13,640,000 Shares1 NANOSPHERE, INC. Common Stock PURCHASE AGREEMENT
Exhibit 1.1
EXECUTION COPY
13,640,000 Shares1
NANOSPHERE, INC.
Common Stock
May 10, 2011
XXXXX XXXXXXX & CO.
As Representative of the Several
Underwriters named in Schedule I hereto
Underwriters named in Schedule I hereto
c/o Xxxxx Xxxxxxx & Co.
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
U.S. Bancorp Center
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Nanosphere, Inc., a Delaware corporation (the “Company”), proposes to sell to the several
underwriters (the “Underwriters”) named in Schedule I hereto for whom Xxxxx Xxxxxxx & Co. is acting
as representative (the “Representative”), an aggregate of 13,640,000 shares (the “Firm Shares”) of
common stock, $0.01 par value per share (the “Common Stock”), of the Company. The Company has also
granted to the several Underwriters an option to purchase up to an aggregate of 2,046,000
additional shares of Common Stock, on the terms and for the purposes set forth in Section 3
hereof (the “Option Shares”). The Firm Shares and any Option Shares purchased pursuant to this
Purchase Agreement are herein collectively called the “Securities.”
The Company hereby confirms its agreement with respect to the sale of the Securities to the
Underwriter.
1. Registration Statement and Prospectus. The Company has prepared and filed with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (File
No. 333-161859) under the Securities Act of 1933, as amended (the “Securities Act” or “Act”) and
the rules and regulations (the “Rules and Regulations”) of the Commission thereunder, and such
amendments to such registration statement as may have been required to the date of this Agreement.
Such registration statement has been declared effective by the Commission. Such registration
statement, at any given time, including amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act at such time and the documents and information otherwise
deemed to be a part thereof or included therein by Rule 430B under the Securities Act (the “Rule
430B Information”) or otherwise pursuant to the Rules and Regulations at such time, is herein
called the “Registration Statement.” The Registration Statement at the time it originally became
effective is herein called the “Original Registration Statement.” Any registration statement filed
by the Company pursuant to Rule 462(b) under the
Securities Act is called the “Rule 462(b) Registration Statement” and, from and after the date
and time of filing of the Rule 462(b) Registration Statement, the term “Registration Statement”
shall include the Rule 462(b) Registration Statement.
| 1 | Plus an option to purchase up to 2,046,000 additional
shares to cover over-allotments. |
The prospectus in the form in which it appeared in the Original Registration Statement is
herein called the “Base Prospectus.” Each preliminary prospectus supplement to the Base Prospectus
(including the Base Prospectus as so supplemented), that describes the Securities and the offering
thereof, that omitted the Rule 430B Information and that was used prior to the filing of the final
prospectus supplement referred to in the following sentence is herein called a “Preliminary
Prospectus.” Promptly after execution and delivery of this Agreement, the Company will prepare and
file with the Commission a final prospectus supplement to the Base Prospectus relating to the
Securities and the offering thereof in accordance with the provisions of Rule 430B and Rule 424(b)
of the Rules and Regulations. Such final supplemental form of prospectus (including the Base
Prospectus as so supplemented), in the form filed with the Commission pursuant to Rule 424(b) is
herein called the “Prospectus.” Any reference herein to the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such
prospectus.
For purposes of this Agreement, all references to the Registration Statement, the Rule 462(b)
Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”). All
references in this Agreement to financial statements and schedules and other information which is
“described,” “contained,” “included” or “stated” in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules and other information
which is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part
of or included in the Registration Statement, the Base Prospectus, any Preliminary Prospectus or
the Prospectus, as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to mean and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and which is deemed to be
incorporated therein by reference therein or otherwise deemed by the Rules and Regulations to be a
part thereof.
2. Representations and Warranties of the Company. The Company represents and warrants to, and
agrees with, the several Underwriters as follows:
(a) The Time of Sale Disclosure Package (as defined below) at the Time of Sale (as defined
below) complied in all material respects with the requirements of the Securities Act and the Rules
and Regulations and did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from the Time of Sale Disclosure Package based upon and in
conformity with written information furnished to the Company by the Underwriters specifically for
use therein; it being understood and agreed that the only such information furnished by the
Underwriters consists of the information described as such in Section 6(f).
(b) The Original Registration Statement was initially declared effective by the Commission
under the Securities Act on September 15, 2009 and any Rule 462(b) Registration Statement has
become effective or will become effective upon filing with the Commission. The Company has
complied, to the Commission’s satisfaction, with all requests of the Commission for additional or
supplemental information. No stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have been instituted or are pending or,
to the best knowledge of the Company, are contemplated or threatened by the Commission.
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(c) Each part of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time such part became effective (including each deemed
effective date with respect to the Underwriters pursuant to Rule 430B or otherwise under the
Securities Act), at all other subsequent times until the expiration of the Prospectus Delivery
Period (as defined below), and at the First Closing Date and the Second Closing Date (as defined
below), as the case may be, and the Prospectus (or any amendment or supplement to the Prospectus),
at the time of filing or the time of first use within the meaning of the Rules and Regulations, at
all subsequent times until expiration of the Prospectus Delivery Period, and at the First Closing
Date and the Second Closing Date, as the case may be, complied and will comply in all material
respects with the applicable requirements and provisions of the Securities Act, the Rules and
Regulations and the Exchange Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date,
or the time of first use within the meaning of the Rules and Regulations, at all subsequent times
until the expiration of the Prospectus Delivery Period, and at the First Closing Date and the
Second Closing Date, as the case may be, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences do not apply to statements in
or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made
in reliance upon and in conformity with written information relating to an Underwriter furnished to
the Company by any Underwriter specifically for use therein; it being understood and agreed that
the only such information furnished by any Underwriter consists of the information described as
such in Section 6(f).
(d) Neither (A) any Issuer General Free Writing Prospectus(es) issued at or prior to the Time
of Sale and set forth on Schedule II, the information set forth on Schedule III and
the Statutory Prospectus at the Time of Sale, all considered together (collectively, the “Time of
Sale Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing Prospectus, when
considered together with the Time of Sale Disclosure Package, includes or included as of the Time
of Sale any untrue statement of a material fact or omit or omitted as of the Time of Sale to state
any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company by the Underwriters
specifically for use therein; it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 6(f).
As used in this paragraph and elsewhere in this Agreement:
(i) “Time of Sale” means 9:25 a.m. (New York time) on the date of this Agreement, or
such other time as agreed to by the company and the Representative.
(ii) “Statutory Prospectus” means the Base Prospectus, as amended and supplemented
immediately prior to the Time of Sale, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof. For purposes of this
definition, Rule 430B Information contained in a form of prospectus that is deemed
retroactively to be a part of the Registration Statement 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) under the Securities Act.
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(iii) “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433 under the Securities Act, relating to the Securities that (A) is
required to be filed with the Commission by the Company, or (B) is exempt from filing
pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a description of
the Securities or of the offering that does not reflect the final terms, or is a “bona fide
electronic roadshow,” as defined in Rule 433 of the Rules and Regulations, in each case in
the form filed or required to be filed with the Commission or, if not required to be filed,
in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities
Act.
(iv) “Issuer General Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule II hereto.
(v) “Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
(e) (A) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the Prospectus Delivery Period or until any earlier date that the Company notified or
notifies the Underwriters as described in Section 4(c)(B), did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement, any Statutory Prospectus or the Prospectus. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished in writing to the Company by any Underwriter
specifically for use therein; it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in Section 6(f).
(B)(1) At the earliest time after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) of the Securities and (2) at the date hereof, the Company was not and is not an
“ineligible issuer,” as defined in Rule 405 under the Securities Act, 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 (without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be
considered an ineligible issuer), nor an “excluded issuer” as defined in Rule 164 under the
Securities Act.
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent
times through the Prospectus Delivery Period, all other conditions to use thereof as set forth in
Rules 164 and 433 under the Securities Act.
(f) The financial statements of the Company, together with the related notes, set forth or
incorporated by reference, in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus comply in all material respects with the requirements of the Securities Act and the
Exchange Act and fairly present the financial condition of the Company as of the dates indicated
and the results of operations and changes in cash flows for the periods therein specified in
conformity with generally accepted accounting principles in the United States consistently applied
throughout the periods involved; and the supporting schedules included in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus have been derived from the
accounting records of the Company and present fairly the information required to be stated therein.
No other schedules or financial statements are required to be included in the Registration
Statement, the Time of Sale Disclosure Package or the Prospectus. To the Company’s knowledge,
Deloitte & Touche LLP, which has expressed its opinion with respect to the financial statements
filed as a part of the Registration
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Statement
and included in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus, is (x)
an independent public accounting firm within the meaning of the Securities Act and the Rules and
Regulations, (y) a registered public accounting firm (as defined in Section 2(a)(12) of the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”)) and (z) in the performance of its work for
the Company, not in violation of the auditor independence requirements of the Xxxxxxxx-Xxxxx Act.
Except as described in the Time of Sale Disclosure Package and the Prospectus, there are no
material off-balance sheet transactions, arrangements, obligations (including contingent
obligations), or any other relationships with unconsolidated entities or other persons, that may
have a material current or, to the Company’s knowledge, future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity, capital expenditures,
capital resources or significant components of revenue or expenses. All non-GAAP financial
information included in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus complies with the requirements of Regulation G and Item 10 of Regulation S-K under the
Securities Act.
(g) The Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware. The Company has no subsidiaries. The Company
has full corporate power and authority to own its properties and conduct its business as currently
being conducted and as described in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, and is duly qualified to do business as a foreign corporation in good standing
in each jurisdiction in which the failure to so qualify might result in a material adverse change
in the general affairs, condition (financial or otherwise), business, prospects, property,
operations or results of operations of the Company (“Material Adverse Change”).
(h) Except as contemplated in the Time of Sale Disclosure Package and the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, (a) the Company has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any dividends or made
any distribution of any kind with respect to its capital stock; and (b) there has not been any
change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of equity compensation awards under the Company’s equity compensation
plans or shares upon the exercise of outstanding options or warrants), or any material change in
the short term or long term debt, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock, of the Company (other than issuances of equity
compensation awards under the Company’s equity compensation plans), or any Material Adverse Change
or any development that could reasonably be expected to result in a Material Adverse Change.
(i) Except as set forth in the Time of Sale Disclosure Package and the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company is a party or of which any property or assets of the Company is the
subject before or by any court or governmental agency, authority or body, or any arbitrator, which,
individually or in the aggregate, could reasonably be expected to result in any Material Adverse
Change. There are no current or pending legal, governmental or regulatory actions, suits or
proceedings that are required to be described in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus that have not been so described.
(j) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus or
to be filed as exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations that have not been so described or filed.
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(k) This Agreement has been duly authorized, executed and delivered by the Company, and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not (A) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of the property or
assets of the Company is subject, (B) result in any violation of the provisions of the charter or
by-laws of the Company or (C) result in the violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental agency or regulatory authority,
except, in the case of clause (A), any lien, charge, encumbrance, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument that, would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. No consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or for the consummation of the
transactions contemplated hereby, including the issuance or sale of the Securities by the Company,
except such as may be required under the Securities Act, the rules of the Financial Industry
Regulatory Authority (“FINRA”) or state securities or blue sky laws; and the Company has full power
and authority to enter into this Agreement and to consummate the transactions contemplated hereby
including the authorization, issuance and sale of the Securities as contemplated by this Agreement.
(l) All of the issued and outstanding shares of capital stock of the Company, including the
outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities that have not been waived in writing (a copy of which has been delivered to
counsel to the Underwriters); the Securities which may be sold hereunder by the Company have been
duly authorized and, when issued, delivered and paid for in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and nonassessable; and the capital
stock of the Company, including the Common Stock and the Securities, conforms to the description
thereof in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus.
Except as otherwise described in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase,
or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to the
Company’s charter, by laws or any agreement or other instrument to which the Company is a party or
by which the Company is bound, other than options to purchase common stock under the Company’s
existing stock option plans. Except as described in the Registration Statement, in the Time of
Sale Disclosure Package and in the Prospectus, neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any shares of Common Stock or other securities of the
Company that have not been fully complied with or previously waived. Except as described in the
Registration Statement, the Time of Sale Disclosure Package and the Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company. The Company has an authorized and
outstanding capitalization as set forth in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder, set forth in the
Time of Sale Disclosure Package and the Prospectus accurately and fairly presents the information
required to be shown with
respect to such plans, arrangements, options and rights. Except as set forth in the Time of
Sale Disclosure Package, the Company is not a participant in any joint venture, partnership or
similar arrangement.
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(m) The Company holds, and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders
of any Governmental Authority or self-regulatory body required for the conduct of its business, and
all such franchises, grants, authorizations, licenses, permits, easements, consents, certifications
and orders are valid and in full force and effect; and the Company has not received notice of any
revocation or modification of any such franchise, grant, authorization, license, permit, easement,
consent, certification or order or has reason to believe that any such franchise, grant,
authorization, license, permit, easement, consent, certification or order will not be renewed in
the ordinary course; and the Company is in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders and decrees.
(n) The Company has good and marketable title to all property (whether real or personal)
described in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus as
being owned by them, in each case free and clear of all liens, claims, security interests, other
encumbrances or defects except as described in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, and except those that could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change. The property held under
lease by the Company is held by it under valid, subsisting and enforceable leases with only such
exceptions with respect to any particular lease as do not interfere in any material respect with
the conduct of the business of the Company.
(o) The Company owns, possesses, or can acquire on reasonable terms, all Intellectual Property
necessary for the conduct of its business as now conducted or as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus to be conducted, except as such
failure to own, possess, or acquire such rights would not result in a Material Adverse Change.
Except as set forth in the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, (A) to the knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property, except as such infringement,
misappropriation or violation would not result in a Material Adverse Change; (B) there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others
challenging the Company’s rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (C) the Intellectual
Property owned by the Company, and to the knowledge of the Company, the Intellectual Property
licensed to the Company, have not been adjudged invalid or unenforceable, in whole or in part, and
there is no pending or threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (D) there is no pending or threatened action,
suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise
violates any Intellectual Property or other proprietary rights of others, and the Company has not
received any written notice of such claim and the Company is unaware of any other fact which would
form a reasonable basis for any such claim; and (E) to the Company’s knowledge, no employee of the
Company is in or has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where
the basis of such violation relates to such employee’s employment with the Company or actions
undertaken by the employee while employed with the Company, except as such violation would not
result in a Material Adverse Change. “Intellectual Property” shall mean all patents, patent
applications, trade and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual
property.
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(p) The Company is not (A) in violation of its charter or by laws; (B) in breach of or
otherwise in default, and no event has occurred which, with notice or lapse of time or both, would
constitute such a default in the performance or observance of any term, covenant, obligation,
agreement or condition contained in any bond, debenture, note, indenture, loan agreement, mortgage,
deed of trust or any other contract, lease or other instrument to which it is subject or by which
it may be bound, or to which any of the material property or assets of the Company is subject; or
(C) in violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except in the case of (B) and (C) above, as
could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Change.
(q) The Company has timely filed all federal, state, local and foreign income and franchise
tax returns required to be filed and is not in default in the payment of any material taxes which
was payable pursuant to said returns or any assessments with respect thereto, other than any which
the Company is contesting in good faith. There is no pending dispute with any taxing authority
relating to any of such returns and the Company has no knowledge of any proposed liability for any
tax to be imposed upon the properties or assets of the Company for which there is not an adequate
reserve reflected in the Company’s financial statements included in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus.
(r) The Company, directly or indirectly, owns no capital stock or other equity or ownership or
proprietary interest in any corporation, partnership, association, trust or other entity.
(s) The Company has not distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Securities other than the Time of Sale
Disclosure Package or the Prospectus or other materials permitted by the Securities Act to be
distributed by the Company; provided, however, that, except as set forth on Schedule II,
the Company has not made and will not make any offer relating to the Securities that would
constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act, except in
accordance with the provisions of Section 4(p) of this Agreement.
(t) The Common Stock of the Company is registered pursuant to Section 12(b) of the Exchange
Act and is listed on The NASDAQ Global Market (“NASDAQ”) under the ticker symbol “NSPH.” 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 delisting the Common Stock from NASDAQ
nor has the Company received any notice that it is not in compliance with the listing or
maintenance requirements of NASDAQ. The Company believes that it is, and has no reason to believe
that it will not in the foreseeable future continue to be, in material compliance with all such
listing and maintenance requirements. Except as described in the Registration Statement, the Time
of Sale Disclosure Package or the Prospectus, there are no affiliations among the Company’s
directors and officers and members of the FINRA. A Registration Statement relating to the Common
Stock on Form 8-A or other applicable form under the Exchange Act has become effective.
(u) The Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with management’s general or
specific authorization; (B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles in the United
States and to maintain accountability for assets; (C) access to assets is permitted only in
accordance with management’s general or specific authorization; and (D) the recorded accountability
for assets is compared with existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Except as disclosed in the Registration Statement, in the Time of
Sale Disclosure Package
and in the Prospectus, the Company’s internal control over financial reporting is effective
and none of the
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Company, its board of directors and audit committee is aware of any “significant
deficiencies” or “material weaknesses” (each as defined by the Public Company Accounting Oversight
Board) in its internal control over financial reporting, or any fraud that involves management or
other employees of the Company who have a significant role in the Company’s internal controls; and
since the end of the latest audited fiscal year, there has been no change in the Company’s internal
control over financial reporting (whether or not remediated) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over financial reporting.
The Company’s board of directors has, subject to the exceptions, cure periods and the phase in
periods specified in the applicable stock exchange rules (“Exchange Rules”), validly appointed an
audit committee to oversee internal accounting controls whose composition satisfies the applicable
requirements of the Exchange Rules and the Company’s board of directors and/or the audit committee
has adopted a charter that satisfies the requirements of the Exchange Rules.
(v) The Company’s board of directors has validly appointed an audit committee whose
composition satisfies the applicable requirements of the NASDAQ Global Market and the Company’s
board of directors and/or the audit committee has adopted a charter that satisfies the applicable
requirements of the NASDAQ Global Market. Neither the Company’s board of directors nor the audit
committee has been informed, nor is any director of the Company or the Company aware, of (A) any
significant deficiencies in the design or operation of the Company’s internal controls which could
adversely affect the Company’s ability to record, process, summarize and report financial data or
any material weakness in the company’s internal controls; or (B) any fraud, whether or not
material, that involves management or other employees of the Company who have a significant role in
the Company’s internal controls.
(w) No relationship, direct or indirect, exists between or among the Company, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company, on the other
hand, which is required to be described in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus which is not so described. The Company has not, directly or indirectly,
extended or maintained credit, or arranged for the extension of credit, or renewed an extension of
credit, in the form of a personal loan to or for any of its directors or executive officers in
violation of applicable laws, including Section 402 of the Xxxxxxxx-Xxxxx Act.
(x) Except as described in the Registration Statement, the Time of Sale Disclosure Package and
the Prospectus, the Company: (A) is and at all times has been in material compliance with all
statutes, rules, regulations, or guidances applicable to Company and the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion,
sale, offer for sale, storage, import, export or disposal of any product manufactured or
distributed by the Company (“Applicable Laws”), except as could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change; (B) have not received any
notice of adverse finding, warning letter, untitled letter or other correspondence or notice from
the U.S. Food and Drug Administration or any other federal, state or foreign governmental authority
having authority over the Company (“Governmental Authority”) alleging or asserting noncompliance
with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such Applicable Laws
(“Authorizations”); (C) possess all material Authorizations and such Authorizations are valid and
in full force and effect and are not in violation of any term of any such Authorizations; (D) have
not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any Governmental Authority or third party alleging that any
product operation or activity is in violation of any Applicable Laws or Authorizations and have no
knowledge that any such Governmental Authority or third party is considering any such claim,
litigation, arbitration, action, suit, investigation or proceeding; (E) have not received notice
that any Governmental
Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke
any Authorizations and the Company has no knowledge that any such Governmental Authority is
considering such action; and (F) have filed, obtained, maintained or submitted all material
reports, documents, forms, notices, applications, records, claims, submissions and supplements or
amendments as required by any Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments
were complete and correct in all material respects on the date filed (or were corrected or
supplemented by a subsequent submission).
9
(y) The studies, tests and preclinical and clinical trials conducted by or on behalf of the
Company were and, if still pending, are, in all material respects, being conducted in accordance
with experimental protocols, procedures and controls pursuant to accepted professional scientific
standards and all Applicable Laws and Authorizations, including, without limitation, the Federal
Food, Drug and Cosmetic Act; the descriptions of the results of such studies, tests and trials
contained in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus are
accurate and complete in all material respects and fairly present the data derived from such
studies, tests and trials; except to the extent disclosed in the Registration Statement, the Time
of Sale Disclosure Package and the Prospectus, the Company is not aware of any studies, tests or
trials the results of which the Company believes reasonably call into question the study, test, or
trial results described or referred to in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus when viewed in the context in which such results are described and the
clinical state of development; and the Company has not received any notices or correspondence from
any Governmental Authority requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on behalf of the Company.
(z) The Company (A) is in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (B) has received and are in material compliance with all
permits, licenses or other approvals required of it under applicable Environmental Laws to conduct
its business; and (C) has not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such failure to comply, or failure to
receive required permits, licenses or approvals, or liability as would not, individually or in the
aggregate, result in a Material Adverse Change.
(aa) The documents incorporated by reference in the Time of Sale Disclosure Package and in the
Prospectus, when they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and were filed on a timely basis with the Commission, and none of such documents
contained an untrue statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; any further documents so filed and incorporated by reference in the Time of Sale
Disclosure Package or in the Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act, and will not contain an
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
(bb) The Company (A) is in compliance, in all material respects, with any and all applicable
foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes
promulgated by any and all governmental authorities (including pursuant to the Occupational Health
and Safety Act) relating to the protection of human health and safety in the workplace
(“Occupational Laws”); (B) has received all material permits, licenses or other approvals required
of it under applicable
Occupational Laws to conduct its business as currently conducted; and (C) is in compliance, in
all material respects, with all terms and conditions of such permit, license or approval. No
action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the
Company’s knowledge, threatened against the Company relating to Occupational Laws, and the Company
does not have knowledge of any facts, circumstances or developments relating to its operations or
cost accounting practices that could reasonably be expected to form the basis for or give rise to
such actions, suits, investigations or proceedings.
10
(cc) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed
to by the Company, or any of its affiliates for employees or former employees of the Company and
has been maintained in material compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to, ERISA and the Internal
Revenue Code of 1986, as amended (the “Code”). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative exemption; and for each
such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA,
no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each such plan (excluding for
these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions.
(dd) Except as set forth in the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, the Company has not granted rights to develop, manufacture, produce, assemble,
distribute, license, market or sell its products to any other person and is not bound by any
agreement that affects the Company’s exclusive right to develop, manufacture, produce, assemble,
distribute, license, market or sell its products.
(ee) Nothing has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus is not based on or derived from sources that are
reliable and accurate in all material respects.
(ff) Other than as contemplated by this Agreement, the Company has not incurred any liability
for any finder’s or broker’s fee or agent’s commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated hereby.
(gg) The Company is not presently doing business with the government of Cuba or with any
person or affiliate located in Cuba.
(hh) The Company carries, or is covered by, insurance in such amounts and covering such risks
as is adequate for the conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries; and the Company has not (A)
received notice from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such insurance or (B) 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 at reasonable cost from similar insurers as may be
necessary to continue its business. All such insurance is outstanding and duly in force on the
date hereof.
(ii) No labor problem or dispute with the employees of the Company exists or is threatened or
imminent.
11
(jj) Neither the Company, nor, to the best knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company has (A) used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; (B) made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; (C) violated or is in violation of
any provision of the Foreign Corrupt Practices Act of 1977; or (D) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(kk) The Company is not and, after giving effect to the offering and sale of the Securities,
will not be an “investment company,” as such term is defined in the Investment Company Act of 1940,
as amended.
(ll) Except as described in the Prospectus or otherwise obtained by the Company, no approval
of the shareholders of the Company is required for the Company to issue and deliver to the
Underwriters the Securities, including such as may be required pursuant to the rules and
regulations of any trading market.
(mm) The conditions for use of Form S-3, set forth in the General Instructions thereto, have
been satisfied.
(nn) The Company is in compliance in all material respects with all applicable provisions of
the Xxxxxxxx-Xxxxx Act and the rules and regulations of the Commission thereunder.
(oo) The Company has established and maintains disclosure controls and procedures (as defined
in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures are effective
in ensuring that material information relating to the Company is made known to the principal
executive officer and the principal financial officer. The Company has utilized such controls and
procedures in preparing and evaluating the disclosures in the Registration Statement, in the Time
of Sale Disclosure Package and in the Prospectus.
(pp) The Company and its board of directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the
Company’s charter documents or the laws of its state of incorporation that is or could reasonably
be expected to become applicable to any of the Underwriters as a result of the Underwriters and the
Company fulfilling their obligations or exercising their rights under the Agreement, including,
without limitation, the Company’s issuance of the Securities and the Underwriters’ ownership of the
Securities.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm
Shares to the several Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the number of Firm Shares set opposite the name of such Underwriter in
Schedule I hereto, subject to adjustments in accordance with Section 9 hereof. The purchase price
for each Firm Share shall be $2.068 per share. In making this Agreement, each Underwriter is
contracting severally and
not jointly; except as provided in Section 8 hereof, the agreement of each Undwerwriter is to
purchase only the respective number of Firm shares specified in Schedule I.
12
The Firm Shares will be delivered by the Company to the Representative for the accounts of the
several Underwriters against payment of the purchase price therefor by wire transfer of same day
funds payable to the order of the Company at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp
Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually
acceptable, at 9:00 am Central time on the third (or if the Firm Shares are priced, as contemplated
by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business
day following the date hereof, or at such other time and date as the Representative and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, such time and date of delivery being
herein referred to as the “First Closing Date.” If the Representative so elects, delivery of the
Firm Shares may be made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Representative.
(b) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby grants to the several
Underwriters an option to purchase all or any portion of the Option Shares to be sold by the
Company hereunder, at the same purchase price as the Firm Shares, for use solely in covering any
over-allotments made by the Underwriters in the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised in whole or in part at any time and from time to time
within 30 days after the effective date of this Agreement upon notice (confirmed in writing) by the
Representative to the Company setting forth the aggregate number of Option Shares as to which the
several Underwriters are exercising the option, the names and denominations in which the
certificates for the Option Shares are to be registered and the date and time, as determined by the
Representative, when the Option Shares are to be delivered, such time and date being herein
referred to as the “Second Closing” and “Second Closing Date”, respectively; provided, however,
that the Second Closing Date shall not be earlier than the First Closing Date nor earlier than the
second business day after the date on which the option shall have been exercised. The number of
Option Shares to be purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of Firm Shares to be
purchased by such Underwriter is of the total number of Firm Shares to be purchased by the several
Underwriters, as adjusted by the Representative in such manner as the Representative deems
advisable to avoid fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to the Representative against payment of
the purchase price therefor by wire transfer of same day funds payable to the order of the Company
at the offices of Xxxxx Xxxxxxx & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis,
Minnesota, or such other location as may be mutually acceptable, at 9:00 a.m. Central time, on the
Second Closing Date. If the Representative so elects, delivery of the Option Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust Company designated by the
Representative.
4. Covenants. The Company covenants and agrees with the several Underwriters as follows:
(a) During the period beginning on the date hereof and ending on the later of the Second
Closing Date and such date, as in the opinion of counsel for the Underwriters, the Prospectus is no
longer required by law to be delivered (assuming the absence of Rule 172 under the Securities Act),
in connection with sales by an Underwriter (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement, including any Rule 462(b) Registration Statement, the
Time of Sale Disclosure Package or the Prospectus, the Company shall furnish to the Underwriters
for review a
copy of each such proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Representative or counsel to the Underwriters
reasonably objects. Subject to this Section 4(a), immediately following execution of this
Agreement, the Company will prepare the Prospectus containing the Rule 430B Information and other
selling terms of the Securities, the plan of distribution thereof and such other information as may
be required by the Securities Act or the Rules and Regulations or as the Representative and the
Company may deem appropriate, and if requested by the Representative, an Issuer Free Writing
Prospectus containing the selling terms of the Securities and such other information as the Company
and the Representative may deem appropriate, and will file or transmit for filing with the
Commission, in accordance with Rule 424(b) or Rule 433, as the case may be, copies of the
Prospectus and each Issuer Free Writing Prospectus.
13
(b) The Company will advise the Representative, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or any post-effective amendment thereto, or preventing
or suspending the use of any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and the Company will promptly use its best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order should be issued.
Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b), 430A or
430B, as applicable, under the Securities Act and will use its reasonable efforts to confirm that
any filings made by the Company under Rule 424(b), Rule 433 or Rule 462 were received in a timely
manner by the Commission.
(c) (A) During the Prospectus Delivery Period, the Company will comply as far as it is able
with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by
the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as
necessary to permit the continuance of sales of or dealings in the Securities as contemplated by
the provisions hereof, the Time of Sale Disclosure Package and the Prospectus. If during such
period any event shall occur or condition shall exist as a result of which the Prospectus (or if
the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package)
would include an untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances then existing, not misleading, or if
during such period it is necessary to amend the Registration Statement or supplement the Prospectus
(or, if the Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure
Package) to comply with the Securities Act or to file under the Exchange Act any document which
would be deemed to be incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, the Company will promptly notify the Representative and will
amend the Registration Statement or supplement the Prospectus (or, if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure Package) or file such document (at
the expense of the Company) so as to correct such statement or omission or effect such compliance.
(B) If, at any time following issuance of an Issuer Free Writing Prospectus, there occurred
or occurs an event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration Statement, any
Statutory Prospectus or the Prospectus relating to the Securities or included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company promptly will notify the Representative and will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
(d) The Company shall take or cause to be taken all necessary action to qualify the Securities
for sale under the securities laws of such jurisdictions as the Representative shall reasonably
designate and to continue such qualifications in effect so long as required for the distribution of
the Securities, except that the Company shall not be required in connection therewith to qualify as
a foreign corporation or to execute a general consent to service of process in any state.
14
(e) The Company will furnish or make available to the Underwriters and counsel for the
Underwriters, at the Company’s expense, copies of the Registration Statement (which will include
three complete manually signed copies of the Registration Statement and all consents and exhibits
filed therewith), and to the Underwriters and any dealer each Preliminary Prospectus, the Time of
Sale Disclosure Package, the Prospectus, the Issuer Free Writing Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and in such quantities as the
Representative may from time to time reasonably request.
(f) During a period of five years commencing with the date hereof, the Company will furnish or
make available to the Underwriters copies of all periodic and special reports furnished to the
stockholders of the Company and all information, documents and reports filed with the Commission,
the FINRA or any securities exchange (other than any such information, documents and reports that
are filed with the Commission electronically via XXXXX or any successor system).
(g) The Company will make generally available to its security holders as soon as practicable,
but in no event later than 15 months after the end of the Company’s current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month period that shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
(h) The Company, whether or not the transactions contemplated hereunder are consummated or
this Agreement is prevented from becoming effective under the provisions of Section 8(a)
hereof or is otherwise terminated (but subject to clause I below), will pay or cause to be paid (A)
all expenses (including transfer taxes allocated to the respective transferees) incurred in
connection with the delivery to the Underwriters of the Securities, (B) all expenses and fees
(including, without limitation, fees and expenses of the Company’s accountants and counsel) in
connection with the preparation, printing, filing, delivery, and shipping of the Registration
Statement (including the financial statements therein and all amendments, schedules, and exhibits
thereto), the Securities, each Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or supplement thereto, and
the printing, delivery, and shipping of this Agreement and other underwriting documents, including
Blue Sky Memoranda (covering the states and other applicable jurisdictions), (C) all reasonable
filing fees and reasonable fees and disbursements of the Underwriters’ counsel incurred in
connection with the qualification of the Securities for offering and sale by the Underwriters or by
dealers under the securities or blue sky laws of the states and other jurisdictions which the
Representative shall designate, (D) the fees and expenses of any transfer agent or registrar, (E)
the reasonable filing fees and fees and disbursements of Underwriters’ counsel incident to any
required review and approval by FINRA of the terms of the sale of the Securities, (F) listing fees,
if any, (G) the costs and expenses of the Company relating to investor presentations or any
“roadshow” undertaken in connection with the marketing of the Securities, (H) all other costs and
expenses of the Company incident to the performance of its obligations hereunder that are not
otherwise specifically provided for herein and (I) all other costs and expenses of the Underwriters
(including reasonable fees and disbursements of counsel) incident to the performance of its
obligations hereunder not otherwise specifically provided for herein, provided however such costs
and expenses provided for in this clause (I) shall not exceed $125,000 in the aggregate. If this
Agreement is terminated pursuant to Section 8(a) hereof or if the sale of the Securities
provided for herein is not consummated by reason of action by the Company pursuant to
Section 9 hereof which prevents this Agreement from becoming effective, or by reason
of any failure, refusal or inability on the part of the Company to perform any agreement on its
part to be performed, or because any other condition of the Underwriters’ obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will reimburse the
Underwriters for all out-of-pocket disbursements (including reasonable fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone charges) incurred by
the Underwriters in connection with their investigation, preparing to market and marketing the
Securities or in contemplation of performing their obligations hereunder; provided, however, such
costs and expenses of the Underwriters provided for by the Company in the event of termination of
this Agreement shall not exceed $125,000 in the aggregate, without the prior written consent of the
Company. The Company shall not in any event be liable to the Underwriters for loss of any
anticipated profits from the transactions contemplated by this Agreement.
15
(i) The Company intends to apply the net proceeds from the sale of the Securities to be sold
by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the
Prospectus.
(j) The Company will not, without the prior written consent of the Representative, from the
date of execution of this Agreement and continuing to and including the date 90 days after the date
of the Prospectus (the “Lock-Up Period”), (A) offer, pledge, 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, directly or
indirectly, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (B) 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 (A) or (B) above is to be settled by delivery of Common Stock
or such other securities, in cash or otherwise, except for (A) sales of the Securities to the
Underwriters pursuant to this Agreement, (B) grants of options or the issuance of shares of Common
Stock by the Company pursuant to equity incentive plans described in the Time of Sale Disclosure
Package and (C) issuance of shares upon exercise or conversion of securities outstanding as of the
date hereof. The Company agrees not to accelerate the vesting of any option or warrant or the lapse
of any repurchase right prior to the expiration of the Lock-Up Period. If (1) during the last 17
days of the Lock-Up Period, (a) the Company issues an earnings release, (b) the Company publicly
announces material news or (c) 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, then the restrictions in
this Agreement, unless otherwise waived by the Representative in writing, shall continue to apply
until the expiration of the date that is 18 calendar days after the date on which (a) the Company
issues the earnings release, (b) the Company publicly announces material news or (c) a material
event relating to the Company occurs; 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. The Company will provide the Representative and each person subject to the
Lock-Up Agreement (as defined below) with prior notice of any such announcement that gives rise to
the extension of the Lock-Up Period.
(k) The Company has caused to be delivered to the Representative prior to the date of this
Agreement a letter, in the form of Exhibit A hereto (the “Lock-Up Agreement”), from each of
the Company’s directors and officers identified on Schedule IV. The Company will issue
stop-transfer instructions to the transfer agent for the Common Stock with respect to any
transaction or contemplated transaction that would constitute a breach of or default under the
applicable Lock-Up Agreement.
(l) The Company has not taken and will not take, directly or indirectly, any action designed
to or which might reasonably be expected to cause or result in, or which has constituted, the
stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities, and has not effected any sales of Common Stock which are required
to be disclosed in response to Item 701 of Regulation S-K under the Securities Act which have not
been so disclosed in the Registration Statement.
16
(m) Other than as contemplated by this Agreement, the Company will not incur any liability for
any finder’s or broker’s fee or agent’s commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
(n) During the Prospectus Delivery Period, the Company will file with the Commission such
periodic and special reports as required by the Rules and Regulations.
(o) The Company will maintain such controls and other procedures, including without limitation
those required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act and the applicable regulations
thereunder, that are designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and forms, including without
limitation, controls and procedures designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive officer and its
principal financial officer, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure, to ensure that material information relating to the
Company is made known to them by others within those entities.
(p) The Company will comply with all applicable provisions of the Xxxxxxxx-Xxxxx Act.
(q) The Company represents and agrees that, unless it obtains the prior written consent of the
Representative, it has not made and will not make any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or
that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the
Securities Act, required to be filed with the Commission; provided that the prior written consent
of the parties hereto shall be deemed to have been given in respect of the free writing
prospectuses included in Schedule II. Any such free writing prospectus consented to by the
Company and the Representative is hereinafter referred to as a “Permitted Free Writing Prospectus.”
The Company represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing
Prospectus, including timely Commission filing where required, legending and record keeping.
5. Conditions of Underwriters’ Obligations. The obligations of the several Underwriters
hereunder are subject to the accuracy, as of the date hereof and at each of the First Closing Date
and the Second Closing Date (as if made at such closing date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to the performance by
the Company of its obligations hereunder and to the following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations, the Company
shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free Writing
Prospectus with the Commission in the manner and within the time period so required (without
reliance
on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no stop
order suspending the effectiveness of the Registration Statement or any part thereof, any Rule
462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use of
the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall
have been issued; no proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be included in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to the satisfaction of the
Representative.
17
(b) No Underwriter shall have advised the Company that (i) the Registration Statement or any
amendment thereof or supplement thereto contains an untrue statement of a material fact which, in
the opinion of counsel to the Representative, is material or omits to state a material fact which,
in the opinion of counsel to the Representative, is required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Time of Sale Disclosure Package or the
Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus
contains an untrue statement of fact which, in the opinion of counsel to the Representative, is
material, or omits to state a fact which, in the opinion of counsel to the Representative, is
material and is required to be stated therein, or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading.
(c) Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure
Package, the Company shall not have incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any dividends or made
any distribution of any kind with respect to its capital stock; and there shall not have been any
change in the capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock of the Company, or
any Material Adverse Change or any development reasonably likely to result in a Material Adverse
Change (whether or not arising in the ordinary course of business), that, in the judgment of the
Representative, makes it impractical or inadvisable to offer or deliver the Securities on the terms
and in the manner contemplated in the Time of Sale Disclosure Package and in the Prospectus.
(d) On the First Closing Date and the Second Closing Date, as the case may be, there shall
have been furnished to the Underwriters, the opinion of Seyfarth Xxxx LLP, counsel for the Company,
dated such closing date and addressed to the Representative in substantially the form attached
hereto as Exhibit B.
(e) On the First Closing Date and the Second Closing Date, as the case may be, there shall
have been furnished to the Underwriters, the opinion of Xxxxxxx Procter LLP, counsel for the
Underwriters, dated such closing date and addressed to the Representative with respect to the
formation of the Company, the validity of the Securities, the Registration Statement, the Time of
Sale Disclosure Package, the Prospectus and other related matters as the Representative reasonably
may request, and such counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(f) On the date of this Agreement, the First Closing Date and the Second Closing Date, as the
case may be, the Underwriters shall have received a letter of Deloitte & Touche LLP, dated such
date and addressed to the Representative, confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the applicable requirements
relating
to the qualifications of accountants under Rule 2-01 of Regulation S-X of the Commission, and
stating, as of the date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial information is given in the
Time of Sale Disclosure Package, as of a date not prior to the date hereof or more than five days
prior to the date of such letter), the conclusions and findings of said firm with respect to the
financial information and other matters covered by its letter delivered to the Underwriters
concurrently with the execution of this Agreement, and the effect of the letter so to be delivered
on the First Closing Date and the Second Closing Date, as the case may be, shall be to confirm the
conclusions and findings set forth in such prior letter.
18
(g) On the First Closing Date and the Second Closing Date, as the case may be, there shall
have been furnished to the Underwriters, a certificate, dated such closing date and addressed to
the Representative, signed by the chief executive officer and by the chief financial officer of the
Company, to the effect that:
(i) The representations and warranties of the Company in this Agreement are true and
correct, as if made at and as of such closing date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or satisfied at
or prior to such closing date;
(ii) No stop order or other order suspending the effectiveness of the Registration
Statement or any part thereof or any amendment thereof or the qualification of the
Securities for offering or sale, nor suspending or preventing the use of the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued,
and no proceeding for that purpose has been instituted or, to the best of their knowledge,
is contemplated by the Commission or any state or regulatory body; and
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and any amendments
thereof or supplements thereto, and
(A) each part of the Registration Statement and the Prospectus, and any
amendments thereof or supplements thereto contain, and contained when such part of
the Registration Statement, or any amendment thereof, became effective, all
statements and information required to be included therein, the Registration
Statement, or any amendment thereof, does not contain and did not contain when such
part of the Registration Statement, or any amendment thereof, became effective, any
untrue statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading, except
that such statement shall not apply to statements in or omissions from the
Registration Statement, or any amendment thereof, based upon and in conformity with
written information furnished to the Company by any Underwriter specifically for use
therein, and the Prospectus, as amended or supplemented, does not include and did
not include as of its date or the time of first use within the meaning of the Rules
and Regulations, any untrue statement of material fact or omit to state and did not
omit to state as of its date or the time of first use within the meaning of the
Rules and Regulations a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except that
such statement shall not apply to statements in or omissions from the Prospectus, as
amended or supplemented, based upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein,
(B) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the Time
of Sale Disclosure Package, include, nor included as of the Time of Sale any untrue
statement of a material fact or omits, or omitted as of the Time of Sale, to state
any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that such
statement shall not apply to statements in or omissions from the Time of Sale
Disclosure Package or any Individual Limited-Use Free Writing Prospectus based upon
and in conformity with written information furnished to the Company by any
Underwriter specifically for use therein,
19
(C) since the Time of Sale there has occurred no event required to be set forth
in an amended or supplemented prospectus which has not been so set forth,
(D) subsequent to the respective dates as of which information is given in the
Registration Statement, the Time of Sale Disclosure Package and Prospectus, the
Company has not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, not in the ordinary course of
business, or declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, and except as disclosed in the Time of Sale
Disclosure Package and in the Prospectus, there has not been any change in the
capital stock (other than a change in the number of outstanding shares of Common
Stock due to the issuance of shares upon the exercise of outstanding options or
warrants), or any material change in the short term or long term debt, or any
issuance of options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company (other than issuances of options under the
Company’s existing stock option plans) or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising
in the ordinary course of business), and
(E) except as stated in the Registration Statement, the Time of Sale Disclosure
Package and in the Prospectus, there is not pending, or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding to which the
Company is a party before or by any court or governmental agency, authority or body,
or any arbitrator, which could reasonably be expected to result in any Material
Adverse Change.
(h) The Underwriters shall have received all the Lock-Up Agreements referenced in Section
4(k).
(i) The Company shall have furnished to the Underwriters such additional documents,
certificates and evidence as the Representative may have reasonably requested.
(j) At the First Closing Date, the Company shall have submitted to NASDAQ a Notification Form:
Listing of Additional Shares related to the Securities.
(k) The Underwriters shall have received on the First Closing Date a certificate of the
Secretary of the Company.
(l) The Underwriters shall not have received any unresolved objection from FINRA as to the
fairness and reasonableness of the amount of compensation allowable or payable to the Underwriters
in connection with the issuance and sale of the Securities.
(m) At the First Closing Date and the Second Closing Date, as the case may be, counsel for the
Underwriters shall have been furnished with such information, certificates and documents as it may
reasonably require for the purpose of enabling it to pass upon the issuance and sale of the
Securities as contemplated herein and related proceedings, or to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any of the conditions, herein contained,
or otherwise in connection with the offering of the Securities contemplated hereby.
20
All such opinions, certificates, letters and other documents mentioned above and elsewhere in
this Agreement will be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Representative and counsel for the Underwriters. The Company will furnish
the Underwriters with such conformed copies of such opinions, certificates, letters and other
documents as the Representative shall reasonably request.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the several Underwriters, their
affiliates, directors and officers 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, from and against any
losses, claims, damages or liabilities, joint or several, to which the Underwriters may become
subject, under the Securities Act or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement,
including the 430B Information and any other information deemed to be a part of the Registration
Statement at the time of effectiveness and at any subsequent time pursuant to the Rules and
Regulations, if applicable, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or in any
materials or information provided to investors by, at the instruction of, the Company in connection
with the marketing of the offering of the Common Stock (“Marketing Materials”), including any
roadshow or investor presentations made to investors by the Company (whether in person or
electronically), 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, and will reimburse the Underwriters for any legal or other expenses reasonably
incurred by them in connection with investigating or defending against such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus, or any such amendment or supplement, any Issuer Free Writing
Prospectus or in any Marketing Materials, in reliance upon and in conformity with information
provided in writing to the Company by any Underwriter specifically for use therein; it being
understood and agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 6(f).
In addition to its other obligations under this Section 6(a), the Company agrees that,
as an interim measure during the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(a), it will reimburse the Underwriters on a monthly
basis for all reasonable legal fees or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of the Company’s
obligation to reimburse the Underwriters for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent jurisdiction. To the extent that
any such interim reimbursement payment is so held to have
been improper, the Underwriter that received such payment shall promptly return it to the
party or parties that made such payment, together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by U.S. Bank (the “Prime Rate”). Any such interim
reimbursement payments which are not made to the Underwriters within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which the Company may otherwise have.
21
(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company,
its affiliates, directors and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, from and against
any losses, claims, damages or liabilities to which the Company may become subject, under the
Securities Act or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus 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 the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any such amendment or supplement, or any Issuer Free Writing Prospectus
in reliance upon and in conformity with information provided in writing to the Company by any
Underwriter specifically for use therein; (it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described as such in
Section 6(f), and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending against any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under Section 6(a) or 6(b) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may have to any indemnified
party except to the extent such indemnifying party has been materially prejudiced by such failure.
In case any such action 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 satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party of the indemnifying
party’s election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the sole judgment of the Representative, it is
advisable for the Underwriters to be represented by separate counsel, the Underwriters shall have
the right to employ a single counsel (in addition to local counsel) to represent the Representative
and all Underwriters who may be subject to liability arising from any claim in respect of which
indemnity may be sought by the Underwriters under subsection (a) of this Section 6, in which event
the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party
or parties and reimbursed to the Underwriters as incurred. An indemnifying party shall not be
obligated under any settlement agreement relating to any action under this Section 6 to
which it has not agreed in writing. In addition, no indemnifying party shall, without the prior
written consent of the indemnified party (which consent shall
not be unreasonably withheld or delayed), effect any settlement of any pending or threatened
proceeding unless such settlement includes an unconditional release of such indemnified party for
all liability on claims that are the subject matter of such proceeding and does not include a
statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
22
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under Section 6(a) or 6(b) above, then
each indemnifying party shall contribute to the amount paid or payable by such indemnified party as
a result of the losses, claims, damages or liabilities referred to in Section 6(a) or 6(b)
above, (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriter, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters and the parties’ relevant
intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of the equitable
considerations referred to in the first sentence of this Section 6(d). The amount paid by
an indemnified party as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this Section 6(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating or defending against
any action or claim which is the subject of this Section 6(d). Notwithstanding the
provisions of this Section 6(d), the Underwriters shall not be required to contribute any
amount in excess of the amount by which the total price at which the Securities underwritten by
them and distributed to the public were offered to the public exceeds the amount of any damages
that the Underwriters have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations
in this Section 6(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the meaning of the
Securities Act; and the obligations of the Underwriters under this Section 6 shall be in
addition to any liability that the Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company (including any person who, with his consent,
is named in the Registration Statement as about to become a director of the Company), to each
officer of the Company who has signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
(f) The Underwriters confirm and the Company acknowledges that the statements with respect to
the public offering of the Securities by the Underwriters set forth in the third, seventh and
thirteenth through fifteenth paragraphs under the caption “Underwriting” in the Time of Sale
Disclosure Package and in the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of the Underwriters
specifically for use in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.
23
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, including but not
limited to the agreements of the Underwriters and the Company contained in Section 6
hereof, shall remain operative and in full force and effect regardless of any investigation made by
or on behalf of the Underwriters or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, or any controlling person thereof, and shall survive
delivery of, and payment for, the Securities to and by the Underwriters hereunder.
8. Termination of this Agreement.
(a) The Representative shall have the right to terminate this Agreement by giving notice to
the Company as hereinafter specified at any time at or prior to the First Closing Date, and the
option referred to in Section 3(b), if exercised, may be cancelled at any time prior to the
Second Closing Date, if (i) the Company shall have failed, refused or been unable, at or prior to
such closing date, to perform any agreement on its part to be performed hereunder, (ii) any other
condition of the Underwriters’ obligations hereunder is not fulfilled, (iii) trading on the NASDAQ
Stock Market, New York Stock Exchange or the NYSE Amex shall have been suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the NASDAQ Stock Market, New York Stock Exchange or the NYSE Amex, by such
Exchange or by order of the Commission or any other Governmental Authority having jurisdiction, (v)
a banking moratorium shall have been declared by federal or state authorities, or (vi) there shall
have occurred any outbreak or escalation of hostilities, any change in financial markets or any
calamity or crisis that, in the Underwriters’ judgment, is material and adverse and makes it
impractical or inadvisable to proceed with the completion of the sale of and payment for the
Securities. Any such termination shall be without liability of any party to any other party except
that the provisions of Section 4(g) and Section 6 hereof shall at all times be
effective and shall survive such termination.
(b) If the Representative elects to terminate this Agreement as provided in this Section
8, the Company shall be notified promptly by the Representative by telephone, confirmed by
letter.
9. Default by the Company
(a) If the Company shall fail at the First Closing Date to sell and deliver the number of
Securities which it is obligated to sell hereunder, then this Agreement shall terminate without any
liability on the part of the Underwriters or, except as provided in Section 4(h) and
Section 6 hereof, any non defaulting party. No action taken pursuant to this Section
0 shall not relieve the Company from liability, if any, in respect of such default.
(b) If any Underwriter shall fail at the First Closing Date to purchase and pay for the
portion of the Securities which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company), the Representative shall use
its reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters,
or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms
set forth herein, the Securities which the defaulting Underwriter or Underwriters failed to
purchase. If during such
36 hours the Representative shall not have procured such other Underwriters, or any others, to
purchase the Securities agreed to be purchased by the defaulting Underwriter or Underwriters, then
(i) if the aggregate number of shares with respect to which such default shall occur does not
exceed 10% of the Securities to be purchased on the First Closing Date, the other Underwriters
shall be obligated, severally, in proportion to the respective numbers of Securities which they are
obligated to purchase hereunder, to purchase the Securities which such defaulting Underwriter or
Underwriters failed to purchase, or (ii) if the aggregate number of shares with respect to which
such default shall occur exceeds 10%
24
of the Securities to be purchased on the First Closing Date,
the Company or the Representative will have the right, by written notice given within the next
36-hour period to the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company except to the extent provided in
Sections 4(viii) and 6 hereof; provided, however, upon any such termination as set forth in this
Section 9(b), the Company shall not be required to pay the expenses of the Underwriters as
described in Section 4(viii) above. In the event of a default by any Underwriter or Underwriters,
as set forth in this Section 9(b), the First Closing Date may be postponed for such period, not
exceeding seven days, as the Representative may determine in order that the required changes in the
Registration Statement, the Time of Sale Disclosure Package or in the Prospectus or in any other
documents or arrangements may be effected. The term “Underwriter” includes any person substituted
for a defaulting Underwriter. Any action taken under this Section 9 shall not relieve any
defaulting Underwriter from liability in respect of any default of such Underwriter under this
Agreement.
10. Notices. Except as otherwise provided herein, all communications hereunder shall be in
writing and, if to the Underwriters, shall be mailed or delivered c/o Xxxxx Xxxxxxx & Co., U.S.
Bancorp Center, 000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: General Counsel, with a
copy to Xxxxxxx Procter LLP, 000 0xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxxx X. Xxxxxx; and if to the Company, shall be mailed or delivered to Nanosphere, Inc., 0000
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 Attention: Chief Executive Officer. Any party to
this Agreement may change such address for notices by sending to the parties to this Agreement
written notice of a new address for such purpose.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns and the
controlling persons, officers and directors referred to in Section 6. Nothing in this
Agreement is intended or shall be construed to give to any other person, firm or corporation any
legal or equitable remedy or claim under or in respect of this Agreement or any provision herein
contained. The term “successors and assigns” as herein used shall not include any purchaser, as
such purchaser, of any of the Securities from the Underwriters.
12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: (a) the
Underwriters have been retained solely to act as underwriters in connection with the sale of the
Securities and that no fiduciary, advisory or agency relationship between the Company and the
Underwriters has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Underwriters have advised or are advising the Company on other matters;
(b) the price and other terms of the Securities set forth in this Agreement were established by the
Company following discussions and arms-length negotiations with the Underwriters and the Company is
capable of evaluating and understanding and understands and accepts the terms, risks and conditions
of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriters
and their affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Underwriters have no obligation to disclose such
interest and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; (d) it has been advised that the Underwriters are acting, in respect of the
transactions contemplated by this Agreement, solely for the benefit of the Representative and the
other Underwriters, and not on behalf of the Company; (e) it waives
to the fullest extent permitted by law, any claims it may have against the Underwriters for
breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions
contemplated by this Agreement and agrees that the Underwriters shall have no liability (whether
direct or indirect) to the Company in respect of such a fiduciary duty claim on behalf of or in
right of the Company, including stockholders, employees or creditors of the Company.
13. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
25
14. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument.
15. General Provisions. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. This Agreement may not
be amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. The Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
[Signature Page Follows]
26
Please sign and return to the Company the enclosed duplicates of this Agreement whereupon this
Agreement will become a binding agreement between the Company and the Underwriters in accordance
with its terms.
| Very truly yours, NANOSPHERE, INC. |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx. | ||||
| Chief Financial Officer | ||||
The foregoing Purchase Agreement
is hereby confirmed and accepted as
of the date first above written, on behalf of
themselves and the other several
Underwriters named in Schedule I hereto.
| XXXXX XXXXXXX & CO. | ||||
By:
|
/s/ Xxxx X. Xxxxx
|
|||
| Managing Director | ||||
27
SCHEDULE I
SCHEDULE I
| Number of Firm Shares | ||||
| Underwriter | to be Purchased(1) | |||
Xxxxx Xxxxxxx & Co. |
10,912,000 | |||
Xxxx Capital Partners LLC |
2,728,000 | |||
Total: |
13,640,000 | |||
| (1) | The Underwriters may purchase up to an additional 2,046,000 Option Shares, to the extent the
option described in Section 3(b) of the Agreement is exercised, in the proportions and in the
manner described in the Agreement. |
28
SCHEDULE II
Issuer General Free Writing Prospectuses
Free Writing Prospectus, dated May 10, 2011
29
SCHEDULE III
Pricing Information
Number of Firm Shares to be Issued: 13,640,000
Offering
Price: $2.20 per share
Underwriting Discounts and Commissions: 6.0 %
30
SCHEDULE III
Executive Officers and Directors Subject to Lockup
Xxxxxxx X. Xxxxxxx, III
Xxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx xx Xxxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxx
J. Xxxxx Xxxxx, Xx.
Xxxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx xx Xxxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxxx
J. Xxxxx Xxxxx, Xx.
Xxxxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
31
EXHIBIT A
Form of Lockup Agreement
May , 2011
XXXXX XXXXXXX & CO.
As Representative of the several Underwriters
c/o Xxxxx Xxxxxxx & Co.
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
| Re: | Public Offering of Shares of Common Stock |
Ladies and Gentlemen:
The undersigned understands that Xxxxx Xxxxxxx & Co (“Xxxxx Xxxxxxx”), will act as
representative for a group of underwriters (the “Underwriters”), that proposes to enter into the
Purchase Agreement (the “Purchase Agreement”) with Nanosphere, Inc., a Delaware corporation (the
“Company”), providing for the offering (the “Offering”) of shares (the “Shares”) of common stock,
$0.01 par value per share (the “Common Stock”), of the Company. Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Purchase Agreement.
In order to induce the Underwriters to enter in to the Purchase Agreement, the undersigned
hereby agrees that, commencing on the date hereof and continuing until the ninetieth (90th) day
following the date of the final prospectus filed by the Company with the Securities and Exchange
Commission in connection with such Offering (the “Lock-Up Period”), the undersigned will not,
without the prior written consent of Xxxxx Xxxxxxx, on behalf of the Underwriters (which consent
may be withheld in Xxxxx Xxxxxxx’x sole discretion), directly or indirectly, (1) offer, sell,
contract to sell, pledge, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of
any shares of the Common Stock, or any securities convertible into or exercisable or exchangeable
for the Common Stock; (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common Stock, or any
securities convertible into or exchangeable for the Common Stock, regardless of whether any such
transaction described herein is to be settled by delivery of the Common Stock or such other
securities, or by delivery of cash or otherwise; (3) make any demand for, or exercise any right
with respect to, the registration of any shares of the Common Stock or any security convertible
into or exercisable of exchangeable for the Common Stock; or (4) publicly announce any intention to
do any of the foregoing.
Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2) above shall
not apply to (a) transfers (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein for the remainder of the
Lock-Up Period, (ii) by will or intestate succession, (iii) to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, (iv) to any partner, member
or stockholder of the undersigned, (v) with the prior written consent of Xxxxx Xxxxxxx or (vi)
effected pursuant to any exchange of “underwater” options with the Company, provided that in
connection with transactions described in clauses (ii), (iii) and (iv) above, the recipient (as
applicable) agrees to be bound in writing by the restrictions set forth herein for the remainder of
the Lock-Up Period and the related transfer shall not involve a
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disposition for value; (b) the
acquisition or exercise of any stock option issued pursuant to the Company’s existing stock option
plan or employee stock purchase plan as described in the Registration Statement, including any
exercise effected by the delivery of Shares of the Company held by the undersigned or (c) sales
under any trading plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) in existence as of the date hereof. In addition, notwithstanding the lock-up
restrictions described herein, the undersigned may at any time after the date hereof enter into a
trading plan meeting the requirements of Rule 10b5-1 of the Exchange Act (a “New Plan”) relating to
the sale of shares of Common Stock, if then permitted by the Company and applicable law, provided
that the shares subject to such New Plan may not be sold during the Lock-Up Period. For purposes
of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. None of the restrictions set forth in this Lock-Up
Agreement shall apply to Common Stock acquired in open market transactions.
Anything herein to the contrary notwithstanding, if:
(1) during the last 17 days of the Lock-Up Period the Company issues an earnings release or
other 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 Lock-Up Period shall be extended and the restrictions imposed by this letter shall continue to
apply until the expiration of the 18 day period beginning on the date of issuance of the earnings
release or the occurrence of the material news or material event, unless Xxxxx Xxxxxxx waives, in
writing, such extension.
The undersigned hereby acknowledges and agrees that written notice of any extension of the
Lock-Up Period pursuant to the previous paragraph will be delivered by Xxxxx Xxxxxxx to the Company
(in accordance with the notice provision in the Purchase Agreement) and that any such notice
properly delivered will be deemed to have been given to, and received by, the undersigned. The
undersigned hereby further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Agreement during the period from the date of
this Lock-Up Agreement to and including the 34th day following the expiration of the initial
Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation from the Company that the
Lock-Up Period (as such may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, if the Company has “actively traded securities” within the meaning
of Rule 101(c)(1) of Regulation M of the Exchange Act or otherwise satisfies the requirements set
forth in Rule 139 that would permit Xxxxx Xxxxxxx or any underwriter to publish issuer-specific
research reports pursuant to Rule 139, the Lock-Up Period shall not be extended upon the occurrence
of (1) or (2) above
The undersigned hereby agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent against the transfer of securities of the Company held by the undersigned
during the Lock-Up Period (as may have been extended pursuant hereto), except in compliance with
this Lock-Up Agreement.
Anything to the contrary notwithstanding, if (i) the Purchase Agreement does not become
effective by May 31, 2011, (ii) after becoming effective, the Purchase Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares to be sold thereunder, or (iii) prior to the Purchase Agreement becoming
effective, the Company notifies the Xxxxx Xxxxxxx in writing that it does not intend to proceed
with the Offering, this Lock-Up Agreement shall lapse and become null and void and the undersigned
shall be released from all obligations under 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. This Lock-Up Agreement may not be revoked by the
undersigned or the Company. All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and any obligations of the undersigned shall be binding
upon the heirs, personal representatives, successors and assigns of the undersigned.
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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, | ||||||
| Print Name: |
|
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| Print Title: |
|
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| Signature: |
|
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EXHIBIT B
Form of Opinion of Company Counsel
[Intentionally Omitted]
35
