GERON CORPORATION 6,000,000 Shares Common Stock ($0.001 par value per Share) Underwriting Agreement
Exhibit 1.1
EXECUTION
COPY
GERON CORPORATION
6,000,000 Shares
Common Stock
($0.001 par value per Share)
($0.001 par value per Share)
September 16, 2005
September 16, 2005
UBS Securities LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Geron Corporation, a Delaware corporation (the “Company”), proposes to issue and sell
to the underwriters named in Schedule A annexed hereto (the “Underwriters”) an
aggregate of 6,000,000 shares (the “Firm Shares”) of common stock, $0.001 par value per
share (the “Common Stock”), of the Company. In addition, solely for the purpose of
covering over-allotments, the Company proposes to grant to the Underwriters the option to purchase
from the Company up to an additional 900,000 shares of Common Stock (the “Additional
Shares”). The Firm Shares and the Additional Shares are hereinafter collectively sometimes
referred to as the “Shares.” The Shares are described in the Prospectus which is referred
to below.
Simultaneously with the purchase and sale to the Underwriters of the Firm Shares, the Company
is issuing and selling to Merck & Co., Inc. (the “Investor”) 2,000,000 shares of Common Stock (the
“Direct Placement Shares”) on the terms set forth in the Common Stock Warrant issued to the
Investor on July 15, 2005 and as described in the Prospectus described below (the “Direct
Placement”). The offer and sale of the Direct Placement Shares is being made pursuant to the
Registration Statements described below, and confirmation of the sale of such shares shall be
accompanied by the Prospectus (in a form which includes the final prospectus supplement referred to
in the last sentence of the paragraph that follows), which shall relate to the offer and sale of
the Shares and the Direct Placement Shares.
The Company has prepared and filed, in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with
the Securities and Exchange Commission (the “Commission”) two registration statements on
Form S-3 (File Nos. 333-81596 and 333-115195) under the Act (the “registration
statements”). Amendments to such registration statements, if necessary or appropriate, have
been similarly prepared and filed with the Commission. Such registration statements, as so
amended, have been declared by the Commission to be effective under the Act. The Company has filed
with the Commission a Prepricing Prospectus (as defined and referred to below) pursuant to Rule
424(b) under the Act, describing the Shares, the Direct Placement Shares and the offering thereof,
in such form as has been provided to or discussed with, and approved by, the Underwriters. The
Company will next file with the Commission pursuant to Rule 424(b)
under the Act a final prospectus supplement to the Basic Prospectuses (as defined below),
describing the Shares, the Direct Placement Shares and the offering thereof, in such form as has
been provided to or discussed with, and approved, by the Underwriters.
The term “Registration Statements” as used in this Agreement means the registration
statements, as amended at the time such registration statements became effective and as
supplemented or amended prior to the execution of this Agreement, including (i) all financial
schedules and exhibits thereto and (ii) all documents incorporated by reference or deemed to be
incorporated by reference therein. If abbreviated registration statements are prepared and filed
with the Commission in accordance with Rule 462(b) under the Act (“Abbreviated Registration
Statements”), the term “Registration Statements” shall also include the Abbreviated
Registration Statements. The term “Basic Prospectuses” as used in this Agreement means the
basic prospectuses dated as of February 14, 2002 and June 30, 2004 and filed with the Commission
pursuant to Rule 424(b) for use in connection with the offer and/or sale of Shares pursuant to this
Agreement. The term “Prepricing Prospectus” as used in this Agreement means any form of
preliminary prospectus used in connection with the marketing of the Shares, including the
preliminary prospectus consisting of the preliminary prospectus supplement dated as of September
12, 2005 and filed with the Commission on September 12, 2005 pursuant to Rule 424 under the Act,
and the Basic Prospectus, in each case as any of the foregoing may be amended or supplemented by
the Company. The term “Prospectus Supplement” as used in this Agreement means any final
prospectus supplement specifically relating to the Shares, in the form filed with, or transmitted
for filing to, the Commission pursuant to Rule 424 under the Act. The term “Prospectus” as
used in this Agreement means the Basic Prospectuses together with any Prospectus Supplement except
that if such Basic Prospectuses are amended or supplemented on or prior to the date on which any
Prospectus Supplement was first filed pursuant to Rule 424, the term “Prospectus” shall
include such Basic Prospectuses as so amended or supplemented and as supplemented by the Prospectus
Supplement. Any reference herein to the registration statements, the Registration Statements, the
Basic Prospectuses, any Prepricing Prospectus, any Prospectus Supplement or the Prospectus shall be
deemed to refer to and include (i) the documents incorporated by reference therein pursuant to Form
S-3 (the “Incorporated Documents”) and (ii) the copy of such Registration Statements, the
Basic Prospectuses, any Prepricing Prospectus, any Prospectus Supplement, the Prospectus or the
Incorporated Documents, as applicable, filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system (“XXXXX”). Any reference herein to the terms
“amend,” “amendment” or “supplement” with respect to the Registration
Statements, any Prepricing Prospectus, any Prospectus Supplement or the Prospectus shall be deemed
to refer to and include the filing of any document under the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the “Exchange Act”) after
the respective effective dates of the Registration Statements, or the date of the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
The Company and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the
respective Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase
from the Company the number of Firm Shares set forth opposite the name of such
- 2 -
Underwriter in Schedule A attached hereto, subject to adjustment in accordance with
Section 8 hereof, in each case at a purchase price of $8.46 per Share. The Company is advised by
you that the Underwriters intend (i) to make a public offering of their respective portions of the
Firm Shares as soon after the effective date of the Registration Statements as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set forth in the Prospectus.
You may from time to time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters the option to purchase, and
upon the basis of the representations and warranties and subject to the terms and conditions herein
set forth, the Underwriters shall have the right to purchase, severally and not jointly, from the
Company, ratably in accordance with the number of Firm Shares to be purchased by each of them, all
or a portion of the Additional Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same purchase price per share to be paid by
the Underwriters to the Company for the Firm Shares. This option may be exercised by UBS
Securities LLC (“UBS”) on behalf of the several Underwriters at any time and from time to
time on or before the thirtieth day following the date of the Prospectus, by written notice to the
Company. Such notice shall set forth the aggregate number of Additional Shares as to which the
option is being exercised and the date and time when the Additional Shares are to be delivered
(such date and time being herein referred to as the “additional time of purchase”);
provided, however, that the additional time of purchase shall not be earlier than
the time of purchase (as defined below) nor earlier than the second business day after the date on
which the option shall have been exercised nor later than the tenth business day after the date on
which the option shall have been exercised. The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 8 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm Shares shall be
made to the Company by Federal Funds wire transfer against delivery of the certificates for the
Firm Shares to you through the facilities of The Depository Trust Company (“DTC”) for the
respective accounts of the Underwriters. Such payment and delivery shall be made at 10:00 A.M.,
New York City time, on September 21, 2005 (unless another time shall be agreed to by you and the
Company or unless postponed in accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are to be made is hereinafter sometimes called “the time of
purchase.” Electronic transfer of the Firm Shares shall be made to you at the time of purchase
in such names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made at the additional time
of purchase in the same manner and at the same office as the payment for the Firm Shares.
Electronic transfer of the Additional Shares shall be made to you at the additional time of
purchase in such names and in such denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with respect to the purchase of the
Shares shall be made at the offices of Xxxxx Xxxxxxxxxx LLP at 1301 Avenue of
- 3 -
the Americas, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M., New York City time, on the date of the
closing of the purchase of the Firm Shares or the Additional Shares, as the case may be.
3. Representations and Warranties of the Company. The Company represents and warrants
to and agrees with each of the Underwriters that:
(a) the Registration Statements have been declared effective under the Act; no stop
order of the Commission preventing or suspending the use of the Basic Prospectuses, any
Prepricing Prospectus, any Prospectus Supplement or the Prospectus or the effectiveness of
the Registration Statements has been issued and no proceedings for such purpose have been
instituted or, to the Company’s knowledge, are contemplated by the Commission; the Company
is eligible to use Form S-3; such registration statements at the date of this Agreement
meet, and the offering of the Shares and the Direct Placement Shares complies with, the
requirements of Rule 415 under the Act. The Registration Statements complied when they
became effective, comply and, at the time of purchase, any additional time of purchase and
at any time at which the Prospectus is delivered in connection with the sale of any Shares,
will comply, and the Basic Prospectuses, any Prepricing Prospectus, any Prospectus
Supplement and the Prospectus conformed as of its date, conform and, at the time of
purchase, any additional time of purchase and at any time at which the Prospectus is
delivered in connection with the sale of any Shares, will conform in all material respects
with the requirements of the Act (including said Rule 415); any statutes, regulations,
contracts or other documents that are required to be described in the Registration
Statements or the Prospectus or to be filed as exhibits to the Registration Statements have
been and will be so described or filed; the conditions to the use of Form S-3 have been
satisfied; and the Registration Statements did not at the time of effectiveness, and,
together with the Prospectus, does not and, at the time of purchase, any additional time of
purchase and at any time at which the Prospectus is delivered in connection with the sale of
any Shares, will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading, and the most recent Prepricing Prospectus and the Prospectus did not as of its
date, does not and, at the time of purchase, any additional time of purchase and at any time
at which the Prospectus is delivered in connection with the sale of any Shares, will not
contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that the
Company makes no warranty or representation with respect to any statement contained in the
Registration Statements, the most recent Prepricing Prospectus or the Prospectus in reliance
upon and in conformity with information concerning an Underwriter and furnished in writing
by or on behalf of such Underwriter through you to the Company expressly for use in the
Registration Statements, the most recent Prepricing Prospectus or the Prospectus; the
documents incorporated by reference in the most recent Prepricing Prospectus, the
Registration Statements and the Prospectus, at the time they became effective or were filed
with the Commission, complied in all material respects with the requirements of the Exchange
Act and did not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and the Company has not
distributed and will not
- 4 -
distribute any offering material in connection with the offering or sale of the Shares
or the Direct Placement Shares other than any Prepricing Prospectus and the Prospectus;
(b) as of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the section of the Prospectus Supplement entitled
“Capitalization,” and, as of the time of purchase and any additional time of purchase, as
the case may be, the Company shall have an authorized and outstanding capitalization as set
forth in the section of the Prospectus Supplement entitled “Capitalization,” (subject, in
each case, to the issuance of shares of Common Stock pursuant to this Agreement, issuance of
the Direct Placement Shares, the issuance of shares of Common Stock upon exercise of stock
options and warrants disclosed as outstanding in the Registration Statements or the
Prospectus, the grant of options under existing stock option plans described in the
Registration Statements or the Prospectus or the issuance of shares of Common Stock under
the employee stock purchase plan described in the Registration Statements or the
Prospectus); all of the issued and outstanding shares of capital stock, including the Common
Stock, of the Company have been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state securities laws
and were not issued in violation of any preemptive right, resale right, right of first
refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and conduct its business as described in
the Registration Statements and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as contemplated herein;
(d) the Company is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing of its properties or the
conduct of its business requires such qualification (the only such jurisdiction being the
State of California), except where the failure to be so qualified and in good standing would
not, individually or in the aggregate, have a material adverse effect on the business,
properties, financial condition, results of operation or prospects of the Company and the
Subsidiary (as hereinafter defined) taken as a whole (a “Material Adverse Effect”);
(e) the Company has no subsidiaries (as defined under the Act) other than Geron Bio-Med
Limited, a United Kingdom company (the “Subsidiary”); the Company owns all of the
issued and outstanding capital stock of the Subsidiary; other than the Subsidiary, the
Company does not own, directly or indirectly, any shares of stock or any other equity or
long-term debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity, except for TA Therapeutics Limited,
a Hong Kong company, and stART Licensing, Inc., a Delaware company, and such securities or
interests that as of the date hereof do not, individually or in the aggregate, exceed a
value to be carried on the Company’s balance sheet of $1,000,000, provided that, except as
disclosed in the Registration Statements and Prospectus, the Company does not “control” (as
such term is defined in the Act) any such entities; complete and correct copies of the
certificates of incorporation and the bylaws of
- 5 -
the Company and the Subsidiary and all amendments thereto have been delivered to you,
and, except as set forth in the exhibits to the Registration Statements, no changes therein
will be made on or before the time of purchase or, if later, the additional time of
purchase; the Subsidiary has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate their properties and to conduct its
businesses as described in the Registration Statements and the Prospectus; the Subsidiary is
duly qualified to do business as a foreign corporation and is in good standing in each
jurisdiction where the ownership or leasing of its properties or the conduct of its
businesses requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a Material Adverse Effect;
all of the outstanding shares of capital stock of the Subsidiary have been duly authorized
and validly issued, are fully paid and non-assessable and are owned by the Company subject
to no security interest, other encumbrance or adverse claims; no options, warrants or other
rights to purchase, agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the Subsidiary are
outstanding; and the assets, operations and liabilities of the Subsidiary are not material
to the consolidated financial position or operations of the Company and the Subsidiary,
taken as a whole;
(f) the Shares and the Direct Placement Shares have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein (in the case of
the Shares) or as provided in the Prospectus (in the case of the Direct Placement Shares),
will be duly and validly issued, fully paid and non-assessable and free of statutory and
contractual preemptive rights, resale rights, rights of first refusal and similar rights
which have not been waived or satisfied;
(g) the capital stock of the Company, including the Shares and the Direct Placement
Shares, conforms to the description thereof contained in the Registration Statements and the
Prospectus, and the certificates for the Shares are in due and proper form, and the holders
of the Shares and of the Direct Placement Shares will not be subject to personal liability
by reason of being such holders;
(h) this Agreement has been duly authorized, executed and delivered by the Company;
(i) neither the Company nor the Subsidiary is in breach or violation of or in default
under (nor has any event occurred which with notice, lapse of time or both would result in
any breach or violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under) (i) its
respective charter or bylaws, or (ii) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or the Subsidiary is a party or by which any of
them or any of their properties may be bound or affected other than, in the case of clause
(ii) for those breaches, violations or default that would not, individually or in the
aggregate, have a Material Adverse Effect, and the execution, delivery and
- 6 -
performance of this Agreement, the issuance and sale of the Shares and the Direct
Placement Shares and the consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under) (x) the charter or bylaws of the Company or the
Subsidiary, (y) any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or the Subsidiary is a party or by which any of them or any
of their respective properties may be bound or affected, or (z) any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to the Company
or the Subsidiary, other than, in the case of clause (y) for those breaches, violations or
default that would not, individually or in the aggregate, have a Material Adverse Effect;
(j) no approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority or agency, or
of or with the National Association of Securities Dealers Automated Quotation National
Market System (“NASDAQ”), or approval of the shareholders of the Company, is
required in connection with the issuance and sale of the Shares or the Direct Placement
Shares or the consummation by the Company of the transactions contemplated hereby other than
(i) registration under the Act of the offer and sale of the Shares and the Direct Placement
Shares, which has been effected, (ii) filings with the Commission pursuant to Rule 424(b)
under the Act, (iii) filings with the Commission on Form 8-K with respect to the
Underwriting Agreement, (iv) and any necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the Shares are being offered by the
Underwriters or (v) under the rules and regulations of the National Association of
Securities Dealers, Inc. (“NASD”) (including any listing applications, and consents
to be received thereunder, and notices required by the Nasdaq National Market in the
ordinary course of the offering of the Shares);
(k) except as expressly set forth in the Registration Statements and the Prospectus,
(i) no person has the right, contractual or otherwise, to cause the Company to issue or sell
to it any shares of Common Stock or shares of any other capital stock or other equity
interests of the Company, (ii) no person has any preemptive rights, resale rights, rights of
first refusal or other rights to purchase any shares of Common Stock or shares of any other
capital stock of or other equity interests in the Company and (iii) no person has the right
to act as an underwriter or as a financial advisor to the Company in connection with the
offer and sale of the Shares or the Direct Placement Shares, in the case of each of the
foregoing clauses (i), (ii) and (iii), whether as a result of the filing or effectiveness of
the Registration Statements or the sale of the Shares or the Direct Placement Shares as
contemplated thereby or otherwise; except in connection with the registration statement on
Form S-3 filed by the Company on August 24, 2005 with respect to the issuance of Common
Stock to Transgenomic, Inc., no person has the right, contractual or otherwise, to cause the
Company to register under the Act the offer or sale of any shares of Common Stock or shares
of any other capital stock of or other equity interests in the Company (except as discussed
in the Registration Statements and the Prospectus, which rights have been waived with
respect to the registration of the Shares
- 7 -
and the Direct Placement Shares), or to include any such shares or interests in the
Registration Statements or the offering contemplated thereby, whether as a result of the
filing or effectiveness of either of the Registration Statements or the sale of the Shares
or the Direct Placement Shares as contemplated thereby or otherwise;
(l) each of the Company and the Subsidiary has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any federal, state,
local or foreign law, regulation or rule, and have obtained all necessary licenses,
authorizations, consents and approvals from other persons, in order to conduct its
respective business, except for such licenses, authorizations, consents and approvals the
failure of which to obtain would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor the Subsidiary is in violation of, or in default
under, or has received notice of any proceedings relating to revocation or modification of,
any such license, authorization, consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment applicable to the Company or the
Subsidiary, except where such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate transactions, off-balance sheet
transactions or off-balance sheet arrangements (as defined in Item 303 of Regulation S-K
under the Act), contracts, licenses, agreements, leases or documents of a character required
to be described in the Registration Statements or the Prospectus or to be filed as an
exhibit to the Registration Statements have been so described or filed as required;
(n) except as described in the Registration Statements or the Prospectus, there are no
actions, suits, claims, investigations or proceedings pending or threatened or contemplated
to which the Company or the Subsidiary or any of their respective directors or officers is
or (in the case of threatened or contemplated actions, suits, claims, investigations or
proceedings) would be a party or of which any of their respective properties is or (in the
case of threatened or contemplated actions, suits, claims, investigations or proceedings)
would be subject at law or in equity, before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, except any such
action, suit, claim, investigation or proceeding which would not result in a judgment,
decree or order having, individually or in the aggregate, a Material Adverse Effect or
preventing consummation of the transactions contemplated hereby;
(o) Ernst & Young LLP, whose report on the consolidated financial statements of the
Company and the Subsidiary is included in the Registration Statements and the Prospectus,
are independent public accountants as required by the Act and by Rule 3600T of the Public
Company Accounting Oversight Board;
(p) the financial statements included in the Registration Statements and the
Prospectus, together with the related notes and schedules, present fairly the consolidated
financial position of the Company and the Subsidiary as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
- 8 -
the Subsidiary for the periods specified and have been prepared in compliance with the
requirements of the Act and in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved; the other financial and
statistical data set forth in the Registration Statements and the Prospectus are accurately
presented and prepared on a basis consistent with the financial statements and books and
records of the Company; there are no financial statements (historical or pro forma) that are
required to be included in the Registration Statements and the Prospectus (including,
without limitation, as required by Rules 3-12 or 3-05 or Article 11 of Regulation S-X under
the Act) that are not included as required; the Company and the Subsidiary do not have any
material liabilities or obligations, direct or contingent (including any off-balance sheet
obligations or any “variable interest entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), not disclosed in the Registration Statements and the
Prospectus; and all disclosures contained in the Registration Statements or the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”) and Item 10 of Regulation S-K under the Act, to the extent applicable;
(q) except as expressly disclosed in the Registration Statements or Prospectus,
subsequent to the respective dates as of which information is given in the Prospectus, there
has not been (i) any material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management, financial condition or
results of operations of the Company and the Subsidiary taken as a whole, (ii) any
transaction which is material to the Company and the Subsidiary taken as a whole, (iii) any
obligation, direct or contingent (including any off-balance sheet obligations), incurred by
the Company or the Subsidiary, which is material to the Company and the Subsidiary taken as
a whole, (iv) any change in the capital stock or outstanding indebtedness of the Company or
the Subsidiary (other than those changes in outstanding capitalization as provided for in
Section 3(b) above) or (v) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company;
(r) the Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in substantially the form set forth as Exhibit A
hereto, of each of its directors and executive officers;
(s) neither the Company nor the Subsidiary is and, after giving effect to the offering
and sale of the Shares and the Direct Placement Shares, neither of them will be, an
“investment company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment Company
Act”);
(t) the Company and the Subsidiary have good and marketable title to all property (real
and personal) described in the Registration Statements or in the Prospectus as being owned
by each of them, free and clear of all liens, claims, security interests or other
encumbrances, other than those liens, claims, security interests or other
- 9 -
encumbrances that would not, individually or in the aggregate, have a Material Adverse
Effect; all the property described in the Registration Statements and the Prospectus as
being held under lease by the Company or the Subsidiary is held thereby under valid,
subsisting and enforceable leases other than as would not, individually or in the aggregate,
have a Material Adverse Effect;
(u) the Company and the Subsidiary own, or have obtained valid and enforceable licenses
for or other rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, service names, copyrights, trade secrets and other
proprietary information described in the Registration Statements or the Prospectus as being
owned or licensed by them (collectively, “Intellectual Property”);
(v) except as disclosed in the Registration Statements or Prospectus or as would not,
individually or in the aggregate, have a Material Adverse Effect,
(i) there are no third parties who have established, or, to the Company’s
knowledge after due inquiry, will be able to establish, conflicting rights to any
Intellectual Property rights;
(ii) to the Company’s knowledge, there is no infringement by third parties of
any Intellectual Property owned by or exclusively licensed to the Company;
(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 any
Intellectual Property, and the Company is unaware of any facts which would form
valid grounds for any such action, suit, proceeding or claim;
(iv) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity, scope or
enforceability of any Intellectual Property, and the Company is unaware of any facts
which would form valid grounds to uphold any such challenges to the Company’s
Intellectual Property;
(v) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company or the Subsidiary infringes or
otherwise violates any patent, trademark, tradename, service name, copyright, trade
secret or other proprietary rights of others, and the Company is unaware of any
Intellectual Property which would be necessary for the Company to conduct the
business now conducted by the Company or proposed to be conducted as described in
the Registration Statement and the Prospectus and for which the Company does not
have sufficient rights to conduct such business;
(vi) to the Company’s knowledge, none of the issued or pending claims of any of
the Intellectual Property is the subject of an interference proceeding in the U.S.
Patent and Trademark Office or a similar proceeding in the patent agency of another
country, or has been suspended pending declaration of such an
-10-
interference; and
(vii) to the Company’s knowledge, the Company is in compliance with its duty of
disclosure under 37 CFR 1.56.
(w) neither the Company nor the Subsidiary is engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the
Company’s knowledge, threatened against the Company or the Subsidiary before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the Company’s knowledge, threatened against the Company
or the Subsidiary and (C) no union representation dispute currently existing concerning the
employees of the Company or the Subsidiary, and (ii) to the Company’s knowledge, (A) no
union organizing activities are currently taking place concerning the employees of the
Company or the Subsidiary and (B) there has been no violation of any federal, state, local
or foreign law relating to discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee Retirement Income Security Act
of 1974 (“ERISA”) or the rules and regulations promulgated thereunder concerning the
employees of the Company or the Subsidiary;
(x) the Company and the Subsidiary and their properties, assets and operations are in
compliance with, and hold all permits, authorizations and approvals required under,
Environmental Laws (as defined below), except to the extent that failure to so comply or to
hold such permits, authorizations or approvals would not, individually or in the aggregate,
have a Material Adverse Effect; there are no past or present, and the Company does not
anticipate any future, events, conditions, circumstances, activities, practices, actions,
omissions or plans that could reasonably be expected to give rise to any material costs or
liabilities to the Company or the Subsidiary under, or to interfere with, or prevent,
compliance by the Company or the Subsidiary in any material respect with, Environmental
Laws; except as would not, individually or in the aggregate, have a Material Adverse Effect,
neither the Company nor the Subsidiary (i) is the subject of any investigation, (ii) has
received any notice or claim, (iii) is a party to or affected by any pending or threatened
action, suit or proceeding, (iv) is bound by any judgment, decree or order or (v) has
entered into any agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or cleanup at any
location of any Hazardous Materials (as defined below) (as used herein, “Environmental
Law” means any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, permit, license, authorization or other
binding requirement, or common law, relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal, transportation, other
handling or release or threatened release of Hazardous Materials, and “Hazardous
Materials” means any material (including, without limitation, pollutants, contaminants,
hazardous or toxic substances or wastes) that is regulated by or may give rise to liability
under any Environmental Law);
-11-
(y) all tax returns required to be filed by the Company and the Subsidiary have been
filed, and all taxes and other assessments of a similar nature (whether imposed directly or
through withholding) including any interest, additions to tax or penalties applicable
thereto due or claimed to be due from such entities have been paid, other than those being
contested in good faith and for which adequate reserves have been provided;
(z) the Company maintains insurance covering its properties, operations, personnel and
businesses and those of the Subsidiary as the Company deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in accordance with customary
industry practice to protect the Company and the Subsidiary and their businesses; all such
insurance is fully in force on the date hereof and will be fully in force at the time of
purchase and any additional time of purchase, except as would not, individually or in the
aggregate, have a Material Adverse Effect;
(aa) neither the Company nor the Subsidiary has sustained since the date of the last
audited financial statements included in the Registration Statements and the Prospectus any
material loss or interference with its respective business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree;
(bb) except as disclosed in the Registration Statements or the Prospectus, (i) the
Company has not sent or received any communication that has not been rescinded as of the
date hereof regarding termination, in whole or in part, of, or intent not to renew, any of
the contracts or agreements referred to or described in, or filed as an exhibit to, the
Registration Statements, and (ii) no such termination or non-renewal has been threatened by
the Company or, to the Company’s knowledge, any other party to any such contract or
agreement, which threat of termination or non-renewal has not been rescinded as of the date
hereof, in whole or in part, except for, in the case of (i) and (ii), any such agreements
the non-renewal or termination of which would not, individually or in the aggregate, have a
Material Adverse Effect;
(cc) the Company and the Subsidiary maintains 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 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;
(dd) the Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the Exchange Act); such disclosure controls and procedures are designed to
ensure that material information relating to the Company,
-12-
including its consolidated subsidiary, is made known to the Company’s Chief Executive
Officer and its Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they were
established; the Company’s auditors and the Audit Committee of the Board of Directors of the
Company have been advised of: (i) any significant deficiencies in the design or operation of
internal controls which could adversely affect the Company’s ability to record, process,
summarize, and report financial data; and (ii) any fraud, whether or not material, that
involves management or other employees who have a role in the Company’s internal controls;
any material weaknesses in internal controls have been identified for the Company’s
auditors; and since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or in other factors
that could significantly affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses; and the Company and, to the
Company’s knowledge, its officers and directors (in their capacities as such) are in
compliance in all material respects with all applicable effective provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and with the listing standards of NASDAQ;
(ee) the Company has provided you true, correct and complete copies of all
documentation pertaining to any extension of credit in the form of a personal loan made,
directly or indirectly, by the Company or any Subsidiary to any director or executive
officer of the Company, or to any family member or affiliate of any director or executive
officer of the Company; and on or after July 30, 2002, the Company has not, directly or
indirectly, including through the Subsidiary: (i) extended credit, arranged to extend
credit, or renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family member or affiliate of
any director or executive officer of the Company; or (ii) made any material modification,
including any renewal thereof, to any term of any personal loan to any director or executive
officer of the Company, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(ff) the clinical, pre-clinical and other studies and tests conducted by or on behalf
of or sponsored by the Company or in which the Company or its product candidates have
participated that are described in the Registration Statements and the Prospectus or the
results of which are referred to in the Registration Statements and the Prospectus were and,
if still pending, are being conducted in accordance with protocols filed with the
appropriate regulatory authorities for each such test or study, as the case may be, and in
accordance with appropriate medical and scientific research procedures; the descriptions in
the Registration Statements and the Prospectus of the results of such studies and tests are
accurate and complete in all material respects, and the Company has no knowledge of any
other studies or tests the results of which are materially inconsistent with the results
described or referred to in the Registration Statements and the Prospectus; the Company has
operated and currently is in compliance in all material respects with all applicable rules,
regulations and policies of the U.S. Food and Drug Administration pertaining to its
clinical, pre-clinical and other studies, and all applicable rules, regulations and policies
of comparable drug regulatory agencies outside of the United States pertaining to its
clinical, pre-clinical and other studies (collectively, the
-13-
“Regulatory Authorities”); the Company has not received any notices or other
correspondence from the Regulatory Authorities or any other governmental agency requiring
the termination or suspension of any clinical or pre-clinical studies or tests that are
described in the Registration Statements and the Prospectus or the results of which are
referred to in the Registration Statements and the Prospectus;
(gg) all statistical or market-related data included in the Registration Statements or
the Prospectus are based on or derived from sources that the Company believes to be reliable
and accurate, and the Company has obtained the written consent to the use of such data from
such sources to the extent required;
(hh) except pursuant to this Agreement, neither the Company nor the Subsidiary has
incurred any liability for any finder’s or broker’s fee or agent’s commission in connection
with the execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby or by the Prospectus;
(ii) neither the Company nor the Subsidiary nor any of their respective directors,
officers, affiliates or controlling persons has taken, directly or indirectly, any action
designed, or which has constituted or might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares or the Direct
Placement Shares;
(jj) to the Company’s knowledge, there are no affiliations or associations between any
member of the NASD and any of the Company’s officers, directors or 5% or greater
securityholders, except as set forth in the Registration Statements and the Prospectus; and
(kk) as of the date of this Agreement, the Investor is not an “affiliate” of the
Company (as such term is defined in Rule 12b-2 under the Exchange Act).
In addition, any certificate signed by any officer of the Company addressed to the
Underwriters or counsel for the Underwriters in connection with the offering of the Shares shall be
deemed to be a representation and warranty by the Company or Subsidiary, as the case may be, as to
matters covered thereby, to each Underwriter.
4. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky laws of such
states or other jurisdictions as you may designate and to maintain such qualifications in
effect so long as you may request for the distribution of the Shares; provided,
however, that the Company shall not be required to qualify as a foreign corporation
or to consent to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares); and to promptly
advise you of the receipt by the Company of any notification with respect to the suspension
of the qualification of the Shares for offer or sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
-14-
(b) to make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or supplements thereto after the
respective effective dates of the Registration Statements) as the Underwriters may
reasonably request for the purposes contemplated by the Act; in case any Underwriter is
required to deliver a prospectus after the nine-month period referred to in Section 10(a)(3)
of the Act in connection with the sale of the Shares, the Company will prepare, at its
expense, promptly upon written request such amendment or amendments to the Registration
Statements and the Prospectus as may be necessary to permit compliance with the requirements
of Section 10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it is necessary for any
post-effective amendment to either Registration Statement to be declared effective before
the Shares may be sold, the Company will endeavor to cause such Registration Statement or
such post-effective amendment to become effective as soon as possible, and the Company will
advise you promptly and, if requested by you, will confirm such advice in writing, (i) when
such post-effective amendment to such Registration Statement has become effective, and (ii)
if Rule 430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a timely manner
under such Rule);
(d) to advise you promptly, confirming such advice in writing, of any request by the
Commission for amendments or supplements to either Registration Statement or the Prospectus
or for additional information with respect thereto, or of notice of institution of
proceedings for, or the entry of a stop order, suspending the effectiveness of either
Registration Statement and, if the Commission should enter a stop order suspending the
effectiveness of either Registration Statement, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise you promptly of any proposal
to amend or supplement either Registration Statement or the Prospectus, including by filing
any documents that would be incorporated therein by reference, and to provide you and
Underwriters’ counsel copies of any such documents for review and comment a reasonable
amount of time prior to any proposed filing and to file no such amendment or supplement to
which you shall object in writing;
(e) to file promptly all reports and any definitive proxy or information statement
required to be filed by the Company with the Commission in order to comply with the Exchange
Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Shares; and to provide you with a
copy of such reports and statements and other documents to be filed by the Company pursuant
to Section 13, 14 or 15(d) of the Exchange Act during such period a reasonable amount of
time prior to any proposed filing, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file one or more registration statements pursuant
to Rule 462(b) under the Act and pay the applicable fees in accordance with the Act;
-15-
(g) to advise the Underwriters promptly of the happening of any event within the time
during which a prospectus relating to the Shares is required to be delivered under the Act
which would require the making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and, during such time, subject to Section 4(d)
hereof, to prepare and furnish, at the Company’s expense, to the Underwriters promptly such
amendments or supplements to such Prospectus as may be necessary to reflect any such change;
(h) to make generally available to its security holders, and to deliver to you, an
earnings statement of the Company (which will satisfy the provisions of Section 11(a) of the
Act) covering a period of twelve months beginning after the effective date of the most
recent Registration Statement (as defined in Rule 158(c) under the Act) as soon as is
reasonably practicable after the termination of such twelve-month period but in any case not
later than November 6, 2006;
(i) to furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a consolidated balance sheet and statements of income,
shareholders’ equity and cash flow of the Company and the Subsidiary for such fiscal year,
accompanied by a copy of the certificate or report thereon of nationally recognized
independent certified public accountants duly registered with the Public Company Oversight
Accounting Board);
(j) to furnish to you six copies of the Registration Statements, as initially filed
with the Commission, and of all amendments thereto (including all exhibits thereto) and
sufficient copies of the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(k) to furnish to you promptly and, upon written request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i) copies of any
reports, proxy statements, or other communications which the Company shall send to its
stockholders or shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms 10-K, 10-Q or 8-K,
or such other similar forms as may be designated by the Commission, (iii) copies of
documents or reports filed with any national securities exchange on which any class of
securities of the Company is listed and (iv) such other information as you may reasonably
request regarding the Company or the Subsidiary;
(l) to furnish to you upon request as early as practicable prior to the time of
purchase and any additional time of purchase, as the case may be, but not later than two
business days prior thereto, a copy of the any unaudited financial statements of the Company
and the Subsidiary which have been read by the Company’s independent certified public
accountants, as stated in their letter to be furnished pursuant to Section 6(c) hereof;
(m) to apply the net proceeds from the sale of the Shares and the Direct
-16-
Placement Shares in the manner set forth under the caption “Use of proceeds” in the
Prospectus;
(n) to pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statements, the Basic Prospectuses, each Prepricing
Prospectus, each Prospectus Supplement, the Prospectus and any amendments or supplements
thereto, and the printing and furnishing of copies of each thereof to the Underwriters and
to dealers (including costs of mailing and shipment), (ii) the registration, issue, sale and
delivery of the Shares and the Direct Placement Shares, including any stock or transfer
taxes and stamp or similar duties payable upon the sale, issuance or delivery of the Shares
to the Underwriters or of the Direct Placement Shares to the Investor, (iii) the producing,
word processing and/or printing of this Agreement, any Agreement Among Underwriters, any
dealer agreements, any Powers of Attorney and any closing documents (including compilations
thereof) and the reproduction and/or printing and furnishing of copies of each thereof to
the Underwriters and (except closing documents) to dealers (including costs of mailing and
shipment), (iv) the qualification of the Shares and the Direct Placement Shares for offering
and sale under state or foreign laws and the determination of their eligibility for
investment under state or foreign law as aforesaid (including, with respect to the Shares,
the reasonable legal fees and filing fees and other disbursements of counsel for the
Underwriters) and the printing and furnishing relating to the Shares to the Underwriters and
to dealers of copies of any blue sky surveys or legal investment surveys relating to the
Shares, (v) any listing of the Shares and the Direct Placement Shares on any securities
exchange or qualification of the Shares and the Direct Placement Shares for quotation on the
NASDAQ and any registration thereof under the Exchange Act, (vi) any filing for review of
the public offering of the Shares by the NASD, including the reasonable legal fees and
filing fees and other disbursements of counsel to the Underwriters, (vii) the fees and
disbursements of any transfer agent or registrar for the Shares and the Direct Placement
Shares, (viii) the costs and expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale of the Shares to
prospective investors and the Underwriters’ sales forces, including, without limitation,
expenses associated with the production of road show slides and graphics, fees and expenses
of any consultants engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by the officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show; and (ix) the performance of
the Company’s other obligations hereunder;
(o) not to sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant
any option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, any Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to Common Stock (collectively,
“Company Securities”), or file or cause to be declared effective a registration statement
under the Act relating to the offer and sale of any shares of Company Securities for a
period of 90 days after the date hereof (the “Lock-Up Period”), without the prior
written consent of UBS, except for (i) the registration of the Shares and the Direct
Placement Shares and the sales of the Shares to the Underwriters pursuant to
-17-
this Agreement and the sale of the Direct Placement Shares to the Investor, (ii)
issuances of Common Stock upon the exercise of options or warrants disclosed as outstanding
in the Registration Statements or the Prospectus, (iii) the issuance of employee stock
options not exercisable during the Lock-Up Period pursuant to stock option plans described
in the Registration Statements or the Prospectus, (iv) the sale of stock to employees
pursuant to the Company’s Employee Stock Purchase Plan, (v) issuance of shares of Common
Stock under the Company’s share purchase rights plan and (vi) the effectiveness of the
Company’s pending registration statement on Form S-3 that was filed before the date hereof;
(p) to use its best efforts to cause the Common Stock to be listed for quotation on the
NASDAQ and to maintain such listing; and
(q) to maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
5. Reimbursement of Underwriters’ Expenses. If the Shares are not delivered for any
reason other than the termination of this Agreement pursuant to the fifth paragraph of Section 8
hereof or the default by one or more of the Underwriters in its or their respective obligations
hereunder, the Company shall, in addition to paying the amounts described in Section 4(n) hereof,
reimburse the Underwriters for their reasonable out-of-pocket expenses, including the reasonable
fees and disbursements of their counsel.
6. Conditions of Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and warranties on the
part of the Company on the date hereof, at the time of purchase and, if applicable, at the
additional time of purchase, the performance by the Company of its obligations hereunder and to the
following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxxx & Xxxxxxx LLP, counsel for the Company,
addressed to the Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with executed copies for each of the other Underwriters, and
in form and substance satisfactory to UBS, in substantially the form set forth in
Exhibit B-1 hereto; the Company shall furnish to you at the time of purchase and, if
applicable, at the additional time of purchase, a letter of Xxxxxx & Xxxxxxx LLP, counsel
for the Company, addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with executed copies for each of the other
Underwriters, and in form and substance satisfactory to UBS, in substantially the form set
forth in Exhibit B-2 hereto.
(b) The Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Xxxxx X. Xxxx, Ph.D., X.X., special counsel for
the Company with respect to patents and proprietary rights, addressed to the Underwriters,
and dated the time of purchase or the additional time of purchase, as the case may be, with
executed copies for each of the other Underwriters, and in form and substance satisfactory
to UBS, in substantially the form set forth in Exhibit C hereto.
-18-
(c) You shall have received from Ernst & Young LLP comfort letters dated, respectively,
the date of this Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (with executed copies for each of the
Underwriters) in the forms heretofore approved by UBS.
(d) You shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the
Underwriters, dated the time of purchase or the additional time of purchase, as the case may
be, in form and substance reasonably satisfactory to UBS.
(e) No Prospectus or amendment or supplement to either Registration Statement or to the
Prospectus, including documents deemed to be incorporated by reference therein, shall have
been filed to which you object in writing.
(f) The Prospectus Supplement shall have been filed with the Commission pursuant to
Rule 424(b) under the Act at or before 5:30 P.M., New York City time, on the second full
business day after the date of this Agreement and any registration statement pursuant to
Rule 462(b) under the Act required in connection with the offering and sale of the Shares
shall have been filed and become effective no later than 10:00 P.M., New York City time, on
the date of this Agreement.
(g) Prior to the time of purchase, and, if applicable, the additional time of purchase,
(i) no stop order with respect to the effectiveness of either Registration Statement shall
have been issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the
Act; (ii) the Registration Statements and all respective amendments thereto shall 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 respective statements therein not misleading; and
(iii) the Prospectus and all amendments or supplements thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which
they are made, not misleading.
(h) Between the time of execution of this Agreement and the time of purchase or the
additional time of purchase, as the case may be, (A) no material adverse change or any
development involving a prospective material adverse change in the business, properties,
management, financial condition or results of operations of the Company and the Subsidiary
taken as a whole shall occur or become known and (B) no transaction which is material and
adverse to the Company has been entered into by the Company or the Subsidiary.
(i) The Company will, at the time of purchase and, if applicable, at the additional
time of purchase, deliver to you a certificate of its Chief Executive Officer and its Chief
Financial Officer in the form attached as Exhibit D hereto.
(j) You shall have received signed Lock-up Agreements referred to in Section 3(r)
hereof.
(k) The Company shall have furnished to you such other documents
-19-
and certificates as to the accuracy and completeness of any statement in the
Registration Statements and the Prospectus as of the time of purchase and, if applicable,
the additional time of purchase, as you may reasonably request.
(l) The Shares and the Direct Shares shall have been approved for quotation on the
NASDAQ, subject only to notice of issuance at or prior to the time of purchase or the
additional time of purchase, as the case may be.
(m) The issuance and sale of the Direct Placement Shares shall have been completed on
the terms and in the manner contemplated by the Prospectus.
7. Effective Date of Agreement; Termination. This Agreement shall become effective
when the parties hereto have executed and delivered this Agreement.
(a) The obligations of the several Underwriters hereunder shall be subject to termination in
the absolute discretion of UBS or any group of Underwriters (which may include UBS) which has
agreed to purchase in the aggregate at least 50% of the Firm Shares, if (x) since the time of
execution of this Agreement or the earlier respective dates as of which information is given in the
Registration Statements and the Prospectus, there has been any material adverse change or any
development involving a prospective material adverse change in the business, properties,
management, financial condition or results of operations of the Company and the Subsidiary taken as
a whole, which would, in UBS’ judgment or in the judgment of such group of Underwriters, make it
impracticable or inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statements and the Prospectus, or (y)
since of execution of this Agreement, there shall have occurred: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ; (ii) a suspension or material limitation in trading in the Company’s
securities on NASDAQ; (iii) a general moratorium on commercial banking activities declared by
either federal or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an outbreak or escalation of
hostilities or acts of terrorism involving the United States or a declaration by the United States
of a national emergency or war; or (v) any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS’ judgment or in the judgment of such group of Underwriters
makes it impracticable or inadvisable to proceed with the public offering or the delivery of the
Shares on the terms and in the manner contemplated in the Registration Statements and the
Prospectus, or (z) since the time of execution of this Agreement, there shall have occurred any
downgrading, or any notice or announcement shall have been given or made of (i) any intended or
potential downgrading or (ii) any watch, review or possible change that does not indicate an
affirmation or improvement in the rating accorded any securities of or guaranteed by the Company or
any Subsidiary by any “nationally recognized statistical rating organization,” as that term is
defined in Rule 436(g)(2) under the Act.
If UBS or any group of Underwriters elects to terminate this Agreement as provided
in this Section 7, the Company and each other Underwriter shall be notified promptly in writing.
- 20 -
If the sale to the Underwriters of the Shares, as contemplated by this Agreement, is not
carried out by the Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this Agreement (except
to the extent provided in Sections 4(n), 5 and 9 hereof), and the Underwriters shall be under no
obligation or liability to the Company under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters’ Commitments. Subject to Sections 6 and 7 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm Shares to be purchased
by it hereunder (otherwise than for a failure of a condition set forth in Section 6 hereof or a
reason sufficient to justify the termination of this Agreement under the provisions of Section 7
hereof) and if the number of Firm Shares which all Underwriters so defaulting shall have agreed but
failed to take up and pay for does not exceed 10% of the total number of Firm Shares, the
non-defaulting Underwriters shall take up and pay for (in addition to the aggregate number of Firm
Shares they are obligated to purchase pursuant to Section 1 hereof) the number of Firm Shares
agreed to be purchased by all such defaulting Underwriters, as hereinafter provided. Such Shares
shall be taken up and paid for by such non-defaulting Underwriters in such amount or amounts as you
may designate with the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set forth opposite the names of such
non-defaulting Underwriters in Schedule A.
(a) Without relieving any defaulting Underwriter from its obligations hereunder, the Company
agrees with the non-defaulting Underwriters that it will not sell any Firm Shares hereunder unless
all of the Firm Shares are purchased by the Underwriters (or by substituted Underwriters selected
by you with the approval of the Company or selected by the Company with your approval).
(b) If a new Underwriter or Underwriters are substituted by the Underwriters or by the Company
for a defaulting Underwriter or Underwriters in accordance with the foregoing provision, the
Company or you shall have the right to postpone the time of purchase for a period not exceeding
five business days in order that any necessary changes in the Registration Statements and the
Prospectus and other documents may be effected.
(c) The term “Underwriter” as used in this Agreement shall refer to and include any
Underwriter substituted under this Section 8 with like effect as if such substituted Underwriter
had originally been named in Schedule A hereto.
(d) If the aggregate number of Firm Shares which the defaulting Underwriter or Underwriters
agreed to purchase exceeds 10% of the total number of Firm Shares which all Underwriters agreed to
purchase hereunder, and if neither the non-defaulting Underwriters nor the Company shall make
arrangements within the five business day period stated above for the purchase of all the Firm
Shares which the defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall terminate without further act or deed and without any liability on the part of the
Company to any Underwriter and without any liability on the part of any non-defaulting Underwriter
to the Company. Nothing in this
- 21 -
paragraph, and no action taken hereunder, shall relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
9. Indemnity and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which, jointly or
severally, any such Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in either Registration Statement (or in either Registration
Statement as amended by any post-effective amendment thereof by the Company) or in a
Prospectus (the term Prospectus for the purpose of this Section 9 being deemed to include
any Prepricing Prospectus or the Prospectus, as any of the foregoing may be amended or
supplemented by the Company), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such Registration
Statement or such Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such Underwriter furnished in
writing by or on behalf of such Underwriter through you to the Company expressly for use in,
such Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus or necessary to make
such information not misleading, (ii) any untrue statement or alleged untrue statement made
by the Company in Section 3 hereof or the failure by the Company to perform when and as
required any agreement or covenant contained herein or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on behalf of the Company
including, without limitation, slides, videos, films or tape recordings used in connection
with the marketing of the Shares.
If any action, suit or proceeding (each, a “Proceeding”) is brought against an
Underwriter or any such person in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such Underwriter or such person shall promptly
notify the Company in writing of the institution of such Proceeding and the Company shall
assume the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify the Company shall not
relieve the Company from any liability which the Company may have to any Underwriter or any
such person or otherwise, except to the extent the Company shall not have otherwise learned
of such Proceeding and such failure results in the forfeiture by the Company of substantial
rights or defenses. Such Underwriter or such person shall have
- 22 -
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to have charge of
the defense of such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but the Company may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the expense of the
Company), in any of which events such fees and expenses shall be borne by the Company and
paid as incurred (it being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The Company shall not be liable
for any settlement of any Proceeding effected without its written consent but, if settled
with the written consent of the Company, the Company agrees to indemnify and hold harmless
any Underwriter and any such person from and against any loss or liability by reason of such
settlement. 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 the second sentence of this paragraph, then 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 60
business days after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified party shall
have given the indemnifying party at least 30 days’ prior notice of its intention to settle.
No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a failure to
act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold harmless the
Company, its directors and officers, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning
- 23 -
such Underwriter furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use in, either Registration Statement (or in either
Registration Statement as amended by any post-effective amendment thereof by the Company) or
in a Prospectus, or arises out of or is based upon any omission or alleged omission to state
a material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company or any such person in respect of which
indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the
Company or such person shall promptly notify such Underwriter in writing of the institution
of such Proceeding and such Underwriter shall assume the defense of such Proceeding,
including the employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify such Underwriter shall not relieve such Underwriter from any liability which such
Underwriter may have to the Company or any such person or otherwise, except to the extent
the Underwriter shall not have otherwise learned of such Proceeding and such failure results
in the forfeiture by the Underwriter of substantial rights or defenses. The Company or such
person shall have the right to employ its own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by such Underwriter in
connection with the defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to defend such
Proceeding or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from or additional to or in
conflict with those available to such Underwriter (in which case such Underwriter shall not
have the right to direct the defense of such Proceeding on behalf of the indemnified party
or parties, but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such Underwriter), in
any of which events such fees and expenses shall be borne by such Underwriter and paid as
incurred (it being understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in any one
Proceeding or series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of such
Underwriter but, if settled with the written consent of such Underwriter, such Underwriter
agrees to indemnify and hold harmless the Company and any such person from and against any
loss or liability by reason of such settlement. 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 the second sentence of
this paragraph, then 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 60 business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the
- 24 -
indemnifying party at least 30 days’ prior notice of its intention to settle. No
indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such
Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or insufficient to hold an
indemnified party harmless in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses, damages,
expenses, liabilities or claims (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 Shares 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 of the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to
be in the same respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received by the
Company, and the total underwriting discounts and commissions received by the Underwriters,
bear to the aggregate public offering price of the Shares. The relative fault of the
Company on the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information supplied by the
Company or by the Underwriters and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 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 that does not take account of the equitable considerations referred to in
subsection (c) above. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by such Underwriter and distributed to the public were
offered to the public exceeds the amount of any damage which such Underwriter has otherwise
been required to pay by reason of such untrue statement or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
- 25 -
contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations to contribute pursuant to this Section 9 are several in
proportion to their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company contained in this Agreement shall
remain in full force and effect regardless of any investigation made by or on behalf of any
Underwriter, its partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on behalf of the Company,
its directors or officers or any person who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and shall survive any termination
of this Agreement or the issuance and delivery of the Shares. The Company and each
Underwriter agree promptly to notify each other of the commencement of any Proceeding
against it and, in the case of the Company, against any of the Company’s officers or
directors in connection with the issuance and sale of the Shares, or in connection with the
Registration Statements or the Prospectus.
10. Information Furnished by the Underwriters. The statements set forth in the first
paragraph under the caption “Plan of Distribution — Underwriting — Commissions and Discounts”
and first, second, third, fourth, fifth and seventh paragraphs under the caption “Plan of
Distribution — Underwriting —Price Stabilization, Short Position, Passive Market Making” in the
Prospectus, only insofar as such statements relate to the amount of selling concession and
reallowance and stabilization activities that may be undertaken by the Underwriters, constitute the
only information furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements, requests, notices
and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient
in all respects if delivered or sent to UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, Attention: Syndicate Department and, if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at 000 Xxxxxxxxxxxx
Xxxxx, Xxxxx Xxxx, XX 00000, Attention: Chief Financial Officer.
12. Governing Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement
(“Claim”), directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect thereto. The Company
hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising
out of or in any way relating to this Agreement is brought by
- 26 -
any third party against UBS or any indemnified party. Each of UBS and the Company (on its
behalf and, to the extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement.
The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in
any such court shall be conclusive and binding upon the Company and may be enforced in any other
courts to the jurisdiction of which the Company is or may be subject, by suit upon such judgment.
14. No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters
are acting solely as an underwriter in connection with the purchase and sale of the Company’s
securities. The Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an arm’s length basis,
and in no event do the parties intend that the Underwriters act or be responsible as a fiduciary to
the Company, its management, stockholders, creditors or any other person in connection with any
activity that the Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date hereof. The Underwriters hereby
expressly disclaim any fiduciary or similar obligations to the Company, either in connection with
the transactions contemplated by this Agreement or any matters leading up to such transactions, and
the Company hereby confirms its understanding and agreement to that effect; notwithstanding the
foregoing, each Underwriter acknowledges solely for the purposes of compliance with Regulation FD
promulgated under the Act (“Regulation FD”) that it is and has been acting as a person who
owes an obligation of confidentiality to the Company. The Company and the Underwriters agree that
they are each responsible for making their own independent judgments with respect to any such
transactions, and that any opinions or views expressed by the Underwriters to the Company regarding
such transactions, including, but not limited to, any opinions or views with respect to the price
or market for the Company’s securities, do not constitute advice or recommendations to the Company.
The Company hereby waives and releases, to the fullest extent permitted by law, any claims that
the Company may have against the Underwriters with respect to any breach or alleged breach of any
fiduciary or similar duty to the Company in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions.
15. Parties at Interest. The Agreement herein set forth has been and is made solely
for the benefit of the Underwriters and the Company and to the extent provided in Section 9 hereof
the controlling persons, partners, directors and officers referred to in such Section, and their
respective successors, assigns, heirs, personal representatives and executors and administrators.
No other person, partnership, association or corporation (including a purchaser, as such purchaser,
from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.
16. Counterparts. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement among the parties.
17. Successors and Assigns. This Agreement shall be binding upon the Underwriters and
the Company and their successors and assigns and any successor or assign of any substantial portion
of the Company’s and any of the Underwriters’ respective businesses
- 27 -
and/or assets.
18. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS AG, is not a bank
and is separate from any affiliated bank, including any U.S. branch or agency of UBS AG. Because
UBS is a separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not deposits, are not insured by
the Federal Deposit Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
[The Remainder of This Page Intentionally Left Blank; Signature Page Follows]
- 28 -
If the foregoing correctly sets forth the understanding between the Company and the several
Underwriters, please so indicate in the space provided below for that purpose, whereupon this
agreement and your acceptance shall constitute a binding agreement between the Company and the
Underwriters, severally.
| Very truly yours, | ||||
| Geron Corporation | ||||
| By: | /s/ XXXXX X. XXXXXXXXX | |||
| Name: Xxxxx X. Xxxxxxxxx | ||||
| Title: Executive Vice President and Chief Financial Officer | ||||
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS Securities LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
By: UBS Securities LLC
| By: | /s/ XXXXX X. XXXXXXXX | |||||
| Name: | Xxxxx X. Xxxxxxxx | |||||
| Title: | Director | |||||
| By: | /s/ SAGE X. XXXXX | |||||
| Name: | Sage X. Xxxxx | |||||
| Title: | Managing Director | |||||
SCHEDULE A
| Number of | ||||
| Underwriter | Firm Shares | |||
UBS Securities LLC |
3,000,000 | |||
XX Xxxxx & Co., LLC |
900,000 | |||
Xxxxxxx & Company, LLC |
840,000 | |||
Lazard Capital Markets LLC |
780,000 | |||
Xxxxxx & Xxxxxxx, LLC |
240,000 | |||
WBB Securities, LLC |
240,000 | |||
Total |
6,000,000 | |||
EXHIBIT A
Geron Corporation
Common Stock
($0.001 Par Value)
September __, 2005
UBS Securities LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
XX Xxxxx & Co., LLC
Xxxxxxx & Company, LLC
Lazard Capital Markets LLC
Xxxxxx & Xxxxxxx, LLC
WBB Securities, LLC
c/o
|
UBS Securities LLC | |
| 000 Xxxx Xxxxxx | ||
| Xxx Xxxx, Xxx Xxxx 00000 |
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection with the proposed
Underwriting Agreement (the “Underwriting Agreement”) to be entered into by Geron Corporation (the
“Company”) and you, as the several Underwriters named therein, with respect to the public offering
(the “Offering”) of common stock, par value $0.001 per share, of the Company (the “Common Stock”).
In order to induce you to enter into the Underwriting Agreement, the undersigned agrees that
for a period from the date hereof until the expiration of 90 days after the date of the final
prospectus supplement relating to the Offering the undersigned will not, without the prior written
consent of UBS Securities LLC (“UBS”), (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of,
directly or indirectly, or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder with respect to, any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
A-1
Stock, or warrants or other rights to purchase Common Stock, whether any such transaction is
to be settled by delivery of Common Stock or such other securities, in cash or otherwise, or (iii)
publicly announce an intention to effect any transaction specified in clause (i) or (ii). The
foregoing sentence shall not apply to (a) the registration of or sale to the Underwriters of any
Common Stock pursuant to the Offering and the Underwriting Agreement, (b) bona fide gifts, provided
the recipient thereof agrees in writing with the Underwriters to be bound by the terms of this
Lock-Up Letter Agreement and confirms that he, she or it has been in compliance with the terms of
this Lock-Up Letter Agreement or (c) dispositions to any trust for the direct or indirect benefit
of the undersigned and/or the immediate family of the undersigned, provided that such trust agrees
in writing with the Underwriters to be bound by the terms of this Lock-Up Letter Agreement and
confirms that it has been in compliance with the terms of this Lock-Up Letter Agreement.
In addition, the undersigned hereby waives any rights the undersigned may have to require
registration of Common Stock in connection with the filing of a registration statement relating to
the Offering. The undersigned further agrees that, for a period from the date hereof until the
expiration of 90 days after the date of the final prospectus supplement relating to the Offering,
the undersigned will not, without the prior written consent of UBS, make any demand for, or
exercise any right with respect to, the registration of Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock.
* * *
A-2
If (i) the Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) the registration statement filed with the Securities and Exchange Commission with
respect to the Offering is withdrawn or (iii) the Offering is not consummated on or before November
30, 2005, this Lock-Up Letter Agreement shall be terminated and the undersigned shall be released
from its obligations hereunder.
| Yours very truly, | ||
| Name: |
X-0
XXXXXXX X-0
OPINION OF XXXXXX & XXXXXXX LLP
| 1. | The Company is a corporation under the general corporation law of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Registration Statements and the Prospectuses. | |
| 2. | Such counsel confirms that the Company is validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in the State of California. | |
| 3. | The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of the Company and this Agreement has been duly executed and delivered by the Company. | |
| 4. | The Shares and the Direct Placement Shares to be issued and sold by the Company pursuant to this Agreement (in the case of the Shares) and the Direct Placement (in the case of the Direct Placement Shares) have been duly authorized by all necessary corporate action of the Company and, when the Shares have been issued and paid for by the Underwriters in accordance with the terms of this Agreement or the Direct Placement Shares have been issued and the exercise price paid upon exercise of the warrant, will be validly issued, fully paid and non-assessable and free of preemptive rights arising from the Company’s certificate of incorporation, the Delaware General Corporation Law (the “DGCL”) or the Material Agreements (as defined below). | |
| 5. | The outstanding shares of Common Stock have been duly authorized by all necessary corporate action of the Company, validly issued, and are fully paid and non-assessable. None of such shares of Common Stock was issued in violation of preemptive or similar rights arising from the Company’s certificate of incorporation or bylaws or the DGCL. As of September 21, 2005, the authorized capital stock of the Company consisted of 100,000,000 shares of Common Stock, par value $0.001 per share and 3,000,000 shares of preferred stock, par value $0.001 per share. | |
| 6. | The form of certificate used to evidence the Common Stock complies in all material respects with the applicable requirements of the DGCL and the Nasdaq National Market. | |
| 7. | The Registration Statements, each as of the respective date on which it was declared effective, and the Prospectus, as of its date, appeared on their face to be appropriately responsive in all material respects to the requirements for registration statements on Form S-3 under the Act and the rules and regulations of the Commission thereunder; it being understood, however, that such counsel expresses no opinion with respect to Regulation S-T or the financial statements, schedules, or other financial data, included in, incorporated by reference in, or omitted from, the Registration Statements or the Prospectus. To such counsel’s knowledge, there are no documents of a character required to be filed as exhibits to the Registration Statements that were not so filed. | |
| 8. | Each of the reports and proxy statements incorporated by reference in the Registration Statements and the Prospectus, as of its respective filing date, appeared on its face to be |
B-1-1
| appropriately responsive in all material respects with the applicable requirements for reports on Forms 10-K, 10-Q, and 8-K, and proxy statements under Regulation 14A, as the case may be, under the Exchange Act and the rules and regulations of the Commission thereunder, it being understood, however, that such counsel expresses no opinion with respect to Regulation S-T or the financial statements, schedules or other financial data, or exhibits included or incorporated by reference in, or omitted from, such reports and proxy statements. | ||
| 9. | The statements in the Basic Prospectuses under the caption “Description of Common Stock,” excluding the statements (a) regarding the number of shares outstanding, (b) that all outstanding shares of Common Stock are fully paid and nonassessable (which is addressed elsewhere herein) and (c) that the Common Stock has no preemptive or other subscription rights, insofar as they purport to constitute a summary of the terms of the Common Stock, are accurate descriptions or summaries in all material respects. | |
| 10. | The Registration Statements have become effective under the Act. No stop order suspending the effectiveness of the Registration Statements have been issued under the Act and no proceedings therefor have been initiated by the Commission. Any required filing of any Prepricing Prospectus and any Prospectus Supplement pursuant to Rule 424 under the Act has been made in accordance with Rule 424 and Rule 430A under the Act. | |
| 11. | The execution and delivery of this Agreement and the issuance and sale of the Shares by the Company to the Underwriters pursuant to this Agreement on the date hereof do not: |
(a) violate the Company’s certificate of incorporation and bylaws;
(b) violate any federal or California statute, rule or regulation or the DGCL or the
court or administrative orders, writs, judgments or decrees specifically directed to the
Company that were identified to us by an officer of the Company as material to the Company
and listed on an exhibit to such opinion;
(c) result in the breach of or a default under any of the agreements (a) listed as
exhibits 4 or 10 to the Company’s Form 10-K for the year ended December 31, 2004, and the
Forms 10-Q for the quarters ended March 31, 2005 and June 30, 2005 or (b) attached as
exhibits to the current reports on Form 8-K filed by the Company on July 18, 2005 and April
25, 2005 (the “Material Agreements”), other than any such breach or default that has been
waived; or
(d) require any consents, approvals, or authorizations to be obtained by the Company
from, or any registrations, declarations or filings to be made by the Company with, in each
case, under any federal or California statute, rule or regulation applicable to the Company
or the DGCL, that have not been obtained or made, except such as may be required under state
securities laws in connection with the purchase and distribution of such Shares by the
Underwriters.
| 12. | The Company is not, and immediately after giving effect to the sale of the Shares in accordance with this Agreement and of the Direct Placement Shares and the application of the proceeds therefrom as described in the Prospectus Supplement under the caption “Use of proceeds,” will not be required to be registered as an “investment company” within the |
B-1-2
| meaning of the Investment Company Act of 1940, as amended. | ||
| 13. | To such counsel’s knowledge, there are no legal proceedings required to be described in the Registration Statements and the Prospectus that are not described as required. | |
| 14. | The statements (A) in the Basic Prospectuses under the caption “Certain Provisions of Delaware Law and of the Company’s Charter and Bylaws,” and (B) in the Prospectus Supplement under the captions “Risk Factors — Our undesignated preferred stock may inhibit potential acquisition bids; this may adversely affect the market price for our common stock and the voting rights of the holders of common stock,” and “Risk Factors — Provisions in our share purchase rights plan, charter and bylaws, and provisions of Delaware law, may inhibit potential acquisition bids for us, which may prevent holders of our common stock from benefiting from what they believe may be the positive aspects of acquisitions and takeovers” and in the Company’s proxy statement on Schedule 14A filed with the Commission on March 24, 2005 under the caption “Certain Transactions — Promissory Note,” insofar as they purport to describe or summarize certain provisions of the agreements, statutes or regulations, referred to therein, are accurate descriptions or summaries in all material respects. | |
| 15. | To such counsel’s knowledge, the Company is not a party to any agreement that would require the registration of shares owned by any person or entity, other than the Company, under the Registration Statements, other than with respect to registration rights which have been waived. |
X-0-0
XXXXXXX X-0
LETTER OF XXXXXX & XXXXXXX LLP
Such counsel has participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company and representatives
of the Underwriters at which the contents of the Registration Statements and the Prospectus were
discussed and, although such counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the Registration Statements or
the Prospectus (except as and to the extent stated in paragraphs 9 and 14 above), on the basis of
the foregoing nothing has come to the attention of such counsel that causes such counsel to believe
that the Registration Statements or any amendment thereto at the respective times such Registration
Statements or amendment became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement thereto at the date of such
Prospectus or such supplement, and at the time of purchase or the additional time of purchase, as
the case may be, contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood that such counsel
need not express any belief with respect to the financial statements, schedules, or other financial
data included or incorporated by reference in, or omitted from, the Registration Statements or the
Prospectus or the Incorporated Documents).
B-2-1
EXHIBIT C
OPINION OF XXXXX X. XXXX, PH.D., X.X.
| 1. | To such counsel’s knowledge, the statements in the Registration Statements and the Prospectus relating to patents and proprietary rights (collectively, the “Intellectual Property Information”), at the respective times such Registration Statements became effective, as of the date of the Prospectus and at the time of purchase or the additional time of purchase, as the case may be, are accurate and complete statements or summaries of the matters therein set forth and present fairly the information therein set forth; nothing has come to such counsel’s attention that causes such counsel to believe that the Intellectual Property Information in the Registration Statements at the respective time such Registration Statements became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any supplement thereto, at the date of such Prospectus or such supplement and at the time of purchase or the additional time of purchase, as the case may be, contained an untrue statement of material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. | |
| 2. | To such counsel’s knowledge, except as described in the Registration Statements or the Prospectus or as would not, individually or in the aggregate, result in a material adverse effect on the business, properties, financial condition, results of operation or prospects of the Company taken as a whole (a “Material Adverse Effect”), (i) there are no legal or governmental proceedings pending relating to patent rights, trade secrets, trademarks, service marks or other proprietary information or materials of the Company, and (ii) no such proceedings are threatened or contemplated by governmental authorities or others. | |
| 3. | Such counsel does not know of any contracts or other documents, relating to the Company’s patents, trade secrets, trademarks, service marks or other proprietary intellectual property rights, of a character required to be described in the Registration Statements or the Prospectus or to be filed as an exhibit to the Registration Statements which have not been so described or filed. | |
| 4. | To such counsel’s knowledge, except as described in the Registration Statements or the Prospectus or as would not result in a Material Adverse Effect, (i) the Company does not and, upon commercialization of the product candidates described in the Prospectus, will not infringe or otherwise violate any patents, trade secrets, trademarks, service marks or other proprietary intellectual property rights of others, and (ii) there are no infringements by others of any of the Company’s patents, trade secrets, trademarks, service marks or other proprietary intellectual property rights which in such counsel’s judgment would affect materially the use thereof by the Company. | |
| 5. | Except as described in the Registration Statements or the Prospectus or as would not result in a Material Adverse Effect, (i) such counsel has no knowledge of any facts which would preclude the Company from having rights to the patents as described in the Registration Statements and the Prospectus; (ii) such counsel has no knowledge of any patents or other |
C-1
| intellectual property which would be necessary for the Company to conduct the business now conducted or proposed to be conducted by the Company as described in the Registration Statements and the Prospectus and for which the Company does not have and will not be able to obtain sufficient rights to conduct such business; and (iii) such counsel is unaware of any facts which provide valid grounds for finding any of the Company’s patents and other intellectual property invalid or unenforceable in all material respects. | ||
| 6. | Except as described in the Registration Statements or the Prospectus or as would not result in a Material Adverse Effect, such counsel is not aware of any material fact with respect to the patent applications of the Company presently on file that (i) would preclude the issuance of all pending claims contained in any application or (ii) would lead such counsel to conclude that all claims of such patents, if and when issued, would be invalid or unenforceable. |
C-2
EXHIBIT D
OFFICERS’ CERTIFICATE
| 1. | I have reviewed the Registration Statements and the Prospectus. | |
| 2. | The representations and warranties of the Company as set forth in this Agreement are true and correct as of the time of purchase and, if applicable, the additional time of purchase. | |
| 3. | The Company has performed all of its obligations under this Agreement as are to be performed at or before the time of purchase and at or before the additional time of purchase, as the case may be. | |
| 4. | The conditions set forth in paragraphs (g) and (h) of Section 6 of this Agreement have been met. | |
| 5. | The financial statements and other financial information included in the Registration Statements and the Prospectus fairly present the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in the Registration Statements. |
D-1
