and in the Prospectus, no such
franchise, lease, contract or agreement has been suspended or terminated for convenience or default
by the Company or any of its subsidiaries or any of the other parties thereto, and neither the
Company nor any of its subsidiaries has received notice nor does the Company have any other
knowledge of any such pending or threatened suspension or termination, except for such pending or
threatened suspensions or terminations that would not reasonably be expected to, singularly or in
the aggregate, have a Material Adverse Effect.
(hh) No relationship or transaction, direct or indirect, exists between or among the Company
and any of its subsidiaries on the one hand, and the directors, officers, stockholders (or
analogous interest holders), customers or suppliers of the Company or any of its subsidiaries or
any of their affiliates on the other hand, which is required to be described in the General
Disclosure Package and the Prospectus or a document incorporated by reference therein and which is
not so described.
15
(ii) No person or entity has the right to require registration of shares of Common Stock or
other securities of the Company or any of its subsidiaries because of the filing or effectiveness
of the Registration Statement or otherwise, except for persons and entities who have expressly
waived such right in writing or who have been given timely and proper written notice and have
failed to exercise such right within the time or times required under the terms and conditions of
such right. Except as described in the General Disclosure Package, there are no persons with
registration rights or similar rights to have any securities registered or to include such
securities with the shares of Common Stock registered by the Company or any of its subsidiaries
under the Securities Act. Each director and executive officer of the Company listed on Schedule II
has delivered to the Representative his executed written lock-up agreement in the form attached to
this Agreement as Exhibit A hereto (“Lock-Up Agreement”).
(jj) Neither the Company nor any of its subsidiaries owns any “margin securities” as that term
is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal
Reserve Board”), and none of the proceeds of the sale of the Shares will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the Shares to be considered a “purpose
credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.
(kk) Neither the Company nor any of its subsidiaries is 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 like payment in
connection with the offering and sale of the Shares or any transaction contemplated by this
Agreement, the Registration Statement, the General Disclosure Package or the Prospectus.
(ll) No forward-looking statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in either the General Disclosure Package or the
Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than
in good faith.
(mm) The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq GM, and the Company has
taken no action designed to, or reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common Stock from the
Nasdaq GM, nor has the Company received any notification that the Commission or the Nasdaq Stock
Market LLC (“Nasdaq”) is contemplating terminating such registration or listing. No consent,
approval, authorization or order of, or filing, notification or registration with, the Nasdaq GM is
required for the listing and trading of the shares of Common Stock on the Nasdaq GM, except for (i)
a Notification Form: Listing of Additional Shares and (ii) a Notification Form: Change in the
Number of Shares Outstanding.
(nn) The Company and its directors and officers, in their capacities as such are in compliance
in all material respects with all applicable provisions of the Xxxxxxxx-Xxxxx Act of
16
2002 and all applicable rules and regulations promulgated thereunder or implementing the
provisions thereof.
(oo) The Company is in compliance in all material respects with all applicable corporate
governance requirements set forth in the Nasdaq Marketplace Rules.
(pp) Neither the Company nor any of its subsidiaries nor any employee or agent of the Company
or any subsidiary, has made any contribution or other payment to any official of, or candidate for,
any federal, state, local or foreign office in violation of any law (including the Foreign Corrupt
Practices Act of 1977, as amended) or of the character required to be disclosed in the Registration
Statement, the General Disclosure Package or the Prospectus or a document incorporated by reference
therein.
(qq) There are no transactions, arrangements or other relationships between and/or among the
Company, any of its affiliates (as such term is defined in Rule 405 of the Securities Act) and any
unconsolidated entity, including, but not limited to, any structured finance, special purpose or
limited purpose entity that could reasonably be expected to materially affect the Company’s or any
of its subsidiaries’ liquidity or the availability of or requirements for their capital resources
required to be described in the General Disclosure Package and the Prospectus or a document
incorporated by reference therein which have not been described as required.
(rr) The statistical and market related data included in the Registration Statement, the
General Disclosure Package and the Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and such data agree with the sources from which they are
derived.
(ss) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance in all material respects with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, and any
other applicable money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Money Laundering Laws is pending, or to the best knowledge of
the Company, threatened.
(tt) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds
of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(uu) Neither the Company nor any subsidiary nor any of their affiliates (within the meaning of
FINRA Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, are
17
controlled by, or is under common control with, or is an associated person (within the meaning
of Article I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
(vv) The Company satisfies the pre-1992 eligibility requirements for the use of a registration
statement on Form S-3 in connection with the Offering contemplated thereby (the pre-1992
eligibility requirements for the use of the registration statement on Form S-3 include (i) having a
non-affiliate, public common equity float of at least $150 million or a non-affiliate, public
common equity float of at least $100 million and annual trading volume of at least three million
shares and (ii) having been subject to the Exchange Act reporting requirements for a period of 36
months).
(ww) No approval of the shareholders of the Company under the rules and regulations of Nasdaq
is required for the Company to issue and deliver to the Underwriters the Shares.
(xx) The Company has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15 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 required to be prepared;
(ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and
procedures at the end of the periods in which the periodic reports are required to be prepared; and
(iii) are effective in all material respects to perform the functions for which they were
established. Based on the evaluation of its disclosure controls and procedures, the Company is not
aware of (A) any significant deficiency in the design or operation of internal controls which could
adversely affect the Company’s ability to record, process, summarize and report financial data; or
(B) any fraud, whether or not material, that involves management or other employees who have a role
in the Company’s internal controls.
3. [RESERVED]
4. Conditions of the Underwriters’ Obligations. The obligations of the Underwriters
under this Agreement are several and not joint. The respective obligations of the Underwriters to
purchase the Shares are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become effective shall have been received
by the Representative and the Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a) of this Agreement and any material required to be filed by the Company
pursuant to Rule 433(d) of the Rules shall have been timely filed with the Commission in accordance
with such Rule.
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Prospectus or
any “free writing prospectus” (as defined in Rule 405 of the Rules), shall have been or shall be in
effect and no order suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the Commission, and
any requests for additional information on the part of the Commission (to
18
be included in the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the satisfaction of the Commission and the Representative. If the Company has
elected to rely upon Rule 430A, information previously omitted from the effective Registration
Statement pursuant to Rule 430A shall have been transmitted to the Commission for filing pursuant
to Rule 424(b) within the prescribed time period and the Company shall have provided evidence
satisfactory to the Representative of such timely filing, or a post-effective amendment providing
such information shall have been promptly filed and declared effective in accordance with the
requirements of Rule 430A.
(c) The representations and warranties of the Company contained in this Agreement and in the
certificates delivered pursuant to Section 4(d) shall be true and correct when made and in all
material respects on and as of each Closing Date as if made on such date; provided, however, that
such materiality qualifier shall not be applicable to any representation or warranty that is
already qualified or modified by materiality or Material Adverse Effect in the text thereof. The
Company shall have performed all covenants and agreements in all material respects and satisfied
all the conditions contained in this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) The Representative shall have received on each Closing Date a certificate, addressed to
the Representative and dated such Closing Date, of the chief executive or chief operating officer
and the chief financial officer or chief accounting officer of the Company to the effect that: (i)
the representations, warranties and agreements of the Company in this Agreement were true and
correct when made and are true and correct in all material respects as of such Closing Date;
provided, however, that such materiality qualifier shall not be applicable to any representation or
warranty that is already qualified or modified by materiality or Material Adverse Effect in the
text thereof; (ii) the Company has performed all of its covenants and agreements in all material
respects and satisfied all conditions contained herein required to be performed or satisfied by the
Company; (iii) they have carefully examined the Registration Statement, the Prospectus, the General
Disclosure Package, and any individual Issuer Free Writing Prospectus and, in their opinion (A) as
of the Effective Date the Registration Statement and Prospectus did not include, and as of the
Applicable Time, neither (i) the General Disclosure Package, nor (ii) any individual Issuer Free
Writing Prospectus, when considered together with the General Disclosure Package, included, any
untrue statement of a material fact and as of the times described above such documents did not omit
to state a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and (B) since the
Effective Date no event has occurred which should have been set forth in a supplement or otherwise
required an amendment to the Registration Statement, the Statutory Prospectus or the Prospectus;
and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued
and, to their knowledge, no proceedings for that purpose have been instituted or are pending under
the Securities Act.
(e) The Representative shall have received: (i) simultaneously with the execution of this
Agreement a signed letter from the Auditor addressed to the Representative and dated the date of
this Agreement, in form and substance reasonably satisfactory to the Representative, containing
statements and information of the type ordinarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain
19
financial information contained in the Registration Statement and the General Disclosure
Package, and (ii) on each Closing Date, a signed letter from the Auditor addressed to the
Representative and dated the date of such Closing Date(s), in form and substance reasonably
satisfactory to the Representative 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 and the Prospectus. To
the extent those sections of the comfort letter relating to the quarter ended June 30, 2009 do not
cover the entire quarter, the Representative shall have received a certificate, addressed to the
Representative and dated as of the date of each delivery of a comfort letter, of the chief
financial officer of the Company, that covers those portions of the quarter ended June 30, 2009
that are not covered by the applicable comfort letter.
(f) The Representative shall have received on each Closing Date from Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Company, (i) an opinion, addressed to the
Representative and dated such Closing Date, stating in effect the matters set forth on Exhibit B-1
hereto, and (ii) a negative assurance letter, addressed to the Representative and dated such
Closing Date, stating in effect the matters set forth on Exhibit B-2 hereto.
(g) The Representative shall have received on each Closing Date from Xxxxx X Xxxxxxxx, Esq.,
Senior Vice President and Chief Intellectual Property Officer of the Company, an opinion, addressed
to the Representative and dated such Closing Date, stating in effect the matters set forth on
Exhibit C hereto.
(h) The Representative shall have received from Xxxxxxx Xxxxxx Xxxxxx & Dodge LLP, a favorable
opinion, addressed to the Representative and dated such Closing Date, covering such matters as are
customarily covered in transactions of this type, and the Company shall have furnished to Xxxxxxx
Xxxxxx Xxxxxx & Dodge LLP such documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(i) All proceedings taken in connection with the sale of the Firm Shares and the Option Shares
as herein contemplated shall be reasonably satisfactory in form and substance to the Representative
and its counsel.
(j) The Representative shall have received copies of the Lock-up Agreements executed by each
entity or person listed on Schedule II hereto.
(k) The Shares shall have been approved for listing on The Nasdaq GM, subject only to official
notice of issuance.
(l) The Representative shall be reasonably satisfied that since the respective dates as of
which information is given in the Registration Statement, the Statutory Prospectus, the General
Disclosure Package and the Prospectus, (i) there shall not have been any material change in the
capital stock of the Company (other than as a result of the exercise of outstanding stock options
or other equity-based rights described in the Registration Statement, the Statutory Prospectus, the
General Disclosure Package and the Prospectus) or any material change in the indebtedness (other
than in the ordinary course of business) of the Company, (ii) except as set forth or contemplated
by the Registration Statement, the Statutory Prospectus, the General
20
Disclosure Package or the Prospectus, no material oral or written agreement or other
transaction shall have been entered into by the Company that is not in the ordinary course of
business or that could reasonably be expected to result in a material reduction in the future
earnings of the Company, (iii) no loss or damage (whether or not insured) to the property of the
Company shall have been sustained that had or could reasonably be expected to have a Material
Adverse Effect, (iv) no legal or governmental action, suit or proceeding affecting the Company or
any of its properties that is material to the Company or that affects or could reasonably be
expected to affect the transactions contemplated by this Agreement shall have been instituted or
threatened and (v) there shall not have been any material change in the assets, properties,
condition (financial or otherwise), or in the results of operations, business affairs or business
prospects of the Company or its subsidiaries considered as a whole that makes it impractical or
inadvisable in the Representative’s judgment to proceed with the purchase or offering of the Shares
as contemplated hereby.
(m) The Company shall have furnished or caused to be furnished to the Representative such
further certificates or documents as the Representative shall have reasonably requested.
5. Covenants and other Agreements of the Company and the Underwriters.
(a) The Company covenants and agrees as follows:
(i) The Company will use its best efforts to cause the Registration Statement,
if not effective at the time of execution of this Agreement, and any amendments
thereto, to become effective as promptly as possible. The Company shall prepare the
Prospectus in a form approved by the Representative and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later than the Commission’s
close of business on the second business day following the execution and delivery of
this Agreement, or, if applicable, such earlier time as may be required by the
Rules. The Company will file with the Commission all Issuer Free Writing
Prospectuses in the time and manner required under Rule 433(d).
(ii) The Company shall promptly advise the Representative in writing (A) when
any post-effective amendment to the Registration Statement shall have become
effective or any supplement to the Prospectus shall have been filed, (B) of any
request by the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus or any
“free writing prospectus”, as defined in Rule 405 of the Rules, or the institution
or threatening of any proceeding for that purpose and (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus or any document incorporated
by reference in the Registration Statement or any Issuer
21
Free Writing Prospectus unless the Company has furnished the Representative a
copy for its review prior to filing and shall not file any such proposed amendment
or supplement to which the Representative reasonably objects. The Company shall use
its best efforts to prevent the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the Shares (or, in lieu
thereof, the notice referred to in Rule 173(a) of the Rules) is required to be
delivered under the Securities Act and the Rules, any event occurs as a result of
which the Prospectus as then amended or supplemented includes any untrue statement
of a material fact or omits to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement the Prospectus to
comply with the Securities Act or the Rules, the Company promptly shall prepare and
file with the Commission, subject to the second sentence of paragraph (ii) of this
Section 5(a), an amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iv) If at any time following issuance of an Issuer Free Writing Prospectus
there occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicts with the information contained in the Registration Statement or
includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances prevailing at the subsequent time, not misleading,
the Company will promptly notify the Representative and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or
correct such conflict, untrue statement or omission.
(v) The Company shall make generally available (through XXXXX or otherwise) to
its security holders and to the Representative as soon as practicable, but not later
than 45 days after the end of the 12 month period beginning at the end of the fiscal
quarter of the Company during which the most recent Effective Date occurs (or 90
days if such 12 month period coincides with the Company’s fiscal year), an earning
statement (which need not be audited) of the Company, covering such 12 month period,
which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 of the Rules.
(vi) Upon written request, the Company shall furnish to the Representative and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to each other
Underwriter, without charge, a copy of the Registration Statement (without exhibits
thereto) and all amendments thereof and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Securities Act or the Rules, as many
copies of any Preliminary Prospectus, any Issuer Free Writing Prospectus and the
Prospectus and any amendments thereof
22
and supplements thereto as the Representative may reasonably request. If
applicable, the copies of the Registration Statement, Preliminary Prospectus, any
Issuer Free Writing Prospectus and Prospectus and each amendment and supplement
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(vii) The Company shall cooperate with the Representative and counsel for the
Underwriters in endeavoring to qualify the Shares for offer and sale in connection
with the offering under the laws of such jurisdictions in the U.S. as the
Representative may designate and shall maintain such qualifications in effect so
long as required for the distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a condition thereof, to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(viii) The Company, during the period when the Prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules) is required to be delivered
under the Securities Act and the Rules or the Exchange Act, will file all reports
and other documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the Exchange Act within the time periods required by the Exchange Act
and the regulations promulgated thereunder.
(ix) Without the prior written consent of the Representative, for a period of
90 days after the date of this Agreement, the Company shall not issue, sell or
register with the Commission (other than on Form S-8 or on any successor form), or
otherwise dispose of, directly or indirectly, any equity securities of the Company
(or any securities convertible into, exercisable for or exchangeable for equity
securities of the Company), except for the issuance of the Shares pursuant to the
Registration Statement and the issuance of shares pursuant to the Company’s existing
stock option plan or bonus plan or upon exercise of warrants outstanding as of the
date hereof as described in the Registration Statement and the Prospectus. In the
event that during this period, (A) any shares are issued pursuant to the Company’s
existing equity incentive plans or bonus plans that are exercisable during such 90
day period or (B) any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 90 day period, the Company shall
obtain the written agreement of such grantee or purchaser or holder of such
registered securities that, for a period of 90 days after the date of this
Agreement, such person will not, without the prior written consent of the
Representative, offer for sale, sell, distribute, grant any option for the sale of,
or otherwise dispose of, directly or indirectly, or exercise any registration rights
with respect to, any shares of Common Stock (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common Stock) owned by such
person; provided, however, that the obligation of the Company to obtain such an
agreement shall only apply if such grantee or purchaser or holder of such registered
securities is an officer or director of the Company, listed on Schedule II
23
hereto. Notwithstanding the foregoing, (i) the Company represents and warrants
that each such grantee or purchaser or holder of such registered securities listed
on Schedule II hereto shall be subject to similar lockup restrictions as set forth
on Exhibit A attached hereto and the Company shall enforce such rights and impose
stop-transfer restrictions on any such sale or other transfer or disposition of such
shares until the end of the applicable period and (ii) if (x) during the last 17
days of the 90 day period described in this Section 5(a)(ix) the Company issues an
earnings release or material news or a material event relating to the Company
occurs; or (y) prior to the expiration of such 90 day period, the Company announces
that it will release earnings results during the 16 day period beginning on the last
day of the 90 day period; the restrictions imposed by this Section 5(a)(ix) 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; provided, however, that this sentence shall not apply if the research
published or distributed on the Company is compliant under Rule 139 of the
Securities Act and the Company’s securities are actively traded as defined in Rule
101(c)(1) of Regulation M of the Exchange Act.
(x) On or before completion of this offering, the Company shall make all
filings required under applicable securities laws and by The Nasdaq GM (including
any required registration under the Exchange Act) provided, however, the Company
shall make all filings required by Nasdaq that may be filed after the completion of
the offering of the Shares within the period required by Nasdaq.
(xi) Prior to the Closing Date, the Company will issue no press release or
other communications directly or indirectly and hold no press conference with
respect to the Company, the condition, financial or otherwise, or the earnings,
business affairs of any of them, or the offering of the Shares without the prior
written consent of the Representative unless in the judgment of the Company and its
counsel, and after notification to the Representative, such press release or
communication is required by law.
(xii) The Company will apply the net proceeds from the offering of the Shares
in the manner set forth under “Use of Proceeds” in the Prospectus.
(xiii) If, immediately prior to the third anniversary of the initial effective
date of the Registration Statement, any of the Shares remain unsold by the
Underwriters, the Company will, upon written notice from the Underwriters at least
30 days prior to that third anniversary file, if it has not already done so, a new
shelf registration statement relating to the Shares, in a form satisfactory to the
Representative, will use its best efforts to cause such registration statement to be
declared effective within 180 days after that third anniversary, and will take all
other action necessary or appropriate to permit the public offering and sale of the
Shares to continue as contemplated in the expired Registration Statement.
References herein to the “Registration Statement” shall include such new shelf
registration statement with respect to the Shares that remain unsold.
24
(b) The Company agrees to pay, or reimburse if paid by the Representative, whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the public offering of the Shares and the performance of the obligations of
the Company under this Agreement including those relating to: (i) the preparation, printing,
reproduction, filing and distribution of the Registration Statement including all exhibits thereto,
each Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus, all amendments and
supplements thereto and any document incorporated by reference therein, and the printing, filing
and distribution of this Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of the various jurisdictions referred to in Section
5(a)(vii), including the reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation, printing, distribution and
shipment of preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including costs
of shipping and mailing) to the Underwriters of copies of each Preliminary Prospectus, the
Prospectus and all amendments or supplements to the Prospectus, any Issuer Free Writing Prospectus,
and of the several documents required by this Section 5(b) to be so furnished, as may be reasonably
requested for use in connection with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold; (v) any filing fees of FINRA in connection with its review of
the terms of the public offering and reasonable fees and disbursements of counsel for the
Underwriters in connection with such review; (vi) inclusion of the Shares for listing on The Nasdaq
GM; (vii) all transfer taxes, if any, with respect to the sale and delivery of the Shares by the
Company to the Underwriters. Subject to the provisions of Section 8, the Underwriters agree to
pay, whether or not the transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the obligations of the
Underwriters under this Agreement not payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of counsel for the Underwriters.
(c) The Company acknowledges and agrees that the Underwriters have acted and are acting solely
in the capacity of a principal in an arm’s length transaction between the Company, on the one hand,
and the Underwriters, on the other hand, with respect to the offering of Shares contemplated hereby
(including in connection with determining the terms of the offering) and not as a financial
advisor, agent or fiduciary to the Company or any other person. Additionally, the Company
acknowledges and agrees that the Underwriters have not and will not advise the Company or any other
person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The
Company has consulted with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the transactions contemplated hereby, and
the Underwriters shall have no responsibility or liability to the Company or any other person with
respect thereto, whether arising prior to or after the date hereof. Any review by the Underwriters
of the Company, the transactions contemplated hereby or other matters relating to such transactions
have been and will be performed solely for the benefit of the Underwriters and shall not be on
behalf of the Company. The Company agrees that it will not claim that the Underwriters, or any one
of them, has rendered advisory services of any nature or respect, or owes a fiduciary duty to the
Company or any other person in connection with any such transaction or the process leading thereto.
25
(d) The Company represents and agrees that, unless it obtains the prior consent of the
Representative, and each of the Underwriters represents and agrees that, unless it obtains the
prior consent of the Company and the Representative, it has not made and will not make any offer
relating to the Shares that would constitute an “issuer free writing prospectus,” as defined in
Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. The Company has complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission where required, legending and record keeping. The
Company represents that is has satisfied and agrees that it will satisfy the conditions set forth
in Rule 433 of the Rules to avoid a requirement to file with the Commission any Road Show.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted),
to which they, or any of them, may become subject under the Securities Act, the Exchange Act or
other Federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Preliminary Prospectus, the Registration
Statement, the Statutory Prospectus (considered together with the Pricing Information), the
Prospectus, any Issuer Free Writing Prospectus or any “issuer-information” filed or required to be
filed pursuant to Rule 433(d) of the Rules, any amendment thereof or supplement thereto, or in any
Blue Sky application or other information or other documents executed by the Company filed in any
state or other jurisdiction to qualify any or all of the Shares under the securities laws thereof
(any such application, document or information being hereinafter referred to as a “Blue Sky
Application”) or arise out of or are based upon 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; provided, however, that such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of any losses, claims, damages
or liabilities arising from the sale of the Shares to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was made in such Preliminary
Prospectus, the Registration Statement, the Prospectus, the Statutory Prospectus (considered
together with the Pricing Information), any Issuer Free Writing Prospectus or any
“issuer-information” filed or required to be filed pursuant to Rule 433(d) of the Rules or such
amendment or supplement thereto, or in any Blue Sky Application in reliance upon and in conformity
with the Underwriter Information. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, each director of the Company, and each officer of the Company who signs the
Registration Statement, against any losses, claims, damages or liabilities (including any
reasonable investigation, legal and other expenses incurred in
26
connection with, and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted) to which such party may become subject, under the Securities Act, the Exchange Act
or other Federal or state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Preliminary
Prospectus, the Registration Statement, the Statutory Prospectus (considered together with the
Pricing Information) or the Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the
Statutory Prospectus (considered together with the Pricing Information) or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with the Underwriter Information;
provided, however, that the obligation of each Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the net proceeds received by
the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified under this Section 6 will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of such action, suit or
proceeding, enclosing a copy of all papers served. No indemnification provided for in Section 6(a)
or 6(b) shall be available to any party who shall fail to give notice as provided in this Section
6(c) if the party to whom notice was not given was unaware of the action, suit or proceeding to
which such notice would have related and was prejudiced in a material manner by the failure to give
such notice but the omission so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to any indemnified party for
contribution or otherwise than under this Section 6. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the indemnifying party
shall not be liable to such indemnified party for any legal or other expenses, except as provided
below and except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party shall have the
right to employ its counsel in any such action, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment of counsel by such indemnified
party has been authorized in writing by the indemnifying parties, (ii) the indemnified party shall
have been advised by counsel that there may be one or more legal defenses available to it which are
different from or in addition to those available to the indemnifying party (in which case the
indemnifying parties shall not have the right to direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement thereof, in each
of which cases the fees and expenses of counsel shall be at the expense of the indemnifying
parties.
27
The indemnifying party under this Section 6 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
against any loss, claim, damage, liability or expense by reason of such settlement or judgment to
the extent set forth herein. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is a
party or could be named and indemnity was or would be sought hereunder by such indemnified party,
unless such settlement, compromise or consent (a) includes an unconditional release of such
indemnified party from all liability for claims that are the subject matter of such action, suit or
proceeding and (b) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
7. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 6(a) or 6(b) is due in
accordance with its terms but for any reason is unavailable to or insufficient to hold harmless an
indemnified party in respect to any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate losses, liabilities,
claims, damages and expenses (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding
or any claims asserted, but after deducting any contribution received by any person entitled
hereunder to contribution from any person who may be liable for contribution) incurred by such
indemnified party, as incurred, 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 pursuant to this Agreement or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company on the one hand and the Underwriters
on the other hand in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to above. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 7, (i) no Underwriter (except as may be
provided in the Agreement Among Underwriters) 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 damages which such Underwriter has
otherwise been required to pay by reason of any 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. For purposes of this Section 7, each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights
28
to contribution as such Underwriter, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who controls the Company
within the meaning of the Section 15 of the Securities Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought shall not relieve
the party or parties from whom contribution may be sought from any other obligation it or they may
have hereunder or otherwise than under this Section 7. No party shall be liable for contribution
with respect to any action, suit, proceeding or claim settled without its written consent. Each
Underwriter’s obligations to contribute pursuant to this Section 7 are several in proportion to
their respective underwriting commitments and not joint.
8. Termination.
(a) This Agreement may be terminated with respect to the Shares to be purchased on a Closing
Date by the Representative by notifying the Company at any time at or before a Closing Date in the
absolute discretion of the Representative if: (i) in the good faith judgment of the Representative
there has occurred any material adverse change in the securities markets or any event, act or
occurrence that has materially disrupted, or will in the future materially disrupt, the securities
markets or there shall be such a material adverse change in general financial, political or
economic conditions or the effect of international conditions on the financial markets in the U.S.
is such as to make it, in the judgment of the Representative, inadvisable or impracticable to
market the Shares or enforce contracts for the sale of the Shares; (ii) there has occurred any
outbreak or material escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the U.S. is such as to make it, in the good faith judgment of the
Representative, inadvisable or impracticable to market the Shares or enforce contracts for the sale
of the Shares; (iii) trading in the Shares or any securities of the Company has been suspended or
materially limited by the Commission or Nasdaq or trading generally on the New York Stock Exchange,
Inc. or The Nasdaq GM has been suspended or materially limited, or minimum or maximum ranges for
prices for securities shall have been fixed, or maximum ranges for prices for securities have been
required, by any of said exchanges or by order of the Commission, FINRA, or any other governmental
or regulatory authority; (iv) a banking moratorium has been declared by any state or Federal
authority; or (v) in the judgment of the Representative, there has been, since the time of
execution of this Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the assets, properties, condition, financial or
otherwise, or in the results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as a whole, whether or not arising in the ordinary course of
business.
(b) If this Agreement is terminated pursuant to any of its provisions, the Company shall not
be under any liability to any Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the Representative or the Underwriters
because of any failure, refusal or inability on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will reimburse the Underwriters for
all out of-pocket expenses (including the
29
reasonable fees and disbursements of their counsel) incurred by them in connection with the
proposed purchase and sale of the Shares or in contemplation of performing their obligations
hereunder and (z) no Underwriter who shall have failed or refused to purchase the Shares agreed to
be purchased by it under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, shall be relieved of liability
to the Company or any other Underwriter for damages occasioned by its failure or refusal.
9. Substitution of Underwriters. If any Underwriter shall default in its obligation
to purchase on any Closing Date the Shares agreed to be purchased hereunder on such Closing Date,
the Representative shall have the right, within 36 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to purchase such Shares on
the terms contained herein. If, however, the Representative shall not have completed such
arrangements within such 36-hour period, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satisfactory to the
Underwriters to purchase such Shares on such terms. If, after giving effect to any arrangements
for the purchase of the Shares of a defaulting Underwriter or Underwriters by the Representative
and the Company as provided above, the aggregate number of Shares which remains unpurchased on such
Closing Date does not exceed one-eleventh of the aggregate number of all the Shares that all the
Underwriters are obligated to purchase on such date, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which such Underwriter
agreed to purchase hereunder at such date and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter
agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default. In any such case, either the Representative or the
Company shall have the right to postpone the applicable Closing Date for a period of not more than
seven days in order to effect any necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or Prospectus or any other documents), and
the Company agrees to file promptly any amendments to the Registration Statement or the Prospectus
which in the opinion of the Company and the Underwriters and their counsel may thereby be made
necessary.
If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the Representative and the Company as provided above, the aggregate
number of such Shares which remains unpurchased exceeds 10% of the aggregate number of all the
Shares to be purchased at such date, then this Agreement, or, with respect to a Closing Date which
occurs after the Firm Share Closing Date, the obligations of the Underwriters to purchase and of
the Company, as the case may be, to sell the Option Shares to be purchased and sold on such date,
shall terminate, without liability on the part of any non-defaulting Underwriter to the Company,
and without liability on the part of the Company, except as provided in Sections 5(b), 6, 7 and 8.
The provisions of this Section 9 shall not in any way affect the liability of any defaulting
Underwriter to the Company or the nondefaulting Underwriters arising out of such default. The term
“Underwriter” as used in this Agreement shall include any person substituted under this Section 9
with like effect as if such person had originally been a party to this Agreement with respect to
such Shares
30
10. Miscellaneous. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the Underwriter, as set forth in this Agreement
or made by or on behalf of them pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or the Company or the or any of their respective officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive delivery of and
payment for the Shares. In addition, the provisions of Sections 5(b), 6, 7 and 8 shall survive the
termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters, the Company and their
respective successors and assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or have any right under
or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser
of Shares from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or delivered or by
telephone or telegraph if subsequently confirmed in writing, (a) if to the Representative, to
Xxxxxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention: Equity Capital
Markets, with a copy to Xxxxxxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel, and to Xxxxxxx Xxxxxx Xxxxxx & Dodge LLP, 000 Xxxxxxxxxx Xxxxxx,
Xxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx, and (b) if to the Company, to ARIAD Pharmaceuticals,
Inc., 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx, Esq., Senior Vice
President, General Counsel with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 Attention: Xxxxxxxx X. Xxxxxxx.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.
31
Please confirm that the foregoing correctly sets forth the agreement among us.
Very truly yours, ARIAD Pharmaceuticals, Inc. |
||||
By | /s/ Xxxxxx X. Xxxxxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxxxxx | |||
Title: | Senior Vice President & CFO | |||
Confirmed: XXXXXXXXXXX & CO. INC. Acting severally on behalf of itself and as representative of the several Underwriters named in Schedule I annexed hereto. |
||||
By | /s/ Xxxxxx XxxXxxxx | |||
Name: | Xxxxxx XxxXxxxx | |||
Title: | Managing Director, Head of Equity Capital Markets | |||
32
SCHEDULE I
Number of | ||
Firm Shares to | ||
Name | Be Purchased | |
Xxxxxxxxxxx & Co. Inc.
|
13,300,000 | |
Lazard Capital Markets LLC
|
5,700,000 | |
Total
|
19,000,000 |
Schedule I
SCHEDULE II
Lock-up Signatories
Xxxxxx X. Xxxxxx, M.D.
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxxxxx, Ph.X.
Xxxxxx X. Xxxxxx, M.D.
Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxx, Ph.D.
Xxxxxxx X. Xxxxx, Esq.
Xxx X. XxXxxxxx
Xxxxxxxx Xxxxxxx, Ph.D.
Xxxxxxx Xxxxxxxx, Ph.D.
Xxxxxxx X. Xxx
X. Xxxxxxx Xxxxx, M.D
Xxxxx Xxxxxx
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxxxx, Ph.D.
Xxxxxxx X. Xxxxxxxx, Ph.X.
Xxxxxx X. Xxxxxx, M.D.
Xxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxx, Ph.D.
Xxxxxxx X. Xxxxx, Esq.
Xxx X. XxXxxxxx
Xxxxxxxx Xxxxxxx, Ph.D.
Xxxxxxx Xxxxxxxx, Ph.D.
Xxxxxxx X. Xxx
X. Xxxxxxx Xxxxx, M.D
Xxxxx Xxxxxx
Schedule II
SCHEDULE III
Issuer Free Writing Prospectus
None
Schedule III
SCHEDULE IV
Pricing Information
Size:
|
19,000,000 shares of common stock | |
Over-allotment option:
|
2,850,000 additional shares of common stock | |
Public offering price:
|
$1.750 per share | |
Underwriters’ discounts and commissions:
|
$0.105 per share | |
Net proceeds (excluding the over-allotment):
|
$30,905,000 (after deducting the underwriters’ discounts and commissions and estimated offering expenses of $350,000 payable by the Company) |
Schedule IV
Exhibit A
FORM OF LOCK-UP AGREEMENT
XXXXXXXXXXX & CO., INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: ARIAD Pharmaceuticals, Inc. — Public Offering
Dear Sirs:
In order to induce Xxxxxxxxxxx & Co., Inc. (“Oppenheimer”), to enter in to a certain
underwriting agreement with ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
with respect to the public offering of the Company’s Common Stock, par value $0.001 per share
(“Common Stock”), and/or other securities of the Company (the “Offering”), the undersigned hereby
agrees that for a period (the “Lock-up Period”) of ninety (90) days following the date of the final
prospectus filed by the Company with the Securities and Exchange Commission in connection with such
public offering, the undersigned will not, without the prior written consent of Oppenheimer,
directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of or agree to dispose of, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock (including, without limitation, shares of Common Stock
or any such securities which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations promulgated under the Securities Act of 1933, as the same
may be amended or supplemented from time to time (such shares or securities, the “Beneficially
Owned Shares”)), (ii) enter into any swap, hedge or other agreement or arrangement that transfers
in whole or in part, the economic risk of ownership of any Beneficially Owned Shares, Common Stock
or securities convertible into or exercisable or exchangeable for Common Stock, (iii) engage in any
short selling of any Beneficially Owned Shares, Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or (iv) publicly announce an intention to effect a
transaction specified in clause (i), (ii) or (iii).
If (i) the Company issues an earnings release or material news or a material event relating to
the Company occurs during the last seventeen (17) days of the Lock-up Period, or (ii) prior to the
expiration of the Lock-up Period, the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the Lock-up Period, the
restrictions imposed by this Agreement shall continue to apply until the expiration of the eighteen
(18)-day period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.
Notwithstanding the foregoing, the undersigned may transfer Beneficially Owned Shares (i) as a
bona fide gift or gifts, (ii) to any trust for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned, or (iii) by will or intestate succession; provided, that
(A) each donee, transferee or distributee shall execute and deliver a letter substantially in the
form hereof agreeing to be bound by the terms hereof and (B) neither the undersigned nor any other
party to the applicable transaction shall be required to file, or voluntarily file, a report
Exhibit A
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
other than a filing on Form 5 made after the expiration of the Lock-up Period. For purposes of
this agreement, the term “immediate family” shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
In addition, notwithstanding the foregoing, the restrictions set forth herein shall not apply
to the establishment of a trading plan that complies with Rule 10b5-1 under the Exchange Act;
provided however, that the restrictions shall apply in full force to sales pursuant to the trading
plan during the Lock-up Period. Furthermore, notwithstanding anything herein to the contrary, this
lock up will not apply to the sale of shares of Common Stock pursuant to a trading plan that
complies with Rule 10b5-1 and existing on the date of this Agreement, but only to the extent that
such sale is in connection with options that are set to expire during the Lock-up Period or any
extension thereof.
Anything contained herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common Stock or Beneficially
Owned Shares are transferred from the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until the expiration of the
ninetieth (90th) day following the date of the Company’s final prospectus, any and all rights, if
any, to request or demand registration pursuant to the Securities Act of 1933, as amended, of any
shares of Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock that are registered in the name of the undersigned or that are Beneficially Owned Shares. In
order to enable the aforesaid covenants to be enforced, the undersigned hereby consents to the
placing of legends and/or stop transfer orders with the transfer agent of the Common Stock with
respect to any shares of Common Stock, securities convertible into or exercisable or exchangeable
for Common Stock or Beneficially Owned Shares.
It is understood that, if the Company notifies Oppenheimer that it does not intend to proceed
with the Offering or if the Offering is not consummated by August 24, 2009, this Agreement shall
terminate and the undersigned will be released from their obligations hereunder.
By | ||||
Printed Name: | ||||
Title: | ||||
Exhibit A