EXHIBIT 1.1
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LIGHT SCIENCES ONCOLOGY, INC.
__________ Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: __________, 2006
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TABLE OF CONTENTS
Page
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SECTION 1. Representations and Warranties............................... 3
SECTION 2. Sale and Delivery to Underwriters; Closing................... 24
SECTION 3. Covenants of the Company..................................... 26
SECTION 4. Payment of Expenses.......................................... 31
SECTION 5. Conditions of Underwriters' Obligations...................... 31
SECTION 6. Indemnification.............................................. 35
SECTION 7. Contribution................................................. 38
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery..................................................... 40
SECTION 9. Termination of Agreement..................................... 40
SECTION 10. Default by One or More of the Underwriters................... 41
SECTION 11. Notices...................................................... 41
SECTION 12. Parties...................................................... 42
SECTION 13. GOVERNING LAW AND TIME....................................... 42
SECTION 14. Effect of Headings........................................... 42
SECTION 15. Definitions.................................................. 42
SECTION 16. Permitted Free Writing Prospectuses.......................... 46
SECTION 17. Absence of Fiduciary Relationship............................ 46
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LIGHT SCIENCES ONCOLOGY, INC.
__________ Shares of Common Stock
UNDERWRITING AGREEMENT
__________, 2006
Xxxxx and Company, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Capital Markets, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representatives of the several Underwriters
Ladies and Gentlemen:
Light Sciences Oncology, Inc., a Washington corporation (the "Company"),
and LSLLC (as defined below), confirm their agreement with Xxxxx and Company,
LLC ("Cowen") and Wachovia Capital Markets, LLC ("Wachovia") and each of the
other Underwriters named in Exhibit A hereto (collectively, the "Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom Cowen and Wachovia are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company of a total of __________ shares (the "Initial
Securities") of the Company's common stock, par value $0.001 per share (the
"Common Stock"), and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of Initial Securities set forth in said
Exhibit A hereto, and with respect to the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of __________ additional shares
of Common Stock to cover over-allotments, if any. The Initial Securities to be
purchased by the Underwriters and all or any part of the __________ shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities." Certain
terms used in this Agreement are defined in Section 15 hereof. References herein
to the Company, its business, operations and other activities and other matters
relating to the Company as of dates and for periods prior to October 6, 2005
(the "Spin Off Date") shall be deemed to include the Company and its business,
operations, other activities and such other matters while the Company's business
was a part of Light Sciences Corporation, a Washington corporation ("LSC"), that
was merged with and into LSLLC, effective on June 30, 2006, with LSLLC being the
surviving entity.
The Company and LSLLC understand that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem advisable
after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to ___% of the Initial
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the
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Underwriters to the Company's employees, business associates and related persons
(the "Reserved Security Offerees") as part of the distribution of the Securities
by the Underwriters, subject to the terms of this Agreement, the applicable
rules, regulations and interpretations of the NASD and all other applicable
laws, rules and regulations. To the extent that any such Reserved Securities are
not orally confirmed for purchase by any such Reserved Security Offeree before
_____ _____.M. (New York City time) on __________, 2006, such Reserved
Securities may, at the sole and absolute discretion of the Representatives, be
offered to the public as part of the public offering contemplated hereby or
offered or sold to any other Reserved Security Offerees.
Promptly after the execution of this Agreement, the Company will prepare
and file with the Commission a prospectus in accordance with the provisions of
Rule 430A and Rule 424(b). Such prospectus in the form first furnished
(electronically or otherwise) to the Underwriters for use in connection with the
offering of the Securities (whether to meet the requests of purchasers pursuant
to Rule 173(d) or otherwise) is herein called the "Prospectus." Any Prospectus
delivered to the Underwriters (electronically or otherwise) for use in
connection with the offering of the Securities (whether to meet the requests of
purchasers pursuant to Rule 173(d) or otherwise) shall be identical to the
electronically transmitted copy thereof filed with the Commission pursuant to
Rule 424(b).
Prior to the date of this Agreement (in the case of clauses (a) through (d)
set forth below) and prior to (in the case of clause (e) set forth below) or
concurrently with (in the case of the remaining clauses set forth below) the
purchase of the Initial Securities by the Underwriters on the Closing Date
referred to in Section 2(c):
(a) the Company shall have effected a five-for-eight reverse stock split
(the "Stock Split") and shall have filed an amendment to its charter (the
"Stock Split Amendment") to effect the Stock Split and to effect an
amendment to Article II, Section (C)(4)(j)(i) thereof in the form
heretofore provided to the Representatives;
(b) an amendment to the Investor Rights Agreement in the form heretofore
provided to the Representatives shall have been executed and delivered by
such persons and entities as are required, pursuant to the terms of the
Investor Rights Agreement, for such amendment to be effective (the
"Investors Rights Agreement Amendment");
(c) all consents, approvals, waivers and amendments necessary under any of
the Shareholder Documents (as defined below) or the Company's charter and
bylaws in connection with the Stock Split, Stock Spit Amendment, Amendment
and Restatement (as defined below), Stock Plan Effectiveness (as defined
below), Investors Rights Agreement Amendment, Preferred Stock Conversion
(as defined below), Shareholder Documents Termination (as defined below) or
the sale and offering of the Securities or for the Company or LSLLC to
enter into this Agreement and perform their respective obligations under
this Agreement shall have been obtained and shall be in full force and
effect (collectively, the "Amendments and Waivers");
(d) an appropriate consent to the merger of LSC into LSLLC shall have been
executed and delivered by the requisite parties pursuant to the Master
Lease (the "Lease Consent");
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(e) the Company's charter and by-laws shall have been amended and restated
and such amended and restated charter shall have been filed with the
Secretary of State of the State of Washington (collectively, the "Amendment
and Restatement");
(f) the Company's 2005 Equity Incentive Plan described in the Statutory
Prospectus and Prospectus under the caption "Management-Incentive
Plans-2005 Equity Incentive Plan" (the "2005 Plan") shall have become
effective and all of the Company's other stock option, stock purchase and
other stock incentive plans shall have been terminated (collectively, the
"Stock Plan Effectiveness");
(g) all of the outstanding shares of Preferred Stock shall have
automatically converted into shares of Common Stock (the "Preferred Stock
Conversion"); and
(h) the Co-Sale Agreement (as defined below) and the Voting Agreement (as
defined below) and the provisions of Section 4 of the Investor Rights
Agreement (as defined below) shall have automatically terminated (the
"Shareholder Documents Termination").
The Stock Split, Stock Split Amendment, Amendment and Restatement, Stock Plan
Effectiveness, Investors Rights Agreement Amendment, Preferred Stock Conversion,
Shareholder Documents Termination, Amendments and Waivers and Lease Consent are
hereinafter called, collectively, the "Pre-Closing Transactions").
The following terms, as used herein, have the respective meanings set forth
below:
(a) "Co-Sale Agreement" means the Right of First Refusal and Co-Sale
Agreement dated October 6, 2005 among the Company, holders of its
Series A Preferred Stock, LSC and certain holders of capital stock of
LSC including any amendments or supplements thereto;
(b) "Investors Rights Agreement" means the Investors Rights Agreement
dated October 6, 2005 among the Company, holders of its Series A
Preferred Stock and LSC, including any amendments or supplements
thereto;
(c) "Voting Agreement" means the Second Amended and Restated Voting
Agreement dated December 12, 2005 among the Company, holders of its
Series A Preferred Stock and LSC, including any amendments or
supplements thereto; and
(d) "Shareholder Documents" means, collectively, the Investors Rights
Agreement, the Voting Agreement and the Co-Sale Agreement.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Applicable
Time, as of the Closing Date referred to in Section 2(c) hereof, and as of each
Option Closing Date (if any) referred to in Section 2(b) hereof, and agrees with
each Underwriter, as follows:
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(1) Compliance with Registration Requirements. The Securities have
been duly registered under the 1933 Act pursuant to the Registration
Statement. Each of the Initial Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act and no stop
order suspending the effectiveness of the Initial Registration Statement or
any Rule 462(b) Registration Statement has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or are pending or,
to the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information has
been complied with.
At the respective times the Initial Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became or become effective, at each time (if any) that any Rule 430C
Information shall be deemed to be part of and included in the Registration
Statement, and at the Closing Date (and, if any Option Securities are
purchased, at the applicable Option Closing Date), the Initial Registration
Statement, any Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
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 not misleading. Neither the Prospectus nor any
amendments or supplements thereto, as of their respective dates, at the
Closing Date (or, if any Option Securities are purchased, at the applicable
Option Closing Date), or at any time when a prospectus is required by
applicable law to be delivered in connection with sales of Securities
(including, without limitation, pursuant to Rule 173(d)), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto or filed pursuant to Rule 424 under the 1933 Act in connection with
the offering of the Securities (including, without limitation, the
Prospectus and the Statutory Prospectus) complied and will comply when so
filed in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and each preliminary prospectus and prospectus
(including, without limitation, the Prospectus and the Statutory
Prospectus) and any amendments or supplements thereto delivered to the
Underwriters (electronically or otherwise) for use in connection with the
offering of the Securities was and will be identical to the electronically
transmitted copy thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
As of the Applicable Time, neither (a) any Issuer General Use Free
Writing Prospectuses issued at or prior to the Applicable Time, the
Statutory Prospectus and the information included on Exhibit G hereto, all
considered together (collectively, the "First General Disclosure Package")
nor (b) if applicable, any Issuer General Use Free Writing Prospectuses
issued at or prior to the Applicable Time, the Statutory Prospectus and the
Issuer Pricing Free Writing Prospectus, all considered together
(collectively, the "Second General Disclosure Package;" the First General
Disclosure Package and the Second General Disclosure Package (if any) are
hereinafter called, collectively, the "General
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Disclosure Packages" and, individually, a "General Disclosure Package,"
provided that, if an Issuer Pricing Free Writing Prospectus is not prepared
in connection with the offering contemplated by this Agreement, then all
references to the "Second General Disclosure Package" shall be disregarded
and all references to the "General Disclosure Packages" and any "General
Disclosure Package" shall be deemed to mean the First General Disclosure
Package, mutatis mutandis) nor (c) any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the First General
Disclosure Package, included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Each Issuer Free Writing
Prospectus delivered to the Underwriters (electronically or otherwise) for
use in connection with the offering of the Securities (other than any
Issuer Free Writing Prospectus that, pursuant to Rule 433, is not required
to be filed with the Commission) was and will be identical to the
electronically transmitted copy thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
The representations and warranties set forth in the three immediately
preceding paragraphs shall not apply to statements in or omissions from the
Registration Statement, the Prospectus or any General Disclosure Package
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representatives expressly
for use therein.
The Company has made available a "bona fide electronic road show" (as
defined in Rule 433(h)(5)) in compliance with Rule 433(d)(8)(ii) such that
no filing with the Commission of any "road show" (as defined in Rule
433(h)) is required in connection with the offering of the Securities.
Each Issuer Free Writing Prospectus, as of its date and at all
subsequent times through the completion of the public offering and sale of
the Securities, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement, the Statutory Prospectus or the Prospectus and
any other preliminary or other prospectus relating to the offering that has
not been superseded or modified.
At the time of filing the Initial Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto and at the
date hereof, the Company was not, is not and will not be an "ineligible
issuer" as defined in Rule 405, in each case without taking into account
any determination made by the Commission pursuant to paragraph (2) of the
definition of such term in Rule 405.
(2) Pre-Closing Transactions. The Pre-Closing Transactions have been
or will be consummated, as the case may be, prior to the respective dates
contemplated by the __________ paragraph of this Agreement (or such earlier
dates as may be contemplated by the Statutory Prospectus or Prospectus) on
the terms contemplated by this Agreement, the Statutory Prospectus and the
Prospectus, and the Amendments and Waivers are in full force and effect.
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(3) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement, the Statutory Prospectus and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(4) Financial Statements. The financial statements of the Company
included in the Registration Statement, the General Disclosure Packages and
the Prospectus, together with the related schedules (if any) and notes,
present fairly the financial position of the Company at the dates indicated
and the results of operations, changes in shareholders' equity and cash
flows of the Company for the periods specified; and all such financial
statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved and comply with all
applicable accounting requirements under the 1933 Act and the 1933 Act
Regulations. The supporting schedules, if any, included in the Registration
Statement present fairly, in accordance with GAAP, the information required
to be stated therein. The information in the Statutory Prospectus and the
Prospectus under the captions "Prospectus Summary--Summary Financial Data"
and "Selected Financial Data" presents fairly the information shown therein
and has been compiled on a basis consistent with that of the audited
financial statements of the Company included in the Registration Statement,
the Statutory Prospectus and the Prospectus. The pro forma and pro forma as
adjusted financial information in the Statutory Prospectus and the
Prospectus and any such information in any General Disclosure Package
presents fairly the information shown therein, has been properly compiled
on the bases described therein, and the assumptions, if any, used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein. Any information contained in the Registration Statement, any
General Disclosure Package and the Prospectus regarding "non-GAAP financial
measures" (as defined in Regulation G of the Commission) comply with
Regulation G and Item 10 of Regulation S-K of the Commission, to the extent
applicable.
(5) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement, the
Statutory Prospectus, the General Disclosure Packages and the Prospectus
(in each case exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, of the Company or in the results of operations, business affairs
or business prospects of the Company, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company which are material with
respect to the Company, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(6) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation under the laws of the State of
Washington (there being no concept of "good standing" for corporations
under the laws of the State of Washington) and has power and authority to
enter into and to perform its obligations under this Agreement and the
LSLLC Agreements; the Company has power and authority
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to own or lease its properties and to conduct its business as described in
the Registration Statement, the General Disclosure Packages and the
Prospectus; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(7) Subsidiaries. The Company has no subsidiaries.
(8) Capitalization. The authorized, issued and outstanding capital
stock of the Company as of the date of this Agreement is as set forth in
the column entitled "Actual" and in the corresponding line items under the
caption "Capitalization" in the Statutory Prospectus and in the Prospectus
and, immediately prior to the purchase of the Initial Securities by the
Underwriters at the Closing Date and each Option Closing Date (if any), the
authorized, issued and outstanding capital stock of the Company will be as
set forth in the column entitled "Pro Forma" and in the corresponding line
items under such caption (in each case except for subsequent issuances, if
any, pursuant to this Agreement, pursuant to the 2005 Plan referred to in
the Statutory Prospectus and in the Prospectus or pursuant to the exercise
of options or warrants referred to in the Statutory Prospectus and in the
Prospectus). The shares of issued and outstanding Capital Stock, options
and warrants of the Company have been duly authorized and the shares of
issued and outstanding Capital Stock of the Company have been validly
issued and are fully paid and non-assessable; and none of the outstanding
shares of Capital Stock of the Company was issued in violation of any
preemptive rights, rights of first refusal or other similar rights of any
securityholder of the Company or any other person.
(9) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(10) Authorization of Securities. The Securities have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued, fully paid and non-assessable; no holder of the Securities
is or will be subject to personal liability solely by reason of being such
a holder; and the issuance and sale of the Securities pursuant to this
Agreement is not subject to any preemptive rights, rights of first refusal
or other similar rights of any securityholder of the Company or any other
person.
(11) Description of Securities. The Common Stock, the Series A
Preferred Stock, the authorized but unissued Preferred Stock, and the
Company's charter and bylaws conform in all material respects to all of the
respective statements relating thereto contained in the Registration
Statement, each General Disclosure Package and the Prospectus and such
statements conform to the rights set forth in the respective instruments
and agreements defining the same.
(12) Absence of Defaults and Conflicts. The Company is not in
violation of its Organizational Documents or in default in the performance
or observance of any
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obligation, agreement, covenant or condition contained in any Company
Document, except (solely in the case of Company Documents other than
Subject Instruments) for such defaults that would not result in a Material
Adverse Effect. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in the
Registration Statement, the General Disclosure Packages and the Prospectus
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Statutory
Prospectus and Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations under this Agreement do not
and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default or
Repayment Event under, or result in the creation or imposition of any Lien
upon any property or assets of the Company pursuant to, any Company
Documents, except (solely in the case of Company Documents other than
Subject Instruments) for such conflicts, breaches, defaults or Liens that
would not result in a Material Adverse Effect, nor will such action result
in any violation of the provisions of the Organizational Documents of the
Company or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
assets, properties or operations, except for such violations of any such
law, statute, rule, regulation, judgment, order, writ or decree that would
not have a Material Adverse Effect.
(13) Absence of Labor Dispute. No labor dispute with the employees of
the Company exists or, to the knowledge of the Company, is imminent, which
would reasonably be expected to result in a Material Adverse Effect.
(14) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company which is required
to be disclosed in the Registration Statement (other than as disclosed
therein), or which would reasonably be expected to result in a Material
Adverse Effect, or which would reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations under this Agreement or any of the LSLLC
Agreements; the aggregate of all pending legal or governmental proceedings
to which the Company is a party or of which any of its property or assets
is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(15) Accuracy of Descriptions and Exhibits. The information in the
Statutory Prospectus and in the Prospectus under the captions "Risk
Factors--There is uncertainty as to the coverage that may be available and
the reimbursement rates that may be established for our product candidates.
Any failure to obtain third-party coverage or an adequate level of
reimbursement for our product candidates will likely have a material
adverse effect on our business," "Risk Factors--The patent covering the
chemical composition of talaporfin sodium has expired in the United States
and most foreign countries and we will therefore have to seek to protect
our product candidates through a
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combination of patents on other aspects of our technology, trade secrets
and through non-patent methods, which may not prove effective," "Risk
Factors--Light Sciences Corporation has licensed to us all of the patents
and most of the patent applications and other intellectual property that
are critical to our business. Any events or circumstances that result in
the termination or limitation of our rights under any of the agreements
between us and Light Sciences Corporation, or under Light Sciences
Corporation's license to use talaporfin sodium, could have a material
adverse effect on our business," "Risk Factors - Following this offering, a
substantial number of our shares of common stock will become available for
sale in the public market, which may cause the market price of our stock to
decline," "Risk Factors--Antitakeover provisions of Washington law, our
articles of incorporation and our bylaws may prevent or delay an
acquisition of us that shareholders may consider favorable or may prevent
or delay attempts to replace or remove our management that could be
beneficial to our shareholders," "Business--Patents and Proprietary
Rights," "Business--Technology In-Licenses and Other Agreements,"
"Business--Legal Proceedings," "Management--Board Committees and Corporate
Governance," "Management--Employment Agreements, Termination of Employment
and Change-in-Control Arrangements," "Management--Incentive Plans,"
"Management--Limitations on Liability and Indemnification," "Certain
Relationships and Related Party Transactions," "Description of Capital
Stock," "Shares Eligible for Future Sale," and "U.S. Federal Tax
Considerations for Non-U.S. Holders" and the information in the
Registration Statement under Items 14 and 15, in each case to the extent
that it constitutes matters of law, summaries of legal matters, summaries
of provisions of the Company's charter or bylaws, any Company Documents or
any other documents, instruments or agreements referred to therein or
summaries of legal proceedings referred to therein, is correct in all
material respects; and there are no franchises, contracts, indentures,
mortgages, deeds of trust, loan or credit agreements, bonds, notes,
debentures, evidences of indebtedness, leases or other documents,
instruments or agreements required to be described or referred to in the
Registration Statement, the Statutory Prospectus or the Prospectus or to be
filed as exhibits to the Registration Statement which have not been so
described and filed as required.
(16) Possession of Intellectual Property. The Company owns or
possesses or has the right to use on reasonable terms all patents, patent
rights, patent applications, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names, service names and other
intellectual property (collectively, "Intellectual Property") necessary to
carry on its business as described in the Statutory Prospectus and the
Prospectus and as proposed to be conducted; and the Company has not
received any notice and is not otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
individually or in the aggregate, would result in a Material Adverse
Effect. All former and current employees of the Company (and, to the
Company's knowledge, all other agents, consultants and contractors of the
Company who contributed to or participated in the conception or development
of the Intellectual Property for the
9
Company) have executed written contracts or agreements that assign to the
Company all rights to any inventions, improvements, discoveries or
information relating to the business of the Company, including without
limitation all Intellectual Property owned, controlled by or in the
possession of the Company. To the knowledge of the Company, there is no
unauthorized use, infringement or misappropriation of any of the
Intellectual Property by any third party, employee or former employee.
(17) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of any shareholder (including, without limitation, any holder of Preferred
Stock) or creditor of the Company, (C) no waiver or consent under any
Subject Instrument, and (D) no authorization, approval, vote or other
consent of any other person or entity, is necessary or required for the
execution, delivery or performance by the Company of this Agreement, for
the offering, issuance, sale or delivery of the Securities hereunder, or
for the consummation of any of the other transactions contemplated by this
Agreement, in each case on the terms contemplated by the Registration
Statement, the General Disclosure Packages and the Prospectus, except such
as have been already obtained under the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations or such as may be required under
state or foreign securities laws or by the NASD or the Nasdaq Global
Market.
(18) Possession of Licenses and Permits. Except as disclosed in the
Registration Statement, the Statutory Prospectus and the Prospectus, the
Company possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by it and the Company is in
compliance with the terms and conditions of all such Governmental Licenses,
except where the failure so to possess or comply would not, individually or
in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity
of such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not have a Material Adverse Effect;
and the Company has not received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(19) Title to Property. The Company has good and marketable title in
fee simple to all real property owned by it and good title to all other
properties and assets owned by it, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Registration Statement, the General Disclosure Packages and the Prospectus
or (b) do not, individually or in the aggregate, materially affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company; all real property,
buildings and other improvements, and equipment and other property held
under lease or sublease by the Company is held by it under valid,
subsisting and enforceable leases or subleases, as the case may be, with,
10
solely in the case of leases or subleases relating to real property and
buildings or other improvements, such exceptions as are not material and do
not interfere with the use made or proposed to be made of such property and
buildings or other improvements by the Company, and all such leases and
subleases are in full force and effect; and the Company has not received
any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company under any of the leases or subleases
mentioned above or affecting or questioning the rights of the Company to
the continued possession of the leased or subleased premises under any such
lease or sublease except for such claims which, if successfully asserted
against the Company, would not, individually or in the aggregate, have a
Material Adverse Effect.
(20) Investment Company Act. The Company is not, and upon the issuance
and sale by the Company of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus,
the Company will not be, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the 1940 Act.
(21) Environmental Laws. Except as described in the Registration
Statement, the General Disclosure Packages and the Prospectus and except as
would not, individually or in the aggregate, result in a Material Adverse
Effect, (A) the Company is not in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
has all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (C) there
are no pending or, to the Company's knowledge, threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company and (D) to the
Company's knowledge, there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws.
(22) Absence of Registration Rights. Except for persons entitled to
registration rights under the Investors Rights Agreement (which rights have
been validly waived in writing), there are no persons with registration
rights or other similar rights to have any securities (debt or equity) (A)
registered pursuant to the Registration Statement or included in the
offering contemplated by this Agreement or (B) otherwise registered by the
Company under the 1933 Act. There are no persons with tag-along rights or
other
11
similar rights to have any securities (debt or equity) included in the
offering contemplated by this Agreement or sold in connection with the sale
of Securities by the Company pursuant to this Agreement except such rights
that have been validly waived in writing.
(23) Parties to Lock-Up Agreements. Each of the Company's directors
and officers, LSLLC and each other holder of any shares of outstanding
Common Stock or other Capital Stock and each holder of any options,
warrants or other securities convertible into, or exchangeable or
exercisable for, Common Stock or other Capital Stock has executed and
delivered to the Representatives a lock-up agreement in the form of Exhibit
C hereto. Exhibit B hereto contains a true, complete and correct list of
all directors and officers of the Company.
(24) Nasdaq Global Market. The outstanding shares of Common Stock and
the Securities being sold hereunder by the Company have been approved for
listing, subject only to official notice of issuance, on the Nasdaq Global
Market.
(25) NASD Matters. All of the information provided to the Underwriters
or to counsel for the Underwriters by the Company in connection with
letters, filings or other supplemental information provided to NASD
Regulation Inc. pursuant to NASD Conduct Rule 2710 or 2720 is true,
complete and correct.
(26) Tax Returns. The Company has filed all foreign, federal, state
and local tax returns that are required to be filed or have requested
extensions thereof, except where the failure so to file would not,
individually or in the aggregate, have a Material Adverse Effect, and has
paid all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any such tax, assessment, fine or penalty that is
currently being contested in good faith by appropriate actions and except
for such taxes, assessments, fines or penalties the nonpayment of which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(27) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts
as are prudent and customary in the business in which it is engaged; all
policies of insurance and any fidelity or surety bonds insuring the Company
or its business, assets, employees, officers and directors are in full
force and effect; the Company is in compliance with the terms of such
policies and instruments in all material respects; there are no claims by
the Company under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause; and the Company has no reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(28) Accounting Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in
12
conformity with GAAP and to maintain asset accountability; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(29) Compliance with the Xxxxxxxx-Xxxxx Act. There is and has been no
failure on the part of the Company or any of the Company's directors or
officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act with which they are required to comply, including
Section 402 related to loans.
(30) Absence of Manipulation. The Company has not taken and will not
take, directly or indirectly, any action designed to or that would
constitute or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security to facilitate
the sale or resale of the Securities.
(31) No Right of First Refusal. Neither the Company nor any other
person has any preemptive right, right of first refusal or other similar
right to purchase or otherwise acquire any of the Securities to be sold by
the Company to the Underwriters pursuant to this Agreement that have not
been validly waived in writing.
(32) Statistical, Demographic or Market-Related Data. Any statistical,
demographic, market-related or similar data included in the Registration
Statement, any General Disclosure Package or the Prospectus is based on or
derived from sources that the Company believes to be reliable and accurate
and all such data included in the Registration Statement, any General
Disclosure Package or the Prospectus accurately reflects the materials upon
which it is based or from which it was derived.
(33) Foreign Corrupt Practices Act. Neither the Company nor, to the
knowledge of the Company, any director, officer, employee or other person
acting on behalf of the Company is aware of or has taken any action,
directly or indirectly, that has resulted or would reasonably be likely to
result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the "FCPA"),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official thereof or
any candidate for foreign political office, in contravention of the FCPA,
and the Company has conducted its business in compliance with the FCPA and
has instituted and maintains policies and procedures designed to ensure
continued compliance therewith.
(34) Money Laundering Laws. The operations of the Company are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, and regulations thereunder
and, to the knowledge of the Company, the money laundering statutes of all
applicable jurisdictions, the rules and regulations
13
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively,
"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 with respect to the Money Laundering Laws is pending
or, to the knowledge of the Company, threatened.
(35) OFAC. Neither the Company nor, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or person acting on
behalf of the Company 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 contemplated by this Agreement, 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.
(36) Lending Relationship. Except as disclosed in the Registration
Statement, the General Disclosure Packages and the Prospectus, to the
Company's knowledge, the Company does not have any lending relationship or
other commercial banking relationship with any bank or similar institution
affiliated with any of the Underwriters, and the Company does not intend to
use any of the proceeds from the sale of the Securities to repay any debt
owed to any Underwriter or, to the Company's knowledge, any affiliate of
any Underwriter.
(37) Transfer Taxes. There are no stock or other transfer taxes, stamp
duties, capital duties or other similar duties, taxes or charges payable in
connection with the execution or delivery of this Agreement by the Company
or the issuance or sale by the Company of the Securities to the
Underwriters hereunder.
(38) Absence of Rulemaking or Similar Proceedings. There are no
rulemaking or similar proceedings before the U.S. Food and Drug
Administration ("FDA"), the U.S. Department of Health and Human Services,
the Centers for Medicare and Medicaid Services or any other federal, state,
local or foreign governmental body having authority over the activities of
the Company (each a "Governmental Authority") known to the Company, which
would reasonably be expected to result in a Material Adverse Effect.
(39) Regulatory Authorities. Except as described in each General
Disclosure Package and the Prospectus, the Company: (i) is and at all times
has been in full compliance with all statutes, rules, regulations,
ordinances, orders, decrees and guidances applicable to the ownership,
testing, in humans or laboratory models, development, manufacture,
formulation, packaging, processing, recordkeeping, use, distribution,
marketing, labeling, promotion, sale, offer for sale, storage, import,
export or disposal of any product manufactured or distributed by or for the
Company ("Applicable Laws"), except where the failure to so comply would
not, individually or in the aggregate, result in a Material Adverse Effect;
(ii) has not received any FDA Form 483 or any foreign counterpart thereof,
notice of adverse finding, warning letter, clinical hold notice, untitled
letter or other correspondence or notice from the FDA, any Institutional
Review Board (as defined by federal regulation at 21 CFR 56.102(g)) or any
other Governmental
14
Authority alleging or asserting noncompliance with any Applicable Laws or
any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Laws
("Authorizations"), except such FDA Forms 483 and foreign counterparts
thereof, notices, letters or other correspondence alleging or asserting
such noncompliance as would not, individually or in the aggregate, result
in a Material Adverse Effect; (iii) possesses all Authorizations
(including, without limitation, exemptions under any Investigational Device
Exemption, as described at 21 CFR 812, and approvals of any Institutional
Review Board) required for the conduct of the Company's business (and such
Authorizations are valid and in full force and effect) and is not in
violation of any term of any such Authorizations, except where the failure
to possess such Authorization or the violation of such Authorization would
not, individually or in the aggregate, result in a Material Adverse Effect;
(iv) has not received notice of any pending or threatened claim, suit,
proceeding, clinical hold, hearing, enforcement, audit, investigation,
arbitration or other action from any Governmental Authority, Institutional
Review Board or other non-governmental authority alleging that any of the
Company's operations or activities is in violation of any Applicable Laws
or Authorizations and the Company has no knowledge or reason to believe
that any such Governmental Authority, Institutional Review Board or other
non-governmental authority is considering any such claim, suit, proceeding,
clinical hold, hearing, enforcement, audit, investigation, arbitration or
other action, except for any such claims, suits, proceedings, clinical
holds, hearings, enforcements, audits, investigations, arbitrations or
other actions that would not, individually or in the aggregate, result in a
Material Adverse Effect; (v) has not received notice that any Governmental
Authority, Institutional Review Board or other non-governmental authority
has taken, is taking or intends to take action to limit, suspend, modify or
revoke any Authorizations and the Company has no knowledge or reason to
believe that any such Governmental Authority is considering such action,
except for any such actions that would not, individually or in the
aggregate, result in a Material Adverse Effect; (vi) has, or has had on its
behalf, filed, declared, obtained, maintained or submitted all reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as are required by any Applicable Laws or
Authorizations, except where the failure to so file, declare, obtain,
maintain or submit would not, individually or in the aggregate, result in a
Material Adverse Effect and all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments
were materially complete and correct on the date filed (or were corrected
or supplemented by a subsequent submission); and (vii) has not, either
voluntarily or involuntarily, initiated, conducted or issued, or caused to
be initiated, conducted or issued, any recall, market withdrawal or
replacement, safety alert, warning, "dear doctor" letter, investigator
notice, or other notice or action relating to an alleged lack of safety or
efficacy of any product or product candidate, any alleged product defect,
or violation of any material Applicable Laws or Authorizations and the
Company is not aware of any facts that would cause the Company or LSLLC or
any of its subsidiaries to initiate any such notice or action and the
Company has no knowledge or reason to believe that any Governmental
Authority, Institutional Review Board or other non-governmental authority
intends to initiate any such notice or action, except for any such notices
or actions that would not, individually or in the aggregate, result in a
Material Adverse Effect. Any clinical trials conducted by or on
15
behalf of the Company or, to the knowledge of the Company, LSLLC or any of
its subsidiaries that are described in the Registration Statement, any
General Disclosure Package or the Prospectus were and, if still pending,
are being conducted in compliance in all material respects with
experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and all applicable federal, state, local
and foreign laws, rules and regulations, including, but not limited to, the
U.S. Food, Drug and Cosmetic Act and implementing regulations at 21 C.F.R.
Parts 50, 54, 56, 58 and 312. Any descriptions of studies, tests and
preclinical and clinical trials, including any related results and
regulatory status, contained in the Registration Statement, any General
Disclosure Package or the Prospectus are, and will be, accurate and
complete in all material respects. The Company is not aware of any studies,
tests or trials the results of which reasonably call into question in any
material respect the clinical trial results described or referred to in the
Registration Statement, any General Disclosure Package or the Prospectus.
Neither the Company, nor, to the knowledge of the Company, LSLLC nor any of
its subsidiaries has received any notices, correspondence or other
communication from the FDA, an Institutional Review Board, or other
governmental agency or non-governmental authority requiring or recommending
the termination, suspension or material modification of any clinical trials
conducted by, or on behalf of, the Company or in which the Company has
participated.
(40) Compliance with Health Care Laws. Without limiting the generality
of subsection (39) above, neither the Company nor any of its licensees (if
any), nor any of its business operations, is in violation of any Health
Care Laws, except where the failure to be in compliance would not,
individually or in the aggregate, result in a Material Adverse Effect. For
purposes of this Agreement, "Health Care Laws" means: (i) the U.S. Food,
Drug and Cosmetic Act and the regulations promulgated thereunder; (ii) all
federal, state, local and all foreign health care related fraud and abuse
laws, including, without limitation, the U.S. Anti-Kickback Statute (42
U.S.C. Section 1320a-7b(b)), the U.S. Xxxxx Law (42 U.S.C. Section 1395nn),
the U.S. Civil False Claims Act (31 U.S.C. Section 3729 et seq.), Sections
1320a-7 and 1320a-7a of Title 42 of the United States Code and the
regulations promulgated pursuant to such statutes; (iii) the U.S. Health
Insurance Portability and Accountability Act of 1996 and the regulations
promulgated thereunder and any non-U.S. counterpart thereof or other law or
regulation the purpose of which is to protect the privacy of individuals;
(iv) the U.S. Controlled Substances Act; (v) Titles XVIII and XIX of the
U.S. Social Security Act and the regulations promulgated thereunder; (vi)
the U.S. Medicare Prescription Drug, Improvement, and Modernization Act of
2003 and the regulations promulgated thereunder; (vii) the U.S.
Prescription Drug Marketing Act of 1987, as amended, and the regulations
promulgated thereunder; (viii) quality, safety and accreditation standards
and requirements of any applicable federal, state, local or foreign laws or
regulatory bodies; and (ix) any and all other applicable health care laws,
regulations, manual provisions, policies and administrative guidance in any
jurisdiction.
(41) Stop Transfer Instructions. The Company has, with respect to all
Common Stock (other than the Securities to be sold pursuant to this
Agreement) and other Capital Stock and any securities convertible into or
exercisable or exchangeable for Common Stock or other Capital Stock owned
or held (of record or beneficially) by any of
16
the persons who have entered into or are required to enter into an
agreement in the form of Exhibit C hereto, instructed the transfer agent or
other registrar to enter stop transfer instructions and implement stop
transfer procedures with respect to such securities during the Lock-Up
Period (as defined below); during the Lock-Up Period, the Company will not
cause or permit any waiver, release, modification or amendment of any such
stop transfer instructions or stop transfer procedures without the prior
written consent of Xxxxx and Wachovia; and, in the event that the Lock-up
Period is extended as provided in Section 3(j) below, the Company will
promptly notify the transfer agent or other registrar and all of the
persons who have entered into an agreement in the form of Exhibit C hereto
of such extension.
(42) LSLLC and Meiji Agreements. Each of the LSLLC Agreements is in
full force and effect, has been duly authorized, executed and delivered by,
and is a valid and binding agreement of, the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof may
be subject to bankruptcy, insolvency or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles.
The Company and, to the knowledge of the Company, LSLLC are in compliance
with their respective obligations under the LSLLC Agreements and the Meiji
Agreement, and, to the knowledge of the Company, the LS11 Licensors are in
compliance with all their respective obligations under the Meiji Agreement.
No event or condition has occurred or exists that gives or would give (x)
LSLLC the right, either immediately or with notice or passage of time or
both, to terminate or limit (in whole or in part) any LSLLC Agreement or,
to the knowledge of the Company, the Meiji Agreement or any rights of the
Company or, to the knowledge of the Company, LSLLC thereunder, to exercise
any of its remedies under any LSLLC Agreement, or to take any action that
would adversely affect any rights of the Company or, to the knowledge of
the Company, LSLLC under any LSLLC Agreement or that might have a Material
Adverse Effect, or (y) to the knowledge of the Company, any LS11 Licensor
the right, either immediately or with notice or passage of time or both, to
terminate or limit (in whole or in part) any LSLLC Agreement or the Meiji
Agreement or any rights of the Company or LSLLC thereunder, to exercise any
of its remedies thereunder, or to take any action that would adversely
affect any rights of the Company or LSLLC thereunder or that might have a
Material Adverse Effect, and the Company is not aware of any facts or
circumstances that could reasonably be expected to result in any of the
foregoing or to give LSLLC or any LS11 Licensor any such right. The Company
is in compliance with all of its obligations under the LSLLC Agreements and
the Meiji Agreement and has not received any notice of default, breach or
non-compliance under any LSLLC Agreement or the Meiji Agreement. To the
knowledge of the Company, LSLLC is in compliance with all of its
obligations under the LSLLC Agreements and the Meiji Agreement and has not
received any notice of default, breach or non-compliance under any LSLLC
Agreement or the Meiji Agreement.
(b) Representations and Warranties by LSLLC. LSLLC represents and warrants
to each Underwriter as of the date hereof, as of the Applicable Time, as of the
Closing Date, and as of each Option Closing Date (if any), and agrees with each
Underwriter, as follows:
17
(1) Compliance with Registration Requirements. At the respective times
the Initial Registration Statement, any Rule 462(b) Registration Statement
and any post-effective amendments thereto became or become effective and at
the Closing Date (and, if any Option Securities are purchased, at the
applicable Option Closing Date), the Initial Registration Statement, any
Rule 462(b) Registration Statement and any amendments and supplements
thereto did not 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 not misleading. Neither the Prospectus nor
any amendments or supplements thereto, as of their respective dates, at the
Closing Date (or, if any Option Securities are purchased, at the applicable
Option Closing Date), or at any time when a prospectus is required by
applicable law to be delivered in connection with sales of Securities
(including, without limitation, pursuant to Rule 173(d)), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
As of the Applicable Time, neither any General Disclosure Package, nor
any individual Issuer Limited Use Free Writing Prospectus when considered
together with the First General Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The representations and warranties set forth in the two immediately
preceding paragraphs shall not apply to any statements in or omissions from
the Registration Statement, the Prospectus or any General Disclosure
Package or any amendments or supplements thereto or any individual Issuer
Limited Use Free Writing Prospectus (i) of any fact, circumstance or other
matter as of a date on or after the Spin Off Date (other than facts,
circumstances or other matters specifically relating to LSLLC or any of its
subsidiaries, the LSLLC Agreements or the Meiji Agreement) or (ii) in any
financial statements or financial information contained in the Registration
Statement, the Prospectus or any General Disclosure Package or in
amendments and supplements thereto or in any individual Issuer Limited Use
Free Writing Prospectus.
(2) Good Standing of the Company. LSLLC has been duly organized and is
validly existing as a limited liability company under the laws of the State
of Washington (there being no concept of "good standing" for limited
liability companies under the laws of the State of Washington) and has
power and authority to enter into and to perform its obligations under this
Agreement, the LSLLC Lock-Up Agreement (as defined below), the LSLLC
Agreements and the Meiji Agreement.
(3) LSC Merger. Effective on June 30, 2006, LSC was merged with and
into LSLLC, with LSLLC being the surviving corporation (the "LSC Merger").
The LSLLC Merger was consummated in accordance with the laws of the State
of Washington and all consents, approvals, waivers and amendments necessary
to effect the LSC Merger were obtained on or prior to June 30, 2006. LSLLC
was formed as a wholly owned subsidiary of LSC for the purpose of effecting
the LSC Merger and conducted no business prior to
18
the effective date of the LSC Merger. As a result of the LSC Merger and by
operation of law, LSLLC has succeeded to and assumed all rights,
agreements, liabilities and obligations of LSLLC, including, without
limitation, all of LSC's rights, agreements, liabilities, and obligations
under the LSLLC Agreements and the Meiji Agreements, and, without
limitation to the foregoing, all right, title and interest in and to all
real, personal and intangible property owned by LSC was vested in LSLLC by
operation of law, effective as of the date of the Merger, without reversion
or impairment. At all times from the initial incorporation of LSC until the
consummation of the LSC Merger, LSC was duly organized and validly existing
as a corporation under the laws of the State of Washington and had power
and authority to enter into and perform its obligations under the LSLLC
Agreements and the Meiji Agreement.
(4) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by LSLLC. An agreement substantially in
the form of Exhibit C hereto (the "LSLLC Lock-Up Agreement"), has been duly
authorized, executed and delivered by LSLLC.
(5) Absence of Defaults and Conflicts. LSLLC is not in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any LSLLC Agreement or the Meiji Agreement. The
consummation of the LSC Merger did not, and the execution, delivery and
performance of this Agreement and the LSLLC Lock-Up Agreement and the
consummation of the transactions contemplated herein and compliance by
LSLLC with its obligations under this Agreement the LSLLC Lock-Up
Agreement, the LSLLC Agreements and the Meiji Agreement do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event under, or result in the creation or imposition of any Lien upon any
property or assets of LSLLC or any of its subsidiaries (it being understood
that, for purposes of this Section 1(b), references to "subsidiaries" of
LSLLC shall not include the Company unless otherwise expressly stated)
pursuant to, (x) any LSLLC Agreements or the Meiji Agreements or (y) to the
knowledge of LSLLC, any other instrument or agreement to which LSLLC or any
of its subsidiaries is a party or by which any of them is bound, except
(solely in the case of instruments or agreements referred to in clause (y)
of this paragraph) for such conflicts, breaches, defaults or liens that
would not have a Material Adverse Effect, nor did or will such action
result in any violation of the provisions of the Organizational Documents
of LSLLC or any of its subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
LSLLC or any of its subsidiaries or any of their respective assets,
properties or operations.
(6) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
LSLLC, threatened, against or affecting LSLLC or any of its subsidiaries or
the Company which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of
19
the transactions contemplated in this Agreement or the performance by LSLLC
of its obligations under this Agreement, the LSLLC Lock-Up Agreement, any
of the LSLLC Agreements or the Meiji Agreement; the aggregate of all
pending legal or governmental proceedings to which LSLLC or any of its
subsidiaries or the Company is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(7) Possession of Intellectual Property. LSLLC owns or possesses, or,
pursuant to the Meiji License Agreement, has a valid license for and the
right to use, all Intellectual Property (a) that the Registration
Statement, the General Disclosure Packages and the Prospectus indicate has
been licensed or sublicensed, as the case may be, by LSLLC to the Company
("LSLLC Intellectual Property") (except to the extent that LSLLC may not
have a right to use any LSLLC Intellectual Property by virtue of the fact
that LSLLC has given the Company an exclusive license to use such LSLLC
Intellectual Property pursuant to the LSLLC Agreements), or (b) that, to
the knowledge of LSLLC, is necessary for the performance by LSLLC of its
obligations under the LSLLC Agreements and the Meiji Agreements, and
neither LSLLC nor any of its subsidiaries nor, solely for periods through
the Spin-Off Date while the Company was a subsidiary of LSLLC, the Company
has received any notice and neither LSLLC nor any of its subsidiaries is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any LSLLC Intellectual Property or of any facts or
circumstances which would render any LSLLC Intellectual Property invalid or
inadequate to protect the interest of LSLLC or its subsidiaries or the
Company therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
individually or in the aggregate, would result in a Material Adverse
Effect. All former and current employees of LSLLC and its subsidiaries and,
solely with respect to periods through the Spin-Off Date while the Company
was a subsidiary of LSLLC, the Company (and all other agents, consultants
and contractors of LSLLC and its subsidiaries and, solely with respect to
periods through the Spin-Off Date while the Company was a subsidiary of
LSLLC, the Company who contributed to or participated in the conception or
development of any LSLLC Intellectual Property for LSLLC or its
subsidiaries or, solely with respect to periods through the Spin-Off Date
while the Company was a subsidiary of LSLLC, the Company) have executed
written contracts or agreements that assign to LSLLC or its subsidiaries or
the Company all rights to any inventions, improvements, discoveries or
information relating to the business of LSLLC and its subsidiaries or the
Company, including without limitation all LSLLC Intellectual Property
owned, controlled by, licensed or sublicensed to or in the possession of
LSLLC and its subsidiaries and the Company. To the knowledge of the LSLLC,
there is no unauthorized use, infringement or misappropriation of any of
the LSLLC Intellectual Property by any third party, employee or former
employee.
(8) Absence of Further Requirements. (A) No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, (B) no authorization, approval, vote or other consent
of any holder of any limited liability company interests in or capital
stock or other securities of LSC or LSLLC or any creditor of LSC or LSLLC,
(C) no
20
waiver or consent under any Subject Instrument, and (D) no authorization,
approval, vote or other consent of any other person or entity, (x) was
necessary for the LSC Merger (except such as were obtained as and when
required) or (y) is necessary or required for the execution, delivery or
performance by LSLLC of this Agreement or the LSLLC Lock-Up Agreement or
for the consummation by LSLLC of any of the transactions contemplated by
this Agreement, in each case on the terms contemplated by the Registration
Statement, the General Disclosure Packages and the Prospectus.
(9) Possession of Licenses and Permits. LSLLC possesses such permits,
licenses, approvals, consents and other authorizations issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary for the performance by LSLLC of its obligations under the LSLLC
Agreements and the Meiji Agreement (collectively, "LSLLC Governmental
Licenses"); LSLLC is in compliance with the terms and conditions of all
such LSLLC Governmental Licenses, except where the failure so to comply
would not, individually or in the aggregate, have a Material Adverse
Effect; all of the LSLLC Governmental Licenses are valid and in full force
and effect, except when the invalidity of such LSLLC Governmental Licenses
or the failure of such LSLLC Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither LSLLC nor any
of its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such LSLLC Governmental Licenses which,
individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(10) Investment Company Act. LSLLC is not, and upon the issuance and
sale by the Company of the Securities as herein contemplated and receipt
and investment of the net proceeds therefrom, LSLLC will not be, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the 1940 Act.
(11) Tax Returns. LSLLC and its subsidiaries and, solely for periods
through the Spin Off Date while the Company was a subsidiary of LSLLC, the
Company have filed all foreign, federal, state and local tax returns that
are required to be filed or have requested extensions thereof, except where
the failure so to file would not, individually or in the aggregate, have a
Material Adverse Effect, and have paid all taxes required to be paid by
them and any other assessment, fine or penalty levied against any of them,
to the extent that any of the foregoing is due and payable, except for any
such tax, assessment, fine or penalty that is currently being contested in
good faith by appropriate actions and except for such taxes, assessments,
fines or penalties the nonpayment of which would not, individually or in
the aggregate, have a Material Adverse Effect. The Company has and will
have no liability for any taxes or other similar assessments, fines or
penalties that are or may be payable by LSLLC or any of its subsidiaries
for periods ending on or prior to the Spin Off Date.
(12) Absence of Manipulation. LSLLC has not taken and will not take,
directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security to facilitate the sale or
resale of the Securities.
21
(13) No Right of First Refusal. Neither LSLLC nor any of its
subsidiaries has any preemptive right, right of first refusal or other
similar right to purchase or otherwise acquire any of the Securities to be
sold by the Company to the Underwriters pursuant to this Agreement.
(14) Regulatory Authorities. Except as described in each General
Disclosure Package and the Prospectus, LSLLC and its subsidiaries and,
solely for periods prior to the Spin Off Date while the Company was a
subsidiary of LSLLC, the Company: (i) are and at all times have been in
full compliance with all statutes, rules, regulations, ordinances, orders,
decrees and guidances applicable to the ownership, testing, in humans or
laboratory models, development, manufacture, formulation, packaging,
processing, recordkeeping, use, distribution, marketing, labeling,
promotion, sale, offer for sale, storage, import, export or disposal of any
product manufactured or distributed by or for such entity ("LSLLC
Applicable Laws"), except where the failure to so comply would not,
individually or in the aggregate, result in a Material Adverse Effect; (ii)
have not received any FDA Form 483 or any foreign counterpart thereof,
notice of adverse finding, warning letter, clinical hold notice, untitled
letter or other correspondence or notice from the FDA, any Institutional
Review Board (as defined by federal regulation at 21 CFR 56.102(g)) or any
other Governmental Authority alleging or asserting noncompliance with any
LSLLC Applicable Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto required by
any such LSLLC Applicable Laws ("LSLLC Authorizations"), except such FDA
Forms 483 and foreign counterparts thereof, notices, letters or other
correspondence alleging or asserting such noncompliance as would not,
individually or in the aggregate, result in a Material Adverse Effect;
(iii) possess all LSLLC Authorizations (including, without limitation,
exemptions under any Investigational Device Exemption, as described at 21
CFR 812, and approvals of any Institutional Review Board) required for the
conduct of such entity's business (and such LSLLC Authorizations are valid
and in full force and effect) and are not in violation of any term of any
such LSLLC Authorizations, except where the failure to possess such LSLLC
Authorization or the violation of such LSLLC Authorization would not,
individually or in the aggregate, result in a Material Adverse Effect; (iv)
have not received notice of any pending or threatened claim, suit,
proceeding, clinical hold, hearing, enforcement, audit, investigation,
arbitration or other action from any Governmental Authority, Institutional
Review Board or other non-governmental authority alleging that any of such
entity's operations or activities is in violation of any LSLLC Applicable
Laws or LSLLC Authorizations and LSLLC has no knowledge that any such
Governmental Authority, Institutional Review Board or other
non-governmental authority is considering any such claim, suit, proceeding,
clinical hold, hearing, enforcement, audit, investigation, arbitration or
other action, except for any such claims, suits, proceedings, clinical
holds, hearings, enforcements, audits, investigations, arbitrations or
other actions that would not, individually or in the aggregate, result in a
Material Adverse Effect; (v) have not received notice that any Governmental
Authority, Institutional Review Board or other non-governmental authority
has taken, is taking or intends to take action to limit, suspend, modify or
revoke any LSLLC Authorizations and LSLLC has no knowledge or reason to
believe that any such Governmental Authority is considering such action,
except for any such actions that would not, individually or in the
aggregate, result in a Material Adverse Effect; (vi) have, or have had on
its behalf, filed,
22
declared, obtained, maintained or submitted all reports, documents, forms,
notices, applications, records, claims, submissions and supplements or
amendments as are required by any LSLLC Applicable Laws or LSLLC
Authorizations, except where the failure to so file, declare, obtain,
maintain or submit would not, individually or in the aggregate, result in a
Material Adverse Effect and all such reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments
were materially complete and correct on the date filed (or were corrected
or supplemented by a subsequent submission); and (vii) have not, either
voluntarily or involuntarily, initiated, conducted or issued, or caused to
be initiated, conducted or issued, any recall, market withdrawal or
replacement, safety alert, warning, "dear doctor" letter, investigator
notice, or other notice or action relating to an alleged lack of safety or
efficacy of any product or product candidate, any alleged product defect,
or violation of any material LSLLC Applicable Laws or LSLLC Authorizations
and LSLLC is not aware of any facts that would cause any such entity to
initiate any such notice or action and LSLLC has no knowledge or reason to
believe that any Governmental Authority, Institutional Review Board or
other non-governmental authority intends to initiate any such notice or
action, except for any such notices or actions that would not, individually
or in the aggregate, result in a Material Adverse Effect. Any clinical
trials conducted by or on behalf of LSLLC or any of its subsidiaries or,
solely for periods prior to the Spin Off Date while the Company was a
subsidiary of LSLLC, the Company that are described in the Registration
Statement, any General Disclosure Package or the Prospectus were and, if
still pending, are being conducted in compliance in all material respects
with experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and all applicable federal, state, local
and foreign laws, rules and regulations, including, but not limited to, the
U.S. Food, Drug and Cosmetic Act and implementing regulations at 21 C.F.R.
Parts 50, 54, 56, 58 and 312. Any descriptions of studies, tests and
preclinical and clinical trials conducted by LSLLC or any of its
subsidiaries or, solely for periods prior to the Spin Off Date while the
Company was a subsidiary of LSLLC, the Company, including any related
results and regulatory status, contained in the Registration Statement, any
General Disclosure Package or the Prospectus are accurate and complete in
all material respects. LSLLC is not aware of any studies, tests or trials
the results of which reasonably call into question in any material respect
the clinical trial results conducted prior to the Spin Off Date described
or referred to in the Registration Statement, any General Disclosure
Package or the Prospectus. Neither LSLLC or any of its subsidiaries or,
solely for periods prior to the Spin Off Date while the Company was a
subsidiary of LSLLC, the Company has received any notices, correspondence
or other communication from the FDA, an Institutional Review Board, or
other governmental agency or non-governmental authority requiring or
recommending the termination, suspension or material modification of any
clinical trials conducted by, or on behalf of, such entity or in which such
entity has participated.
(15) Compliance with Health Care Laws. Without limiting the generality
of subsection (14) above, neither LSLLC nor any of its subsidiaries nor any
of their respective business operations is in violation of any Health Care
Laws, except where the failure to be in compliance would not, individually
or in the aggregate, result in a Material Adverse Effect.
23
(16) LSLLC and Meiji Agreements. Each of the LSLLC Agreements and the
Meiji Agreement is in full force and effect, has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, LSLLC,
enforceable against LSLLC in accordance with its terms, except as
enforcement thereof may be subject to bankruptcy, insolvency or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles. LSLLC is in compliance with its obligations
under the LSLLC Agreements and the Meiji Agreement, and, to the knowledge
of the LSLLC, the LS11 Licensors are in compliance with all their
respective obligations under the Meiji Agreement. No event or condition has
occurred or exists that gives or would give LSLLC or, to the knowledge of
LSLLC, any LS11 Licensor the right, either immediately or with notice or
passage of time or both, to terminate or limit (in whole or in part) any
LSLLC Agreement or the Meiji Agreement or any rights of the Company or
LSLLC thereunder, to exercise any of its remedies thereunder, or to take
any action that would adversely affect any rights of the Company or LSLLC
thereunder or that might have a Material Adverse Effect, and LSLLC is not
aware of any facts or circumstances that could reasonably be expected to
result in any of the foregoing or to give LSLLC or any LS11 Licensor any
such right. Each of LSLLC and, to the knowledge of LSLLC, the Company is in
compliance with all of its respective obligations under the LSLLC
Agreements and the Meiji Agreement, and neither LSLLC nor any of its
subsidiaries nor, solely for periods prior to the Spin-Off Date while the
Company was a subsidiary of LSLLC, the Company has received any notice of
default, breach or non-compliance under any LSLLC Agreement or the Meiji
Agreement.
(b) Certificates. Any certificate signed by any officer of the Company or
LSLLC and delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company and LSLLC,
respectively to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter, severally and
not jointly, agrees to purchase from the Company, at the price of $__________
per share (the "Purchase Price"), the number of Initial Securities set forth in
Exhibit A opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, subject to such adjustments
among the Underwriters as the Representatives in their sole discretion shall
make to eliminate any sales or purchases of fractional Securities. The price at
which the Securities shall initially be offered to the public is $__________ per
share.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase any or all of the Option Securities at a price per
share equal to the Purchase Price referred to in Section 2(a) above; provided
that the price per share for any Option Securities shall be reduced by an amount
per share equal to any dividends or distributions declared, paid or payable by
the Company on
24
the Initial Securities but not payable on such Option Securities. The option
hereby granted will expire at the close of business on the 30th day after the
date hereof and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (an "Option Closing Date") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date. If the
option is exercised as to all or any portion of the Option Securities, the
Company will sell to the Underwriters that number of Option Securities then
being purchased and each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Exhibit A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxxx
Coie LLP, 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (New York time) on __________, 2006 (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called
"Closing Date").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Option Closing Date as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a single bank account designated by the Company, in each case
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Securities and the Option Securities, if any, which it
has agreed to purchase. Each of Xxxxx and Wachovia, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Date or the relevant Option Closing Date, as the case
may be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the
25
Representatives may request in writing at least one full business day before the
Closing Date or the relevant Option Closing Date, as the case may be. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination and packaging by the Representatives in The
City of New York not later than noon (New York City time) on the business day
prior to the Closing Date or the relevant Option Closing Date, as the case may
be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and Rule 433 and will notify the Representatives immediately, and
confirm the notice in writing, (i) when the Initial Registration Statement,
any Rule 462(b) Registration Statement or any post-effective amendment to
the Registration Statement shall become effective, or when the Statutory
Prospectus, any other preliminary prospectus, the Prospectus or any Issuer
Free Writing Prospectus or any amendment or supplement thereto shall have
been filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Statutory Prospectus, any
other preliminary prospectus, the Prospectus or any Issuer Free Writing
Prospectus or for additional information, (iv) 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
Statutory Prospectus, any other of any preliminary prospectus, the
Prospectus or any Issuer Free Writing Prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes, or of any examination pursuant to Section 8(e) of the
1933 Act concerning the Registration Statement and (v) if the Company
becomes the subject of a proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities. The Company will make every
reasonable effort to prevent the issuance of any stop order or the
suspension of qualification of the Securities for offering or sale and, if
any stop order is issued or suspension of qualification of the Securities
for offering or sale occurs, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)) or any
amendment, supplement or revision to the prospectus included in the
Registration Statement at the time it became effective, the Statutory
Prospectus, any other preliminary prospectus, the Prospectus or any Issuer
Free Writing Prospectus, whether pursuant to the 1933 Act or otherwise, and
will furnish the Representatives with copies of any such documents within a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith)
and signed copies of all consents and certificates of
26
experts. The copies of the Registration Statement and each amendment
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.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
and any Issuer Free Writing Prospectuses (excluding any Exempt Electronic
Road Show) prepared prior to the date of this Agreement as such Underwriter
reasonably requested, and the Company hereby consents to the use of such
copies for purposes permitted by the 1933 Act. The Company will furnish to
each Underwriter, without charge, such number of copies of the documents
constituting any General Disclosure Package, any Issuer Free Writing
Prospectus (excluding any Exempt Electronic Road Show) prepared on or after
the date of this Agreement and the Prospectus and any amendments or
supplements thereto as such Underwriter may reasonably request. The
Statutory Prospectus, each Issuer Free Writing Prospectus (excluding any
Exempt Electronic Road Show) and the Prospectus and any amendments or
supplements thereto furnished to the Underwriters was, is or will be, as
the case may be, identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and the Prospectus. If at any time when a prospectus is required
by the 1933 Act or the 1933 Act Regulations to be delivered in connection
with sales of the Securities (including, without limitation, pursuant to
Rule 172 or 173), any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement any General Disclosure Package or the Prospectus in
order that such General Disclosure Package on the Prospectus, as the case
may be, will not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement any General Disclosure Package or the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject to
Section 3(b) hereof, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement,
such General Disclosure Package or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may
reasonably request. 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, conflicts
or would conflict with the information contained in the Registration
Statement or included, includes or would include an untrue statement of a
material fact or omitted, omits or would omit to state a material fact
necessary in order to make the statements
27
therein, in the light of the circumstances prevailing at that subsequent
time, not misleading, the Company will promptly notify the Representatives
and the Company will, subject to Section 3(b) hereof, promptly amend or
supplement such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate
and to maintain such qualifications in effect for a period of not less than
one year from the date of this Agreement; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the date of this
Agreement.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide to the Underwriters the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Statutory
Prospectus and Prospectus under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the Nasdaq National Market.
(j) Restriction on Sale of Securities. During the period beginning on
and including the date of this Agreement through and including the date
that is the 180th day after the date of this Agreement (as such period may
be extended pursuant to the provisions set forth in the next sentence, the
"Lock-Up Period"), the Company will not, without the prior written consent
of the Representatives, directly or indirectly:
(i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend or otherwise transfer
or dispose of any shares of Common Stock or other Capital Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock or other Capital Stock,
(ii) file or cause the filing of any registration statement under
the 1933 Act with respect to any Common Stock or other Capital Stock
or any securities convertible into or exercisable or exchangeable for
any Common Stock or other Capital Stock (other than any Rule 462(b)
Registration Statement filed to register Securities to be sold to the
Underwriters pursuant to this Agreement), or
28
(iii) enter into any swap or other agreement, arrangement or
transaction that transfers to another, in whole or in part, directly
or indirectly, any of the economic consequence of ownership of any
Common Stock or other Capital Stock or any securities convertible into
or exercisable or exchangeable for any Common Stock or other Capital
Stock,
whether any transaction described above is to be settled by delivery of
Common Stock, other Capital Stock, other securities, in cash or otherwise.
Moreover, if:
(1) during the last 17 days of such 180 day period the Company issues
an earnings release or material news or a material event relating to
the Company occurs, or
(2) prior to the expiration of such 180 day period, the Company
announces that it will release earnings results during the 16-day
period beginning on the last day of such 180 day period,
the Lock-Up Period shall be extended and the restrictions imposed by this
Section 3(j) shall continue to apply until the expiration of the 18-day
period beginning on the date of issuance of the earnings release or the
occurrence of the material news or material event, as the case may be,
unless the Representatives waive, in writing, such extension.
Notwithstanding the provisions set forth in the immediately preceding
paragraph, the Company may, without the prior written consent of the
Representatives:
(1) issue Securities to the Underwriters pursuant to this Agreement,
(2) issue shares, and options to purchase shares, of Common Stock
pursuant to the 2005 Plan described in the Statutory Prospectus and
the Prospectus under the caption "Management-Incentive Plans-2005
Equity Incentive Plan,"
(3) issue shares of Common Stock upon the exercise of (a) stock
options or shares of Series A Preferred Stock or warrants described in
the Statutory Prospectus and the Prospectus that are outstanding on
the date of this Agreement and (b) stock options issued after the date
of this Agreement under the 2005 Plan referred to in clause (2) above,
and
(4) issue shares of Common Stock and securities convertible into or
exchangeable or exercisable for Common Stock issued as consideration
or partial consideration for the Company's acquisition of businesses
or assets or in connection with the formation of joint ventures,
strategic partnerships or similar collaborations in which the Company
is a partner or participant, in each case so long as the sum of (i)
the number of shares of Common Stock so issued plus (ii) the number of
shares of Common Stock issuable upon the conversion, exercise and
exchange of all convertible, exchangeable or exercisable securities so
issued does not in the aggregate exceed the number of shares of Common
Stock (subject to adjustment for stock splits, stock dividends,
recapitalizations and similar transactions) equal to 8% of the sum of
(a) the number of shares of
29
Common Stock outstanding as of June 30, 2006, plus (b) the number of
shares of Common Stock issued and sold to the Underwriters pursuant to
this Agreement (including any Option Securities issued and sold to the
Underwriters);
provided that, in the case of any issuance described in clause (4) above,
the recipient executes and delivers to the Representatives, acting on
behalf of the Underwriters, not later than one business day prior to such
issuance, a written agreement in substantially the form attached as Exhibit
C hereto.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act
(including, without limitation, pursuant to Rule 172 or 173), will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(l) Preparation of Prospectus. Immediately following the execution of
this Agreement, the Company will, subject to Section 3(b) hereof, prepare
the Prospectus containing the Rule 430A Information and other selling terms
of the Securities, the plan of distribution thereof and such other
information as may be required by the 1933 Act or the 1933 Act Regulations
or as the Representatives and the Company may deem appropriate, and, if
requested by the Representatives, will prepare the Issuer Pricing Free
Writing Prospectus containing the information set forth in Exhibit G hereto
and such other information as maybe required by the 1933 Act or the 1933
Act Regulations or as the Representatives and the Company may deem as
appropriate, and will file the Prospectus and the Issuer Pricing Free
Writing Prospectus with the Commission in the manner and within the time
period required by Rule 424(b) (without reliance on Rule 424(b)(8)) and
Rule 433, respectively. Any Prospectus delivered pursuant to Rule 173(d)
shall be identical to the electronically transmitted copy thereof filed
with the Commission pursuant to Rule 424(b).
(m) Compliance with NASD Rules. The Company hereby agrees that it
cause the Reserved Securities to be restricted as required or may be
required by the NASD or the rules of the NASD from sale, transfer,
assignment, pledge or hypothecation for a period of three months (or such
other period as may be required by the NASD or the rules of the NASD) and
to provide for such period to be extended on the same terms as the Lock-Up
Period may be extended pursuant to the provisions set forth in the first
paragraph of Section 3(j) hereof, provided that the Representatives shall
have notified the Company as to which persons are to be subject to such
restrictions. At the request of the Underwriters, the Company will direct
the transfer agent to place a stop transfer restriction upon such
Securities for such period of time. Should the Company release, or seek to
release, from such restrictions any of the Reserved Securities, the Company
agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection
with such release.
30
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the word
processing, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the counsel,
accountants and other advisors to the Company, (v) the qualification or
exemption of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplements
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus, the documents
constituting each General Disclosure Package and the Prospectus and any
amendments or supplements thereto and any costs associated with electronic
delivery of any of the foregoing by the Underwriters to the investors, (vii) the
word processing, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplements thereto and any Canadian "wrapper" and any
supplements thereto, (viii) the fees and expenses of the transfer agent and
registrar for the Securities, (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities, (x) the
costs and expenses of the Company relating to investor presentations on any road
show undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides
and graphics and any electronic road show, fees and expenses of any consultants
engaged in connection with the road show presentation, travel and other
transportation expenses (except for chartered aircraft, the cost and expenses of
which are provided for below) and lodging expenses of the representatives and
officers of the Company and any such consultants, and one-half of the costs and
expenses of aircraft chartered in connection with the road show, (xi) the fees
and expenses incurred in connection with the listing of the Securities on the
Nasdaq Global Market, (xii) all costs and expenses of the Underwriters,
including the reasonable fees and disbursements of counsel for the Underwriters,
in connection with matters related to the Reserved Securities and the
establishment and administration of the program for the sale of the Reserved
Securities and (xiii) the disbursements of counsel for the Underwriters in
connection with the copying and delivery of closing documents delivered by the
Company or the Company's accountants or counsel (including any local counsel).
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) or (v) hereof, the Company shall reimburse the Underwriters for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the
31
Company and LSLLC contained in this Agreement or in certificates of any officer
of the Company or LSLLC delivered pursuant to the provisions hereof, to the
performance by the Company and LSLLC of their respective covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Date (or the applicable Option Closing Date, as
the case may be) no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or, to the knowledge of the Company,
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. The Prospectus shall have been
filed with the Commission in the manner and within the time period required
by Rule 424(b) (without reliance upon Rule 424(b)(8)) and each Issuer Free
Writing Prospectus required to be filed shall have been filed with the
Commission in the manner and within the time period required by Rule 433,
and prior to Closing Date, the Company shall have provided evidence
satisfactory to the Representatives of such timely filing.
(b) Opinion of Counsel for Company. At Closing Date, the
Representative shall have received the favorable opinion, dated as of
Closing Date, of Xxxxxxx Coie LLP, counsel for the Company ("Company
Counsel") and of Hunton & Xxxxxxxx LLP, special patent counsel to the
Company ("Patent Counsel"), each in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letters for each of the other Underwriters, to the effect set forth in
Exhibits D and E, respectively, hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing Date, the
Representatives shall have received the favorable opinion, dated as of
Closing Date, of Sidley Austin LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters, with respect to the Registration Statement, the Prospectus,
the General Disclosure Packages and such other matters as the
Representatives may request. In giving such opinion such counsel may rely
without investigation, as to all matters governed by the laws of any
jurisdictions other than the law of the State of New York or the federal
law of the United States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and of public officials.
(d) Officers' Certificate. At Closing Date or the applicable Option
Closing Date, as the case may be, there shall not have been, since the date
hereof or since the respective dates as of which information is given in
the Registration Statement, the Statutory Prospectus, the Prospectus or
either General Disclosure Package (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), any material
adverse change in the condition, financial or otherwise, or in the results
of operations, business affairs or business prospects of the Company,
whether or not arising
32
in the ordinary course of business, and, at the Closing Date, the
Representatives shall have received a certificate of the President or the
Chief Executive Officer of the Company and of the Chief Financial Officer
of the Company, dated as of Closing Date, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties of the Company in this Agreement are true and correct with the
same force and effect as though expressly made at and as of Closing Date,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing
Date under or pursuant to this Agreement, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to
their knowledge, are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from
PricewaterhouseCoopers LLP a letter, dated the date of this Agreement and
in form and substance satisfactory to the Representatives, together with
signed or reproduced copies of such letter for each of the other
Underwriters, 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 of the Company
contained in the Registration Statement, the General Disclosure Packages
(including, without limitation, the Statutory Prospectus forming a part of
any General Disclosure Package) and the Prospectus (and any amendments or
supplements thereto) and any Issuer Free Writing Prospectuses.
(f) Bring-down Comfort Letter. At Closing Date, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Date and in form and substance satisfactory to the Representatives,
to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Date.
(g) Approval of Listing. At Closing Date and each Option Closing Date,
if any, the Securities to be purchased by the Underwriters at such time
shall have been approved for listing on the Nasdaq Global Market, subject
only to official notice of issuance.
(h) Lock-up Agreements. Prior to the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by each of the Company's directors and officers,
LSLLC and each other holder of any shares of outstanding Common Stock or
other Capital Stock and each holder of any outstanding options, warrants or
other securities convertible into, or exchangeable or exercisable for,
Common Stock or other Capital Stock.
(i) No Objection. Prior to the date of this Agreement, NASD Regulation
Inc. shall have confirmed in writing that it has no objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
33
(j) Opinion of LSLLC Counsel; Certificate of LSLLC. At the Closing
Date, the Representative shall have received the favorable opinion, dated
as of the Closing Date, of Xxxxxxx Xxxxx & Xxxxx LLP, counsel to LSLLC
("LSLLC Counsel"), in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters, to the effect set forth in Exhibit F
hereto, and to such further effect as counsel to the Underwriters may
reasonably request; and, at the Closing Date, the Representatives shall
have received a certificate of the President or the Chief Executive Officer
of LSLLC and of the Chief Financial Officer of LSLLC, dated the Closing
Date, to the effect that (i) the representations and warranties of LSLLC in
this Agreement are true and correct with the same force and effect as if
expressly made at and as of the Closing Date and (ii) LSLLC has complied
with all agreements and satisfied all conditions on its part to be
performed or satisfied as or prior to the Closing Date under or pursuant to
this Agreement.
(k) Pre-Closing Transactions. Prior to the purchase of the Initial
Securities on the Closing Date, the Pre-Closing Transactions shall have
been duly consummated at the respective times and on the terms contemplated
by this Agreement, the General Disclosure Packages and the Prospectus and
the Representatives shall have received a copy of the amended and restated
charter of the Company certified by the Secretary of State of the State of
Washington, the Investors Rights Agreement Amendment, the Amendments and
Waivers and the Lease Consents, duly executed by the requisite parties, and
such other evidence that the Pre-Closing Transactions have been consummated
as the Representatives may reasonably request.
(l) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities on any Option Closing
Date that is after the Closing Date, the obligations of the several
Underwriters to purchase the applicable Option Securities shall be subject
to the conditions specified in the introductory paragraph of this Section 5
and to the further condition that, at the applicable Option Closing Date,
the Representatives shall have received:
(1) Officers' Certificate. A certificate, dated such Option
Closing Date, to the effect set forth in, and signed by the officers
specified in, Section 5(d) hereof, except that the references in such
certificate to the Closing Date shall be changed to refer to such
Option Closing Date.
(2) Opinion of Counsel for Company. The favorable opinion of
Company Counsel and Patent Counsel, each in form and substance
satisfactory to counsel for the Underwriters, dated such Option
Closing Date, relating to the Option Securities to be purchased on
such Option Closing Date and otherwise to the same effect as the
opinions required by Section 5(b) hereof.
(3) Opinion of Counsel for Underwriters. The favorable opinion of
Sidley Austin LLP, counsel for the Underwriters, dated such Option
Closing Date, relating to the Option Securities to be purchased on
such Option Closing Date and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
34
(4) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Option Closing Date, substantially in
the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Option Closing
Date.
(5) Opinion of LSLLC Counsel; Certificate of LSLLC. The favorable
opinion of LSLLC Counsel, dated such Option Closing Date, to the same
effect as the opinion required by Section 5(j) hereof, and a
certificate, to the effect set forth in, and signed by the officers of
LSLLC specified in, Section 5(j) hereof, except that the references in
such certificate to the Closing Date should be changed to refer to
such Option Closing Date.
(m) Additional Documents. At Closing Date and at each Option Closing
Date, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained in this Agreement; and all proceedings taken by the Company and
LSLLC in connection with the issuance and sale of the Securities as herein
contemplated and in connection with the other transactions contemplated by
this Agreement shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase
of Option Securities on an Option Closing Date which is after the Closing
Date, the obligations of the several Underwriters to purchase the relevant
Option Securities, may be terminated by the Representatives by notice to
the Company at any time on or prior to Closing Date or such Option Closing
Date, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section 4 hereof and
except that Sections 1, 6, 7 and 8 hereof shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification by the Company. 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 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement
or alleged untrue statement of a material fact included in the Statutory
Prospectus, any other
35
preliminary prospectus, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representatives),
reasonably incurred 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 statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above,
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), or in the Statutory Prospectus, any other
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification by LSLLC. LSLLC 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 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arising out of any untrue statement
or alleged untrue statement of a material fact included in the Statutory
Prospectus, any other preliminary prospectus, any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto), or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or
36
threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected with
the written consent of LSLLC; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representatives),
reasonably incurred 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 statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above,
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission (1) of any
fact, circumstance or any other matter as of a date on or after the Spin Off
Date (other than facts, circumstances and other matters specifically relating to
LSLLC or any of its subsidiaries, the LSLLC Agreements or the Meiji Agreement),
(2) in any financial statements or financial information contained in the
Registration Statement (or any amendment thereto), or in the Statutory
Prospectus, any other preliminary prospectus, any Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement thereto) or (3) made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto), or in the Statutory
Prospectus, any other preliminary prospectus, any Issuer Free Writing Prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Indemnification by the Underwriters. Each Underwriter severally agrees
to indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section 6, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto) or the Statutory Prospectus, any other preliminary
prospectus, any Issuer Free Writing Prospectus, or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use in the Registration Statement (or such
amendment thereto) or the Statutory Prospectus, such other preliminary
prospectus, such Issuer Free Writing Prospectus or the Prospectus (or such
amendment or supplement thereto), as the case may be.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected as follows:
counsel to the Underwriters and each
37
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall be selected by the
Representatives; and, counsel to the Company, its directors, each of its
officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for the fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, and the fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for the Company, its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, in each case in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) 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.
(e) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) or Section 6(b)(ii), as the case may be, effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(f) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a request
in writing from the Representatives, to indemnify and hold harmless the
Underwriters from and against any and all losses, liabilities, claims, damages
and expenses incurred by any of the Underwriters as a result of the failure of
any Reserved Security Offeree to pay for and accept delivery of Reserved
Securities which such Reserved Security Offeree agreed (orally or in writing
(including by email or any other form of electronic communication)) to purchase.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party
38
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and LSC on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and LSC on the
one hand and of 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 relative benefits received by the Company and LSC on the one hand and
the Underwriters on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.
The relative fault of the Company and LSC on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, LSC 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 (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 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, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any 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. Notwithstanding the
provisions of this Section 7, LSLLC shall not be required to contribute in
respect to any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or omission
made in the Registration Statement (or any amendment thereto) or in the
Statutory Prospectus, any other preliminary prospectus, any Issuer Free Writing
Prospectus or the Prospectus (or any amendment or supplement thereto) (i) of any
fact, circumstance or other matter as of a date on or after the Spin Off Date
(other than facts,
39
circumstances or other matters specifically relating to LSLLC or any of its
subsidiaries, the LSLLC Agreement or the Meiji Agreement) or (ii) in any
financial statements or financial information contained in the Registration
Statement (or any amendment thereto) or in the Statutory Prospectus, any other
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) 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 1933 Act or Section 20 of
the 1934 Act shall have the same rights 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 Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Exhibit A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or LSLLC submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company or LSLLC, and shall survive delivery of the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time on or prior to Closing Date (and, if any
Option Securities are to be purchased on an Option Closing Date which occurs
after the Closing Date, the Representatives may terminate the obligations of the
several Underwriters to purchase such Option Securities, by notice to the
Company, at any time on or prior to such Option Closing Date) (i) if 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 or any General
Disclosure Package, any material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
Global Market, or if trading generally on the American Stock Exchange or the
NYSE or in the Nasdaq Global Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
40
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or a
material disruption has occurred in commercial banking or securities settlement
or clearance services in the United States or in Europe, or (iv) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 hereof shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Date or an Option Closing Date to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters; or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to
any Option Closing Date which occurs after the Closing Date, the obligation
of the Underwriters to purchase and of the Company to sell the Option
Securities that were to have been purchased and sold on such Option Closing
Date, shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of an Option Closing Date which is after the
Closing Date, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, the Representatives shall have the right to postpone Closing
Date or the relevant Option Closing Date, as the case may be, for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard
41
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Wachovia
Capital Markets, LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and notices to
the Company shall be directed to it at 00000 X.X. Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention of Chief Executive Officer; and notices
to LSLLC shall be directed to it at 00000 X.X. Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, Attention of Xxxxx Xxxx.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and LSLLC and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and LSLLC and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company and
LSLLC and their respective successors, and said controlling persons and officers
and directors and their heirs and legal representatives, and for the benefit of
no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS MAY
OTHERWISE BE EXPRESSLY SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
SECTION 14. Effect of Headings. The Section and Exhibit headings herein are
for convenience only and shall not affect the construction hereof.
SECTION 15. Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below:
"Applicable Time" means __________ (New York time) on __________, 2006 or
such other date or time as agreed by the Company and the Representatives.
"Capital Stock" means any Common Stock, Series A Preferred Stock, Preferred
Stock or other capital stock of the Company.
"Commission" means the Securities and Exchange Commission.
"Company Documents" means any contracts, indentures, mortgages, deeds of
trust, loan or credit agreements, bonds, notes, debentures, evidences of
indebtedness, leases or other instruments or agreements to which the Company is
a party or by which the Company is bound or to which any of the property or
assets of the Company is subject, including, without limitation, all Subject
Instruments.
"XXXXX" means the Commission's Electronic Data Gathering, Analysis and
Retrieval System.
42
"Exclusive License Agreement" means the Exclusive License Agreement
effective as of October 5, 2005 between LSC and the, including any amendments or
supplements thereto Company.
"Exempt Electronic Road Show" means any "road show" that is a "written
communication" within the meaning of Rule 433(d)(8)(i) and that, pursuant to
Rule 433(d)(ii), is not required to be filed with the Commission.
"GAAP" means generally accepted accounting principles.
"Initial Registration Statement" means the Company's registration statement
on Form S-1 (Registration No. 333-133474), as amended (if applicable), at the
time it became effective, including the Rule 430A Information. In addition, in
the event that any Rule 430C Information is deemed, pursuant to Rule 430C, to be
part of and included in the Initial Registration Statement, then the term
"Initial Registration Statement" shall also include such Rule 430C information
from and after the time that such Rule 430C information is deemed, pursuant to
Rule 430C, to be part of and included in the Initial Registration Statement.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433, relating to the Securities (including,
without limitation, any "road show" that is a "written communication" within the
meaning of Rule 433(d)(8)(i) whether or not required to be filed with the
Commission, any issuer free writing prospectus that is exempt from filing
pursuant to Rule 433(d)(5)(i) because it contains a description of the
Securities or of the offering that does not reflect the final terms, and all
issuer free writing prospectuses that are listed in Exhibit H or Exhibit I
hereto), in each case in the form furnished (electronically or otherwise) to the
Underwriters for use in connection with the offering of the Securities or, in
the case of any such "road show" that is a "written communication," in the form
made available to prospective investors in connection with the offering of the
Securities.
"Issuer General Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by it being listed in Exhibit H hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus or an
Issuer Pricing Free Writing Prospectus.
"Issuer Pricing Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being listed on Exhibit I hereto.
"Lien" means any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
"LSLLC" means, collectively, Light Sciences, LLC, a Washington limited
liability company, and unless otherwise expressly stated or the context
otherwise requires, its predecessors, including, without limitation, LSC and
Light Sciences Limited Partnership, a Washington limited partnership.
43
"LSLLC Agreements" means, collectively, the Exclusive License Agreement,
the Sublicense Agreement, the Stock Option Agreement and the Sublease Agreement.
"Master Lease" means, collectively, the sublease agreement dated September
9, 2002 between Great Plains Software O.C., Inc. and LSLLC and the Lease dated
March 2, 2000 between Snoqualmie Ridge Cascade View LLC and Great Plains
Software O.C., Inc.
"Meiji Agreement" means the License and Supply Agreement dated April 28,
2000 among LSLLC, Nippon Petrochemicals Co., Ltd. ("NPC") and Meiji Seika
Kaisha, Ltd. ("Meiji," and together with NPC, the "LS11 Licensors"), including
any amendments or supplements thereto.
"NASD" means the National Association of Securities Dealers, Inc.
"NYSE" means the New York Stock Exchange.
"Organizational Documents" means (a) in the case of a corporation, its
charter and by-laws; (b) in the case of a limited or general partnership, its
partnership certificate, certificate of formation or similar organizational
document and its partnership agreement; (c) in the case of a limited liability
company, its articles of organization, certificate of formation or similar
organizational documents and its operating agreement, limited liability company
agreement, membership agreement or other similar agreement; (d) in the case of a
trust, its certificate of trust, certificate of formation or similar
organizational document and its trust agreement or other similar agreement; and
(e) in the case of any other entity, the organizational and governing documents
of such entity.
"Preferred Stock" means the Company's preferred stock, par value $0.001 per
share.
"preliminary prospectus" means the Statutory Prospectus and any other
prospectus used in connection with the offering of the Securities that was used
before the Initial Registration Statement became effective, or that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, or that omitted the Rule 430A Information or that was captioned
"Subject to Completion."
"Registration Statement" means the Initial Registration Statement; provided
that, if a Rule 462(b) Registration Statement is filed with the Commission, then
the term "Registration Statement" shall also include such Rule 462(b)
Registration Statement.
"Repayment Event" means any event or condition which gives the holder of
any bond, note, debenture or other evidence of indebtedness (or any person
acting on such 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
subsidiary of the Company.
"Rule 164," "Rule 172," "Rule 173," "Rule 405," "Rule 424(b)," "Rule 430A,"
"Rule 430C," "Rule 433" and "Rule 462(b)" refer to such rules under the 1933
Act.
"Rule 430A Information" means the information included in the Prospectus
that was omitted from the Initial Registration Statement at the time it became
effective but that is deemed
44
to be a part of the Initial Registration Statement at the time it became
effective pursuant to Rule 430A.
"Rule 430C Information" means information, if any, deemed to be part of and
included in the Initial Registration Statement pursuant to Rule 430C.
"Rule 462(b) Registration Statement" means a registration statement filed
by the Company pursuant to Rule 462(b) for the purpose of registering any of the
Securities under the 1933 Act, including the Rule 430A Information.
"Xxxxxxxx-Xxxxx Act" means the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations promulgated thereunder or implementing the provisions thereof.
"Series A Preferred Stock" means the Company's Series A Convertible
Preferred Stock, par value $0.001 per share.
"Statutory Prospectus" means the preliminary prospectus dated September
__________, 2006 in the form first furnished (electronically or otherwise) to
the Underwriters for use in connection with the offering of the Securities.
"Stock Option Agreement" means the Stock Option Administration Agreement
dated as of June 23, 2006 between LSLLC and the Company, including any
amendments or supplements thereto.
"Subject Instruments" means the Shareholder Documents, the LSLLC
Agreements, the Meiji Agreement and all other instruments, agreements and
documents filed as exhibits to the Registration Statement pursuant to Rule
601(b)(10) of Regulation S-K of the Commission; provided that if any instrument,
agreement or other document filed as an exhibit to the Registration Statement as
aforesaid has been redacted or if any portion thereof has been deleted or is
otherwise not included as part of such exhibit (whether pursuant to a request
for confidential treatment or otherwise), the term "Subject Instruments" shall
nonetheless mean such instrument, agreement or other document, as the case may
be, in its entirety, including any portions thereof which shall have been so
redacted, deleted or otherwise not filed.
"Sublease Agreement" means the Sublease Agreement effective as of October
6, 2005 between LSLLC and the Company, including any amendments or supplements
thereto, including any amendments or supplements thereto.
"Sublicense Agreement" means the Sublicense Agreement effective as of
October 5, 2005 between LSLLC and the Company, including any amendments or
supplements thereto.
"1933 Act" means the Securities Act of 1933, as amended.
"1933 Act Regulations" means the rules and regulations of the Commission
under the 1933 Act.
"1934 Act" means the Securities Exchange Act of 1934, as amended.
45
"1934 Act Regulations" means the rules and regulations of the Commission
under the 1934 Act.
"1940 Act" means the Investment Company Act of 1940, as amended.
All references in this Agreement to the Registration Statement, the Initial
Registration Statement, any Rule 462(b) Registration Statement, the Statutory
Prospectus, any other preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to XXXXX; all references in this Agreement to any
Issuer Free Writing Prospectus that is required to be filed with the Commission
pursuant to Rule 433 shall be deemed to include the copy thereof filed with the
Commission pursuant to XXXXX; and all references in the Agreement to
"supplements" to the Statutory Prospectus, any other preliminary prospectus or
the Prospectus shall include, without limitation, any supplement, "wrapper" or
similar materials prepared in connection with any offering or private placement
of any Securities by the Underwriters outside of the United States.
SECTION 16. Permitted Free Writing Prospectuses. The Company represents,
warrants and agrees that, unless it obtains the prior consent of the
Representatives, and each Underwriter, severally and not jointly, represents and
agrees that, unless it obtains the prior consent of the Company and the
Representatives, it has not made and will not make any offer relating to the
Securities 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. Any such free
writing prospectus consented to by the Representatives or by the Company and by
the Representatives, as the case may be, is hereinafter referred to as a
"Permitted Free Writing Prospectus." The Company represents and warrants that it
has treated and agrees that it will treat each Permitted Free Writing Prospectus
as an "issuer free writing prospectus," as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted
Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping. For the purposes of clarity, the parties
hereto agree that all free writing prospectus, if any, listed on Exhibits H or I
hereto are Permitted Free Writing Prospectuses.
SECTION 17. Absence of Fiduciary Relationship. The Company and LSLLC
acknowledge and agree that:
(a) Each of the Underwriters is acting solely as an underwriter in
connection with the public offering of the Securities and no fiduciary, advisory
or agency relationship between the Company or LSLLC, on the one hand, and any of
the Underwriters, on the other hand, has been or will be created in respect of
any of the transactions contemplated by this Agreement, irrespective of whether
or not any of the Underwriters have advised or is advising the Company or LSLLC
on other matters and none of the Underwriters has any obligation to the Company
or LSLLC with respect to the transactions contemplated by this Agreement except
the obligations expressly set forth in this Agreement;
46
(b) the public offering price of the Securities and the price to be paid by
the Underwriters for the Securities set forth in this Agreement were established
by the Company following discussions and arms-length negotiations with the
Representatives;
(c) each is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;
(d) in connection with each transaction contemplated by this Agreement and
the process leading to such transactions, each Underwriter is and has been
acting solely as principal and not as fiduciary, advisor or agent of the Company
or LSLLC or any of their respective affiliates, shareholders (or other equity
holders), creditors or employees or any other party;
(e) none of the Underwriters has provided any legal, accounting, regulatory
or tax advice with respect to the transactions contemplated by this Agreement
and the Company or LSLLC, as the case may be, has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate;
(f) each is aware that the Underwriters and their respective affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Company and LSLLC and that none of the Underwriters has any
obligation to disclose such interests and transactions to the Company or LSLLC
by virtue of any fiduciary, advisory or agency relationship; and
(g) each waives, to the fullest extent permitted by law, any claims it may
have against any of the Underwriters for breach of fiduciary duty or alleged
breach of fiduciary duty and agrees that none of the Underwriters shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to it in
respect of such a fiduciary duty claim or to any person asserting a fiduciary
duty claim on its behalf or in right of it or any of its shareholders, employees
or creditors.
[SIGNATURE PAGE FOLLOWS]
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and LSLLC a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company and LSLLC in accordance with its terms.
Very truly yours,
LIGHT SCIENCES ONCOLOGY, INC.
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
LIGHT SCIENCES, LLC
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CONFIRMED AND ACCEPTED, as of the
date first above written:
XXXXX AND COMPANY, LLC
By
----------------------------------
Authorized Signatory
WACHOVIA CAPITAL MARKETS, LLC
By
----------------------------------
Authorized Signatory
For themselves and as Representative of the Underwriters named in Exhibit A
hereto.
48
