EXHIBIT 1.1
_____________ Shares
SGX Pharmaceuticals, Inc.
Common Stock
UNDERWRITING AGREEMENT
___________, 2006
CIBC World Markets Corp.
Xxxxx Xxxxxxx & Co.
JMP Securities LLC
c/o CIBC World Markets Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
SGX Pharmaceuticals, Inc., a Delaware corporation (the "Company")
proposes, subject to the terms and conditions contained herein, to sell to you
and the other underwriters named on Schedule I to this Agreement (the
"Underwriters"), for whom you are acting as Representatives (the
"Representatives"), an aggregate of shares (the "Firm Shares") of the Company's
common stock, $0.001 par value per share (the "Common Stock"). All of the Firm
Shares are to be issued and sold by the Company. The respective amounts of the
Firm Shares to be purchased by each of the several Underwriters are set forth
opposite their names on Schedule I hereto. In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional shares (the
"Option Shares") of Common Stock from the Company for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are collectively called the "Shares."
The Company has prepared and filed in conformity with the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), and the
published rules and regulations thereunder (the "Rules") adopted by the
Securities and Exchange Commission (the "Commission") a Registration Statement
(as hereinafter defined) on Form S-1 (No. 333-128059), including a preliminary
prospectus relating to the Shares, and such amendments thereof as may have been
required to the date of this Agreement. Copies of such Registration Statement
(including all amendments thereof) and of the related Preliminary Prospectus (as
hereinafter defined) have heretofore been delivered by the Company to you. The
term "Preliminary Prospectus" means the preliminary prospectus included as a
part of the Registration Statement or filed with the Commission by the Company
pursuant to Rule 424(a) of the Rules in the form first used to make offers and
described on Schedule IV hereto. The term "Registration Statement" as used in
this Agreement means the initial registration statement (including all exhibits
and financial schedules thereto), as amended at the time and on the date it
becomes effective (the "Effective Date"), including the information (if any)
contained in the form of final prospectus filed with the Commission pursuant to
Rule 424(b) of the Rules and deemed to be part thereof at the time of
effectiveness pursuant to Rule 430A of the Rules. If the Company has filed an
abbreviated registration statement to register additional Shares pursuant to
Rule 462(b) under the Rules (the "462(b) Registration Statement"), then any
reference herein to the Registration Statement shall also be deemed to include
such 462(b) Registration Statement. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the Registration
Statement at the time of effectiveness or, if Rule 430A of the Rules is relied
on, the term Prospectus shall also include the final prospectus filed with the
Commission pursuant to and within the time limits described in Rule 424(b) of
the Rules.
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The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Statutory Prospectus
(as hereinafter defined) and the Prospectus, as soon after the Effective Date
and the date of this Agreement as the Representatives deem advisable. The
Company hereby confirms that the Underwriters and dealers have been authorized
to distribute or cause to be distributed each Preliminary Prospectus and each
Issuer Free Writing Prospectus (as hereinafter defined) in connection with the
offering of the Shares and are authorized to distribute the Prospectus (as from
time to time amended or supplemented if the Company furnishes amendments or
supplements thereto to the Underwriters) in connection with the sale of the
Shares.
1. Sale, Purchase, Delivery and Payment for the Shares. On the basis of
the representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $ per
share (the "Initial Price"), the number of Firm Shares set forth
opposite the name of such Underwriter under the column "Number of Firm
Shares to be Purchased" on Schedule I to this Agreement, subject to
adjustment in accordance with Section 8 hereof.
(b) The Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, all or any part of the
Option Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted by
the Representatives to eliminate fractions) of the total number of
Option Shares to be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised only to
cover over-allotments in the sales of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, New York City time, on the business day before the
Firm Shares Closing Date (as defined below), and from time to time
thereafter within 30 days after the date of this Agreement, in each case
upon written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by the
Representatives to the Company no later than 12:00 noon, New York City
time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm
Shares Closing Date) of such purchase.
(c) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the offices of CIBC
World Markets Corp., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., New York City time, on the third business day following the
date of this Agreement or at such time on such other date, not later
than ten (10) business days after the date of this Agreement, as shall
be agreed upon by the Company and the Representatives (such time and
date of delivery and payment are called the "Firm Shares Closing Date").
In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and
delivery of the certificates, for such Option Shares shall be made at
the above-mentioned offices, or at such other place as shall be agreed
upon by the Representatives and the Company, on each date of delivery as
specified in the notice from the Representatives to the Company (such
time and date of delivery and payment are called the "Option Shares
Closing Date"). The Firm Shares Closing Date and any Option Shares
Closing Date are called, individually, a "Closing Date" and, together,
the "Closing Dates."
(d) Payment shall be made to the Company by wire transfer of
immediately available funds or by certified or official bank check or
checks payable in New York Clearing House (same day) funds drawn to the
order of the Company against delivery of the respective certificates to
the
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Representatives for the respective accounts of the Underwriters of
certificates for the Shares to be purchased by them.
(e) Certificates evidencing the Shares shall be registered in
such names and shall be in such denominations as the Representatives
shall request at least two full business days before the Firm Shares
Closing Date or, in the case of Option Shares, on the day of notice of
exercise of the option as described in Section 1(b) and shall be
delivered by or on behalf of the Company to the Representatives through
the facilities of the Depository Trust Company ("DTC") for the account
of such Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and packaging,
at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares
Closing Date in the case of the Option Shares).
2. Representations and Warranties of the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Firm Shares
Closing Date and as of each Option Shares Closing Date (if any), as follows:
(a) On the Effective Date, the Registration Statement complied,
and on the date of the Prospectus, the date any post-effective amendment
to the Registration Statement becomes effective, the date any supplement
or amendment to the Prospectus is filed with the Commission and each
Closing Date, the Registration Statement and the Prospectus (and any
amendment thereof or supplement thereto) will comply, in all material
respects, with the requirements of the Securities Act and the Rules and
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the Commission thereunder. The
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and on the Effective Date and the
other dates referred to above neither the Registration Statement nor the
Prospectus, nor any amendment thereof or supplement thereto, will
contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. When the Preliminary
Prospectus was first filed with the Commission (whether filed as part of
the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement
thereto was first filed with the Commission, such Preliminary Prospectus
as amended or supplemented complied in all material respects with the
applicable provisions of the Securities Act and the Rules and did not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading. If applicable, each
Preliminary Prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 2(a) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus or any
amendments thereof or supplements thereto made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by
the Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished
in writing by the Representatives on behalf of the several Underwriters
for use in the Registration Statement or the Prospectus or any
amendments thereof or supplements thereto is the statements contained in
the tenth, thirteenth and fourteenth paragraphs under the caption
"Underwriting" in the Preliminary Prospectus (the "Underwriter
Information").
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(b) As of the Applicable Time (as hereinafter defined), the
Statutory Prospectus (as hereinafter defined), as then amended or
supplemented by the Company, if applicable, did not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements
therein not misleading. Each Issuer Free Writing Prospectus (i) is
identified in Schedule III hereto, (ii) when considered as part of the
Statutory Prospectus, did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, and
(iii) that the Company is required to file pursuant to Rule 433(d) of
the Rules has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act and the applicable Rules.
The Company has made at least one version of the Road Show available
without restriction by means of graphic communication to any person,
including any potential investor in the Shares (and if there is more
than one version of a "bona fide electronic road show" as defined in
Rule 433(h)(5) under the Securities Act that is a written communication,
the Road Show was made available no later than the other versions).
Notwithstanding the foregoing, none of the representations and
warranties in this paragraph 2(b) shall apply to statements in, or
omissions from, the Statutory Prospectus or any amendments thereof or
supplements thereto made in reliance upon, and in conformity with, the
Underwriter Information.
As used in the foregoing paragraph and elsewhere in this
Agreement:
"Applicable Time" means ___:00 [a/p]m (Eastern time) on
the date of this Underwriting Agreement.
"Issuer Free Writing Prospectus" means each "issuer free
writing prospectus" (as defined in Rule 405 of the
Rules) prepared by or on behalf of the Company or used
or referred to by the Company in connection with the
offering of the Shares. Each Issuer Free Writing
Prospectus is identified in Schedule III hereto.
"Statutory Prospectus" as of any time means the
Preliminary Prospectus relating to the Shares that is
included in the Registration Statement immediately prior
to the Applicable Time together with each Issuer Free
Writing Prospectus used, issued or filed on or after the
date of such Preliminary Prospectus and at or prior to
the Applicable Time. For purposes of this definition,
information contained in a form of prospectus that is
deemed retroactively to be a part of the Registration
Statement pursuant to Rule 430A of the Rules shall be
considered to be included in the Statutory Prospectus as
of the actual time that form of prospectus is filed with
the Commission pursuant to Rule 424(b) of the Rules.
"Road Show" means the "bona fide electronic road show"
as defined in Rule 433(h)(5) under the Securities Act
that has been made available by the Company without
restriction to any person.
(c) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of any
Preliminary Prospectus, any "free writing prospectus," as defined in
Rule 405 of the Rules, pertaining to the Company, the Shares or the
Public Offering, or the Prospectus has been issued by the Commission
and, to the Company's knowledge, no proceedings for that purpose have
been instituted or are threatened under the Securities Act. Any required
filing of the Prospectus and any supplement thereto pursuant to Rule
424(b) of the Rules has been or will be made in the manner and within
the time period required by such Rule 424(b). Any material required
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to be filed by the Company pursuant to Rule 433(d) of the Rules has been
or will be made in the manner and within the time period required by
such Rules.
(d) The financial statements of the Company (including all notes
and schedules thereto) included in the Registration Statement, the
Statutory Prospectus and the Prospectus present fairly, in all material
respects, the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; and such financial statements
and related schedules and notes thereto, and the unaudited financial
information filed with the Commission as part of the Registration
Statement, have been prepared in conformity with generally accepted
accounting principles, consistently applied throughout the periods
involved (provided that non-year-end financial statements are subject to
normal recurring year-end audit adjustments that are not expected to be
material in the aggregate and do not contain all footnotes required by
generally accepted accounting principles). The summary and selected
consolidated financial data included in the Statutory Prospectus and the
Prospectus present fairly, in all material respects, the information
shown therein as at the respective dates and for the respective periods
specified and have been presented on a basis consistent with the
consolidated financial statements set forth in the Statutory Prospectus
and the Prospectus and other financial information.
(e) Ernst & Young LLP (the "Auditor"), whose reports are filed
with the Commission as a part of the Registration Statement, are and,
during the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Rules.
(f) The Company and each of its subsidiaries is duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation or organization and is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by it
requires such qualification, except for such jurisdictions where the
failure to so qualify or be in good standing, individually or in the
aggregate, would not have a material adverse effect on the assets,
properties, condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the Company and
its subsidiaries considered as a whole (a "Material Adverse Effect");
and to the Company's knowledge, no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or qualification.
(g) The Company and each of its subsidiaries has all requisite
corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and
from all governmental or regulatory bodies or any other person or entity
(collectively, the "Permits"), to own, lease and license its assets and
properties and conduct its business, all of which are valid and in full
force and effect, except where the lack of such Permits, individually or
in the aggregate, would not have a Material Adverse Effect. The Company
and each of its subsidiaries has fulfilled and performed in all material
respects all of its material obligations with respect to such Permits
and, to the Company's knowledge, no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities Act,
the rules of the National Association of Securities Dealers, Inc. (the
"NASD") and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and to issue
and sell the Shares.
(h) At the time of the filing of the Registration Statement and
at the date hereof, the Company was not and is not an "ineligible
issuer," as defined in Rule 405 of the Rules, including without
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limitation the Company or any subsidiary thereof in the preceding three
years not having been convicted of a felony or misdemeanor or having
been made the subject of a judicial or administrative decree or order as
described in Rule 405 of the Rules.
(i) The Company and each of its subsidiaries owns or possesses
legally enforceable rights to use all patents, patent rights,
inventions, trademarks, trademark applications, trade names, service
marks, copyrights, copyright applications, licenses, know-how and other
similar rights and proprietary knowledge necessary for the conduct of
its business (collectively, "Intangibles") as conducted on the date
hereof and described in the Registration Statement and Prospectus.
Neither the Company nor any of its subsidiaries has received any written
notice of and neither the Company nor any of its subsidiaries has any
knowledge of any infringement of or conflict with asserted rights of
others with respect to any Intangibles.
(j) The Company and each of its subsidiaries has good and
marketable title in fee simple to all real property, and good and
marketable title to all tangible personal property owned by it, in each
case free and clear of all liens, encumbrances, claims, security
interests and defects, except as are disclosed in the Prospectus or such
as are not material to the Company and its subsidiaries, taken as a
whole, and do not materially interfere with the use made or proposed to
be made of such property, as of the date hereof, by the Company and its
subsidiaries. All property held under lease by the Company and its
subsidiaries is held by them under valid, existing and enforceable
leases, with only such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such
property by the Company and its subsidiaries. Subsequent to the
respective dates as of which information is given in the Registration
Statement, the Statutory Prospectus and the Prospectus, (i) there has
not been any Material Adverse Effect; (ii) neither the Company nor any
of its subsidiaries has sustained any loss or interference with its
assets, businesses or properties (whether owned or leased) from fire,
explosion, earthquake, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or any court or legislative or
other governmental action, order or decree which would have a Material
Adverse Effect; and (iii) since the date of the latest balance sheet
included in the Registration Statement, the Statutory Prospectus and the
Prospectus, except as otherwise disclosed in the Prospectus, neither the
Company nor its subsidiaries has (A) incurred any liability or
obligation, direct or contingent, for borrowed money, except such
liabilities or obligations incurred in the ordinary course of business,
(B) entered into any transaction not in the ordinary course of business
or (C) declared or paid any dividend or made any distribution on any
shares of its stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of its
capital stock.
(k) There is no document, contract or other agreement required
to be described in the Registration Statement, the Statutory Prospectus
and the Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required by the Securities
Act or Rules. Each description of a contract, document or other
agreement in the Registration Statement, the Statutory Prospectus and
the Prospectus accurately reflects in all material respects the terms of
the underlying contract, document or other agreement. Each contract,
document or other agreement described in the Registration Statement, the
Statutory Prospectus and the Prospectus or listed in the Exhibits to the
Registration Statement is in full force and effect and is valid and
enforceable by and against the Company or its subsidiaries, as the case
may be, in accordance with its terms. Neither the Company nor any of its
subsidiaries, if a subsidiary is a party, nor to the Company's
knowledge, any other party is in default in the observance or
performance of any term or obligation to be performed by it under any
such contract, document or other agreement and no event has occurred
which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the
aggregate, would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both would
constitute a default, in the
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due performance and observance of any term, covenant or condition, by
the Company or its subsidiary, if a subsidiary is a party thereto, of
any other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which Company or its properties or
business of a subsidiary or its properties or business may be bound or
affected which default or event, individually or in the aggregate, would
have a Material Adverse Effect.
(l) The statistical and market related data included in the
Registration Statement, the Statutory Prospectus and the Prospectus are
based on or derived from sources that the Company believes to be
reliable and accurate.
(m) Neither the Company nor any of its subsidiaries is in
violation of any term or provision of its charter or bylaws or of any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation, individually or in
the aggregate, would have a Material Adverse Effect.
(n) This Agreement has been duly authorized, executed and
delivered by the Company.
(o) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and
sale by the Company of the Shares) will give rise to a right to
terminate or accelerate the due date of any payment due under, or
conflict with or result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse of time or
both would constitute a default) under, or require any consent or waiver
under, or result in the execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or its
subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which either the Company or its
subsidiaries or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its subsidiaries, expect
where it would not have a Material Adverse Effect, or violate any
provision of the charter or by-laws of the Company or any of its
subsidiaries, except for such consents or waivers which have already
been obtained and are in full force and effect.
(p) On the date set forth therein, the Company had the
authorized and outstanding capital stock as set forth under the caption
"Capitalization" in the Statutory Prospectus and the Prospectus. The
certificates evidencing the Shares are in due and proper legal form and
have been duly authorized for issuance by the Company. All of the issued
and outstanding shares of Common Stock have been duly and validly issued
and are fully paid and nonassessable. Except as disclosed in the
Registration Statement, the Statutory Prospectus and the Prospectus or
as set forth in the Amended and Restated Investor Rights Agreement dated
April 21, 2005 by and among the Company and the parties named therein,
there are no statutory preemptive or other similar rights granted by the
Company to subscribe for or to purchase or acquire any shares of Common
Stock of the Company or any of its subsidiaries or any such rights
pursuant to its Certificate of Incorporation or bylaws or any agreement
or instrument to or by which the Company or any of its subsidiaries is a
party or bound, other than such rights that have been properly waived.
The Shares, when issued and sold pursuant to this Agreement, will be
duly and validly issued, fully paid and nonassessable and none of them
will be issued in violation of any preemptive or other similar right
granted by the Company. Except as disclosed in the Registration
Statement, the Statutory Prospectus and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of,
and there is no commitment, plan or arrangement to issue, any share of
stock of the Company or any of its subsidiaries or any security
convertible into, or exercisable or exchangeable for, such stock. The
Common Stock and the Shares conform in all material respects to all
statements in relation thereto
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contained in the Registration Statement, the Statutory Prospectus and
the Prospectus. All outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, and
are fully paid and nonassessable and are owned directly by the Company
or by another wholly-owned subsidiary of the Company free and clear of
any security interests, liens, encumbrances, equities or claims, other
than those described in the Statutory Prospectus and the Prospectus.
(q) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which
would individually or in the aggregate have a Material Adverse Effect;
and, to the knowledge of the Company, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others.
(r) No holder of any security of the Company has any right,
which has not been waived, to have any security owned by such holder
included in the Registration Statement or to demand registration of any
security owned by such holder for a period of 180 days after the date of
this Agreement. Each director and executive officer of the Company and
each stockholder of the Company listed on Schedule II has delivered to
the Representatives his enforceable written lock-up agreement in the
form attached to this Agreement as Exhibit A hereto ("Lock-Up
Agreement").
(s) All necessary corporate action has been duly and validly
taken by the Company and to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the Shares by
the Company. This Agreement has been duly and validly authorized,
executed and delivered by the Company and constitute and will constitute
legal, valid and binding obligations of the Company enforceable against
the Company in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
(t) Neither the Company nor any of its subsidiaries is involved
in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened, which dispute would have a Material Adverse Effect.
The Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers or contractors which
would have a Material Adverse Effect. The Company is not aware of any
threatened or pending litigation between the Company or its subsidiaries
and any of its executive officers which, if adversely determined, could
have a Material Adverse Effect.
(u) No transaction has occurred between or among the Company and
any of its officers or directors, stockholders or any affiliate or
affiliates of any such officer or director or stockholder that is
required to be described in and is not described in the Registration
Statement, the Statutory Prospectus and the Prospectus.
(v) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected
to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Common Stock or any security of the Company to
facilitate the sale or resale of any of the Shares.
(w) The Company and each of its subsidiaries has filed all
Federal, state, local and foreign tax returns which are required to be
filed through the date hereof, which returns are true and correct in all
material respects or has received valid extensions thereof, and has paid
all taxes shown on such returns and all assessments received by it to
the extent that the same are material and have become
8
due. To the Company's knowledge, there are no tax audits or
investigations pending, which if adversely determined would have a
Material Adverse Effect; nor to the Company's knowledge are there any
material proposed additional tax assessments against the Company or any
of its subsidiaries.
(x) The Shares have been duly authorized for quotation on the
National Association of Securities Dealers Automated Quotation
("Nasdaq") National Market System, subject to official Notice of
Issuance. A registration statement has been filed on Form 8-A pursuant
to Section 12 of the Exchange Act, which registration statement complies
in all material respects with the Exchange Act.
(y) The Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock
under the Exchange Act or the quotation of the Common Stock on the
Nasdaq National Market, nor has the Company received any notification
that the Commission or the Nasdaq National Market is contemplating
terminating such registration or quotation.
(z) The books, records and accounts of the Company and its
subsidiaries accurately and fairly reflect, in reasonable detail, the
transactions in, and dispositions of, the assets of, and the results of
operations of, the Company and its subsidiaries. The Company and each of
its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(aa) The Company is actively taking steps to establish
disclosure controls and procedures (as such term is defined in Rule
13a-15 under the Exchange Act), which: (i) are designed to ensure that
material information relating to the Company is made known to the
Company's principal executive officer and its principal financial
officer by others within the Company, particularly during the periods in
which the periodic reports required under the Exchange Act are required
to be prepared; (ii) provide for the periodic evaluation of the
effectiveness of such disclosure controls and procedures at the end of
the periods in which the periodic reports are required to be prepared;
and (iii) are effective in all material respects to perform the
functions for which they were established.
(bb) Based on the evaluation of its disclosure controls and
procedures as established to date, the Company is not aware of (i) any
significant deficiency in the design or operation of internal controls
which could adversely affect the Company's ability to record, process,
summarize and report financial data or any material weaknesses in
internal controls; or (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company's
internal controls.
(cc) Except as described in the Statutory Prospectus and the
Prospectus, there are no material off-balance sheet arrangements (as
defined in Item 303 of Regulation S-K) that have or are reasonably
likely to have a material current or future effect on the Company's
financial condition, revenues or expenses, changes in financial
condition, results of operations, liquidity, capital expenditures or
capital resources.
9
(dd) Except as described in the Statutory Prospectus and the
Prospectus and as preapproved in accordance with the requirements set
forth in Section 10A of the Exchange Act, the Auditor has not been
engaged by the Company to perform any "prohibited activities" (as
defined in Section 10A of the Exchange Act).
(ee) The Company's Board of Directors has validly appointed an
audit committee whose composition satisfies the requirements of Rule
4350(d)(2) of the Rules of the National Association of Securities
Dealers, Inc. (the "NASD Rules") and the Board of Directors and/or the
audit committee has adopted a charter that satisfies the requirements of
Rule 4350(d)(1) of the NASD Rules.
(ff) The Company is actively taking steps to ensure that it will
be in compliance with all other applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002, any related rules and regulations
promulgated by the Commission and corporate governance requirements
under the NASD Rules upon the effectiveness of such provisions as may be
applicable.
(gg) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the transactions as
described in the Statutory Prospectus and the Prospectus; all policies
of insurance insuring the Company or any of its subsidiaries or the
Company's or its subsidiaries' respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
each of its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects; and neither the
Company nor any subsidiary of the Company has any 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. Neither the
Company nor any of its subsidiaries has been denied any insurance
coverage which it has sought or for which it has applied.
(hh) Each approval, consent, order, authorization, designation,
declaration or filing of, by or with any regulatory, administrative or
other governmental body necessary in connection with the execution and
delivery by the Company of this Agreement and the consummation of the
transactions herein contemplated required to be obtained or performed by
the Company (except such additional steps as may be required by the NASD
or may be necessary to qualify the Shares for public offering by the
Underwriters under the state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(ii) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any
five percent or greater stockholder of the Company, except as set forth
in the Registration Statement or otherwise disclosed in writing to the
Representatives.
(jj) (i) Neither the Company nor any of its subsidiaries are in
violation of any applicable rules, laws and regulation relating to the
use, treatment, storage and disposal of toxic substances and protection
of health or the environment ("Environmental Law") which are applicable
to its business except for any violation which would not have a Material
Adverse Effect; (ii) neither the Company nor its subsidiaries has
received any notice from any governmental authority or third party of an
asserted claim under Environmental Laws; (iii) each of the Company and
each of its subsidiaries has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to the
conduct its business and is in compliance with all terms and conditions
of any such permit, license or approval, except for where non-compliance
would not have a Material Adverse Effect;
10
(iv) to the Company's knowledge, no facts currently exist that will
require the Company or any of its subsidiaries to make future material
capital expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, or to the Company's knowledge,
leased or occupied by the Company or its subsidiaries has been
designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise
designated as a contaminated site under applicable state or local law.
Neither the Company nor any of its subsidiaries has been named as a
"potentially responsible party" under CERCLA.
(kk) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the net proceeds therefrom
as described in the Statutory Prospectus and the Prospectus, will not be
subject to registration as an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act").
(ll) Neither the Company nor any other person associated with or
acting on behalf of the Company including, without limitation, any
director or officer or, to the Company's knowledge, any agent or
employee of the Company or its subsidiaries, has, directly or indirectly
while acting on behalf of the Company or its subsidiaries, (i) used any
corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity; (ii) made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(mm) The operations of the Company and its subsidiaries are and
have been conducted at all times in material compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions applicable to the Company, the
rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the "Money Laundering Laws") and no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of it subsidiaries with respect to the Money Laundering Laws is pending,
or to the best knowledge of the Company, threatened.
(nn) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject
to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will
not directly or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person who, to the Company's knowledge,
is currently subject to any U.S. sanctions administered by OFAC.
(oo) The clinical, pre-clinical and other trials, studies and
tests conducted by or on behalf of or sponsored by the Company or in
which the Company or its products or product candidates have
participated that are described in the Registration Statement and
Prospectus or the results of which are referred to in the Registration
Statement or Prospectus were and, if still pending, are being conducted
in all material respect in accordance with medical and scientific
protocols and research procedures that the Company reasonably believes
are appropriate. The descriptions in the Registration Statement and
Prospectus of the results of such trials, studies and tests are accurate
in all material respects and fairly present the data derived from such
trials, studies and tests, and the Company has no knowledge of any other
trials, studies or tests the results of which are materially
inconsistent with or otherwise materially
11
call into question the results described or referred to in the
Registration Statement and Prospectus. The Company has operated and
currently is in compliance in all material respects with applicable
statutes and implementing regulations administered or enforced by the
United States Food and Drug Administration ("FDA"), except where the
failure to so comply would not have a Material Adverse Effect. Except to
the extent disclosed in the Registration Statement and the Prospectus,
the Company has not received any notices or other correspondence from
the FDA or any other governmental agency requiring the termination,
suspension or modification of any clinical trials or pre-clinical
studies or tests that are described in the Registration Statement or
Prospectus or the results of which are referred to in the Registration
Statement or Prospectus.
(pp) Except as described in the Registration Statement, the
Statutory Prospectus and the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding
the Applicable Time, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, equity incentive plans or other
employee compensation plans or pursuant to outstanding options, rights
or warrants.
(qq) The Company has fulfilled its obligations, if any, in all
material respects, under the minimum funding standards of Section 302 of
the U.S. Employee Retirement Income Security Act of 1974 ("ERISA") and
the regulations and published interpretations thereunder with respect to
each "plan" as defined in Section 3(3) of ERISA and such regulations and
published interpretations in which its employees are eligible to
participate and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations
and published interpretations. No "Reportable Event" (as defined in 12
ERISA) has occurred with respect to any "Pension Plan" (as defined in
ERISA) for which the Company would have any material liability.
(rr) None of the Company, its directors or its officers has
distributed nor will distribute prior to the later of (i) the Firm
Shares Closing Date, or the Option Shares Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any
Preliminary Prospectus, the Prospectus, the Registration Statement and
other materials, if any, permitted by the Securities Act and consistent
with Section 4(e) below.
3. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) Notification that the Registration Statement became
effective on the Effective Date shall have been received by the
Representatives and the Prospectus shall have been timely filed with the
Commission in accordance with Section 4(a) of this Agreement and any
material required to be filed by the Company pursuant to Rule 433(d) of
the Rules shall have been timely filed with the Commission in accordance
with such rule.
(b) No order preventing or suspending the use of any preliminary
prospectus, the Prospectus or any "free writing prospectus", as defined
in Rule 405 of the Rules, pertaining to the Company, the Shares or the
Public Offering, shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in
effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission to be included in the
Registration Statement or the Prospectus or otherwise shall have been
complied with to the satisfaction of the Commission and the
Representatives. If the Company has elected to rely upon Rule 430A, Rule
430A information
12
previously omitted from the effective Registration Statement pursuant to
Rule 430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) within the prescribed time period and the
Company shall have provided evidence satisfactory to the Underwriters of
such timely filing, or a post-effective amendment providing such
information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A.
(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section
3(d) shall be true and correct when made and on and as of each Closing
Date as if made on such date. The Company shall have performed all
covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing
Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company to the
effect that: (i) the representations and warranties and agreements of
the Company in this Agreement were true and correct when made and are
true and correct as of such Closing Date; (ii) the Company has performed
all covenants and agreements and satisfied all conditions contained
herein required to be performed or satisfied by it at or prior to the
Closing Date; (iii) they have examined the Registration Statement, the
Statutory Prospectus (including any individual Issuer Free Writing
Prospectus) and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement, the Prospectus and each
Issuer Free Writing Prospectus, when considered as part of the Statutory
Prospectus, did not, and as of the Applicable Time, the Statutory
Prospectus did not, include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (B) since the Effective
Date no event has occurred which should have been set forth in a
supplement or an amendment to the Registration Statement, the Statutory
Prospectus or the Prospectus; and (iv) to their knowledge, 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 under the Securities Act.
(e) The Representatives shall have received (i) simultaneously
with the execution of this Agreement a signed letter from the Auditor
addressed to the Representatives and dated the date of this Agreement,
in form and substance reasonably satisfactory to the Representatives,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Statutory Prospectus, and (ii) on each such Closing Date, in form and
substance reasonably satisfactory to the Representatives, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) The Representatives shall have received on each Closing Date
from Xxxxxx Godward LLP, counsel for the Company, an opinion, addressed
to the Representatives and dated such Closing Date containing the
opinions substantially as set forth in Exhibit B attached hereto.
(g) The Representatives shall have received on each Closing Date
from Xxxxx, Xxxxxx & XxXxxxxx, P.C., special counsel for the Company
with respect to FDA regulatory matters, an opinion, addressed to the
Representatives and dated such Closing Date, containing the opinions
substantially as set forth in Exhibit C attached hereto.
13
(h) The Representatives shall have received on each Closing Date
from Xxxxxxxx and Xxxxxxxx and Crew LLP and Millen, White, Xxxxxx &
Xxxxxxxx, P.C., intellectual property counsel for the Company, opinions,
addressed to the Representatives and dated such Closing Date, containing
the opinions substantially as set forth in Exhibits D and E,
respectively, attached hereto.
(i) The Representatives shall have received on each Closing Date
from Xxxxxx & Xxxxxxx LLP, counsel for the Representatives, an opinion,
addressed to the Representatives and dated such Closing Date, containing
the opinions substantially as set forth in Exhibit F attached hereto.
(j) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Underwriters
counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(k) The Representatives shall have received copies of the
Lock-up Agreements executed by each entity or person listed on Schedule
II hereto.
(l) The Shares shall have been approved for quotation on the
Nasdaq National Market, subject only to official notice of issuance.
(m) The Company shall have furnished or caused to be furnished
to the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
4. Certain Covenants of the Company and the Underwriters.
(a) The Company covenants and agrees as follows:
(i) The Company will use its reasonable efforts to cause
the Registration Statement, if not effective at the time of
execution of this Agreement, and any amendments thereto, to
become effective as promptly as possible. The Company shall
prepare the Prospectus in a form reasonably approved by the
Representatives and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close
of business on the second business day following the execution
and delivery of this Agreement, or, if applicable, such earlier
time as may be required by the Rules. The Company will file with
the Commission all Issuer Free Writing Prospectuses that are
required to be filed under Rule 433(d) of the Rules in the time
and manner required under Rule 433(d) of the Rules.
(ii) The Company shall promptly advise the
Representatives in writing after it receives notice thereof (A)
when any post-effective amendment to the Registration Statement
shall have become effective or any supplement to the Prospectus
shall have been filed, (B) of any request by the Commission for
any amendment of the Registration Statement or the Prospectus or
for any additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending
the use of any preliminary prospectus or any "free writing
prospectus," as defined in Rule 405 of the Rules, pertaining to
the Company, the Shares or the Public Offering, or the
institution or threatening of any proceeding for that purpose
and (D) of the suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished the
14
Representatives a copy for its review prior to filing and shall
not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its
best efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and
the Rules (or, in lieu thereof, the notice referred to in Rule
173(a) of the Rules), any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary, in the Company's
reasonable judgment, to amend or supplement the Prospectus to
comply with the Securities Act or the Rules, the Company
promptly shall prepare and file with the Commission, subject to
the second sentence of paragraph (ii) of this Section 4(a), an
amendment or supplement which shall correct such statement or
omission or an amendment which shall effect such compliance.
(iv) If at any time following issuance of an Issuer Free
Writing Prospectus there occurs an event or development as a
result of which such Issuer Free Writing Prospectus would
conflict with the information contained in the Registration
Statement or would include an untrue statement of a material
fact or would omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances prevailing at the
subsequent time, not misleading, the Company will promptly
notify the Representatives and will promptly, at its own
expense, correct such conflict, untrue statement or omission by
amending or supplementing such Issuer Free Writing Prospectus
or, after consultation with the Representatives, as otherwise
may be permitted under the Rules.
(v) The Company shall make generally available to its
security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90 days
if such 12-month period coincides with the Company's fiscal
year), an earning statement (which need not be audited) of the
Company, covering such 12-month period, which shall satisfy the
provisions of Section 11(a) of the Securities Act or Rule 158 of
the Rules.
(vi) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, such number of
the following documents as the Representatives shall reasonably
request: conformed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and to
each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and all amendments thereof and, so
long as delivery of a prospectus by an Underwriter or dealer may
be required by the Securities Act or the Rules, as many copies
of any preliminary prospectus, any Issuer Free Writing
Prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonable
request. If applicable, the copies of the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus and the Prospectus and each amendment and supplement
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(vii) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the
Shares for offer and sale in connection with the offering under
the laws of such jurisdictions as the Representatives may
designate and shall maintain such
15
qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company
shall not be required in connection therewith, or as a condition
thereof, to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction or
subject itself to taxation as doing business in any
jurisdiction.
(viii) The Company, during the period when the
Prospectus is required to be delivered under the Securities Act
and the Rules or the Exchange Act (or in lieu thereof, the
notice referred to in Rule 173(a) of the Rules), will file all
reports and other documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the
regulations promulgated thereunder.
(ix) Without the prior written consent of CIBC World
Markets Corp. and Xxxxx Xxxxxxx & Co., for a period of 180 days
after the date of this Agreement, the Company shall not issue,
sell or register with the Commission (other than on Form S-8 or
on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any
securities convertible into, exercisable for or exchangeable for
equity securities of the Company), except for (A) the issuance
of the Shares pursuant to the Registration Statement, and (B)
the issuance of equity securities of the Company (or any
securities convertible into, exercisable for or exchangeable for
equity securities of the Company), (i) pursuant to the Company's
existing equity plans or bonus plan as described in the
Registration Statement and the Prospectus, (ii) pursuant to
currently outstanding options, warrants or convertible notes as
described in the Registration Statement, (iii) upon the
conversion of the Company's Series A or Series B Preferred
Stock, (iv) in connection with a strategic partnership, joint
venture, collaboration, lending or other similar arrangement, or
(v) in connection with the acquisition or license by the Company
of any business, products or technologies; provided, however,
that the shares issuable under clauses (iv) and (v) shall not
exceed, in the aggregate during such 180-day period, ten percent
(10.0%) of the Company's outstanding capital stock measured as
of the Firm Shares Closing Date, including the Shares to be
issued and sold hereunder. In the event that during this period,
(A) any such shares are issued or (B) any registration is
effected on Form S-8 or any successor form relating to shares
that are exercisable within such 180-day period, the Company
shall obtain the written agreement of such grantee or purchaser
or holder of such registered securities that, for a period of
180 days after the date of this Agreement, such person will not,
without the prior written consent of CIBC World Markets Corp.
and Xxxxx Xxxxxxx & Co., offer for sale, sell, distribute, grant
any option for the sale of, or otherwise dispose of, directly or
indirectly, or exercise any registration rights with respect to,
any shares of Common Stock (or any securities convertible into,
exercisable for, or exchangeable for any shares of Common Stock)
owned by such person. Notwithstanding the foregoing, (i) the
Company represents and warrants that each such grantee or
purchaser or holder of such registered securities shall be
subject to lockup restrictions materially consistent with those
set forth on Exhibit A attached hereto and the Company shall
enforce such rights and impose stop-transfer restrictions on any
such sale or other transfer or disposition of such shares until
the end of the period set forth in the applicable lock-up
restrictions, and to the extent such grantee or purchaser or
holder of such registered securities is subject to the lock-up
attached hereto as Exhibit A (ii) if (x) during the last 17 days
of the 180 day period described in this Section 4(a)(viii) the
Company issues an earnings release or material news or a
material event relating to the Company occurs; or (y) prior to
the expiration of such 180 day period, the Company announces
that it will release earnings results during the 16-day period
beginning on the last day of the 180 day period; the
restrictions imposed in this Section 4(a)(viii) shall continue
to apply until the expiration of the 18-day period beginning on
the issuance of the earnings release or the occurrence of the
material news or material event; provided, however, that this
sentence shall not apply if the research published or
distributed on the Company is compliant
16
under Rule 139 of the Securities Act and the Company's
securities are actively traded as defined in Rule 101(c)(1) of
Regulation M of the Exchange Act.
(x) On or before completion of this offering, the
Company shall make all filings required to be made by the
Company under applicable securities laws and by the Nasdaq
National Market (including any required registration under the
Exchange Act).
(xi) Prior to the Closing Date, the Company will issue
no press release or other communications directly or indirectly
and hold no press conference with respect to the Company, the
condition, financial or otherwise, or the earnings, business
affairs or business prospects of any of them, or the offering of
the Shares without giving prior notification and a copy or
summary of such press release or other communication to legal
counsel for the Representatives, not less than two business days
prior to the intended release date of such press release or
other communication, and discussing with the Representative and
its counsel promptly and in good faith any modifications or
amendments thereto requested by the Representative unless in the
judgment of the Company and its counsel, and after notification
to the Representatives, such press release or communication is
required by law; provided, however, that any such press release
or other communication which refers to any of the
Representatives shall require the prior written consent of the
Representatives.
(xii) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of
Proceeds" in the Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the public offering of the Shares and the performance of the
obligations of the Company under this Agreement including those relating
to: (i) the preparation, printing, filing, reproduction and distribution
of the Registration Statement including all exhibits thereto, each
Preliminary Prospectus, each Issuer Free Writing Prospectus, the
Prospectus, all amendments and supplements to the Registration Statement
and the Prospectus and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for the
Shares to the Underwriters; (iii) the registration or qualification of
the Shares for offer and sale under the securities or Blue Sky laws of
the various jurisdictions referred to in Section 4(a)(vi), including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration and qualification and the preparation,
printing, distribution and shipment of preliminary and supplementary
Blue Sky memoranda; (iv) the furnishing (including costs of shipping and
mailing) to the Representatives and to the Underwriters of copies of
each preliminary prospectus, the Prospectus and all amendments or
supplements to the Prospectus, and of the several documents required by
this Section to be so furnished, as may be reasonably requested for use
in connection with the offering and sale of the Shares by the
Underwriters or by dealers to whom Shares may be sold; (v) the filing
fees of the NASD in connection with its review of the terms of the
public offering and reasonable fees and disbursements of counsel for the
Underwriters in connection with such review; (vi) inclusion of the
Shares for quotation on the Nasdaq National Market; and (vii) all
transfer taxes, if any, with respect to the sale and delivery of the
Shares by the Company to the Underwriters. Subject to the provisions of
Section 7, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses incident to the performance of the
obligations of the Underwriters under this Agreement not payable by the
Company pursuant to the preceding sentence, including, without
limitation, the fees and disbursements of counsel for the Underwriters.
17
(c) The Company acknowledges and agrees that each of the
Underwriters has acted and is acting solely in the capacity of a
principal in an arm's length transaction between the Company, on the one
hand, and the Underwriters, on the other hand, with respect to the
offering of Shares contemplated hereby (including in connection with
determining the terms of the offering) and not as a financial advisor,
agent or fiduciary to the Company or any other person. Additionally, the
Company acknowledges and agrees that the Underwriters have not and will
not advise the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The
Company has consulted with its own advisors concerning such matters and
shall be responsible for making its own independent investigation and
appraisal of the transactions contemplated hereby, and the Underwriters
shall have no responsibility or liability to the Company or any other
person with respect thereto, whether arising prior to or after the date
hereof. Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions have
been and will be performed solely for the benefit of the Underwriters
and shall not be on behalf of the Company. The Company agrees that it
will not claim that the Underwriters, or any of them, has rendered
advisory services of any nature or respect, or owes a fiduciary duty to
the Company or any other person in connection with any such transaction
or the process leading thereto.
(d) The Company represents and agrees that, unless it obtains
the prior consent of CIBC World Markets Corp. and Xxxxx Xxxxxxx & Co.,
and each Underwriter represents and agrees that, unless it obtains the
prior consent of the Company and CIBC World Markets Corp. and Xxxxx
Xxxxxxx & Co., it has not made and will not make any offer relating to
the Shares that would constitute an "issuer free writing prospectus," as
defined in Rule 433 of the Rules, or that would otherwise constitute a
"free writing prospectus," as defined in Rule 405 of the Rules, required
to be filed with the Commission. The Company represents that it has
complied and will comply with the requirements of Rule 433 of the Rules
applicable to any Issuer Free Writing Prospectus, including timely
filing with the Commission where required, legending and record keeping.
The Company represents that is has satisfied and agrees that it will
satisfy the conditions in Rule 433 of the Rules to avoid a requirement
to file with the Commission any Road Show.
5. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, become subject under the
Securities Act, the Exchange Act or other Federal or state law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, the Registration Statement, the Prospectus,
any Issuer Free Writing Prospectus or any "issuer-information" filed or
required to be filed pursuant to Rule 433(d) of the Rules, or any
amendment thereof or supplement thereto, or in any Blue Sky application
or other information or other documents executed by the Company filed in
any state or other jurisdiction to qualify any or all of the Shares
under the securities laws thereof (any such application, document or
information being hereinafter referred to as a "Blue Sky Application")
or arise out of or are based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that
such indemnity shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) on account of any losses, claims,
damages or liabilities if such untrue statement or omission or alleged
untrue statement or omission was made in any Preliminary
18
Prospectus, the Registration Statement, any Issuer Free Writing
Prospectus or the Prospectus, or such amendment or supplement thereto,
or in any Blue Sky Application, in reliance upon and in conformity with
the Underwriter Information. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter agrees to indemnify and hold harmless the
Company, and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each director of the Company, and each officer of the
Company who signs the Registration Statement, against any losses,
claims, damages or liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit
or proceeding or any claim asserted), to which such party may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
preliminary prospectus, the Registration Statement or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with
the Underwriter Information; provided, however, that the obligation of
each Underwriter to indemnify the Company (including any controlling
person, director or officer thereof) shall be limited to the net
proceeds received by the Company from such Underwriter. This indemnity
agreement will be in addition to any liability which any Underwriter may
otherwise have.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section 5(a) or 5(b)
shall be available to any party who shall fail to give notice as
provided in this Section 5(c) if the party to whom notice was not given
was unaware of the proceeding to which such notice would have related
and was prejudiced by the failure to give such notice but the omission
so to notify such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it may have to
any indemnified party for contribution or otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the approval by the
indemnified party of such counsel (not to be unreasonably withheld or
delayed), the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred
by such indemnified party in connection with the defense thereof. The
indemnified party shall have the right to employ its counsel in any such
action, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the
indemnifying parties, (ii) the indemnified party shall have been advised
by counsel that there may be one or more legal defenses available to it
which are different from or in addition to those available to the
indemnifying party (in which case the indemnifying parties shall not
have the right to direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying
19
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement
thereof, in each of which cases the fees and expenses of counsel to the
indemnified party shall be at the expense of the indemnifying parties.
An indemnifying party shall not be liable for any settlement of any
action, suit, and proceeding or claim effected without its written
consent, which consent shall not be unreasonably withheld or delayed.
6. Contribution. In order to provide for just and equitable contribution
in circumstances in which the indemnification provided for in Section 5(a) or
5(b) is due in accordance with its terms but for any reason is unavailable to or
insufficient to hold harmless an indemnified party in respect to any losses,
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate losses, liabilities,
claims, damages and expenses (including any investigation, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received by any person entitled hereunder to
contribution from any person who may be liable for contribution) incurred by
such indemnified party, as incurred, in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares pursuant to this
Agreement or, if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Company on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 6 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.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. Notwithstanding the provisions of
this Section 6, no Underwriter (except as may be provided in the Agreement Among
Underwriters) shall be required to contribute any amount in excess of the amount
by which the total price at which the shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of damages which
such underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act shall have the same
rights 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
Securities Act or Section 20 of the Exchange Act, shall have the same rights to
contribution as the Company. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section 6, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have hereunder or otherwise than under this Section 6. No party
shall be liable for contribution with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriter's obligations to
contribute pursuant to this Section 6 are several in proportion to their
respective underwriting commitments and not joint.
20
7. Termination.
(a) This Agreement may be terminated with respect to the Shares
to be purchased on a Closing Date by the Representatives by notifying
the Company at any time at or before a Closing Date in the absolute
discretion of the Representatives if: (i) there has occurred any
material adverse change in the securities markets or any event, act or
occurrence that has materially disrupted, or in the opinion of the
Representatives, will in the future materially disrupt, the securities
markets or there shall be such a material adverse change in general
financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
is such as to make it, in the judgment of the Representatives,
inadvisable or impracticable to market the Shares or enforce contracts
for the sale of the Shares; (ii) there has occurred any outbreak or
material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such as
to make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Shares or enforce contracts for the sale of
the Shares; (iii) trading in the Shares or any securities of the Company
has been suspended or materially limited by the Commission or trading
generally on the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. or the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by any of said exchanges or by such
system or by order of the Commission, the National Association of
Securities Dealers, Inc., or any other governmental or regulatory
authority; or (iv) a banking moratorium has been declared by any state
or Federal authority; or (v) in the judgment of the Representatives,
there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus,
any material adverse change in the assets, properties, condition,
financial or otherwise, or in the results of operations, business
affairs or business prospects of the Company and its subsidiaries
considered as a whole, whether or not arising in the ordinary course of
business.
(b) If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any
Underwriter, and no Underwriter shall be under any liability to the
Company, except that (y) if this Agreement is terminated by the
Representatives or the Underwriters because of any failure, refusal or
inability on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by them in
connection with the proposed purchase and sale of the Shares or in
contemplation of performing their obligations hereunder and (z) no
Underwriter who shall have failed or refused to purchase the Shares
agreed to be purchased by it under this Agreement, without reason
sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the
Company or to the other Underwriters for damages occasioned by its
failure or refusal.
8. Substitution of Underwriters. If any Underwriter shall default in its
obligation to purchase on any Closing Date the Shares agreed to be purchased
hereunder on such Closing Date, the Representatives shall have the right, within
36 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase such Shares on the terms
contained herein. If, however, the Representatives shall not have completed such
arrangements within such 36-hour period, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Underwriters to purchase such Shares on such
terms. If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided above, the aggregate number of Shares which remains
unpurchased on such Closing Date does not exceed one-eleventh of the aggregate
number of all the Shares that all the Underwriters are obligated to purchase on
such date, then the
21
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such date and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default. In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
seven days in order to effect any necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus or any other documents), and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in the opinion
of the Company and the Underwriters and their counsel may thereby be made
necessary.
If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided above, the aggregate number of such Shares which remains
unpurchased exceeds 10% of the aggregate number of all the Shares to be
purchased at such date, then this Agreement, or, with respect to a Closing Date
which occurs after the First Closing Date, the obligations of the Underwriters
to purchase and of the Company, as the case may be, to sell the Option Shares to
be purchased and sold on such date, shall terminate, without liability on the
part of any non-defaulting Underwriter to the Company, and without liability on
the part of the Company, except as provided in Sections 4(b), 5, 6 and 7. The
provisions of this Section 8 shall not in any way affect the liability of any
defaulting Underwriter to the Company or the nondefaulting Underwriters arising
out of such default. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section 8 with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
9. Miscellaneous. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or the Company or any of their respective officers, directors
or controlling persons referred to in Sections 5 and 6 hereof, and shall survive
delivery of and payment for the Shares. In addition, the provisions of Sections
4(b), 5, 6 and 7 shall survive the termination or cancellation of this
Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Legal Department, and Xxxxx Xxxxxxx & Co.,
U.S. Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Legal Department, with a copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxxxxx Xxxxx,
Xxxxx Xxxx, XX 00000-0000, Attention: Xxx X. Xxxxxx, Esq. and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement with a copy to Xxxxxx Godward LLP, 0000
Xxxxxxxx Xxxx, Xxx Xxxxx, XX 00000, Attention: Xxxxxxxxx X. Xxxx, Esq.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
22
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
SGX Pharmaceuticals, Inc.
By:
---------------------------------
Print Name:
-------------------------
Title:
------------------------------
23
CONFIRMED:
CIBC World Markets Corp.
Xxxxx Xxxxxxx & Co.
JMP Securities LLC
Acting severally on behalf of itself and as representative of the several
Underwriters named in Schedule I annexed hereto.
CIBC World Markets Corp Xxxxx Xxxxxxx & Co.
By: By:
------------------------------ --------------------------------
Print Name: Print Name:
---------------------- ------------------------
Title: Title:
--------------------------- -----------------------------
24
SCHEDULE I
NUMBER OF
FIRM SHARES TO
NAME BE PURCHASED
---- --------------
CIBC World Markets Corp.
Xxxxx Xxxxxxx & Co.
JMP Securities LLC
--------------
Total
SCHEDULE I
SCHEDULE II
LOCK-UPS
Each director and executive officer of the Company.
The holders of [ ]% of the Company's outstanding capital stock.
The holders of [ ]% of the Company's outstanding stock options, warrants,
convertible notes and other convertible securities.
SCHEDULE II
SCHEDULE III
ISSUER FREE WRITING PROSPECTUSES
SCHEDULE III
SCHEDULE IV
PRELIMINARY PROSPECTUS
SCHEDULE IV
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
_________, 200_
CIBC World Markets Corp.
Xxxxx Xxxxxxx & Co.
JMP Securities LLC
As Representative of the Several Underwriters
c/o CIBC World Markets Corp.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Public Offering of SGX Pharmaceuticals, Inc.
Ladies and Gentlemen:
The undersigned, a holder of common stock, par value $0.001 per share
("Common Stock") or rights to acquire Common Stock of SGX Pharmaceuticals, Inc.
(the "Company"), understands that you, as Representative of the several
Underwriters, propose to enter into an Underwriting Agreement (the "Underwriting
Agreement") with the Company, providing for the public offering (the "Public
Offering") by the several Underwriters named in Schedule I to the Underwriting
Agreement (the "Underwriters"), of shares of Common Stock of the Company (the
"Securities"). Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Underwriting Agreement.
In consideration of the Underwriters' agreement to enter into the
Underwriting Agreement and to proceed with the Public Offering of the
Securities, and for other good and valuable consideration receipt of which is
hereby acknowledged, the undersigned hereby agrees for the benefit of the
Company, you and the other Underwriters that, without the prior written consent
of CIBC World Markets Corp. on behalf of the Underwriters, the undersigned will
not, during the period ending 180 days after the date of the prospectus relating
to the Public Offering (the "Lock-Up Period"), directly or indirectly (1) offer,
pledge, assign, encumber, announce the intention to sell, 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, or otherwise transfer
or dispose of, any shares of Common Stock of the Company or any securities
convertible into or exercisable or exchangeable for Common Stock owned either of
record or beneficially (as defined in the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) by the undersigned on the date hereof or hereafter
acquired or (2) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise, or publicly announce an intention to do any of the foregoing. In
addition, the undersigned agrees that, without the prior written consent of CIBC
World Markets Corp. on behalf of the Underwriters, it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The foregoing shall not apply to:
(i) the sale of the Securities to be sold pursuant to the prospectus relating to
the Public Offering; (ii) sales under any 10b-5 plan; or (iii) transfers of
Common Stock (A) as a bona fide gift or gifts, (B) to any trust for the direct
or indirect benefit of the undersigned or the immediate family of the
undersigned, (C) if the
EXHIBIT A
undersigned is a corporation, to any wholly-owned subsidiary of such
corporation, (D) if the undersigned is a limited liability company, to a member
or affiliated limited liability company, or (E) if the undersigned is a
partnership, to a partner or affiliated partnership; provided, however, that in
each such case under clause (iii) above, (1) it shall be a condition to the
transfer that the donee or transferee execute an agreement stating that the
donee or transferee is receiving and holding such capital stock subject to the
provisions of this Lock-Up Agreement and there shall be no further transfer of
such capital stock except in accordance with this Lock-Up Agreement, (2) any
such transfer shall not involve a disposition for value, (3) no filing by any
party (donor, donee, transferor or transferee) under the Exchange Act shall be
required or shall be voluntarily made in connection with such transfer (other
than a filing on a Form 5, Schedule 13D or Schedule 13G made after the
expiration of the Lock-Up Period), (4) each party (donor, donee, transferor or
transferee) shall not be required by law (including without limitation the
disclosure requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act) to make, and shall agree to not
voluntarily make, any public announcement of the transfer or disposition, and
(5) the undersigned notifies CIBC World Markets Corp. at least two business days
prior to the proposed transfer or disposition. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
Notwithstanding the foregoing, if (1) during the last 17 days of the
Lock-Up Period the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-Up Period, the
restrictions imposed in this Lock-Up Agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event; provided,
however, that this sentence shall not apply if the research published or
distributed on the Company is compliant under Rule 139 of the Securities Act and
the Company's securities are actively traded as defined in Rule 101(c)(1) of
Regulation M of the Exchange Act.
In furtherance of the foregoing, the Company, and any duly appointed
transfer agent for the registration or transfer of the securities described
herein, are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Agreement. All authority
herein conferred or agreed to be conferred and any obligations of the
undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released form all obligations under this Lock-Up Agreement.
The undersigned, whether or not participating in the Public Offering,
understands that the Underwriters are entering into the Underwriting Agreement
and proceeding with the Public Offering in reliance upon this Lock-Up Agreement.
[signature page follows]
EXHIBIT A
This Lock-Up Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of laws
principles thereof.
Very truly yours,
[STOCKHOLDER]
By:
--------------------------------
Name:
Title:
EXHIBIT A
EXHIBIT B
FORM OF OPINION OF XXXXXX GODWARD LLP
EXHIBIT B
EXHIBIT C
FORM OF OPINION OF XXXXX, XXXXXX & XXXXXXXX, P.C.
EXHIBIT C
EXHIBIT D
FORM OF OPINION OF XXXXXXXX AND XXXXXXXX AND CREW LLP
EXHIBIT D
EXHIBIT E
FORM OF OPINION OF MILLEN, WHITE, XXXXXX & XXXXXXXX, P.C
EXHIBIT E
EXHIBIT F
FORM OF OPINION OF XXXXXX & XXXXXXX LLP
EXHIBIT F
