20,000,000 Shares Avanir Pharmaceuticals, Inc. Common Stock ($0.0001 par value per share) UNDERWRITING AGREEMENT
Exhibit 1.1
20,000,000 Shares
Common Stock
($0.0001 par value per share)
November 17, 2010
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
As Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Introductory. Avanir Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes
to issue and sell to the several underwriters named in Schedule A (the “Underwriters”) an
aggregate of 20,000,000 shares of its common stock, par value $0.0001 per share (the “Shares”).
The 20,000,000 Shares to be sold by the Company are called the “Firm Shares.” In addition, the
Company has granted to the Underwriters an option to purchase up to
an additional 3,000,000 Shares
as provided in Section 2 hereof. The additional 3,000,000 Shares to be sold by the Company
pursuant to such option are collectively called the “Optional Shares.” The Firm Shares and, if and
to the extent such option is exercised, the Optional Shares are collectively called the “Offered
Shares.” Jefferies & Company, Inc. (“Jefferies”) has agreed to act as representative of the
several Underwriters (in such capacity, the “Representative”) in connection with the offering and
sale of the Offered Shares.
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a shelf registration statement on Form S-3 (File No. 333-161789), which contains a
form of prospectus (the “First Base Prospectus”) to be used in connection with the public offering
and sale of the Offered Shares. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Securities Act”), including all documents incorporated or deemed to
be incorporated by reference therein and any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B under the Securities Act or the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange
Act”), is called the “First Registration Statement.” The Company has also prepared and filed with
the Commission a shelf registration statement on Form S-3 (File No. 333-169175), which contains a
form of prospectus (together with the First Base Prospectus, the “Base Prospectus”) to be used in
connection with the public offering and sale of the Offered Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto, in the form in
which it was declared effective
by the Commission under the Securities Act, including all documents incorporated or deemed to
be incorporated by reference therein and any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B under the Securities Act or the Exchange Act, is called the
“Second Registration Statement” (together with the First Registration Statement, the
“Registration
Statements”). Any registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act with respect to the Registration Statements is called the “Rule 462(b) Registration Statement,” and from and after the date and
time of filing of the Rule 462(b) Registration Statement the term “Registration Statements” shall
include the Rule 462(b) Registration Statement. Any preliminary prospectus supplement to the Base
Prospectus that describes the Offered Shares and the offering thereof and is used prior to the
filing of the Prospectus (as defined below), together with the Base Prospectus, is called a
“preliminary prospectus.” As used herein, the term “Prospectus” shall mean the final prospectus
supplement to the Base Prospectus that describes the Offered Shares and the offering thereof (the
“Final Prospectus Supplement”), together with the Base Prospectus, in the form first used by the
Underwriters to confirm sales of the Offered Shares or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the
Securities Act. As used herein, “Applicable Time” is 8:30 a.m. (New York time) on November 17,
2010. As used herein, “free writing prospectus” has the meaning set forth in Rule 405 under the
Securities Act, and “Time of Sale Prospectus” means any preliminary prospectus, as amended or
supplemented immediately prior to the Applicable Time, together
with the free writing prospectuses,
if any, identified in Schedule B hereto, each “road show” (as defined in Rule 433 under the
Securities Act), if any, related to the offering of the Shares contemplated hereby that is a
“written communication” (as defined in Rule 405 under the Securities Act), and the information
relating to the number of Shares being offered, the price per Share to the public and the estimated
net proceeds to be received by the Company identified in Schedule C hereto. As used
herein, the terms “Registration Statement,” “Rule 462(b) Registration Statement,” “preliminary
prospectus,” “Base Prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the
documents incorporated and deemed to be incorporated by reference therein. All references in this
Agreement to amendments or supplements to the Registration Statements, the Rule 462(b) Registration
Statement, any preliminary prospectus, the Base Prospectus, the Time of Sale Prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under the Exchange Act
which is or is deemed to be incorporated by reference in the Registration Statements, the Rule
462(b) Registration Statement, any preliminary prospectus, the Base Prospectus, the Time of Sale
Prospectus or the Prospectus, as the case may be. All references in this Agreement to (i) the
Registration Statements, the Rule 462(b) Registration Statement, any preliminary prospectus, the
Base Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (“▇▇▇▇▇”) and (ii) the Prospectus shall be deemed to include any
“electronic Prospectus” provided for use in connection with the offering of the Offered Shares as
contemplated by Section 3(o) of this Agreement.
All references in this Agreement to financial statements and schedules and other information
which are “contained,” “included” or “stated” in the Registration Statements, the Rule 462(b)
Registration Statement, any preliminary prospectus, the Base Prospectus, the Time of Sale
Prospectus or the Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which is or is deemed to
be incorporated by reference in the Registration Statements or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the Registration Statements,
the Rule 462(b) Registration Statement, any preliminary prospectus, the Base Prospectus, the Time
of Sale Prospectus or the Prospectus, as the case may be, and all references in this Agreement to
amendments or supplements to the Registration Statements, the
Rule 462(b) Registration Statement, any preliminary prospectus, the Base Prospectus, the Time
of Sale Prospectus or the Prospectus shall be deemed to mean and include the filing of any document
under the Exchange Act which is or is deemed to be incorporated by reference in the
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Registration
Statements, the Rule 462(b) Registration Statement, any preliminary prospectus, the Base
Prospectus, the Time of Sale Prospectus or the Prospectus, as the case may be.
In the event that the Company has only one subsidiary, then all references herein to
“subsidiaries” of the Company shall be deemed to refer to such single subsidiary, mutatis
mutandis.
The Company hereby confirms its agreements with the Underwriters as follows:
Section 1. Representations and Warranties of the Company
The Company hereby represents and warrants to, and covenants with, each Underwriter, as of the
date of this Agreement, as of the First Closing Date (as hereinafter defined) and as of each Option
Closing Date (as hereafter defined), if any, as follows:
(a) Compliance with Registration Requirements. Each Registration Statement
has been declared effective by the Commission under the
Securities Act and each 462(b) Registration Statement became
effective upon filing with the Commission. The Company has complied to the Commission’s satisfaction with all requests of
the Commission for additional or supplemental information. No stop order suspending the
effectiveness of either Registration Statement or any Rule 462(b) Registration Statement is in
effect and no proceedings for such purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated or threatened by the Commission.
Any preliminary prospectus and the Prospectus when filed complied in all material respects
with the Securities Act and, if filed by electronic transmission pursuant to ▇▇▇▇▇ (except as
may be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of the Offered
Shares. Each Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all times during which
a prospectus is required by the Securities Act to be delivered (whether physically or through
compliance with Rule 172 under the Securities Act or any other applicable rule) in connection
with any sale of the Offered Shares (“Prospectus Delivery Period”), complied and will comply in
all material respects with the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. As of the Applicable Time, the Time
of Sale Prospectus (including any preliminary prospectus wrapper) did not, and at the time of
each sale of the Offered Shares and at the First Closing Date (as defined in Section 2 hereof),
the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable,
will not, contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Prospectus (including any Prospectus wrapper), as amended or
supplemented, as of its date and at all times during the Prospectus Delivery Period, did not
and will not contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and warranties set forth in the
three immediately preceding
sentences do not apply to statements in or omissions from the Registration Statements, any
Rule 462(b) Registration Statement or any post-effective amendment thereto, or the Prospectus
or the Time of Sale Prospectus, or any amendments or supplements thereto, made in reliance upon
and in conformity with information relating to any Underwriter furnished to
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the Company in
writing by the Representative expressly for use therein, it being understood and agreed that
the only such information furnished by the Representative to the Company consists of the
information described in Section 9(b) below. There are no contracts or other documents
required to be described in the Time of Sale Prospectus or the Prospectus or to be filed as
exhibits to the Registration Statements which have not been described or filed as required.
The Company is not an “ineligible issuer” in connection with the offering of the Offered
Shares pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities
Act has been, or will be, filed with the Commission in accordance with the requirements of the
Securities Act. Each free writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or behalf of or
used or referred to by the Company complies or will comply in all material respects with the
requirements of Rule 433 under the Securities Act including timely filing with the Commission
or retention where required and legending, and each such free writing prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale of
the Offered Shares did not, does not and will not include any information that conflicted,
conflicts with or will conflict with the information contained in the Registration Statements,
the Prospectus or any preliminary prospectus, including any document incorporated by reference
therein. Except for the free writing prospectuses, if any, identified in Schedule B
hereto, and electronic road shows, if any, furnished to you before first use, the Company has
not prepared, used or referred to, and will not, without your prior consent, prepare, use or
refer to, any free writing prospectus. No Road Show or electronic road show will contain any
statement of a material fact that does not appear in a previously filed document under the
Exchange Act which is or is deemed to be incorporated by reference in the Registration
Statements and the Base Prospectus.
(b) Offering Materials Furnished to Underwriters. The Company has delivered to the
Representative one conformed copy of each Registration Statement, each amendment thereto
(without exhibits), any Rule 462(b) Registration Statement and of each consent and certificate
of experts filed as a part thereof, and any preliminary prospectuses, the Time of Sale
Prospectus, the Prospectus, as amended or supplemented, and any free writing prospectus
reviewed and consented to by the Representative, in such quantities and at such places as the
Representative has reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has not distributed and
will not distribute, prior to the later of (i) the expiration or termination of the option
granted to the several Underwriters in Section 2 hereof and (ii) the completion of the
Underwriters’ distribution of the Offered Shares, any offering material in connection with the
offering and sale of the Offered Shares other than the Time of Sale Prospectus, the Prospectus,
any preliminary prospectus or free writing prospectus reviewed and consented to by the
Representative, or the Registration Statements.
(d) The Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable in accordance
with its terms, except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles.
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(e) Authorization of the Offered Shares. The Offered Shares have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and the
issuance and sale of the Offered Shares is not subject to any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase the Offered Shares.
(f) No Applicable Registration or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt securities registered for sale
under either Registration Statement or included in the offering contemplated by this Agreement.
(g) No Material Adverse Change. Except as otherwise disclosed in the Time of Sale Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale
Prospectus: (i) there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its subsidiaries,
considered as one entity (any such change is called a “Material Adverse Change”); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary course of business
nor entered into any material transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any kind declared, paid or made by the
Company or, except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.
(h) Independent Accountants. KMJ ▇▇▇▇▇▇ & Company LLP, who have expressed their opinion with
respect to the financial statements (which term as used in this Agreement includes the related
notes thereto) and supporting schedules, if any, filed with the Commission as a part of the
Registration Statements and included in the Prospectus and Time of Sale Prospectus (each, an
“Applicable Prospectus” and collectively, the “Applicable Prospectuses”), are (i) independent
public or certified public accountants as required by the Securities Act and the Exchange Act,
(ii) in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X and (iii) a registered public accounting firm as
defined by the Public Company Accounting Oversight Board (the
“PCAOB”) whose registration has not been suspended or revoked and who has not requested
such registration to be withdrawn.
(i) Preparation of the Financial Statements. The financial statements filed with the
Commission as a part of the Registration Statements and included in the Time of Sale Prospectus
and the Prospectus present fairly the consolidated financial position of the Company and its
subsidiaries as of and at the dates indicated and the results of their operations and cash
flows for the periods specified. The supporting schedules, if any, included in the
Registration Statements present fairly the information required to be stated therein. Such
financial statements have been prepared in conformity with generally accepted accounting
principles as applied in the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes thereto. No other financial
statements or supporting schedules are required to be included in the Registration Statements
or any Applicable Prospectus. No person who has been suspended or barred from being associated
with a registered public accounting firm, or who has failed to comply with any sanction
pursuant to Rule 5300 promulgated by the PCAOB, has participated in or
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otherwise aided the
preparation of, or audited, the financial statements, supporting schedules, if any, or other
financial data filed with the Commission as a part of the Registration Statements and included
in any Applicable Prospectus.
(j) Company’s Accounting System. The Company and each of its subsidiaries make and keep
accurate books and records and maintain a system of internal accounting controls sufficient to
provide reasonable assurance 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 generally accepted accounting principles
as applied in the United States 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. There has not been
and is no material weakness in the Company’s internal control over financial reporting (whether
or not remediated) and since September 30, 2009, there has been no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial reporting.
(k) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company
and its subsidiaries has been duly incorporated or organized, as the case may be, and is
validly existing as a corporation, partnership or limited liability company, as applicable, in
good standing under the laws of the jurisdiction of its incorporation or organization and has
the power and authority (corporate or other) to own, lease and operate its properties and to
conduct its business as described in each Applicable Prospectus and, in the case of the
Company, to enter into and perform its obligations under this Agreement. Each of the Company
and each subsidiary is duly qualified as a foreign corporation, partnership or limited
liability company, as applicable, to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to be so qualified and in good standing or have such power or authority would not,
individually or in the aggregate, be reasonably expected to result in a Material Adverse
Change. All of the issued and outstanding capital stock or other equity or ownership interests
of each subsidiary have been duly authorized and validly issued, are fully paid and
nonassessable and are owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance or adverse claim. The Company does
not own or control, directly or indirectly, any corporation, association or other entity other
than (i) the subsidiaries listed in Exhibit 21 to the Company’s Annual Report on Form 10-K for
the fiscal year ended September 30, 2009 and (ii) such other entities omitted from Exhibit 21
which, when such omitted entities are considered in the aggregate as a single subsidiary, would
not constitute a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X.
(l) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding
capital stock of the Company is as set forth in each Applicable Prospectus under the caption
“Capitalization” or other similar headings (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Time of Sale Prospectus or upon the
exercise of outstanding options or warrants or the vesting of restricted stock units described
in each Applicable Prospectus). The Shares (including the Offered Shares) conform in all
material respects to the description thereof contained in the Time of Sale Prospectus. All of
the issued and outstanding Shares have been duly authorized and validly issued, are fully paid
and nonassessable and have been issued in compliance with federal and state securities laws.
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None of the outstanding Shares was issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described in each Applicable Prospectus. The description of the Company’s
stock option, stock bonus and other equity incentive plans or arrangements, and the options or
other rights granted thereunder, set forth in each Applicable Prospectus accurately and fairly
presents the information required to be shown with respect to such plans, arrangements, options
and rights.
Except as described in the Prospectus, the Company has not sold or issued any Shares
during the six-month period preceding the date of the Prospectus, including any sales pursuant
to Rule 144A under, or Regulations D or Regulation S of, the Securities Act other than Shares
issued pursuant to employee benefit plans, qualified stock option and equity incentive plans or
other employee compensation plans or pursuant to outstanding options, rights or warrants.
(m) Stock Exchange Listing. The Shares are registered pursuant to Section 12(g) of the
Exchange Act and are listed on the Nasdaq Global Market, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of the Shares under
the Exchange Act or delisting the Shares from the Nasdaq Global Market, nor has the Company
received any notification that the Commission or the Nasdaq Global Market is contemplating
terminating such registration or listing.
(n) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its subsidiaries is in violation of its charter or
bylaws or similar organizational document, as applicable, or is in default (or, with the giving
of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may be bound
(including, without limitation, any credit agreement, indenture, pledge agreement, security
agreement or other instrument or agreement evidencing, guaranteeing, securing or relating to
indebtedness of the Company or any of its subsidiaries ), or to which any of the property or
assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”),
except for such Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company’s execution, delivery and performance of this Agreement,
consummation of the transactions contemplated hereby and by each Applicable Prospectus and the
issuance and sale of the Offered Securities (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of the charter or
bylaws or similar organizational document of the Company or any subsidiary, as applicable, (ii)
will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering
Event (as defined below) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to,
or require the consent of any other party to, any Existing Instrument and (iii) will not result
in any violation of any law, administrative regulation or administrative or court decree
applicable to the Company or any subsidiary, except, in case of each of clauses (ii) and (iii)
above, for any such conflict, breach, violation, Default, lien, charge or encumbrance that
would not, individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. No consent, approval, authorization or other order of, or registration or
filing with, any court or other governmental or regulatory authority or
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agency, is required for
the Company’s execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby and by each Applicable Prospectus, except such as have been
obtained or made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the Financial Industry Regulatory
Authority, Inc. (“FINRA”). As used herein, a “Debt Repayment Triggering Event” means any event
or condition which gives, or with the giving of notice or lapse of time would give, the holder
of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s
behalf) the right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any of its subsidiaries.
(o) No Material Actions or Proceedings. Except as otherwise disclosed in each Applicable
Prospectus, there are no legal or governmental actions, suits or proceedings pending or, to the
Company’s knowledge, threatened (i) against or affecting the Company or any of its
subsidiaries, (ii) which have as the subject thereof any officer or director of, or property
owned or leased by, the Company or any of its subsidiaries or (iii) relating to environmental
or discrimination matters, where in any such case (A) there is a reasonable possibility that
such action, suit or proceeding might be determined adversely to the Company, such subsidiary
or such officer or director, (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change or adversely
affect the consummation of the transactions contemplated by this Agreement or (C) any such
action,
suit or proceeding is or would be material in the context of the sale of Shares. No
material labor dispute with the employees of the Company or any of its subsidiaries, or with
the employees of any principal supplier, manufacturer, customer or contractor of the Company,
exists or, to the Company’s knowledge, is threatened or imminent.
(p) Intellectual Property Rights. The Company and its subsidiaries own, possess or license,
and otherwise have legally enforceable rights to use all patents, patent applications, trade
and service marks, trade and service ▇▇▇▇ registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology and know-how, except with regard to off-the-shelf
software provided by third parties (collectively, the “Intellectual Property Rights”) necessary
for the conduct of the Company’s business as now conducted or, to the knowledge of the Company,
as proposed in the Applicable Prospectuses to be conducted. Except as disclosed in the
Applicable Prospectus, (i) to the Company’s knowledge, there are no rights of third parties to
any such Intellectual Property Rights that conflict with the Company’s use or proposed use of
any such Intellectual Property Rights; (ii) the Company is not aware of any material
infringement by third parties of any such Intellectual Property Rights; (iii) there is no
pending or, to the Company’s knowledge, threatened, action, suit, proceeding or claim by others
challenging the Company’s rights in or to use any such Intellectual Property Rights, and the
Company is unaware of any facts which would form a reasonable basis for any such claim; (iv)
there is no pending or, to the Company’s knowledge, threatened, action, suit, proceeding or
claim by others challenging the validity, enforceability, or scope of any such Intellectual
Property Rights, and the Company is unaware of any facts which would form a reasonable basis
for any such claim; (v) there is no pending or threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any patent, trademark, copyright, trade
secret or other proprietary rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim; (vi) to the knowledge of the Company,
there is no patent or published patent application which contains claims that dominate or may
dominate any Intellectual Property Rights described in the Applicable Prospectuses as being
owned by or licensed to the Company or that interferes
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with the issued or pending claims of any
such Intellectual Property Rights; and (vii) there is no prior art of which the Company is
aware that may render any patent held or licensed by the Company invalid or any patent
application held by the Company unpatentable which has not been disclosed to the appropriate
patent office(s) to the extent such disclosure may be required.
(q) All Necessary Permits, etc. The Company and each subsidiary possess such valid and
current certificates, authorizations or permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies necessary to conduct their respective businesses, except
for such certificates, authorizations or permits which the failure to obtain would not
reasonably be expected to result in a Material Adverse Change, and neither the Company nor any
subsidiary has received, or has any reason to believe that it will receive, any notice of
proceedings relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse Change.
(r) Title to Properties.
The Company and each of its subsidiaries has good and marketable title to all of the
real and personal property and other assets reflected as owned in the financial statements
referred to in Section 1(i) above (or elsewhere in any Applicable Prospectus), in each case
free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse
claims and other defects, except such as do not materially and adversely affect the value of
such property and do not materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held under valid and
enforceable leases, with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property, improvements, equipment or
personal property by the Company or such subsidiary.
(s) Tax Law Compliance. The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns or have properly filed requested extensions
thereof and have paid all taxes required to be paid by any of them and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them. The Company has
made adequate charges, accruals and reserves in the applicable financial statements referred to
in Section 1(i) above in respect of all federal, state and foreign income and franchise taxes
for all periods as to which the tax liability of the Company or any of its subsidiaries has not
been finally determined.
(t) Company Not an “Investment Company”. The Company is not, and will not be, either after
receipt of payment for the Offered Shares or after the application of the proceeds therefrom as
described under “Use of Proceeds” in each Applicable Prospectus, an “investment company” within
the meaning of Investment Company Act of 1940, as amended (the “Investment Company Act”), and
will conduct its business in a manner so that it will not become subject to the Investment
Company Act.
(u) Insurance. Each of the Company and its subsidiaries are insured by institutions believed
to be recognized, financially sound and reputable, with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and policies covering the Company and its subsidiaries for
9
product liability claims
and clinical trial liability claims. The Company has no reason to believe that it or any
subsidiary will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions, in each case
as may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Change. Neither of the Company nor any subsidiary has
been denied any insurance coverage which it has sought or for which it has applied.
(v) No Price Stabilization or Manipulation; Compliance with Regulation M.
The Company has not taken, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of the price of the
Shares or any other “reference security” (as defined in Rule 100 of Regulation M under the 1934
Act (“Regulation M”)) whether to facilitate the sale or resale of the Offered Shares or
otherwise, and has taken no action which would directly or indirectly violate Regulation M.
The Company acknowledges that the Underwriters may engage in passive market making transactions
in the Offered Shares on the Nasdaq Global Market in accordance with Regulation M.
(w) Related Party Transactions. There are no business relationships or related-party
transactions involving the Company or any of its subsidiaries or any other person required to
be described in each Applicable Prospectus which have not been described as required. The Time
of Sale Prospectus contains in all material respects the same description of the matters set
forth in the preceding sentence contained in the Prospectus.
(x) S-3 Eligibility. At the time each Registration Statement was originally declared
effective and at the time the Company’s Annual Report on Form 10-K for the year ended September
30, 2009 (the “Annual Report”) was filed with the Commission, the Company met the then
applicable requirements for use of Form S-3 under the Securities Act. The Company meets the
requirements for use of Form S-3 under the Securities Act specified in FINRA Conduct Rule
5110(b)(7)(C)(i).
(y) Exchange Act Compliance. The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the Exchange Act,
and, when read together with the other information in the Prospectus, at the time each
Registration Statement and any amendments thereto become effective and at the First Closing
Date and the applicable Option Closing Date, as the case may be, will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(z) FINRA Matters. All of the information provided to the Underwriters or to counsel for the
Underwriters by the Company, its officers and directors and the holders of any securities (debt
or equity) or options to acquire any securities of the Company in connection with letters,
filings or other supplemental information provided to FINRA pursuant to FINRA Rule 5110 or NASD
Conduct Rule 2720 is true, complete and correct.
(aa) Parties to Lock-Up Agreements. Each of the Company’s directors and executive officers and
each of the other persons and entities listed in Exhibit C has executed and delivered to
Jefferies a lock-up agreement in the form of Exhibit D hereto. Exhibit C hereto
10
contains a
true, complete and
correct list of all directors and executive officers of the Company and any stockholder
who both (i) beneficially owns more than 5% of the outstanding Shares and (ii) is affiliated
with any of the Company’s directors. If any additional persons shall become directors or
executive officers of the Company prior to the end of the Company Lock-up Period (as defined
below), the Company shall cause each such person, prior to or contemporaneously with their
appointment or election as a director or executive officer of the Company, to execute and
deliver to Jefferies an agreement in the form attached hereto as Exhibit D.
(bb) Statistical and Market-Related Data. The statistical, demographic and market-related data
included in the Registration Statements and each Applicable Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate or represent the Company’s
good faith estimates that are made on the basis of data derived from such sources.
(cc) No Unlawful Contributions or Other Payments. Neither the Company nor any of its
subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or any
subsidiary, has made any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of the character required to be
disclosed in the Registration Statements and each Applicable Prospectus.
(dd) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over
Financial Reporting. The Company has established and maintains disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are designed
to ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s principal executive officer and its principal
financial officer by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have been evaluated
by management of the Company for effectiveness as of the end of the Company’s most recent
fiscal quarter; and (iii) are effective in all material respects to perform the functions for
which they were established. The Company is not aware of (i) any significant deficiencies or
material weaknesses in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information or (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal
control over financial reporting. The Company is not aware of any change in its internal
control over financial reporting that has occurred during its most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(ee) Compliance with Environmental Laws. Except as described in each Applicable Prospectus and
except as would not, singly or in the aggregate, result in a Material Adverse Change, (i)
neither the Company nor any of its subsidiaries is in violation of any applicable federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any binding and enforceable judicial or administrative interpretation thereof,
including any judicial or
administrative order, consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without limitation,
laws and regulations relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous Materials”) or to the
11
manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials (collectively,
“Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in compliance with
their requirements, (iii) there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries and (iv) there are no events
or circumstances that might reasonably be expected to form the basis of an order for clean-up
or remediation, or an action, suit or proceeding by any private party or governmental body or
agency, or against or affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(ff) Periodic Review of Costs of Environmental Compliance. In the ordinary course of its
business, the Company conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries, in the course of which
it identifies and evaluates associated costs and liabilities (including, without limitation, to
the extent applicable, any capital or operating expenditures required for clean-up, closure of
properties or compliance with applicable Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential liabilities to third
parties). On the basis of such review and the amount of its established reserves, if any, the
Company has reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, result in a Material Adverse Change.
(gg) ERISA Compliance. Except as otherwise disclosed in the Time of Sale Prospectus, the
Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company,
its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all
material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a
subsidiary, any member of any group of organizations described in Sections 414(b),(c),(m) or
(o) of the Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member.
No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any “employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee
benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as
defined under ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan” established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act, which would cause
the loss of such qualification.
(hh) Brokers. Except for the underwriting discounts and commissions payable to the
Underwriters as described in the Time of Sale Prospectus and the Prospectus, there is no
broker, finder or other party that is entitled to receive from the Company any brokerage or
12
finder’s fee or other fee or commission as a result of any transactions contemplated by this
Agreement.
(ii) No Outstanding Loans or Other Extensions of Credit. Since the adoption of Section 13(k)
of the Exchange Act, neither the Company nor any of its subsidiaries has extended or maintained
credit, arranged for the extension of credit, or renewed any extension of credit, in the form
of a personal loan, to or for any director or executive officer (or equivalent thereof) of the
Company and/or such subsidiary except for such extensions of credit as are expressly permitted
by Section 13(k) of the Exchange Act.
(jj) Compliance with Laws. The Company has not been advised, and has no reason to believe,
that it and each of its subsidiaries are not conducting business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is conducting business,
except where failure to be so in compliance would not result in a Material Adverse Change.
Except as described in the Applicable Prospectus, each of the Company and its subsidiaries: (A)
is and at all times has been in material compliance with all statutes, rules or regulations
applicable to the ownership, testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or
disposal of any product under development, manufactured or distributed by the Company
(“Applicable Laws”); (B) has not received any FDA Form 483, notice of adverse finding, warning
letter, untitled letter or other correspondence or notice from the U.S. Food and Drug
Administration (the “FDA”) or any other federal, state, local or foreign governmental or
regulatory authority alleging or asserting material noncompliance with any Applicable Laws or
any licenses, certificates, approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws (“Authorizations”); (C) possesses all
material Authorizations and such Authorizations are valid and in full force and effect and the
Company is not in material violation of any term of any such Authorizations; (D) has not
received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from the FDA or any other federal, state, local or foreign
governmental or regulatory authority or third party alleging that any product operation or
activity is in material violation of any Applicable Laws or Authorizations and has no knowledge
that the FDA or any other federal, state, local or foreign governmental or regulatory authority
or third party is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (E) has not received notice that the FDA or any other federal,
state, local or foreign governmental or regulatory authority has taken, is taking or intends to
take action to limit, suspend, modify or revoke any material Authorizations and has no
knowledge that the FDA or any other federal, state, local or foreign governmental or
regulatory authority is considering such action; (F) has filed, obtained, maintained or
submitted all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were materially complete and correct on the date
filed (or were corrected or supplemented by a subsequent submission); and (G) has not, either
voluntarily or involuntarily, initiated, conducted, or issued or caused to be initiated,
conducted or issued, any recall, market withdrawal or replacement, safety alert, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or efficacy of any
product or any alleged product defect or violation and, to the Company’s knowledge, no third
party has initiated, conducted or intends to initiate any such notice or action.
(kk) Clinical Studies. The studies, tests and preclinical and clinical trials conducted by or
on behalf of the Company or any of its subsidiaries were and, if still pending, are being
13
conducted in accordance with experimental protocols, procedures and controls pursuant to
accepted professional scientific standards and all Applicable Laws and Authorizations,
including, without limitation, the Federal Food, Drug and Cosmetic Act and the rules and
regulations promulgated thereunder (collectively, “FFDCA”); the descriptions of the results of
such studies, tests and trials contained in the Registration Statements and the Applicable
Prospectus are accurate and complete and fairly present the data derived from such studies,
tests and trials; the Company is not aware of any studies, tests or trials, the results of
which the Company believes reasonably call into question the study, test, or trial results
described or referred to in the Registration Statements, the Applicable Prospectus when viewed
in the context in which such results are described and the clinical state of development; and,
since December 31, 2005, the Company has not received any notices or correspondence from the
FDA or any other federal, state, local or foreign governmental or regulatory authority
requiring the termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the Company.
(ll) Dividend Restrictions. No subsidiary of the Company is prohibited or restricted, directly
or indirectly, from paying dividends to the Company, or from making any other distribution with
respect to such subsidiary’s equity securities or from repaying to the Company or any other
subsidiary of the Company any amounts that may from time to time become due under any loans or
advances to such subsidiary from the Company or from transferring any property or assets to the
Company or to any other subsidiary
(mm) Foreign Corrupt Practices Act. Neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee, affiliate or other person
acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action,
directly or indirectly, that has resulted or would result in a violation 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 and its subsidiaries and, to the
knowledge of the Company, the Company’s affiliates have conducted their respective 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.
(nn) Government Contracting. No payment has been made by the Company or its subsidiaries, or
by any person authorized to act on their behalf, to any person in connection with any contracts
with any governmental entity or regulatory agency (“Government Contracts”), in violation of
applicable procurement laws or regulations. There are no outstanding claims against the
Company or any subsidiary, either by the United States government or by any prime contractor,
subcontractor, vendor or other third party, arising under or relating to any Government
Contract. There is no suit or investigation pending and, to the Company’s knowledge, no suit
or investigation threatened against the Company or any subsidiary with respect to any
Government Contract. The Company is not a party to any material Government Contract.
(oo) Money Laundering Laws. The operations of the Company and its subsidiaries are, and have
been conducted at all times, in compliance with applicable financial recordkeeping
14
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, the money laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar applicable rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its subsidiaries
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(pp) OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or person acting on behalf of the Company or
any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of this offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
Any certificate signed by any officer of the Company or any of its subsidiaries and
delivered to the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters covered
thereby.
The Company acknowledges that the Underwriters and, for purposes of the opinions to be
delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the Underwriters,
will rely upon the accuracy and truthfulness of the foregoing representations and hereby
consents to such reliance.
Section 2. Purchase, Sale and Delivery of the Offered Shares.
(a) The Firm Shares. Upon the terms herein set forth, the Company agrees to issue and sell to the several
Underwriters an aggregate of 20,000,000 Firm Shares. On the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriters agree, severally and not jointly, to purchase from the
Company the respective number of Firm Shares set forth opposite their names on Schedule
A. The purchase price per Firm Share to be paid by the several Underwriters to the Company
shall be $4.158 per share.
(b) The First Closing Date. Delivery of certificates for the Firm Shares to be purchased by the Underwriters and
payment therefor shall be made at the offices of Jefferies, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ (or such other place as may be agreed to by the Company and the Representative) at 9:00
a.m. New York time, on November 22, 2010, or such other time and date not later than 1:30 p.m.
New York time, on December 2, 2010, as the Representative
shall designate by notice to the Company (the time and date of such closing are called the
“First Closing Date”). The Company hereby acknowledges that circumstances under which the
Representative may provide notice to postpone the First Closing Date as originally scheduled
include, but are in no way limited to, any determination by the Company or the Representative
to recirculate to the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
15
(c) The Optional Shares; Option Closing Date. In addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Underwriters to purchase, severally and not jointly, up
to an aggregate of 3,000,000 Optional Shares from the Company at the purchase price per share
to be paid by the Underwriters for the Firm Shares. The option granted hereunder is for use by
the Underwriters solely in covering any over-allotments in connection with the sale and
distribution of the Firm Shares. The option granted hereunder may be exercised at any time and
from time to time in whole or in part upon notice by the Representative to the Company, which
notice may be given at any time within 30 days from the date of this Agreement. Such notice
shall set forth (i) the aggregate number of Optional Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the certificates for the
Optional Shares are to be registered and (iii) the time, date and place at which such
certificates will be delivered (which time and date may be simultaneous with, but not earlier
than, the First Closing Date; and in the event that such time and date are simultaneous with
the First Closing Date, the term “First Closing Date” shall refer to the time and date of
delivery of certificates for the Firm Shares and such Optional Shares). Any such time and date
of delivery, if subsequent to the First Closing Date, is called an “Option Closing Date” and
shall be determined by the Representative and shall not be earlier than three nor later than
five full business days after delivery of such notice of exercise. If any Optional Shares are
to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of
Optional Shares (subject to such adjustments to eliminate fractional shares as the
Representative may determine) that bears the same proportion to the total number of Optional
Shares to be purchased as the number of Firm Shares set forth on Schedule A opposite
the name of such Underwriter bears to the total number of Firm Shares. The Representative may
cancel the option at any time prior to its expiration by giving written notice of such
cancellation to the Company.
(d) Public Offering of the Offered Shares. The Representative hereby advises the Company that the Underwriters intend to offer for
sale to the public, initially on the terms set forth in the Time of Sale Prospectus and the
Prospectus, their respective portions of the Offered Shares as soon after this Agreement has
been executed as the Representative, in its sole judgment, has determined is advisable and
practicable.
(e) Payment for the Offered Shares. Payment for the Offered Shares shall be made at the First Closing Date (and, if
applicable, at each Option Closing Date) by wire transfer of immediately available funds to the
order of the Company.
It is understood that the Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment
of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed
to purchase. Jefferies, individually and not as the Representative of the Underwriters, may
(but shall not be obligated to) make payment for any Offered Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representative by the First Closing
Date or the applicable Option Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(f) Delivery of the Offered Shares. The Company shall deliver, or cause to be delivered, to the Representative for the
accounts of the several Underwriters certificates for the Firm Shares at the First Closing
Date, against the irrevocable release of a wire transfer of
16
immediately available funds for the
amount of the purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several Underwriters, certificates for
the Optional Shares the Underwriters have agreed to purchase at the First Closing Date or the
applicable Option Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price therefor. If the
Representative so elects, the certificates for the Offered Shares shall be in definitive form
and registered in such names and denominations as the Representative shall have requested at
least two full business days prior to the First Closing Date (or the applicable Option Closing
Date, as the case may be) and shall be made available for inspection on the business day
preceding the First Closing Date (or the applicable Option Closing Date, as the case may be) at
a location in New York City as the Representative may designate. Time shall be of the essence,
and delivery at the time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.
Section 3. Additional Covenants of the Company.
The Company further covenants and agrees with each Underwriter as follows:
(a) Delivery of Time of Sale Prospectus and Prospectus. The Company shall furnish to you in New York City, without charge, prior to 10:00 a.m.
New York City time on the business day next succeeding the date of this Agreement and during
the period mentioned in Section 3(e) or 3(f) below, as many copies of the Time of Sale
Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration
Statements as you may reasonably request.
(b) Representative’s Review of Proposed Amendments and Supplements. During the Prospectus Delivery Period, prior to amending or supplementing any
Registration Statement (including any registration statement filed under Rule 462(b) under the
Securities Act), any preliminary prospectus, the Time of Sale Prospectus or the Prospectus
(including any amendment or supplement through incorporation by reference of any report filed
under the Exchange Act), the Company shall furnish to the
Representative for review, a reasonable amount of time prior to the proposed time of
filing or use thereof, a copy of each such proposed amendment or supplement, and the Company
shall not file or use any such proposed amendment or supplement without the Representative’s
consent, and to file with the Commission within the applicable period specified in Rule 424(b)
under the Securities Act any prospectus required to be filed pursuant to such Rule.
(c) Free Writing Prospectuses. The Company shall furnish to the Representative for review, a reasonable amount of time
prior to the proposed time of filing or use thereof, a copy of each proposed free writing
prospectus or any amendment or supplement thereto to be prepared by or on behalf of, used by,
or referred to by the Company and the Company shall not file, use or refer to any proposed free
writing prospectus or any amendment or supplement thereto without the Representative’s consent.
The Company shall furnish to each Underwriter, without charge, as many copies of any free
writing prospectus prepared by or on behalf of, or used by the Company, as such Underwriter may
reasonably request. If at any time during the Prospectus Delivery Period (but in any event if
at any time through and including the First Closing Date) there occurred or occurs an event or
development as a result of which any free writing prospectus prepared by or on behalf of, used
by, or referred to by the Company conflicted or would conflict with the information contained
in the Registration Statements or included or would include an untrue statement of a material
fact or omitted or
17
would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time, not
misleading, the Company shall promptly amend or supplement such free writing prospectus to
eliminate or correct such conflict or so that the statements in such free writing prospectus as
so amended or supplemented will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances prevailing at such subsequent time, not misleading, as the case may be; provided,
however, that prior to amending or supplementing any such free writing prospectus, the Company
shall furnish to the Representative for review, a reasonable amount of time prior to the
proposed time of filing or use thereof, a copy of such proposed amended or supplemented free
writing prospectus and the Company shall not file, use or refer to any such amended or
supplemented free writing prospectus without the Representative’s consent.
(d) Filing of Underwriter Free Writing Prospectuses. The Company shall 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 Securities
Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter
otherwise would not have been required to file thereunder.
(e) Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus 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 or condition exist as a result of which it is necessary to amend or supplement the Time
of Sale Prospectus so that the Time of Sale Prospectus does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when delivered to a prospective purchaser, not
misleading, or if any event shall occur or condition exist as a result of which the Time of
Sale Prospectus conflicts with the information contained in the Registration
Statements, or if, in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Time of Sale Prospectus to comply with applicable law, including the
Securities Act, the Company shall (subject to Sections 3(b) and 3(c)) forthwith prepare, file
with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon
request, either amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances when delivered to a prospective
purchaser, not misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statements, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable law including the
Securities Act.
(f) Securities Act Compliance. After the date of this Agreement, during the Prospectus Delivery Period, the Company
shall promptly advise the Representative in writing (i) of the receipt of any comments of, or
requests for additional or supplemental information from, the Commission, (ii) of the time and
date of any filing of any post-effective amendment to either Registration Statement or any Rule
462(b) Registration Statement or any amendment or supplement to any preliminary prospectus, the
Time of Sale Prospectus, any free writing prospectus or the Prospectus, (iii) of the time and
date that any post-effective amendment to either Registration Statement or any Rule 462(b)
Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of either Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto or any amendment or supplement
to the Time of Sale Prospectus or the
18
Prospectus or of any order preventing or suspending the
use of any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus or
the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation
the Shares from any securities exchange upon which they are listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings for any of
such purposes. If the Commission shall enter any such stop order at any time, the Company will
use its best efforts to obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions of Rule 424(b), Rule
433 and Rule 430A, as applicable, under the Securities Act and will use its reasonable efforts
to confirm that any filings made by the Company under such Rule 424(b) or Rule 433 were
received in a timely manner by the Commission.
(g) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event shall occur or condition exist as
a result of which it is necessary to amend or supplement the Prospectus so that the Prospectus
does not include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the
Representative or counsel for the Underwriters it is otherwise necessary to amend or supplement
the Prospectus to comply with applicable law, including the Securities Act, the Company agrees
(subject to Section 3(b) and 3(c)) to promptly prepare, file with the Commission and furnish at
its own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law including the
Securities Act. Neither the Representative’s consent to, or delivery of, any such amendment or
supplement shall constitute a waiver of any of the Company’s obligations under Sections 3(b) or
(c).
(h) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for the Underwriters to
qualify or register the Offered Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian provincial securities laws
(or other foreign laws) of those jurisdictions designated by the Representative, shall comply
with such laws and shall continue such qualifications, registrations and exemptions in effect
so long as required for the distribution of the Offered Shares. The Company shall not be
required to qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently qualified or
where it would be subject to taxation as a foreign corporation. The Company will advise the
Representative promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Offered Shares for offering, sale or trading in any jurisdiction or
any initiation or threat of any proceeding for any such purpose, and in the event of the
issuance of any order suspending such qualification, registration or exemption, the Company
shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(i) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Shares sold by it
in the manner described under the caption “Use of Proceeds” in each Applicable Prospectus.
19
(j) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent
for the Shares.
(k) Earnings Statement. As soon as practicable, but in any event no later than twelve months after the date of
this Agreement, the Company will make generally available to its security holders and to the
Representative an earnings statement (which need not be audited) covering a period of at least
twelve months beginning with the first fiscal quarter of the Company occurring after the date
of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(l) Periodic Reporting Obligations. The Company shall file, on a timely basis, with the Commission and the Nasdaq Global
Market all reports and documents required to be filed under the Exchange Act.
(m) Exchange Act Compliance. During the Prospectus Delivery Period, the Company shall file all documents required to
be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act in the manner
and within the time periods required by the Exchange Act.
(n) Listing. During the Prospectus Delivery Period, the Company will use its best efforts to effect
and maintain the inclusion and quotation of the Offered Shares on the Nasdaq Global Market.
(o) Company to Provide Copy of the Prospectus in Form That May be Downloaded from the
Internet. The Company shall cause to be prepared and delivered, at its expense, within one
business day from the effective date of this Agreement, to Jefferies an “electronic Prospectus”
to be used by the Underwriters in connection with the offering and sale of the Offered Shares.
As used herein, the term “electronic Prospectus” means a form of Time of Sale Prospectus, and
any amendment or supplement thereto, that meets each of the following conditions: (i) it shall
be encoded in an electronic format, satisfactory to Jefferies, that may be transmitted
electronically by Jefferies and the other Underwriters to offerees and purchasers of the
Offered Shares; (ii) it shall disclose the same information as the paper Time of Sale
Prospectus, except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced in the
electronic Prospectus with a fair and accurate narrative description or tabular representation
of such material, as appropriate; and (iii) it shall be in or convertible into a paper format
or an electronic format, satisfactory to Jefferies, that will allow investors to store and have
continuously ready access to the Time of Sale Prospectus at any future time, without charge to
investors (other than any fee charged for subscription to the Internet as a whole and for
on-line time). The Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to ▇▇▇▇▇ or otherwise with the Commission and in the Registration
Statements at the time it was declared effective an undertaking that, upon receipt of a request
by an investor or his or her representative, the Company shall transmit or cause to be
transmitted promptly, without charge, a paper copy of the Time of Sale Prospectus.
(p) Agreement Not to Offer or Sell Additional Shares. During the period commencing on and including the date hereof and ending on and including
the 90th day following the date of this Agreement (as the same may be extended as
described below, the “Lock-up Period”), the Company will not, without the prior written consent
of Jefferies (which consent may be withheld at the sole discretion of Jefferies), directly or
indirectly, sell (including, without
20
limitation, any short sale), offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the Securities Act, except
for a registration statement on Form S-8 relating to the Company’s employee benefit plans, in
respect of, any Shares, options, rights or warrants to acquire Shares or securities
exchangeable or exercisable for or convertible into Shares (other than as contemplated by this
Agreement with respect to the Offered Shares) or publicly announce the intention to do any of
the foregoing, other than (i) the issuance of restricted
Common Stock, restricted stock units or options to acquire Common Stock pursuant to the
Company’s employee benefit plans, qualified stock option plans or other equity incentive plans
as such plans are in existence on the date hereof and described in the Applicable Prospectus,
(ii) issuances of Common Stock upon the exercise or settlement of options or restricted stock
units or warrants disclosed as outstanding in any Applicable Prospectus. Notwithstanding the
foregoing, if (A) during the last 17 days of the Lock-up Period, the Company issues an earnings
release or material news or a material event relating to the Company occurs or (B) prior to the
expiration of the Lock-up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-up Period, then in each case the
Lock-up Period will be extended until the expiration of the 18-day period beginning on the date
of the issuance of the earnings release or the occurrence of the material news or material
event, as applicable, unless Jefferies waives, in writing, such extension (which waiver may be
withheld at the sole discretion of Jefferies), except that such extension will not apply if,
(i) within three business days prior to the 15th calendar day before the last day of the
Lock-up Period, the Company delivers a certificate, signed by the Chief Financial Officer or
Chief Executive Officer of the Company, certifying on behalf of the Company that (i) the Shares
are “actively traded securities” (as defined in Regulation M), (ii) the Company meets the
applicable requirements of paragraph (a)(1) of Rule 139 under the Securities Act in the manner
contemplated by NASD Conduct Rule 2711(f)(4), and (iii) the provisions of NASD Conduct Rule
2711(f)(4) are not applicable to any research reports relating to the Company published or
distributed by any of the Underwriters during the 15 days before or after the last day of the
Lock-up Period (before giving effect to such extension). The Company will provide the
Representative with prior notice of any such announcement that gives rise to an extension of
the Lock-up Period.
(q) Future Reports to the Representative. During the period of five years hereafter the Company will furnish to Jefferies at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ Attention: Capital Markets: (i) as soon as practicable after
the end of each fiscal year, copies of the Annual Report of the Company containing the balance
sheet of the Company as of the close of such fiscal year and statements of income,
stockholders’ equity and cash flows for the year then ended and the opinion thereon of the
Company’s independent public or certified public accountants; (ii) as soon as practicable after
the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the
Commission, FINRA or any securities exchange; and (iii) as soon as available, copies of any
report or communication of the Company mailed generally to holders of its capital stock;
provided that the requirements of this subsection (q) shall be satisfied to the extent the
reports, communications, financial statements or other documents referenced herein are
available on ▇▇▇▇▇.
(r) Investment Limitation. The Company shall not invest, or otherwise use the proceeds received by the Company
from its sale of the Offered Shares in such a manner as would require the Company or any of its
subsidiaries to register as an investment company under the Investment Company Act.
21
(s) No Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of the price of the
Shares or any other reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and the Company will, and shall cause each of its affiliates to, comply
with all applicable provisions of Regulation M. If the limitations of Rule 102 of Regulation M
(“Rule 102”) do not apply with respect to the Offered Shares or any other reference security
pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from
the Representative (or, if later, at the time stated in the notice), the Company will, and
shall cause each of its affiliates to, comply with Rule 102 as though such exception were not
available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.
(t) Existing Lock-Up Agreements. During the Lock-Up Period, the Company will use commercially reasonable efforts to
enforce all existing agreements between the Company and any of its security holders that
prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company’s
securities. In addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such existing “lock-up”
agreements for the duration of the periods contemplated in such agreements, including, without
limitation, “lock-up” agreements entered into by the Company’s officers and directors pursuant
to Section 6(h).
Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in
writing the performance by the Company of any one or more of the foregoing covenants or extend
the time for their performance.
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance and delivery of
the Offered Shares (including all printing and engraving costs), (ii) all fees and expenses of
the registrar and transfer agent of the Shares, (iii) all necessary issue, transfer and other
stamp taxes in connection with the issuance and sale of the Offered Shares to the Underwriters,
(iv) all fees and expenses of the Company’s counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration Statements
(including financial statements, exhibits, schedules, consents and certificates of experts),
the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on
behalf of, used by, or referred to by the Company, and each preliminary prospectus, and all
amendments and supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees
and expenses incurred by the Company or the Underwriters in connection with qualifying or
registering (or obtaining exemptions from the qualification or registration of) all or any part
of the Offered Shares for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the Representative, preparing and
printing a “Blue Sky Survey” or memorandum and a “Canadian wrapper”, and any supplements
thereto, advising the Underwriters of such qualifications, registrations, determinations and
exemptions, (vii) the filing fees incident to, and the reasonable fees and expenses of counsel
for the Underwriters in connection with, FINRA’s review, if any, and approval of the
Underwriters’ participation in the offering and distribution of the Offered
Shares, (viii) the costs and expenses of the Company relating to investor presentations on
any “road show” undertaken in connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the preparation or dissemination of any
electronic road show, expenses
22
associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of the Representative,
employees and officers of the Company and of the Representative and any such consultants, and
the cost of any aircraft chartered in connection with the road show, (ix) the fees and expenses
associated with including the Offered Shares on the Nasdaq Global Market, and (ix) all other
fees, costs and expenses of the nature referred to in Item 14 of Part II of either Registration
Statement. Except as provided in this Section 4, Section 7, Section 9 and Section 10 hereof,
the Underwriters shall pay their own expenses, including the fees and disbursements of their
counsel.
Section 5. Covenant of the Underwriters. Each Underwriter severally and not jointly, covenants with the Company not to take any
action that would result in the Company being required to file with the Commission pursuant to
Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed by the Company thereunder, but for
the action of the Underwriter.
Section 6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Offered Shares
as provided herein on the First Closing Date and, with respect to the Optional Shares, each
Option Closing Date, shall be subject to the accuracy of the representations and warranties on
the part of the Company set forth in Section 1 hereof as of the date hereof and as of the First
Closing Date as though then made and, with respect to the Optional Shares, as of each Option
Closing Date as though then made, to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) Accountants’ Comfort Letter. On the date hereof, the Representative shall have received from KMJ ▇▇▇▇▇▇ & Company
LLP, independent public or certified public accountants for the Company, (i) a letter dated the
date hereof addressed to the Underwriters, in form and substance satisfactory to the
Representative, containing statements and information of the type ordinarily included in
accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the Registration
Statements, the Time of Sale Prospectus, and each free writing prospectus, if any, and, with
respect to each letter dated the date hereof only, the Prospectus, and (ii) confirming that
they are (A) independent public or certified public accountants as required by the Securities
Act and the Exchange Act and (B) in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X.
(b) Compliance with Registration Requirements; No Stop Order; No Objection from FINRA. For the period from and after effectiveness of this Agreement and prior to the First
Closing Date and, with respect to the Optional Shares, each Option Closing Date:
(i) the Company shall have filed the Prospectus with the Commission (including the
information previously omitted from the Registration Statements pursuant to Rule 430B under
the Securities Act) in the manner and within the time period required by Rule 424(b) under
the Securities Act;
(ii) no stop order suspending the effectiveness of either Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment to
23
either Registration
Statement, shall be in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period from and after the date of this Agreement and through and including the
First Closing Date and, with respect to the Optional Shares, each Option Closing Date:
(i) in the reasonable judgment of the Representative there shall not have occurred any
Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of a possible change, in the rating accorded any securities
of the Company or any of its subsidiaries by any “nationally recognized statistical rating
organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
(d) Opinion of Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of ▇▇▇▇▇▇▇ Procter LLP, counsel for the Company, dated as of such
Closing Date, the form of which is attached as Exhibit A.
(e) Opinion of Intellectual Property Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and Crew LLP, intellectual property counsel
for the Company, dated as of such Closing Date, the form of which is attached as Exhibit
B.
(f) Opinion of Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representative shall
have received the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, dated as of such Closing Date.
(g) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date the Representative shall
have received a written certificate executed by the Chief Executive Officer or President of the
Company and the Chief Financial Officer of the Company, dated as of such Closing Date, to the
effect set forth in subsection (b)(ii) of this Section 6, and further to the effect that:
(i) for the period from and including the date of this Agreement through and including
such Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations, warranties and covenants of the Company set forth in Section
1 of this Agreement are true and correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date.
24
(h) Bring-down Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representative shall
have received from KMJ ▇▇▇▇▇▇ & Company LLP, independent public or certified public accountants
for the Company, a letter dated such date, in form and substance satisfactory to the
Representative, to the effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 6, except that the specified date referred to
therein for the carrying out of procedures shall be no more than three business days prior to
the First Closing Date or the applicable Option Closing Date, as the case may be.
(i) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representative
an agreement in the form of Exhibit D hereto from the persons listed on Exhibit
C hereto, and such agreement shall be in full force and effect on each of the First Closing
Date and each Option Closing Date.
(j) Additional Documents. On or before each of the First Closing Date and each Option Closing Date, the
Representative and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably request for the purposes of enabling them to pass upon the
issuance and sale of the Offered Shares as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Offered Shares as contemplated herein and in
connection with the other transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Representative and counsel for the Underwriters.
If any condition specified in this Section 6 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at
any time on or prior to the First Closing Date and, with respect to the Optional Shares, at any
time on or prior to the applicable Option Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4, Section 6,
Section 9 and Section 10 shall at all times be effective and shall survive such termination.
Section 7. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the Representative pursuant to Section 6, Section 11
or Section 12, or if the sale to the Underwriters of the Offered Shares on the First Closing
Date is not consummated because of any refusal, inability or failure on the part of the Company
to perform any agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representative and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand for all
documented out-of-pocket expenses that shall have been reasonably incurred by the
Representative and the Underwriters in connection with the proposed purchase and the offering
and sale of the Offered Shares, including but not limited to fees and disbursements of counsel,
printing expenses, travel expenses, postage, facsimile and telephone charges.
Section 8. Effectiveness of this Agreement. This Agreement shall not become effective
until the execution of this Agreement by the each of the parties hereto.
Section 9. Indemnification.
25
(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the meaning of the
Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as
incurred, to which such Underwriter or such officer, employee or controlling person may become
subject, under the Securities Act, the Exchange Act, other federal or state statutory law or
regulation, or the laws or regulations of foreign jurisdictions where Offered Shares have been
offered or sold or at common law or otherwise (including in settlement of any litigation),
insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements, or any amendment
thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the
Securities Act, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading; or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has used,
referred to or filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or
the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or (iii) any act or failure to
act or any alleged act or failure to act by any Underwriter in connection with, or relating in
any manner to, the Shares or the offering contemplated hereby, and which is included as part of
or referred to in any loss, claim, damage, liability or action arising out of or based upon any
matter covered by
clause (i) or (ii) above, provided that the Company shall not be liable under this clause
(iii) to the extent that a court of competent jurisdiction shall have determined by a final
judgment that such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Underwriter through its bad
faith or willful misconduct or (B) the violation of any laws or regulations of foreign
jurisdictions where Offered Shares have been offered or sold; and to reimburse each Underwriter
and each such officer, employee and controlling person for any and all expenses (including the
fees and disbursements of counsel chosen by Jefferies) as such expenses are reasonably incurred
by such Underwriter or such officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity agreement shall
not apply to any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Representative expressly for use in the Registration
Statements, any preliminary prospectus, the Time of Sale Prospectus, any such free writing
prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and
agreed that the only such information furnished by the Representative to the Company consists
of the information described in subsection (b) below. The indemnity agreement set forth in
this Section 9(a) shall be in addition to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration Statements and
each person, if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer or controlling person may become subject, under the
Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at
common law or
26
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below) arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statements, any preliminary prospectus the Time of Sale Prospectus, any free
writing prospectus that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act or the Prospectus (or such amendment or
supplement thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statements, such preliminary prospectus, the Time of Sale Prospectus, such free
writing prospectus that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act, the Prospectus (or such amendment or supplement
thereto), in reliance upon and in conformity with written information furnished to the Company
by the Representative expressly for use therein; and to reimburse the Company, or any such
director, officer or controlling person for any legal and other expense reasonably incurred by
the Company, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only information that
the Representative and the Underwriters have furnished to the Company expressly for use in the
Registration Statements, any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has
filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus
(or any amendment or supplement thereto) are the statements set forth in the first paragraph
under the section entitled “Commissions and Expenses” and the second, third, fourth and fifth
paragraphs under the section entitled “Price Stabilization, Short Positions and Penalty Bids”,
each under the caption “Underwriting” in the Company’s prospectus supplement dated November 17,
2010 relating to the offering of the Offered Shares. The indemnity agreement set forth in this
Section 9(b) shall be in addition to any liabilities that each Underwriter may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 9 of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 9, notify the indemnifying party in
writing of the commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for contribution
or otherwise than under the indemnity agreement contained in this Section 9 or to the extent it
is not prejudiced as a proximate result of such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to participate in, and, to
the extent that it shall elect, jointly with all other indemnifying parties similarly notified,
by written notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may
be legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party or parties shall
have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the
27
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party
of counsel, the indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and expenses of more than
one separate counsel (together with local counsel), representing the indemnified parties who
are parties to such action), which counsel (together with any local counsel) for the
indemnified parties shall be selected by Jefferies (in the case of counsel for the indemnified
parties referred to in Section 9(a) above) or by the Company (in the case of counsel for the
indemnified parties referred to in Section 9(b) above)) (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified party at the
expense of the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party and shall be paid as they are incurred.
(d) Settlements. The indemnifying party under this Section 9 shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by Section 9(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit
or proceeding.
Section 10. Contribution. If the indemnification provided for in Section 9 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Offered Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
28
benefits
received by the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Offered Shares pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the offering of the
Offered Shares pursuant to this Agreement (before deducting expenses) received by the Company,
and the total underwriting discounts and commissions received by the Underwriters, in each case
as set forth on the front cover page of the Prospectus bear to the aggregate initial public
offering price of the Offered Shares as set forth on such cover. The relative fault of the
Company, on the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Underwriters, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 9(c), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim. The
provisions set forth in Section 9(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 10; provided, however, that
no additional notice shall be required with respect to any action for which notice has been
given under Section 9(c) for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 10 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 in this Section 10.
Notwithstanding the provisions of this Section 10, no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions received by such
Underwriter in connection with the Offered Shares underwritten by it and distributed to the
public. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to
this Section 10 are several, and not joint, in proportion to their respective underwriting
commitments as set forth opposite their respective names on Schedule A. For purposes
of this Section 10, each officer and employee of an Underwriter and each person, if any, who
controls an Underwriter within the meaning of the Securities Act or the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statements, and each person, if any, who
controls the Company with the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as the Company.
Section 11. Default of One or More of the Several Underwriters. If, on the First Closing Date or the applicable Option Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase Offered Shares
that it or they have agreed to purchase hereunder on such date, and the aggregate number of
Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase does not exceed 10% of the aggregate number of the Offered Shares to be purchased
on such
29
date, the Representative may make arrangements satisfactory to the Company for the
purchase of such Offered Shares by other persons, including any of the Underwriters, but if no
such arrangements are made by such Closing Date, the other Underwriters shall be obligated,
severally and not jointly, in the proportions that the number of Firm Shares set forth opposite
their respective names on Schedule A bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such other proportions
as may be specified by the Representative with the consent of the non-defaulting Underwriters,
to purchase the Offered Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the First Closing Date or the applicable
Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or
refuse to purchase Offered Shares and the aggregate number of Offered Shares with respect to
which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased
on such date, and
arrangements satisfactory to Jefferies and the Company for the purchase of such Offered
Shares are not made within 48 hours after such default, this Agreement shall terminate with
respect to the non-defaulting Underwriters without liability to any other party, except that
the provisions of Section 4, Section 7, Section 9 and Section 10 shall at all times be
effective and shall survive such termination. In any such case either the Representative or
the Company shall have the right to postpone the First Closing Date or the applicable Option
Closing Date, as the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Registration Statements and the Prospectus or any other
documents or arrangements may be effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 11 Any action taken under this
Section 11 hall not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Section 12. Termination of this Agreement. Prior to the purchase of the Firm Shares by the Underwriters on the First Closing Date
this Agreement may be terminated by the Representative by notice given to the Company if at any
time (i) trading or quotation in any of the Company’s securities shall have been suspended or
limited by the Commission or by the Nasdaq Global Market, or trading in securities generally on
either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on any of such
stock exchanges by the Commission or FINRA; (ii) a general banking moratorium shall have been
declared by any of federal, New York or California authorities; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United States’ or
international political, financial or economic conditions, as in the judgment of the
Representative is material and adverse and makes it impracticable to market the Offered Shares
in the manner and on the terms described in the Time of Sale Prospectus or the Prospectus or to
enforce contracts for the sale of securities; (iv) in the reasonable judgment of the
Representative there shall have occurred any Material Adverse Change; or (v) the Company shall
have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representative may interfere materially with the conduct of
the business and operations of the Company regardless of whether or not such loss shall have
been insured. Any termination pursuant to this Section 12 shall be without liability on the
part of (a) the Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representative and the Underwriters pursuant to Sections 4 and 7
hereof, (b)
30
any Underwriter to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 9 and Section 10 shall at all times be effective and
shall survive such termination.
Section 13. No Advisory or Fiduciary Relationship. The Company acknowledges and agrees
that (a) the purchase and sale of the Offered Shares pursuant to this Agreement, including the
determination of the public offering price of the Offered Shares and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand,
and the several Underwriters, on the other hand, (b) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter is and has
been acting solely as a principal and is not the agent or fiduciary of the Company, or
its stockholders, creditors, employees or any other party, (c) no Underwriter has assumed
or will assume an advisory or fiduciary responsibility in favor of the Company with respect to
the offering contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (d) the Underwriters and their
respective affiliates may be engaged in a broad range of transactions that involve interests
that differ from those of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.
Section 14. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of its or their
partners, officers or directors or any controlling person, as the case may be, and, anything
herein to the contrary notwithstanding, will survive delivery of and payment for the Offered
Shares sold hereunder and any termination of this Agreement.
Section 15. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Representative:
Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Jefferies & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
31
If to the Company:
Avanir Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 16. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 11 hereof, and to the benefit of the
employees, officers and directors and controlling persons referred to in Section 9 and Section
10, and in each case their respective successors, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any purchaser of the Offered
Shares as such from any of the Underwriters merely by reason of such purchase.
Section 17. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such minor changes
(and only such minor changes) as are necessary to make it valid and enforceable.
Section 18. Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws
of the State of New York applicable to agreements made and to be performed in such state. Any
legal suit, action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal
courts of the United States of America located in the Borough of Manhattan in the City of New
York or the courts of the State of New York in each case located in the Borough of Manhattan in
the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits
to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement
of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is
non-exclusive) of such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such court. The
parties irrevocably and unconditionally waive any objection to the laying of venue of any suit,
action or other proceeding in the Specified Courts and irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such suit, action or other
proceeding brought in any such court has been brought in an inconvenient forum.
With respect to any Related Proceeding, each party irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of sovereignty or
otherwise) from jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified Courts or any
other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any
such immunity at or in respect of any such Related Proceeding or Related
32
Judgment, including, without limitation, any immunity pursuant to the United States
Foreign Sovereign Immunities Act of 1976, as amended.
Section 19. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings
and negotiations with respect to the subject matter hereof. This Agreement may be executed in
two or more counterparts, each one of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom the condition is
meant to benefit. The Table of Contents and the Section headings herein are for the
convenience of the parties only and shall not affect the construction or interpretation of this
Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof,
including, without limitation, the indemnification provisions of Section 9 and the contribution
provisions of Section 10, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 9 and 10 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has been made in the Registration
Statements, any preliminary prospectus, the Time of Sale Prospectus, each free writing
prospectus and the Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
33
If the foregoing is in accordance with your understanding of our agreement, kindly
sign and return to the Company the enclosed copies hereof, whereupon this instrument, along
with all counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, Avanir Pharmaceuticals, Inc. |
||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| Vice President, Finance | ||||
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representative in New York, New York as of the date first above written.
| ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. Acting as Representative of the several Underwriters named in the attached Schedule A. |
||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
| Title: | Managing Director | |||
34
SCHEDULE A
| Number of | ||||
| Firm Shares | ||||
| Underwriters | to be Purchased | |||
▇▇▇▇▇▇▇▇▇ & Company, Inc. |
13,000,000 | |||
Canaccord Genuity Inc. |
3,500,000 | |||
Wedbush Securities Inc. |
2,000,000 | |||
Summer Street Research Partners |
1,000,000 | |||
▇▇▇▇▇▇▇▇ Capital, Inc. |
500,000 | |||
Total |
20,000,000 | |||
SCHEDULE B
Schedule of Free Writing Prospectuses included in the Time of Sale Prospectus
None.
SCHEDULE C
Number of
Shares being offered: 20,000,000
Underwriters
Over-Allotment Amount: 3,000,000 shares
Price per Share to the public: $4.40