Shares OMEROS CORPORATION Common Stock ($0.01 Par Value) EQUITY UNDERWRITING AGREEMENT
Exhibit 1.1
_______________ Shares
OMEROS CORPORATION
Common Stock
($0.01 Par Value)
[ ], 2008
Deutsche Bank Securities Inc.
As Representative of the Several Underwriters
As Representative of the Several Underwriters
c/o Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Omeros Corporation, a Washington corporation (the “Company”), proposes to sell to the several
underwriters (the “Underwriters”) named in Schedule I hereto for whom you are acting as
Representative (the “Representative”) an aggregate of ___shares (the “Firm Shares”) of the
Company’s common stock, $0.01 par value (the “Common Stock”). The respective amounts of the Firm
Shares to be so purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters’ option an aggregate of
up to ___additional shares of the Company’s Common Stock (the “Option Shares”) as set forth
below.
As the Representative, you have advised the Company (a) that you are authorized to enter into
this Agreement on behalf of the several Underwriters, and (b) that the several Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm Shares set forth
opposite their respective names in Schedule I, plus their pro rata portion of the Option Shares if
you elect to exercise the over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the aforementioned option is
exercised) are herein collectively called the “Shares.”
Deutsche Bank Securities Inc. (“DBSI”) has agreed to reserve up to ___of the Shares
to be purchased by it under this Agreement for sale to the Company’s directors, officers, employees
and business associates and other parties related to the Company (collectively, “Participants”), as
set forth in the Prospectus (as defined below) under the heading “Underwriting” (the “Directed
Share Program”). The Shares to be sold by DBSI and its affiliates pursuant to the Directed Share
Program are referred to hereinafter as the “Directed Shares.” Any Directed Shares not orally confirmed for purchase by any Participants by the end of the
business day on which this Agreement is executed will be offered to the public by the Underwriters
as set forth in the Prospectus.
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In consideration of the mutual agreements contained herein and of the interests of the parties
in the transactions contemplated hereby, the parties hereto agree as follows:
1. | Representations and Warranties of the Company. | ||
The Company represents and warrants to each of the Underwriters as follows: |
(a) A registration statement on Form S-1 (File No. 333-___) with respect to the Shares has
been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as
amended (the “Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities
and Exchange Commission (the “Commission”) thereunder and has been filed with the Commission.
Copies of such registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations) contained therein and the
exhibits and financial statements, as finally amended and revised, have heretofore been delivered
by the Company to you. Such registration statement, together with any registration statement filed
by the Company pursuant to Rule 462(b) under the Act, is herein referred to as the “Registration
Statement,” which shall be deemed to include all information omitted therefrom in reliance upon
Rules 430A, 430B or 430C under the Act and contained in the Prospectus referred to below, has
become effective under the Act and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. “Prospectus” means the form of prospectus first filed
with the Commission pursuant to and within the time limits described in Rule 424(b) under the Act.
Each preliminary prospectus included in the Registration Statement prior to the time it becomes
effective is herein referred to as a “Preliminary Prospectus.”
(b) As of the Applicable Time (as defined below) and as of the Closing Date or the Option
Closing Date, as the case may be, neither (i) the General Use Free Writing Prospectus(es) (as
defined below) issued at or prior to the Applicable Time, the Statutory Prospectus (as defined
below) and the information included on Schedule II hereto, all considered together (collectively,
the “General Disclosure Package”), nor (ii) any individual Limited Use Free Writing Prospectus (as
defined below), when considered together with the General Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from any Issuer Free Writing Prospectus, in
reliance upon, and in conformity with, written information furnished to the Company by or on behalf
of any Underwriter through the Representative, specifically for use therein, it being understood
and agreed that the only such information is that described in Section 13 herein. As used in this
subsection and elsewhere in this Agreement:
“Applicable Time” means ___[a/p]m (New York time) on the date of this Agreement or such
other time as agreed to by the Company and the Representative.
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“Statutory Prospectus” as of any time means the Preliminary Prospectus relating to the Shares
that is included in the Registration Statement immediately prior to that time.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Act, relating to the Shares 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 Act.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule III to this Agreement.
“Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a
General Use Free Writing Prospectus.
(c) The Company has been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Washington, with corporate power and authority to own or
lease its properties and conduct its business as described in the Registration Statement, the
General Disclosure Package and the Prospectus. The subsidiary of the Company listed in Exhibit A
hereto (the “Subsidiary”) has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as described in the Registration
Statement, the General Disclosure Package and the Prospectus. The Subsidiary is the only
subsidiary, direct or indirect, of the Company. The Company and the Subsidiary are duly qualified
to transact business in all jurisdictions in which the conduct of their business requires such
qualification except where the failure to qualify would not either (i) have, individually or in the
aggregate, a material adverse effect on the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the Company and of the
Subsidiary taken as a whole or (ii) prevent the consummation of the transactions contemplated
hereby (the occurrence of any such effect or any such prevention described in the foregoing clauses
(i) and (ii) being referred to as a “Material Adverse Effect”). The outstanding shares of capital
stock of the Subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of all liens, encumbrances and equities
and claims; and no options, warrants or other rights to purchase, agreements or other obligations
to issue or other rights to convert any obligations into shares of capital stock or ownership
interests in the Subsidiary are outstanding.
(d) The outstanding shares of Common Stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; the Shares to be issued and sold by the
Company have been duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and non-assessable; and except as waived or terminated in writing before
the date hereof, there are no preemptive rights of shareholders with respect to any of the Shares
or the issue and sale thereof. Neither the filing of the Registration Statement nor the offering
or sale of the Shares as contemplated by this Agreement gives rise to any rights, other than those
which have been waived or satisfied, for or relating to the registration of any shares of Common
Stock.
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(e) The information set forth under the caption “Capitalization” in the Registration Statement
and the Prospectus (and any similar section or information contained in the General Disclosure
Package) is true and correct. All of the Shares conform to the description thereof contained in
the Registration Statement, the General Disclosure Package and the Prospectus. The form of
certificates for the Shares conforms to the corporate law of the jurisdiction of the Company’s
incorporation and to any requirements of the Company’s organizational documents. Subsequent to the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package and the Prospectus, except as otherwise specifically stated therein or in this
Agreement, the Company has not: (i) issued any securities (other than securities issued in
connection with the conversion of the outstanding convertible preferred stock, a stock split, or
the grant or exercise of outstanding stock options as set forth in the Registration Statement, the
General Disclosure Package and the Prospectus) or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any dividend or made any other
distribution on or in respect to its capital stock. Prior to the time of purchase of the Shares as
described herein, all outstanding shares of Series A convertible preferred stock, par value $0.01
per share, Series B convertible preferred stock, par value $0.01 per share, Series C convertible
preferred stock, par value $0.01 per share, Series D convertible preferred stock, par value $0.01
per share and Series E convertible preferred stock, par value $0.01 per share, of the Company shall
convert into the number of shares of Common Stock, and shall convert in the manner, set forth in
the Registration Statement and the Prospectus; [prior to the date hereof the Company has duly
effected and completed a [ ]-for-[ ] stock split of the Common Stock [and Preferred Stock] in
the manner set forth in the Registration Statement and the Prospectus;] and the Amended and
Restated Articles of Incorporation of the Company and the Amended and Restated By-Laws of the
Company, each in the form filed as an exhibit to the Registration Statement, have been heretofore
duly authorized and approved in accordance with the Washington Business Corporation Act and shall
become effective and in full force and effect on or before the time of such purchase.
(f) The Commission has not issued an order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus relating to the proposed offering
of the Shares, and no proceeding for that purpose or pursuant to Section 8A of the Act has been
instituted or, to the Company’s knowledge, threatened by the Commission. The Registration
Statement contains, and the Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform to, the requirements of the
Act and the Rules and Regulations. The Registration Statement and any amendment thereto do not
contain, and will not contain, any untrue statement of a material fact and do not omit, and will
not omit, to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus and any amendments and supplements thereto do
not contain, and will not contain, any untrue statement of a material fact and do not omit, and
will not 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; provided, however, that the
Company makes no representations or warranties as to information contained in or omitted from the
Registration Statement or the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Company by or on behalf of any
Underwriter through the Representative, specifically for use therein, it being understood and
agreed that the only such information is that described in Section 13 herein.
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(g) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Shares, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement or the Prospectus.
(h) The Company has not, directly or indirectly, distributed and will not distribute any
offering material in connection with the offering and sale of the Shares other than any Preliminary
Prospectus, the Prospectus and other materials, if any, permitted under the Act and consistent with
Section 4(b) below. The Company will file with the Commission all Issuer Free Writing Prospectuses
in the time required under Rule 433(d) under the Act. The Company has satisfied or will satisfy
the conditions in Rule 433 under the Act to avoid a requirement to file with the Commission any
electronic road show.
(i) (i) At the time of the initial filing of the Registration Statement and (ii) as of the
date hereof (with such date being used as the determination date for purposes of this subclause
(ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 under the Act,
without taking into account any determination by the Commission pursuant to Rule 405 under the Act
that it is not necessary that the Company be considered an ineligible issuer), including, without
limitation, for purposes of Rules 164 and 433 under the Act with respect to the offering of the
Shares as contemplated by the Registration Statement.
(j) The consolidated financial statements of the Company and the Subsidiary, together with
related notes and schedules as set forth in the Registration Statement, the General Disclosure
Package and the Prospectus, present fairly the financial position and the results of operations and
cash flows of the Company and the consolidated Subsidiary, at the indicated dates and for the
indicated periods. Such financial statements and related schedules have been prepared in
accordance with generally accepted principles of accounting (“GAAP”), consistently applied
throughout the periods involved, except as disclosed therein, and all adjustments necessary for a
fair presentation of results for such periods have been made. The summary and selected
consolidated financial data included in the Registration Statement, the General Disclosure Package
and the Prospectus present fairly the information shown therein and such data has been compiled on
a basis consistent with the financial statements presented therein and the books and records of the
Company. The pro forma financial statements and other pro forma financial information included in
the Registration Statement, the General Disclosure Package and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements, have been properly compiled on the pro
forma bases described therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein. The Company and the Subsidiary do not
have any material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations or any “variable interest entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), not disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus. There are no financial statements (historical or pro forma)
that are required to be included in the Registration Statement, the General Disclosure Package or
the Prospectus that are not included as required.
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(k) Each of Ernst & Young and PricewaterhouseCoopers LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration Statement, the General
Disclosure Package and the Prospectus, is an independent registered public accounting firm with
respect to the Company and the Subsidiary within the meaning of the Act and the applicable Rules
and Regulations and the Public Company Accounting Oversight Board (United States) (the “PCAOB”).
(l) Except as disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, neither the Company nor the Subsidiary is aware of (i) any material weakness in its
internal control over financial reporting or (ii) change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(m) Solely to the extent that the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules and
regulations promulgated by the Commission and The Nasdaq Stock Market, Inc. (“NASDAQ”) thereunder
(the “Xxxxxxxx-Xxxxx Act”) has been applicable to the Company, there is and has been no failure on
the part of the Company to comply in all material respects with any provision of the Xxxxxxxx-Xxxxx
Act. The Company has taken all necessary actions to ensure that it is in compliance with all
provisions of the Xxxxxxxx-Xxxxx Act that are in effect and with which the Company is required to
comply.
(n) There is no action, suit, claim or proceeding pending or, to the knowledge of the Company,
threatened against the Company or the Subsidiary before any court or administrative agency or
otherwise which if determined adversely to the Company or the Subsidiary would have, individually
or in the aggregate, a Material Adverse Effect, except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus.
(o) The Company and the Subsidiary have good and marketable title to all of the properties and
assets reflected in the consolidated financial statements hereinabove described or described in the
Registration Statement, the General Disclosure Package and the Prospectus, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those reflected in such financial
statements or described in the Registration Statement, the General Disclosure Package and the
Prospectus and except as would not, individually or in the aggregate, have a Material Adverse
Effect. The Company and the Subsidiary occupy their leased properties under valid and binding
leases conforming in all material respects to the description thereof set forth in the Registration
Statement, the General Disclosure Package and the Prospectus with such exceptions as are not
material and do not interfere with the use of such property.
(p) The Company and the Subsidiary have filed all Federal, State, local and foreign tax
returns which have been required to be filed and have paid all taxes indicated by such returns and
all assessments received by them or any of them to the extent that such taxes have become due and
are not being contested in good faith and for which an adequate reserve for accrual has been
established in accordance with GAAP. All tax liabilities have been adequately provided for in the
financial statements of the Company, and the Company does not know of any actual or proposed
additional material tax assessments.
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(q) Since the respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, as each may be amended or supplemented, there
has not been any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise), or prospects of the Company and the Subsidiary
taken as a whole, whether or not occurring in the ordinary course of business, and there has not
been any material transaction entered into or any material transaction that is probable of being
entered into by the Company or the Subsidiary, other than transactions in the ordinary course of
business and changes and transactions described in the Registration Statement, the General
Disclosure Package and the Prospectus, as each may be amended or supplemented. The Company and the
Subsidiary have no material contingent obligations which are not disclosed in the Company’s
financial statements which are included in the Registration Statement, the General Disclosure
Package and the Prospectus.
(r) Neither the Company nor the Subsidiary is or with the giving of notice or lapse of time or
both, will be, (i) in violation of its articles of incorporation, by-laws, certificate of
formation, limited liability agreement, or other organizational documents or (ii) in violation of
or in default under any agreement, lease, contract, indenture or other instrument or obligation to
which it is a party or by which it, or any of its properties, is bound and, solely with respect to
this clause (ii), which violation or default would have a Material Adverse Effect. The execution
and delivery of this Agreement and the consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, (x) any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or the Subsidiary is a party or by which the Company
or the Subsidiary or any of their respective properties is bound, which violation or default would
not, individually or in the aggregate, have a Material Adverse Effect or (y) the articles of
incorporation or by-laws of the Company or (z) any law, order, rule or regulation judgment, order,
writ or decree applicable to the Company or the Subsidiary of any court or of any government,
regulatory body or administrative agency or other governmental body having jurisdiction.
(s) The execution and delivery of, and the performance by the Company of its obligations
under, this Agreement has been duly and validly authorized by all necessary corporate action on the
part of the Company, and this Agreement has been duly executed and delivered by the Company.
(t) Each approval, consent, order, authorization, designation, declaration or filing by or
with any regulatory, administrative or other governmental body necessary in connection with the
execution and delivery by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the Commission, the
Financial Industry Regulatory Authority (the “FINRA”) or such additional steps as may be necessary
to qualify the Shares for public offering by the Underwriters under State securities or Blue Sky
laws or Canadian provincial securities laws or other non-U.S. laws of those jurisdictions
designated by the Representative) has been obtained or made and is in full force and effect.
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(u) The Company and the Subsidiary hold all material licenses, certificates and permits from
governmental authorities which are necessary to the conduct of their businesses. Except as
described in the Registration Statement, the General Disclosure Package and the Prospectus, the
Company and the Subsidiary own, have obtained or can acquire on reasonable terms, valid and
enforceable licenses for, or other legal rights to use, the inventions, patent applications,
patents, patent rights, trademarks (both registered and unregistered), trade names, service marks
(both registered and unregistered), service names, copyrights, trade secrets, customer lists,
designs, know-how (including trade secrets and other unpatented and unpatentable proprietary or
confidential information, systems or procedures) or other intellectual property rights or
proprietary rights and information described in the Registration Statement, the General Disclosure
Package and the Prospectus as being owned or licensed by the Company, or used in or necessary to
carry on their business as presently conducted or specifically proposed to be conducted
(collectively, the “Products”), each as described in the Registration Statement, the General
Disclosure Package and the Prospectus (collectively, “Intellectual Property”). To the Company’s
knowledge, all of such patents, registered trademarks, registered copyrights or applications
therefor, owned or licensed by the Company have been duly registered in, filed in or issued by the
United States Patent and Trademark Office, the United States Copyright Office or the corresponding
offices of other jurisdictions and have been maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the United States and all such other
jurisdictions, except where the failure to do so, individually or in the aggregate, would not have
a Material Adverse Effect. The Company has taken all commercially reasonable steps to establish
and preserve its ownership of or rights to all material Intellectual Property. To the Company’s
knowledge, there are no third parties who have or will be able to assert rights nor have any third
parties provided written notice to the Company alleging that such third party may establish rights,
to any Intellectual Property related to the Products, except as disclosed in the Registration
Statement, the General Disclosure Package or Prospectus. To the Company’s knowledge, there is no
infringement by third parties of any Intellectual Property that would, individually or in the
aggregate, have a Material Adverse Effect (other than with respect to trademarks that would not,
individually or in the aggregate, have a Material Adverse Effect). To the Company’s knowledge,
there is no pending or threatened action, suit or proceeding or written claim by others challenging
the Company’s rights in or to any Intellectual Property that would, individually or in the
aggregate, have a Material Adverse Effect (other than with respect to trademarks that would not,
individually or in the aggregate, have a Material Adverse Effect). There is no pending, or to the
Company’s knowledge, threatened action, suit or proceeding or written claim by others challenging
the validity or enforceability of any Intellectual Property except as described in the Registration
Statement, the General Disclosure Package and the Prospectus. To the Company’s knowledge, the
Company has not formerly and presently is not infringing or violating the valid and enforceable
Intellectual Property of any other person that would, individually or in the aggregate, have a
Material Adverse Effect. There is no pending, or to the Company’s knowledge, threatened action,
suit or proceeding or written claim by another that the Company infringes or otherwise violates the
Intellectual Property of a third party that would, individually or in the aggregate, have a
Material Adverse Effect, and the Company is unaware of any facts that could form a reasonable basis
for any such action, suit, proceeding or claim that would, individually or in the aggregate, have a
Material Adverse Effect. To the Company’s knowledge, the manufacture, use, sale, offer for sale or
import of any Product described in the Registration Statement or Prospectus by the Company would
not infringe any
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valid and enforceable claim of any patent of another, except that of a licensor who has
granted the Company a license under any such patent. The Company is in compliance with the
material terms of all agreements pursuant to which Intellectual Property has been licensed to the
Company as such are described in the Registration Statement, the General Disclosure Package or the
Prospectus. All such agreements are in full force and effect and there is no notice of default by
the Company thereto, and to the Company’s knowledge, no notice of default thereunder has been
threatened against the Company. To the Company’s knowledge, sublicenses granted to others are now
in compliance with the material terms of all agreements pursuant to which Intellectual Property
has been sublicensed by the Company. To the Company’s knowledge, all such agreements are in full
force and effect and there is no default by any sublicensee thereto. To the Company’s knowledge,
there is no patent or patent application containing claims that interfere with the issued or
pending claims of any patent owned by or licensed to the Company that relate to its product
candidates described in the Registration Statement, the General Disclosure Package and the
Prospectus. The Products described in the Registration Statement, the General Disclosure Package
or the Prospectus, if any, as developed or under development by the Company, fall within the scope
of one or more claims of one or more patents or patent applications owned by or licensed to the
Company. Upon the making, selling, offering for sale or importing into the United States of any
product covered by one or more claims of a United States patent owned or licensed by the Company,
the Company will comply with the marking and notice requirements of 35 U.S.C. § 287(a).
(v) The Company has duly and properly filed or caused to be filed with the U.S. Patent and
Trademark Office (the “PTO”) and applicable foreign and international patent authorities all patent
applications owned by the Company (the “Company Patent Applications”). To the knowledge of the
Company, the Company has complied with the PTO’s duty of candor, good faith and disclosure for the
Company Patent Applications and has made no material misrepresentation in the Company Patent
Applications. To the Company’s knowledge, except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, the Company Patent Applications disclose patentable
subject matters, and the Company has not been notified of any inventorship challenges nor has any
interference been declared or provoked nor is any material fact known by the Company that would
preclude the issuance of patents with respect to the Company Patent Applications or would render
such patents invalid or unenforceable, except as would not individually or in the aggregate have a
Material Adverse Effect. To the Company’s knowledge, except as disclosed in the Registration
Statement, the General Disclosure Package and the Prospectus, no third party possesses rights to
the Company’s Intellectual Property that, if exercised, could enable such party to develop products
competitive to those the Company intends to develop as described in each of the Registration
Statement, the General Disclosure Package and the Prospectus. To the Company’s knowledge, the
Company does not lack nor will it be unable to obtain any rights or licenses to use patents that
are, or would be, necessary to conduct the business now conducted or that is proposed to be
conducted by the Company as described in the Registration Statement, the General Disclosure Package
and the Prospectus.
(w) The Company takes security measures adequate to assert trade secret protection in its
non-patented trade secret technology.
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(x) Neither the Company, nor to the Company’s knowledge, any of its affiliates, has taken or
may take, directly or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the stabilization or manipulation
of the price of the shares of Common Stock to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market making transactions in the
Shares on the Nasdaq Global Market in accordance with Regulation M under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).
(y) Neither the Company nor the Subsidiary is or, after giving effect to the offering and sale
of the Shares contemplated hereunder and the application of the net proceeds from such sale as
described in the Registration Statement, General Disclosure Package and the Prospectus, will be an
“investment company” within the meaning of such term under the Investment Company Act of 1940 as
amended (the “1940 Act”), and the rules and regulations of the Commission thereunder.
(z) Each of the Company and the Subsidiary maintains for it, and if applicable, for the
Subsidiary, a system of internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(aa) The Company has established and maintains “disclosure controls and procedures” (as
defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act); the Company’s “disclosure
controls and procedures” are reasonably designed to ensure that all information (both financial and
non-financial) 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 rules and regulations of the Exchange Act, and that all such information is
accumulated and communicated to the Company’s management as appropriate to allow timely decisions
regarding required disclosure and to make the certifications of the Chief Executive Officer and
Chief Financial Officer of the Company required under the Exchange Act with respect to such
reports.
(bb) The statistical, industry-related and market-related data included in the Registration
Statement, the General Disclosure Package and the Prospectus are based on or derived from sources
which the Company reasonably and in good faith believes are reliable and accurate, and the Company
has obtained the written consent to the use of such data from such sources to the extent required.
(cc) The operations of the Company and the Subsidiary are and have been conducted at all times
in compliance with applicable financial record-keeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or the Subsidiary with respect to the Money Laundering Laws is pending or, to the Company’s
knowledge, threatened.
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(dd) Neither the Company nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to the Subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(ee) The Company and the Subsidiary carry, or are covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies engaged in similar businesses. All
policies of insurance and fidelity or surety bonds insuring the Company or the Subsidiary or their
respective businesses, assets, employees, officers and directors are in full force and effect; the
Company and the Subsidiary are in compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or the Subsidiary under any such policy
or instrument as to which any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor the Subsidiary has been refused any
insurance coverage sought or applied for.
(ff) The Company and the Subsidiary is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder (“ERISA”); no “reportable event”
(as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for
which the Company and the Subsidiary would have any liability; the Company and the Subsidiary has
not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “pension plan” for which the Company or the Subsidiary would have
any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or by failure to act, which would
cause the loss of such qualification.
(gg) To the Company’s knowledge, there are no affiliations or associations between (i) any
member of the FINRA and (ii) any of the Company’s officers, directors or 5% or greater
securityholders, except as set forth in the Registration Statement.
(hh) Neither the Company nor the Subsidiary is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic substances (collectively,
“environmental laws”), owns or operates any real property contaminated with any substance that is
subject to environmental laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental laws, which violation,
contamination, liability or claim would, individually or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any pending
investigation which might lead to such a claim.
11
(ii) The Shares have been approved for listing subject to notice of issuance on the Nasdaq
Global Market.
(jj) There are no relationships or related-party transactions involving the Company or the
Subsidiary or any other person required to be described in the Prospectus which have not been
described as required.
(kk) Neither the Company nor the Subsidiary has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation of any law which
violation is required to be disclosed in the Prospectus.
(ll) The Company has not failed to file with the applicable regulatory authorities (including,
without limitation, the United States Food and Drug Administration (the “FDA”)) or any foreign,
federal, state or local governmental or regulatory authority performing functions similar to those
performed by the FDA) any required filing, declaration, listing, registration, report or
submission; all such filings, declarations, listings, registrations, reports or submissions were in
material compliance with applicable laws when filed and, except as referred to or described in the
Registration Statement, the General Disclosure Package or the Prospectus or which would not have,
individually or in the aggregate, a Material Adverse Effect, no deficiencies have been asserted by
any applicable regulatory authority (including, without limitation, the FDA or any foreign,
federal, state or local governmental or regulatory authority performing functions similar to those
performed by the FDA) with respect to any such filings, declarations, listings, registrations,
reports or submissions that remain unresolved. Except as would not, individually or in the
aggregate, have a Material Adverse Effect, the Company is in compliance in all material respects
with all applicable rules and regulations of the FDA, and all applicable U.S. and foreign laws,
statutes, ordinances, rules or regulations.
(mm) To the best of the Company’s knowledge, there are no rulemaking or similar proceedings
before the FDA which affect or involve the Company or any of the processes or drug candidates that
the Company has developed, is developing or proposes to develop or uses or proposes to use which,
if the subject of an action unfavorable to the Company, would have a Material Adverse Effect; to
the Company’s knowledge, all of the manufacturing facilities and operations of the Company and its
United States and foreign contract manufacturers are in compliance in all material respects with
applicable FDA and comparable regulations, including current Good Manufacturing Practices, with
respect to the manufacture of the Company’s product candidates.
(nn) The preclinical tests and clinical trials that are described in, or the results of which
are referred to in, the Registration Statement, the General Disclosure Package or the Prospectus,
and, to the Company’s knowledge, such studies and tests conducted by or that the Company intends to
rely on in support of regulatory approval by the FDA or foreign regulatory agencies, were and, if
still pending, are being conducted in all material respects in accordance with protocols filed with
the appropriate regulatory authorities for each such test or trial and in accordance with all
applicable statutes, laws, rules and regulations, as the case may be, and with
12
standard medical and scientific research procedures and all applicable rules, regulations and
policies of the FDA, including, to the extent required by applicable law or regulation, the FDA’s
regulations related to Good Clinical Practices and Good Laboratory Practices, and all applicable
foreign regulatory requirements and standards except where such failure to comply would not have a
Material Adverse Effect; the description of the results of such tests and trials contained in the
Registration Statement, the General Disclosure Package or the Prospectus accurately present
summaries in all material respects of the data derived from such tests and trials, and the Company
has no knowledge of any other tests or trials the results of which discredit or call into question
the preclinical tests or clinical results described or referred to in the Registration Statement,
the General Disclosure Package or the Prospectus such that such test or trial would result in a
Material Adverse Effect; except as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, the Company has not received any notices or other correspondence from
the FDA or any committee thereof or from any other U.S. or foreign government or drug regulatory
agency requiring the termination, suspension or modification of any preclinical tests or clinical
trials conducted by, or on behalf of, the Company or in which the Company has participated that are
described or referred to in the Registration Statement, the General Disclosure Package or the
Prospectus; and the Company has operated and currently is in compliance in all material respects
with all applicable rules and regulations of the FDA and comparable foreign drug or medical
regulatory agencies outside of the United States except where such failure to comply would not
result in a Material Adverse Effect.
(oo) As of the date of the initial filing of the Registration Statement referred to in Section
1(a), there were no outstanding personal loans made, directly or indirectly, by the Company to any
director or executive officer of the Company.
(pp) None of the information on (or hyperlinked from) the Company’s website at
xxxx://xxx.xxxxxx.xxx includes or constitutes a “free writing prospectus” as defined in Rule 405
under the Act and the Company does not maintain or support any website other than
xxxx://xxx.xxxxxx.xxx.
(qq) The Subsidiary is not currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on the Subsidiary’s capital stock,
from repaying to the Company any loans or advances to the Subsidiary from the Company or from
transferring any of the Subsidiary’s property or assets to the Company.
(rr) Neither the Company nor the Subsidiary nor any director, officer, agent, employee or
affiliate of the Company or the Subsidiary is aware of or has taken any action, directly or
indirectly, that would result in a violation by such Persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of
any money, or other property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any foreign political
party or official thereof or any candidate for foreign political office, in contravention of the
FCPA and the Company, the Subsidiary and its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
13
(ss) Immediately after the issuance and sale of the Shares as contemplated hereby, no shares
of preferred stock of the Company shall be issued or outstanding; and the issuance and sale of the
Shares as contemplated hereby will not cause any holder of any shares of capital stock, securities
convertible into or exchangeable or exercisable for capital stock or options, warrants or other
rights to purchase capital stock or any other securities of the Company to have any right to
acquire any shares of preferred stock of the Company.
(tt) Except pursuant to 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 or by the Prospectus.
(uu) No material labor problem or dispute with the employees of the Company or the Subsidiary
exist or, to the Company’s knowledge, is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of its or the Subsidiary’s
principal suppliers, contractors or customers, that could have a Material Adverse Effect.
(vv) No consent, approval, authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in connection with the offering of the
Directed Shares in any jurisdiction where the Directed Shares are being offered.
(ww) The Company has not offered, or caused DBSI or its affiliates to offer, Shares to any
person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i)
a customer or supplier of the Company to alter the customer’s or supplier’s level or type of
business with the Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.
2. | Purchase, Sale and Delivery of the Firm Shares. |
(a) On the basis of the representations, warranties and covenants herein contained, and
subject to the conditions herein set forth, the Company agrees to sell to the Underwriters and each
Underwriter agrees, severally and not jointly, to purchase, at a
price of
$ per share, the
number of Firm Shares set forth opposite the name of each Underwriter in Schedule I hereof, subject
to adjustments in accordance with Section 9 hereof.
(b) Payment for the Firm Shares to be sold hereunder is to be made in Federal (same day) funds
against delivery of certificates therefor to the Representative for the several accounts of the
Underwriters. Such payment and delivery are to be made through the facilities of The Depository
Trust Company, New York, New York at 10:00 a.m., New York time, on the third business day after the
date of this Agreement or at such other time and date not later than five business days thereafter
as you and the Company shall agree upon, such time and date being herein referred to as the
“Closing Date.” (As used herein, “business day” means a day on which the New York Stock Exchange
is open for trading and on which banks in New York are open for business and are not permitted by
law or executive order to be closed.)
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(c) In addition, on the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company hereby grants an option to the
several Underwriters to purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once thereafter within
30 days after the date of this Agreement, by you, as Representative of the several Underwriters, to
the Company setting forth the number of Option Shares as to which the several Underwriters are
exercising the option and the time and date at which such certificates are to be delivered. The
time and date at which certificates for Option Shares are to be delivered shall be determined by
the Representative but shall not be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing Date (such time and date being
herein referred to as the “Option Closing Date”). If the date of exercise of the option is three
or more days before the Closing Date, the notice of exercise shall set the Closing Date as the
Option Closing Date. The number of Option Shares to be purchased by each Underwriter shall be in
the same proportion to the total number of Option Shares being purchased as the number of Firm
Shares being purchased by such Underwriter bears to the total number of Firm Shares, adjusted by
you in such manner as to avoid fractional shares. The option with respect to the Option Shares
granted hereunder may be exercised only to cover over-allotments in the sale of the Firm Shares by
the Underwriters. You, as Representative of the several Underwriters, may cancel such option at
any time prior to its expiration by giving written notice of such cancellation to the Company. To
the extent, if any, that the option is exercised, payment for the Option Shares shall be made on
the Option Closing Date in Federal (same day funds) through the facilities of The Depository Trust
Company in New York, New York drawn to the order of the Company.
3. | Offering by the Underwriters. |
It is understood that the several Underwriters are to make a public offering of the Firm
Shares as soon as the Representative deems it advisable to do so. The Firm Shares are to be
initially offered to the public at the initial public offering price set forth in the Prospectus.
The Representative may from time to time thereafter change the public offering price and other
selling terms.
It is further understood that you will act as the Representative for the Underwriters in the
offering and sale of the Shares in accordance with a Master Agreement Among Underwriters entered
into by you and the several other Underwriters.
4. | Covenants of the Company. | ||
The Company covenants and agrees with the several Underwriters that: |
(a) The Company will (A) prepare and timely file with the Commission under Rule 424(b) under
the Act a Prospectus in a form approved by the Representative containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance on Rules 430A, 430B
or 430C under the Act, (B) not file any amendment to the Registration Statement or distribute an
amendment or supplement to the General Disclosure Package or the Prospectus of which the
Representative shall not previously have been advised
15
and furnished with a copy or to which the Representative shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and (C) file on a timely basis
all reports and any definitive proxy or information statements required to be filed by the Company
with the Commission subsequent to the date of the Prospectus and prior to the termination of the
offering of the Shares by the Underwriters.
(b) The Company will (A) not make any offer relating to the Shares that would constitute an
Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus” (as
defined in Rule 405 under the Act) required to be filed by the Company with the Commission under
Rule 433 under the Act unless the Representative approves its use in writing prior to first use
(each, a “Permitted Free Writing Prospectus”); provided that the prior written consent of the
Representative hereto shall be deemed to have been given in respect of the Issuer Free Writing
Prospectus(es) included in Schedule III hereto, (B) treat each Permitted Free Writing Prospectus as
an Issuer Free Writing Prospectus, (C) comply with the requirements of Rules 164 and 433 under the
Act applicable to any Issuer Free Writing Prospectus, including the requirements relating to timely
filing with the Commission, legending and record keeping and (D) not take any action that would
result in an Underwriter or the Company being required to file with the Commission pursuant to Rule
433(d) under the Act a free writing prospectus prepared by or on behalf of such Underwriter that
such Underwriter otherwise would not have been required to file thereunder. The Company will
satisfy the conditions in Rule 433 under the Act to avoid a requirement to file with the Commission
any electronic road show.
(c) The Company will advise the Representative promptly (A) when the Registration Statement or
any post-effective amendment thereto shall have become effective, (B) of receipt of any comments
from the Commission, (C) of any request of the Commission for amendment of the Registration
Statement or for supplement to the General Disclosure Package or the Prospectus or for any
additional information, and (D) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, or of the institution
of any proceedings for that purpose or pursuant to Section 8A of the Act. The Company will use its
best efforts to prevent the issuance of any such order and to obtain as soon as possible the
lifting thereof, if issued.
(d) The Company will cooperate with the Representative in endeavoring to qualify the Shares
for sale under the securities laws of such jurisdictions as the Representative may reasonably have
designated in writing and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company shall not be
required to qualify as a foreign corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and other documents, as are or
may be required to continue such qualifications in effect for so long a period as the
Representative may reasonably request for distribution of the Shares.
(e) The Company will deliver to, or upon the order of, the Representative, from time to time,
as many copies of any Preliminary Prospectus as the Representative may reasonably request. The
Company will deliver to, or upon the order of, the Representative, from time to time, as many
copies of any Issuer Free Writing Prospectus as the Representative may
16
reasonably request. The Company will deliver to, or upon the order of, the Representative
during the period when delivery of a Prospectus (or, in lieu thereof, the notice referred to under
Rule 173(a) under the Act) is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representative may reasonably request. The
Company will deliver to the Representative at or before the Closing Date, five signed copies of the
Registration Statement and all amendments thereto including all exhibits filed therewith, and will
deliver to the Representative such number of copies of the Registration Statement (including such
number of copies of the exhibits filed therewith that may reasonably be requested), and of all
amendments thereto, as the Representative may reasonably request.
(f) The Company will comply with the Act and the Rules and Regulations, and the Exchange Act,
and the rules and regulations of the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the Prospectus. If during the
period in which a prospectus (or, in lieu thereof, the notice referred to under Rule 173(a) under
the Act) is required by law to be delivered by an Underwriter or dealer, any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of the Underwriters,
it becomes necessary to amend or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or supplement the Prospectus to comply
with any law, the Company promptly will prepare and file with the Commission an appropriate
amendment to the Registration Statement or supplement to the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with the law.
(g) If the General Disclosure Package is being used to solicit offers to buy the Shares at a
time when the Prospectus is not yet available to prospective purchasers and any event shall occur
as a result of which, in the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the General Disclosure Package in order
to make the statements therein, in the light of the circumstances, not misleading, or to make the
statements therein not conflict with the information contained in the Registration Statement then
on file, or if it is necessary at any time to amend or supplement the General Disclosure Package to
comply with any law, the Company promptly will prepare, file with the Commission (if required) and
furnish to the Underwriters and any dealers an appropriate amendment or supplement to the General
Disclosure Package.
(h) The Company will make generally available to its security holders, as soon as it is
practicable to do so, but in any event not later than 15 months after the effective date of the
Registration Statement, an earnings statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the effective date of the
Registration Statement, which earnings statement shall satisfy the requirements of Section 11(a) of
the Act and Rule 158 under the Act and will advise you in writing when such statement has been so
made available.
(i) Prior to the Closing Date, the Company will furnish to the Underwriters, as soon as they
have been prepared by or are available to the Company, a copy of any unaudited interim financial
statements of the Company for any period subsequent to the period covered by the most recent financial statements appearing in the Registration Statement, the General
Disclosure Package and the Prospectus.
17
(j) No offering, sale, short sale or other disposition of any shares of Common Stock of the
Company or other securities convertible into or exchangeable or exercisable for shares of Common
Stock or derivative of Common Stock (or agreement for such) will be made for a period of 180 days
after the date of the Prospectus, directly or indirectly, by the Company otherwise than hereunder
or with the prior written consent of the Representative, in each case, except for (A) the
registration of the Shares and the sales to the Underwriters pursuant to this Agreement, (B)
issuances of Common Stock upon the exercise of options or warrants or conversion of preferred stock
disclosed as outstanding in the Registration Statement and the Prospectus, (C) the issuance of
employee stock options not exercisable during the Lock-Up Period pursuant to stock option plans
described in the Registration Statement and the Prospectus, and (D) the issuance of shares of
Common Stock or securities convertible into or exchangeable or exercisable for Common Stock or
warrants or other rights to purchase Common Stock or any other securities of the Company in
connection with any acquisition, strategic partnership, joint venture or collaboration to which the
Company is a party, or the acquisition or license of any products or technology by the Company;
provided that the number of shares of Common Stock issued or underlying securities convertible,
exchangeable or exercisable (including pursuant to warrants or other rights) for Common Stock
issued in any case pursuant to clause (D) shall not exceed 500,000 shares and provided further
that, prior to the issuance of any such securities pursuant to clause (D), the Company shall cause
the recipients of such securities to execute and deliver to you Lock-Up Agreements (as defined
below), each substantially in the form of Exhibit A hereto. Notwithstanding the foregoing, if (1)
during the last 17 days of the 180-day restricted period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (2) prior to the expiration of
the 180-day restricted period, the Company announces that it will release earnings results during
the 16-day period following the last day of the 180-day restricted period, then in each case the
restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day
period beginning on the date of the release of the earnings results or the occurrence of material
news or a material event relating to the Company, as the case may be, unless the Representative
waives, in writing, such extension.
(k) The Company will use its best efforts to list the Shares for quotation on the Nasdaq
Global Market and maintain the listing of the Shares on the Nasdaq Global Market.
(l) The Company has caused each officer and director and specific shareholders of the Company
to furnish to you, on or prior to the date of this agreement, a letter or letters, substantially in
the form attached hereto as Exhibit A (the “Lockup Agreement”).
(m) The Company shall apply the net proceeds of its sale of the Shares as set forth in the
Registration Statement, General Disclosure Package and the Prospectus and shall file such reports
with the Commission with respect to the sale of the Shares and the application of the proceeds
therefrom as may be required in accordance with Rule 463 under the Act.
(n) The Company shall not invest, or otherwise use the proceeds received by the Company from
its sale of the Shares in such a manner as would require the Company or the Subsidiary to register
as an investment company under the 0000 Xxx.
(o) The Company will maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
(p) The Company will not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
18
(q) The Company will not, during the Lock-Up Period (as defined in the Lockup Agreement),
waive, amend or modify any lockup agreement or similar provision in any existing agreement it
currently has with any shareholder without the prior written consent of the Representative.
(r) The Company will comply with all applicable securities and other applicable laws, rules
and regulations in each jurisdiction in which the Directed Shares are offered in connection with
the Directed Share Program.
5. | Costs and Expenses. |
The Company will pay all costs, expenses and fees (except as otherwise set forth in this
Agreement) incident to the performance of the obligations of the Company under this Agreement,
including, without limiting the generality of the foregoing, the following: accounting fees of the
Company; the fees and disbursements of counsel for the Company; any road show expenses of the
Company (it being understood and agreed that the Company shall be responsible for one-half of the
charter fees and expenses of any private aircraft hired in connection with the road show); the cost
of preparing, printing, filing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Issuer Free Writing Prospectuses, the
Prospectus, this Agreement, the Listing Application, a Blue Sky survey and any supplements or
amendments thereto (including the preparation and printing of the Canadian wrapper, financial
statements, exhibits, schedules, consents and certificates of experts); the filing fees of the
Commission; the filing fees and expenses (including reasonable legal fees and disbursements)
incident to securing any required review by the FINRA of the terms of the sale of the Shares; the
listing fee of the NASDAQ; the costs and expenses (including without limitation any damages or
other amounts payable in connection with legal or contractual liability) associated with the
reforming of any contracts for sale of the Shares made by the Underwriters caused by a breach of
the representation in Section 1(b); and the expenses, including the reasonable fees and
disbursements of counsel for the Underwriters up to an aggregate of $[ ], incurred in
connection with the qualification of the Shares under State securities or Blue Sky laws or the
provincial securities laws of Canada. The Company agrees to pay all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the Underwriters, incident to the
offer and sale of Directed Shares by the Underwriters to employees and persons having business
relationships with the Company and the Subsidiary. The Company shall not, however, be required to
pay for any of the Underwriters’ expenses (other than those related to qualification under FINRA
regulation and State securities or Blue Sky laws or the provincial securities laws of Canada)
except that, if this Agreement shall not be consummated because the conditions in Section 6 hereof
are not satisfied, or because this Agreement is terminated by the Representative pursuant to
Section 11 hereof, or by reason of any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement or to comply with any of the terms hereof on its part to be
performed, unless such failure, refusal or inability is due primarily to the default or omission of
any Underwriter, the Company shall reimburse the several Underwriters for reasonable and documented
out-of-pocket expenses, including reasonable fees and disbursements of counsel, reasonably incurred
in connection with investigating, marketing and proposing to market the Shares or in contemplation
of performing their obligations hereunder; but the Company shall not in any event be liable to any
of the several Underwriters for damages on account of loss of anticipated profits from the sale by
them of the Shares.
19
6. | Conditions of Obligations of the Underwriters. |
The several obligations of the Underwriters to purchase the Firm Shares on the Closing Date
and the Option Shares, if any, on the Option Closing Date are subject to the accuracy, as of the
Applicable Time, the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company contained herein, and to the performance by the
Company of its covenants and obligations hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments thereto shall have become
effective and the Prospectus and each Issuer Free Writing Prospectus shall have been filed as
required by Rules 424, 430A, 430B, 430C or 433 under the Act, as applicable, within the time period
prescribed by, and in compliance with, the Rules and Regulations, and any request of the Commission
for additional information (to be included in the Registration Statement or otherwise) shall have
been disclosed to the Representative and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended from time to time,
shall have been issued and no proceedings for that purpose or pursuant to Section 8A under the Act
shall have been taken or, to the knowledge of the Company, shall be contemplated or threatened by
the Commission and no injunction, restraining order or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date which would prevent
the issuance of the Shares.
(b) The Representative shall have received on the Closing Date or the Option Closing Date, as
the case may be, the opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Company, dated
the Closing Date or the Option Closing Date, as the case may be, addressed to the Underwriters, and
in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
substantially in the form set forth on Exhibit B hereto.
(c) The Representative shall have received on the Closing Date or the Option Closing Date, as
the case may be, the opinions of (i) Seed IP, special counsel to the Company with respect to
patents and proprietary rights and (ii) Xxxxxxxxxxx O’Xxxxxx Xxxxxxx Kindness PLLC, special counsel
to the Company with respect to patents and proprietary rights, each dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters, and in form and substance
satisfactory to Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, substantially in the form
set forth on Exhibit C hereto.
(d) The Representative shall have received on the Closing Date or the Option Closing Date, as
the case may be, the opinion of the General Counsel to the Company with respect to patents and proprietary rights, dated the Closing Date or the Option Closing Date,
as the case may be, addressed to the Underwriters, and in form and substance satisfactory to
Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, substantially in the form set forth on
Exhibit D hereto.
20
(e) The Representative shall have received on the Closing Date or the Option Closing Date, as
the case may be, the opinion of Buc & Xxxxxxxxx, special counsel to the Company with respect to
regulatory matters, dated as of the Closing Date or the Option Closing Date, as the case may be,
addressed to the Underwriters (and stating that it may be relied upon by counsel to the
Underwriters), and in form and substance satisfactory to Xxxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, substantially in the form set forth on Exhibit E hereto.
(f) The Representative shall have received from Xxxxxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, an opinion dated the Closing Date or the Option Closing Date, as the case may be, in
form and substance reasonably satisfactory to the Representative.
(g) You shall have received, on each of the date hereof, the Closing Date and, if applicable,
the Option Closing Date, letters dated the date hereof, the Closing Date or the Option Closing
Date, as the case may be, each in form and substance satisfactory to you, of Ernst & Young and
PricewaterhouseCoopers LLP in form and substance satisfactory to the Representative; and containing
such other statements and information as is ordinarily included in accountants’ “comfort letters”
to Underwriters with respect to the financial statements and certain financial and statistical
information contained in the Registration Statement, the General Disclosure Package and the
Prospectus.
(h) The Representative shall have received on the Closing Date and, if applicable, the Option
Closing Date, as the case may be, a certificate or certificates of the Chief Executive Officer and
the Chief Financial Officer of the Company to the effect that, as of the Closing Date or the Option
Closing Date, as the case may be, each of them severally represents as follows:
(i) The Registration Statement has become effective under the Act and no stop order suspending
the effectiveness of the Registration Statement or no order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus has been issued, and
no proceedings for such purpose or pursuant to Section 8A of the Act have been taken or are, to his
or her knowledge, contemplated or threatened by the Commission;
(ii) The representations and warranties of the Company contained in Section 1 hereof are true
and correct as of the Closing Date or the Option Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules 424, 430A, 430B or 430C under
the Act have been made as and when required by such rules;
(iv) He or she has carefully examined the General Disclosure Package and any individual
Limited Use Free Writing Prospectus and, in his or her opinion, as of the Applicable Time, the
statements contained in the General Disclosure Package and any individual Limited Use Free Writing Prospectus did not contain any untrue statement of a material fact,
and such General Disclosure Package and any individual Limited Use Free Writing Prospectus, when
considered together with the General Disclosure Package, did not 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;
21
(v) He or she has carefully examined the Registration Statement and, in his or her opinion, as
of the effective date of the Registration Statement, the Registration Statement and any amendments
thereto did not contain any untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein not misleading, and since the
effective date of the Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not been so set forth in such
supplement or amendment;
(vi) He or she has carefully examined the Prospectus and, in his or her opinion, as of its
date and the Closing Date or the Option Closing Date, as the case may be, the Prospectus and any
amendments and supplements thereto did not contain any untrue statement of a material fact and did
not 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; and
(vii) Since the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package and Prospectus, there has not been any material adverse
change or any development involving a prospective material adverse change in or affecting the
business, management, properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and the Subsidiary taken as a whole, whether or not arising in the
ordinary course of business.
(i) The Company shall have furnished to the Representative such further certificates and
documents confirming the representations and warranties, covenants and conditions contained herein
and related matters as the Representative may reasonably have requested.
(j) The Firm Shares and Option Shares, if any, have been approved for quotation upon notice of
issuance on the Nasdaq Global Market.
(k) The Lockup Agreements described in Section 4(l) are in full force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in all material respects satisfactory to the
Representative and to Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, the obligations of the
Underwriters hereunder may be terminated by the Representative by notifying the Company of such
termination in writing or by telegram at or prior to the Closing Date or the Option Closing Date,
as the case may be.
In such event, the Company and the Underwriters shall not be under any obligation to each
other (except to the extent provided in Sections 5 and 8 hereof).
22
7. | Conditions of the Obligations of the Company. |
The obligations of the Company to sell and deliver the portion of the Shares required to be
delivered as and when specified in this Agreement are subject to the conditions that at the Closing
Date or the Option Closing Date, as the case may be, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and in effect or proceedings therefor initiated
or threatened.
8. | Indemnification. |
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter, the directors and officers of each
Underwriter and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which such Underwriter or any such controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the
Prospectus or any amendment or supplement thereto, (ii) with respect to the Registration
Statement or any amendment or supplement thereto, 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 or (iii) with respect to any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the Prospectus or any amendment or supplement thereto, 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 the light of the circumstances under which
they were made; provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability 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, any Issuer Free Writing Prospectus, the
Prospectus, or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representative 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 13 herein ; and
(2) to reimburse each Underwriter, each Underwriters’ directors and officers, and each
such controlling person upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding or in responding
to a subpoena or governmental inquiry related to the offering of the Shares, whether or not
such Underwriter or controlling person is a party to any action or proceeding. In the event that it is finally judicially
determined that the Underwriters were not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Underwriters will promptly return all sums that
had been advanced pursuant hereto.
(b) Each Underwriter severally and not jointly will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of the Act, against any losses, claims,
damages or liabilities to which the Company or any such director, officer, or controlling person
may become subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any
amendment or supplement thereto, (ii) with respect to the Registration Statement or any amendment
or supplement thereto, 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 or (iii) with
respect to any Preliminary Prospectus, any Issuer Free Writing Prospectus, the Prospectus or any
amendment or supplement thereto, 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 the
light of the circumstances under which they were made ; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer, or controlling person in
connection with investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission has been made in the Registration Statement, any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the Prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by or through the Representative
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 13 herein.
This indemnity agreement will be in addition to any liability which such Underwriter may otherwise
have.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to this Section 8, such
person (the “indemnified party”) shall promptly notify the person against whom such indemnity may
be sought (the “indemnifying party”) in writing. No indemnification provided for in Section 8(a),
(b) or (d) shall be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such
notice would have related and was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or parties from any liability
which it or they may have to the indemnified party for contribution or otherwise than on account of
the provisions of Section 8(a), (b) or (d). In case any such proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein 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 shall pay as incurred the fees and disbursements
of such counsel related to such proceeding. In
23
any such proceeding, any indemnified party shall have the right to retain its own counsel at
its own expense. Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or
within 30 days of presentation) the fees and expenses of the counsel retained by the indemnified
party in the event (i) the indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel acceptable to the indemnified party within a reasonable period of time after notice
of commencement of the action. It is understood and agreed that the indemnifying party shall not,
in connection with any proceeding or related proceedings in the same jurisdiction be liable for the
reasonable fees and expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by you in the case of parties indemnified pursuant to Section
8(a), (b) or (d) and by the Company in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. In addition, the indemnifying party
will not, without the prior written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action or proceeding of
which indemnification may be sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out of such
claim, action or proceeding.
(d) The Company and each subsidiary of the Company, whether direct or indirect, jointly and
severally, agree to indemnify and hold harmless DBSI, it directors, officers, affiliates and each
person, if any, who controls DBSI or its affiliates within the meaning of either Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any material prepared by or
with the consent of the Company for distribution to Participants in connection with the Directed
Share Program, or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of Directed Shares that the
Participant has agreed to purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad faith or gross
negligence of DBSI.
(e) To the extent the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under Section 8(a), (b) or (d) above in respect
of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect the
24
relative benefits received by the Company on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is appropriate to reflect
not only such relative benefits 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 which resulted in such
losses, claims, damages or liabilities (or actions or proceedings in respect thereof), 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 Underwriters, 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 on the one hand or the Underwriters on the other and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8(e) were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in this Section 8(e).
The amount paid or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in this Section 8(e)
shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares purchased by such
Underwriter, and (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations in this Section 8(e) to
contribute are several in proportion to their respective underwriting obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the Prospectus or any supplement or amendment thereto, each party
against whom contribution may be sought under this Section 8 hereby consents to the jurisdiction of
any court having jurisdiction over any other contributing party, agrees that process issuing from
such court may be served upon it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join it as an additional defendant in
any such proceeding in which such other contributing party is a party.
(g) Any losses, claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages, liabilities or expenses are
incurred. The indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall remain
25
operative and in full force and effect, regardless of (i) any investigation made by or on
behalf of any Underwriter, its directors or officers or any person controlling any Underwriter, the
Company, its directors or officers or any persons controlling the Company, (ii) acceptance of any
Shares and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter, its directors or officers or any person controlling any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.
9. | Default by Underwriters. |
If on the Closing Date or the Option Closing Date, as the case may be, any Underwriter shall
fail to purchase and pay for the portion of the Shares 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), you, as Representative of the Underwriters, shall use your 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 Shares
which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours you,
as such Representative, shall not have procured such other Underwriters, or any others, to purchase
the Shares agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does not exceed 10% of
the Shares to be purchased on the Closing Date or the Option Closing date, as the case may be, the
other Underwriters shall be obligated, severally, in proportion to the respective numbers of Shares
which they are obligated to purchase hereunder, to purchase the Shares which such defaulting
Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of shares of Shares
with respect to which such default shall occur exceeds 10% of the Shares to be purchased on the
Closing Date or the Option Closing Date, as the case may be, the Company or you as the
Representative of the Underwriters 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 5 and 8 hereof. In the event of a default by any Underwriter or Underwriters, as set
forth in this Section 9, the Closing Date or Option Closing Date, as the case may be, may be
postponed for such period, not exceeding seven days, as you, as Representative, may determine in
order that the required changes in the Registration Statement, the General 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. |
All communications hereunder shall be in writing and, except as otherwise provided herein,
will be mailed, delivered, telecopied or telegraphed and confirmed as follows: if to the
Underwriters, to Deutsche Bank Securities Inc., 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000; Attention: Syndicate Manager, with a copy to Deutsche Bank Securities Inc., 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; if to the Company, to Omeros
Corporation, 0000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000; Attention: General Counsel, with a copy to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000-0000; Attention: Xxxxx Xxxxxxx.
26
11. | Termination. |
This Agreement may be terminated by you by notice to the Company (a) at any time prior to the
Closing Date or any Option Closing Date (if different from the Closing Date and then only as to
Option Shares) if any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement, the General Disclosure Package and the
Prospectus, any material adverse change or any development involving a prospective material adverse
change in or affecting the earnings, business, management, properties, assets, rights, operations,
condition (financial or otherwise) or prospects of the Company and the Subsidiary taken as a whole,
whether or not arising in the ordinary course of business, (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other national or international calamity
or crisis (including, without limitation, an act of terrorism) or change in economic or political
conditions if the effect of such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States would, in your judgment, materially impair the
investment quality of the Shares, (iii) suspension of trading in securities generally on the New
York Stock Exchange, the American Stock Exchange, the NASDAQ, the Nasdaq Global Market or
limitation on prices (other than limitations on hours or numbers of days of trading) for securities
on either such Exchange, (iv) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental authority which in your
opinion materially and adversely affects or may materially and adversely affect the business or
operations of the Company, (v) the declaration of a banking moratorium by United States or New York
State authorities, (vi) any downgrading, or placement on any watch list for possible downgrading,
in the rating of any of the Company’s debt securities by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g) under the Exchange Act), or (vii) the
suspension of trading of the Company’s common stock by the NASDAQ, the Nasdaq Global Market, the
Commission, or any other governmental authority or, (viii) the taking of any action by any
governmental body or agency in respect of its monetary or fiscal affairs which in your opinion has
a material adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
12. | Successors. |
This Agreement has been and is made solely for the benefit of the Underwriters and the Company
and their respective successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will have any right or
obligation hereunder. No purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign merely because of such purchase.
13. | Information Provided by Underwriters. |
The Company and the Underwriters acknowledge and agree that the only information furnished or
to be furnished by any Underwriter to the Company for inclusion in the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus consists of [the information set forth in the [third, ninth, and tenth through
fifteenth] paragraphs under the caption “Underwriting” in the Prospectus [and] [include any
information furnished by the Underwriters for inclusion in any Issuer Free Writing Xxxxxxxxxx]].
00
00. | Miscellaneous. |
The reimbursement, indemnification and contribution agreements contained in this Agreement and
the representations, warranties and covenants in this Agreement shall remain in full force and
effect regardless of (a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of the Company or its
directors or officers, and (c) delivery of and payment for the Shares under this Agreement.
The Company acknowledges and agrees that each Underwriter in providing investment banking
services to the Company in connection with the offering, including in acting pursuant to the terms
of this Agreement, has acted and is acting as an independent contractor and not as a fiduciary and
the Company does not intend such Underwriter to act in any capacity other than as an independent
contractor, including as a fiduciary or in any other position of higher trust.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.
This Agreement shall be governed by, and construed in accordance with, the law of the State of
New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.
The Underwriters, on the one hand, and the Company (on its own behalf and, to the extent
permitted by law, on behalf of its stockholders), on the other hand, waive any right to trial by
jury in any action, claim, suit or proceeding with respect to the your engagement as underwriter or
your role in connection herewith.
If the foregoing letter is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among
the Company and the several Underwriters in accordance with its terms.
28
Very truly yours, OMEROS CORPORATION |
||||
By: | ||||
Name: | ||||
Title: | ||||
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. DEUTSCHE BANK SECURITIES INC. As Representative of the several Underwriters listed on Schedule I |
||||
By: | Deutsche Bank Securities Inc. | |||
By: | ||||
Authorized Officer | ||||
By: | ||||
Authorized Officer | ||||
29
SCHEDULE I
Schedule of Underwriters
Number of Firm Shares | ||
Underwriter | to be Purchased | |
Deutsche Bank Securities Inc. |
||
Pacific Growth Equities, LLC |
||
Leerink
Xxxxx LLC |
||
Xxxxxxx & Company, LLC |
||
Total |
30
SCHEDULE II
Price per share (before deduction of underwriting discounts): $[ ]
Number of Shares (including over-allotment): [ ]
Approximate net proceeds to the Company (not including over-allotment): $[ ]
31
SCHEDULE III
32
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
, 2007
Deutsche Bank Securities Inc.
As Representative of the
Several Underwriters
Several Underwriters
c/o Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that Deutsche Bank Securities Inc., as representative (the
“Representative”) of the several underwriters (the “Underwriters”), proposes to enter into an
Underwriting Agreement (the “Underwriting Agreement”) with Omeros Corporation, a Washington
corporation (the “Company”), providing for the public offering by the Underwriters, including the
Representative, of common stock, par value $0.01 (the “Common Stock”), of the Company (the “Public
Offering”).
To induce the Underwriters that may participate in the Public Offering to continue their
efforts in connection with the Public Offering, the undersigned agrees that, without the prior
written consent of the Representative, the undersigned will not, directly or indirectly, offer,
sell, pledge, contract to sell (including any short sale), grant any option to purchase or
otherwise dispose of any shares of Common Stock (including, without limitation, shares of Common
Stock of the Company which may be deemed to be beneficially owned by the undersigned on the date
hereof in accordance with the rules and regulations of the Securities and Exchange Commission,
shares of Common Stock which may be issued upon exercise of a stock option or warrant and any other
security convertible into or exchangeable for Common Stock) or enter into any Hedging Transaction
(as defined below) relating to the Common Stock (each of the foregoing referred to as a
“Disposition”) during the period specified in the following paragraph (the “Lock-Up Period”). The
foregoing restriction is expressly intended to preclude the undersigned from engaging in any
Hedging Transaction or other transaction which is designed to or reasonably expected to lead to or
result in a Disposition during the Lock-Up Period even if the securities would be disposed of by
someone other than the undersigned. “Hedging Transaction” means
any short sale (whether or not against the box) or any purchase, sale or grant of any right
(including, without limitation, any put or call option) with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any significant part of
its value from the Common Stock.
33
The initial Lock-Up Period will commence on the date hereof and continue until, and include,
the date that is 180 days after the date of the final prospectus (the “Prospectus”) relating to the
Public Offering (the “Initial Lock-Up Period”); provided, however, that if (1)
during the last 17 days of the Initial Lock-Up Period, (A) the Company releases earnings results or
(B) material news or a material event relating to the Company occurs, or (2) prior to the
expiration of the Initial Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period following the last day of the Initial Lock-Up Period, then in each
case the Lock-Up Period will be extended until the expiration of the 18-day period beginning on the
date of the release of the earnings results or the occurrence of material news or a material event
relating to the Company, as the case may be, unless the Representative waives, in writing, such
extension.
Notwithstanding the foregoing, the undersigned may transfer (a) shares of Common Stock
acquired (i) from the Underwriters pursuant to the directed share program described in the
Prospectus, subject to the terms of such program or (ii) in open market transactions by the
undersigned after the completion of the Public Offering and (b) any or all of the shares of Common
Stock or other Company securities if the transfer is (i) to an immediate family member or a trust
formed for the benefit of an immediate family member, (ii) by gift, will or intestacy, (iii) if the
undersigned is a corporation, partnership or other business entity (A) to another corporation,
partnership or other business entity that is a direct or indirect affiliate of the undersigned or
(B) as part of a private distribution without consideration by the undersigned to its equity
holders on a pro rata basis, (iv) if the undersigned is a trust, to a trustor or beneficiary of the
trust, provided, that in the case of a transfer pursuant to clause (a)(i) or clause (b) (x)
no filing by any person (donor, donee, transferor or transferee) under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), shall be required or shall be voluntarily made in
connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or
Schedule 13G (or 13D-A or 13G-A) made after the expiration of the Lock-Up Period) and (y) each
person (donor, donee, transferor or transferee) shall not be required by law (including, without
limitation, the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange
Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or
disposition; provided, further, that in the case of a transfer pursuant to clause
(b), it shall be a condition to the transfer that the transferee execute an agreement stating that
the transferee is receiving and holding the securities subject to the provisions of this Lock-Up
Agreement. In the case of any transfer or disposition in accordance with this paragraph, the
undersigned shall notify Deutsche Bank Securities Inc. at least two business days prior to the
proposed transfer or disposition. For purposes of this paragraph, “immediate family” means the
spouse, domestic partner, lineal descendants, father, mother, brother or sister of the transferor.
34
The undersigned agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.
The undersigned hereby waives any and all notice requirements and rights with respect to
registration of securities pursuant to any agreement, understanding or otherwise setting forth the
terms of any security of the Company held by the undersigned, including, without limitation, the
Amended and Restated Investors’ Rights Agreement dated October 15, 2004 among the Company, the
undersigned and other holders of the Company’s securities, as such may be amended from time to
time, and any other registration rights agreement to which the undersigned and the Company may be
party; provided that such waiver shall apply only to the proposed Public Offering, and any
other action taken by the Company in connection with the proposed Public Offering. The undersigned
further agrees that, for the Lock-Up Period, the undersigned will not, without the prior written
consent of the Representative, make any demand for, or exercise any right with respect to, the
registration of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock or any such securities.
In addition, the undersigned hereby waives any and all preemptive rights, participation
rights, resale rights, rights of first refusal and similar rights that the undersigned may have in
connection with the Public Offering or with any issuance or sale by the Company of any equity or
other securities before the Public Offering, except for any such rights as have been heretofore
duly exercised.
The undersigned hereby agrees that, to the extent that the terms of this Lock-Up Agreement
conflict with or are in any way inconsistent with any registration rights agreement or other
transfer restrictions to which the undersigned and the Company may be a party, this Lock-Up
Agreement supersedes such registration rights agreement or other transfer restrictions.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be
conferred 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.
Notwithstanding anything herein to the contrary, if (a) the closing of the Public Offering has
not occurred prior to June 30, 2008, (b) the Company withdraws the registration statement related
to the Public Offering or (c) the Underwriting Agreement is executed but is terminated prior to
payment for and delivery of any shares of Common Stock, this Lock-Up Agreement shall be of no
further force or effect.
Signature: | ||||
Print Name: |
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EXHIBIT B
FORM OF OPINION OF XXXXXX XXXXXXX XXXXXXXX & XXXXXX
EXHIBIT C
FORM OF OPINIONS OF SEED IP AND XXXXXXXXXXX O’XXXXXX XXXXXXX
KINDNESS PLLC
KINDNESS PLLC
1
EXHIBIT D
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
EXHIBIT E
FORM OF OPINION OF BUC & XXXXXXXXX