2,500,000 Shares XENOPORT, INC. COMMON STOCK (PAR VALUE $0.001 PER SHARE) UNDERWRITING AGREEMENT
Exhibit 1.1
2,500,000 Shares
XENOPORT, INC.
COMMON STOCK (PAR VALUE $0.001 PER SHARE)
July 8, 2009
July 8, 2009
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Ladies and Gentlemen:
XenoPort, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the
several underwriters named in Schedule I (the “Underwriters”) hereto for whom you are acting as
managers (the “Managers”) 2,500,000 shares of its Common Stock (par value $0.001 per share) (the
“Firm Shares”). The Company also proposes to issue and sell to the several Underwriters not more
than an additional 375,000 shares of its Common Stock (par value $0.001 per share) (the “Additional
Shares”) if and to the extent that you, as Managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of common stock granted
to the Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the “Shares.” The shares of Common Stock (par value $0.001 per share)
of the Company to be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the “Common Stock.” If the firm or firms listed in Schedule I hereto
include only Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxx, Sachs & Co., then the terms
“Underwriters” and “Managers” as used herein shall each be deemed to refer to such firms.
The Company has filed with the Securities and Exchange Commission (the “Commission”) a
registration statement, including a prospectus, (the file number of which is set forth in Schedule
II hereto) on Form S-3, relating to the securities (the “Shelf Securities”), including the Shares,
to be issued from time to time by the Company. The registration statement as amended to the date
of this Agreement, including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act
of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration
Statement”, and the related prospectus covering the Shelf Securities dated December 30, 2008 in the
form
first used to confirm sales of the Shares (or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the
Securities Act) is hereinafter referred to as the “Basic Prospectus.” The Basic Prospectus, as
supplemented by the prospectus supplement specifically relating to the Shares in the form first
used to confirm sales of the Shares (or in the form first made available to the Underwriters by the
Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “Prospectus,” and the term “preliminary prospectus” means any
preliminary form of the Prospectus.
For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule
405 under the Securities Act, “Time of Sale Prospectus” means the Basic Prospectus and the
preliminary prospectus together with the final term sheet relating to the offering of the Shares as
contemplated by Section 6(j) and the free writing prospectuses, if any, and the pricing information
conveyed by the Underwriters to investors, in each case set forth in Schedule II hereto, and
“broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5)
under the Securities Act that has been made available without restriction to any person. As used
herein, the terms “Registration Statement,” “Basic Prospectus,” “preliminary prospectus,” “Time of
Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference
therein. The terms “supplement,” “amendment,” and “amend” as used herein with respect to the
Registration Statement, the Basic Prospectus, the Time of Sale Prospectus, any preliminary
prospectus or free writing prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that are deemed to be incorporated by reference therein.
1. Representations and Warranties. The Company represents and warrants to and agrees with
each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the Company’s knowledge, after due inquiry, threatened by the Commission. If
the Registration Statement is an automatic shelf registration statement as defined in Rule 405
under the Securities Act, the Company (i) is eligible to use the Registration Statement as an
automatic shelf registration statement, (ii) was a well-known seasoned issuer (as defined in Rule
405 under the Securities Act) at each of (A) the time of filing of the Registration Statement and
(B) the time of the Company’s most recent amendment to the Registration Statement for purposes of
complying with Section 10(a)(3) of the Securities Act, and (iii) has not received notice that the
Commission objects to the use of the Registration Statement as an automatic shelf registration
statement.
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(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of the Registration Statement, when such
part became effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein not misleading,
(iii) the Registration Statement as of the date hereof does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (iv) the Registration Statement and the Prospectus comply,
and as amended or supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission thereunder, (v) the Time
of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the
offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date
(as defined in Section 4), the Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (vi) each broadly available road show, if any, when
considered together with the Time of Sale Prospectus, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, (vii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading and (viii) the free
writing prospectuses listed on Schedule II hereto, if any, do not conflict with the information
contained in the Registration Statement, the Time of Sale Prospectus or the Prospectus, except that
the representations and warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing by such Underwriter
expressly for use therein.
(c) The Company is not an “ineligible issuer” in connection with the offering pursuant to
Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with
the Commission in accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that the Company has
filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or behalf of or used or referred to by the Company complies or will comply in all
material respects with the requirements
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of the Securities Act and the applicable rules and regulations of the Commission thereunder.
Except for the free writing prospectuses, if any, identified in Schedule II hereto, and electronic
road shows, if any, each furnished to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use or refer to, any free writing
prospectus.
(d) The Company has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the Time of Sale
Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company.
(e) The Company has no subsidiaries.
(f) This Agreement has been duly authorized, executed and delivered by the Company.
(g) The authorized capital stock of the Company conforms in all material respects as to legal
matters to the description thereof contained in each of the Time of Sale Prospectus and the
Prospectus.
(h) The shares of Common Stock outstanding prior to the issuance of the Shares have been duly
authorized and are validly issued, fully paid and non-assessable.
(i) The Shares have been duly authorized and, when issued and delivered in accordance with the
terms of this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(j) The execution and delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any provision of (i) applicable law, (ii) the
certificate of incorporation or bylaws of the Company, (iii) any agreement or other instrument
binding upon the Company, or (iv) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company except, in the cases of clauses (i) and (iii) above for
any such contravention that would not have a material adverse effect on the Company, and no
consent, approval, authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky laws of the various states or the
bylaws and rules of the Financial Industry Regulatory Authority (“FINRA”) in connection with the
offer and sale of the Shares.
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(k) There has not occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations of the Company, from that set forth or contemplated in the Time of Sale
Prospectus.
(l) There are no legal or governmental proceedings pending or, to the Company’s knowledge,
threatened to which the Company is a party or to which any of the properties of the Company is
subject (i) other than proceedings accurately described in all material respects in the Time of
Sale Prospectus and proceedings that would not have a material adverse effect on the Company or on
the power or ability of the Company to perform its obligations under this Agreement or to
consummate the transactions contemplated by the Time of Sale Prospectus or (ii) that are required
to be described in the Registration Statement or the Prospectus and are not so described; and there
are no statutes, regulations, contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(m) Each preliminary prospectus filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(n) The Company is not, and after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus will not be, required to
register as an “investment company” as such term is defined in the Investment Company Act of 1940,
as amended.
(o) The Company (i) is in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii)
has received all permits, licenses or other approvals required under applicable Environmental Laws
to conduct its business and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company.
(p) There are no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any related constraints on
operating activities and any
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potential liabilities to third parties) that would, singly or in the aggregate, have a
material adverse effect on the Company.
(q) Except as described in the Time of Sale Prospectus and except as set forth in those
Purchase Agreements, each dated December 30, 2008, between the Company and the investors named
therein, there are no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require the Company to include
such securities with the Shares registered pursuant to the Registration Statement.
(r) The Company nor, to the Company’s knowledge, any director, officer, employee, agent, or
representative of the Company, has taken or, with respect to the Company, will take any action in
furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or
giving of money, property, gifts or anything else of value, directly or indirectly, to any
“government official” (including any officer or employee of a government or government-owned or
controlled entity or of a public international organization, or any person acting in an official
capacity for or on behalf of any of the foregoing, or any political party or party official or
candidate for political office) to influence official action or secure an improper advantage; and
the Company has conducted its business in compliance with applicable anti-corruption laws and has
instituted and maintained and will continue to maintain policies and procedures designed to promote
and achieve compliance with such laws and with the representation and warranty contained herein.
(s) The operations of the Company are and have been conducted at all times in material
compliance with all applicable financial recordkeeping and reporting requirements, including those
of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT
Act), and the applicable anti-money laundering statutes of jurisdictions where the Company conducts
business, the rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (collectively, the
“Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company with respect to the
Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(t) (i) The Company represents that neither the Company nor, to the knowledge of the Company,
any director, officer, employee, agent, affiliate or representative of the Company, is an
individual or entity (“Person”) that is, or is owned or controlled by a Person that is:
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(A) the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively,
“Sanctions”), nor
(B) located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran,
North Korea, Sudan and Syria).
(ii) The Company represents and covenants that it will not, directly or indirectly, use the
proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any
joint venture partner or other Person:
(A) to fund or facilitate any activities or business of or with any Person
or in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
(iii) The Company represents and covenants that, for the past 5 years, it has not knowingly
engaged in, is not now knowingly engaged in, and will not knowingly engage in, any dealings or
transactions with any Person, or in any country or territory, that at the time of the dealing or
transaction is or was to the Company’s knowledge the subject of Sanctions.
(u) Subsequent to the respective dates as of which information is given in each of the
Registration Statement, the Time of Sale Prospectus and the Prospectus, (i) the Company has not
incurred any material liability or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock other than ordinary and customary repurchases of restricted stock from
employees upon termination of service pursuant to the terms of the Company’s equity incentive
plans, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital
stock other than ordinary and customary dividends; and (iii) there has not been any material change
in the capital stock, short-term debt or long-term debt of the Company, except in each case as
described in each of the Registration Statement, the Time of Sale Prospectus and the Prospectus.
(v) The Company has good and marketable title to all personal property owned by it that is
material to the business of the Company, free and clear of all
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liens, encumbrances and defects except as described in the Time of Sale Prospectus or such as
do not materially affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company; and any real property and buildings held under
lease by the Company is held under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made of such property
and buildings by the Company, except as described in the Time of Sale Prospectus. The Company does
not own any real property.
(w) All patents and patent applications owned by the Company (the “Owned Patents”) are owned
or co-owned by the Company free and clear of all liens, encumbrances, defects or other
restrictions, except as would not, singly or in the aggregate, have a material adverse effect on
the Company; and the Company is not aware of any valid or bona fide basis for a finding that any of
the Owned Patents in their entirety is unpatentable, invalid or unenforceable; and the Company
reasonably believes that the Owned Patents are patentable, valid and enforceable, except as would
not, singly or in the aggregate, have a material adverse effect on the Company.
(x) In connection with the Company’s Owned Patents, all known relevant prior art references
were disclosed or will be disclosed to the USPTO to the extent required by and in accordance with
37 C.F.R. Section 1.56; all information submitted to the USPTO in such patent applications, and in
connection with the prosecution of such applications, was accurate in all material respects; and
neither the Company nor, to the Company’s knowledge, any other person made any material
misrepresentations or concealed any material information from the USPTO in such applications, or in
connection with the prosecution of such applications, in violation of 37 C.F.R. Section 1.56.
(y) Except as set forth or contemplated in the Time of Sale Prospectus, the Company owns or
possesses rights to use, or can acquire on reasonable terms ownership of or rights to use, all
patents, patent applications, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names and other intellectual property
(collectively, “Intellectual Property”) necessary for the conduct of the Company’s business
substantially as now conducted, and for the manufacture, use or sale of its presently proposed
products, as described in the Time of Sale Prospectus, and the Company has not received any notice
of infringement of or conflict with asserted rights of others with respect to any of the foregoing
that, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company.
(z) To the Company’s knowledge, after due inquiry, and except as would not have a material
adverse effect on the Company, there are no valid and
8
enforceable rights of third parties to such Intellectual Property that are or would be
infringed by the business currently conducted by the Company or in the manufacture, use, sale,
offer for sale or import of its presently proposed products, as described in the Time of Sale
Prospectus.
(aa) The Company is not subject to any judgment, order, writ, injunction or decree of any
court or any federal, state, local, foreign or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any arbitrator. Except as would not have
a material adverse effect on the Company, the Company is not a party to any contract, which
restricts or impairs its use of any Intellectual Property.
(bb) To the Company’s knowledge, after due inquiry, there are no ongoing infringements by
others of any Intellectual Property owned by the Company in connection with the business currently
conducted by the Company or its presently proposed products, as described in the Time of Sale
Prospectus.
(cc) Other than as disclosed in the Time of Sale Prospectus and except as would not have a
material adverse effect on the Company, to the Company’s knowledge, after due inquiry, there is no
U.S. patent or published U.S. patent application which contains valid and enforceable claims that
dominate or that would dominate any Intellectual Property described in the Time of Sale Prospectus
as being owned by the Company or that interferes with the issued or pending claims of any such
Intellectual Property.
(dd) No material labor dispute with the employees of the Company exists, except as described
in the Time of Sale Prospectus, or, to the knowledge of the Company, is imminent; and the Company
is not aware of any existing, threatened or imminent labor disturbance by the employees of any of
its principal suppliers, manufacturers or contractors that would reasonably be expected to have a
material adverse effect on the Company.
(ee) The Company is insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which it is
engaged; the Company has not been refused any insurance coverage sought or applied for; and the
Company has no reason to believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a material adverse effect on the
Company, except as described in the Time of Sale Prospectus.
(ff) Except as described in the Time of Sale Prospectus, the Company has not sold, issued or
distributed any shares of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S of, the Securities Act, other
than shares issued
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pursuant to employee benefit plans, qualified stock option plans or other employee
compensation plans or arrangements, or pursuant to outstanding options, restricted stock units,
rights or warrants.
(gg) The Company has established and maintains disclosure controls and procedures (as defined
in Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such
disclosure controls and procedures are designed to ensure that information required to be disclosed
by the Company is recorded, processed, summarized and reported, within the time periods specified
in the SEC’s rules and forms and that such information is accumulated and communicated to the
Company’s principal executive officer and its principal financial officer. Such disclosure
controls and procedures are sufficient to provide reasonable assurance that the Company’s principal
executive officer and principal financial officer are alerted to material information required to
be included in the Company’s periodic reports required under the Exchange Act so as to allow timely
decisions regarding required disclosure.
(hh) The Company maintains a system of internal control over financial reporting (as defined
in Rule 13a-15 under the Exchange Act) sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(ii) There are no outstanding loans made by the Company to any executive officer (as defined
in Rule 3b-7 under the Exchange Act) or director of the Company which are prohibited by Section 402
of the Xxxxxxxx-Xxxxx Act of 2002, as amended. The Company has not since January 19, 2005 taken
any action prohibited by Section 402 of the Xxxxxxxx-Xxxxx Act of 2002, as amended.
(jj) The Company has all necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all required declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory organizations and all courts
and other tribunals, to own, lease, license and use its properties and assets and to conduct its
business in the manner described in the Time of Sale Prospectus, including, without limitation, all
necessary U.S. Food and Drug Administration (“FDA”) and applicable foreign regulatory agency
approvals, except as disclosed in the Time of Sale Prospectus, and except to the extent that the
failure to obtain such consents, authorizations, approvals, orders, certificates, permits, or to
make such declarations or filings would not have a material adverse effect on the Company. The
Company has not
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received any notice of proceedings relating to the revocation or modification of any such
consent, authorization, approval, order, certificate or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect
on the Company, except as described in the Time of Sale Prospectus.
(kk) No investigational new drug (“IND”) application filed by or on behalf of the Company with
the FDA has been terminated by the FDA, and neither the FDA nor any applicable foreign regulatory
agency has commenced, or, to the knowledge of the Company, threatened to initiate, any action to
place a clinical hold order on, or otherwise delay or suspend, proposed or ongoing clinical
investigations conducted or proposed to be conducted by or on behalf of the Company.
(ll) To the best of the Company’s knowledge, all the operations of the Company and all the
manufacturing facilities and operations of the Company’s suppliers of products and product
candidates and the components thereof manufactured in or imported into the United States are in
compliance with applicable FDA regulations, including current Good Manufacturing Practices, and
meet sanitation standards set by the Federal Food, Drug and Cosmetic Act of 1938, as amended, and
all the operations of the Company and all the manufacturing facilities and operations of the
Company’s suppliers of products and product candidates manufactured outside, or exported from, the
United States are in compliance with applicable foreign regulatory requirements and standards,
except to the extent that the failure to be in compliance with such regulations and standards would
not have a material adverse effect on the Company.
(mm) Except as described in the Time of Sale Prospectus, the clinical trials and the human and
animal studies that are described in the Time of Sale Prospectus were and, if still pending, are
being, conducted (to the knowledge of the Company with respect to such studies conducted by or on
behalf of third parties) in accordance in all material respects with standard medical and
scientific research procedures and all applicable rules, regulations and policies of the FDA,
including the current Good Clinical Practices and Good Laboratory Practices, and all applicable
foreign regulatory requirements and standards.
(nn) The Company has operated its business and currently is in compliance in all material
respects with all applicable rules, regulations and policies of the FDA and any applicable foreign
regulatory organization.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the
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Company the respective numbers of Firm Shares set forth in Schedule I hereto opposite its name
at $17.9075 a share (the “Purchase Price”).
On the basis of the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to sell to the Underwriters the Additional Shares, and
the Underwriters shall have the right to purchase, severally and not jointly, up to 375,000
Additional Shares at the Purchase Price. You may exercise this right on behalf of the Underwriters
in whole or from time to time in part by giving written notice not later than 30 days after the
date of this Agreement. Any exercise notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase
date must be at least one business day after the written notice is given and may not be earlier
than the closing date for the Firm Shares nor later than ten business days after the date of such
notice. Additional Shares may be purchased as provided in Section 4 hereof solely for the purpose
of covering over-allotments made in connection with the offering of the Firm Shares. On each day,
if any, that Additional Shares are to be purchased (an “Option Closing Date”), each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the same proportion to
the total number of Additional Shares to be purchased on such Option Closing Date as the number of
Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter bears to the total
number of Firm Shares.
The Company hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx & Co.
Incorporated and Xxxxxxx, Sachs & Co. on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock; (ii) file any registration statement with the Commission relating to the offering of
any shares of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock; or (iii) enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant, the vesting or settlement of any restricted stock units or
other equity compensation awards or the conversion of a security outstanding on the date hereof;
(C) the grant of options, restricted stock units or other equity compensation awards, or the
issuance of shares of Common Stock by the Company to employees, officers, directors, advisors or
consultants of
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the Company in each case either (x) pursuant to equity incentive and employee stock purchase
plans described in the Prospectus or (y) as an inducement grant within the meaning of NASDAQ Rule
5635(c)(4) consistent with past practice, and the issuance by the Company of any shares of Common
Stock upon the exercise, vesting or settlement of such equity compensation awards; or (D) the
filing of any registration statement (x) on Form S-8 in respect of any equity compensation plans or
arrangements maintained by the Company or (y) that the Company is contractually obligated to file
pursuant to the terms of those certain Purchase Agreements, each dated December 30, 2008, between
the Company and the investors named therein.
3. Terms of Public Offering. The Company is advised by you that the Underwriters propose to
make a public offering of their respective portions of the Shares as soon after the Registration
Statement and this Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Shares are to be offered to the public initially at $19.00 a
share (the “Public Offering Price”) and to certain dealers selected by you at a price that
represents a concession not in excess of $0.65 a share under the Public Offering Price.
4. Payment and Delivery. Payment for the Firm Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City time, on July 13,
2009, or at such other time on the same or such other date, not later than the fifth business day
thereafter, as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the “Closing Date.”
Payment for any Additional Shares shall be made to the Company in Federal or other funds
immediately available in New York City against delivery of such Additional Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 2 or at such other time on the same or
on such other date, in any event not later than 30 days after Closing Date, as shall be designated
in writing by you.
The Firm Shares and Additional Shares shall be registered in such names and in such
denominations as you shall request in writing not later than one full business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be. The Firm Shares and
Additional Shares shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly paid, against
payment of the Purchase Price therefor.
13
5. Conditions to the Underwriters’ Obligations. The several obligations of the Underwriters
to purchase and pay for the Shares are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date:
(i) (A) there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any of the Company’s securities by any “nationally
recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act and (B) no such organization
shall have publicly announced that it has under surveillance or review, with the
possible negative implications, its rating of any of the Company’s debt
securities; and
(ii) there shall not have occurred any change, or any development involving
a prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company, from that set forth in the Time
of Sale Prospectus that, in your judgment, is material and adverse and that
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate, dated the Closing
Date and signed by an executive officer of the Company, to the effect set forth in Sections 5(a)(i)
and 5(a)(ii) above and to the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date and that the Company has
complied, in all material respects, with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before the Closing Date. The officer
signing and delivering such certificate may rely upon the best of his or her knowledge as to
proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an opinion of Xxxxxx Godward
Kronish LLP, outside counsel for the Company, together with a negative assurance letter, each dated
the Closing Date, in the forms agreed upon as of the date hereof.
(d) The Underwriters shall have received on the Closing Date an opinion of D. Xxxxx Xxxxxx,
internal patent counsel for the Company, dated the Closing Date in the form agreed upon as of the
date hereof.
14
(e) The Underwriters shall have received on the Closing Date an opinion of Xxxxx Xxxx &
Xxxxxxxx LLP, counsel for the Underwriters, dated the Closing Date, with respect to such matters as
the Underwriters may reasonably require, which shall include a negative assurances statement.
The opinion and negative assurance letter of Xxxxxx Godward Kronish LLP described in Section
5(c) above shall be rendered to the Underwriters at the request of the Company and shall so state
therein.
(f) The Underwriters shall have received, on each of the date hereof and the Closing Date, a
letter dated the date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, independent registered public accounting
firm, containing statements and information of the type ordinarily included in accountants’
“comfort letters” to underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement, the Time of Sale Prospectus and the
Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not
earlier than the date hereof.
(g) The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you
and each executive officer and director of the Company relating to sales and certain other
dispositions of shares of Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares hereunder are
subject to the delivery to you on the applicable Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due authorization and
issuance of the Additional Shares to be sold on such Option Closing Date and other matters related
to the issuance of such Additional Shares.
6. Covenants of the Company. In further consideration of the agreements of the Underwriters
herein contained, the Company covenants with each Underwriter as follows:
(a) To furnish to you upon request, without charge a signed copy of the Registration Statement
(including exhibits thereto) and for delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Sections 6(e) and 6(f) below, as many copies of the
Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
15
(b) Before amending or supplementing the Registration Statement, the Time of Sale Prospectus
or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not
to file any such proposed amendment or supplement to which you reasonably object, and to file with
the Commission within the applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on
behalf of, used by, or referred to by the Company and not to use or refer to any proposed free
writing prospectus to which you reasonably object.
(d) Not to take any action that would result in an Underwriter or the Company being required
to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing
prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not
have been required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy the Shares at a time
when the Prospectus is not yet available to prospective purchasers and any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Time of Sale
Prospectus in order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration Statement then on file, or
if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time
of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the circumstances when delivered
to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of the Shares as in the
opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to
in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with
sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule
173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion
of counsel for the Underwriters, it is necessary to amend or
16
supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule
173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law.
(g) To endeavor to qualify the Shares for offer and sale under the securities or Blue Sky laws
of such jurisdictions as you shall reasonably request.
(h) To make generally available to the Company’s security holders and to you as soon as
practicable an earning statement covering a period of at least twelve months beginning with the
first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(i) Whether or not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements and expenses of the
Company’s counsel and the Company’s accountants in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or
referred to by the Company and amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the Shares under state securities
laws and all expenses in connection with the qualification of the Shares for offer and sale under
state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing fees and the
reasonable and reasonably-documented fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the Shares by FINRA, (v) all
costs and expenses incident to listing the Shares on the NASDAQ Global Select Market, (vi) the cost
of printing certificates representing the Shares, (vii) the costs and
17
charges of any transfer agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses associated with
the preparation of dissemination of any electronic roadshow, 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 with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such consultants, and,
with the Company’s prior consent, the cost of any aircraft chartered in connection with the road
show, (ix) all expenses in connection with any offer and sale of the Shares outside of the United
States, including filing fees and the reasonable and reasonably-documented fees and disbursements
of counsel for the Underwriters in connection with offers and sales outside of the United States,
(x) the document production charges and expenses associated with printing this Agreement and (xi)
all other costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section. It is understood, however,
that except as provided in this Section, Section 8 entitled “Indemnity and Contribution,” and the
last paragraph of Section 10 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of
the Shares by them and any advertising expenses connected with any offers they may make.
(j) To prepare a final term sheet relating to the offering of the Shares, containing only
information that describes the final terms of the offering in a form consented to by the Managers
(it being understood that the form of final term sheet attached hereto as Exhibit B is hereby
consented to by the Managers), and, if required, to file such final term sheet within the period
required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have
been established for the offering of the Shares.
7. Covenants of the Underwriters. Each Underwriter severally covenants with the Company not
to take any action that would result in the Company being required to file with the Commission
under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that
otherwise would not be required to be filed by the Company thereunder, but for the action of the
Underwriter.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter
within the meaning of Rule 405 under the Securities Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any
18
such action or claim) caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus,
the Time of Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the
Securities Act, any Company information that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or the Prospectus or any amendment or supplement
thereto, or caused by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and each person, if any,
who controls the Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such
Underwriter, but only with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus or the
Prospectus or any amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b),
such person (the “indemnified party”) shall promptly notify the person against whom such indemnity
may be sought (the “indemnifying party”) in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified
19
parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxx, Sachs & Co., in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant
to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. 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 and third sentences of this paragraph, the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date
of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement 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 (i)
includes an unconditional release of such indemnified party from all liability on claims that are the subject matter
of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d)
To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or
liabilities (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 8(d)(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 8(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the Shares (before deducting expenses)
received by the Company and the total underwriting discounts and commissions received by the Underwriters, in each
20
case as set forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters’ respective obligations to contribute pursuant to
this Section 8 are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or equitable if
contribution pursuant to this Section 8 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 Section 8(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 8, 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 it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies that may otherwise be available to any indemnified party at
law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Company contained in this Agreement shall
remain operative and in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter, any person controlling any
Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Termination. The Underwriters may terminate this Agreement by notice given by you to the
Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New
21
York Stock Exchange, the American
Stock Exchange, the NASDAQ Global Market, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United States shall have
occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal
or New York State authorities or (v) there shall have occurred any outbreak or escalation of
hostilities, or any change in financial markets or any calamity or crisis that, in your judgment,
is material and adverse and which, singly or together with any other event specified in this clause
(v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Shares on the terms and in the manner contemplated in the Time of Sale Prospectus
or Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it has or they have agreed to purchase
hereunder on such date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Shares to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of Firm Shares set forth opposite their respective
names in Schedule I bears to the aggregate number of Firm Shares set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default
occurs is more than one-tenth of the aggregate number of Firm Shares to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such Firm Shares are not
made within 36 hours after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company. In any such case either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement, in the Time of Sale
Prospectus, in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional Shares and the aggregate
22
number of Additional Shares
with respect to which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase the Additional Shares
to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the reasonably-documented fees and disbursements of their counsel) reasonably
incurred by such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. Entire Agreement. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Shares, represents the entire agreement between the Company and the
Underwriters with respect to the preparation of any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Shares.
(b) The Company acknowledges that in connection with the offering of the Shares: (i) the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the
Company or any other person, (ii) the Underwriters owe the Company only those duties and
obligations set forth in this Agreement and prior written agreements (to the extent not superseded
by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of
the Company. The Company waives to the full extent permitted by applicable law any claims it may
have against the Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Shares.
12. Counterparts. This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
13. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.
23
14. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
15. Notices. All communications hereunder shall be in writing and effective only upon receipt
and if to the Underwriters shall be delivered, mailed or sent to you in care of Xxxxxx Xxxxxxx &
Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets
Syndicate Desk, Fax No. (000) 000-0000 and Xxxxxxx, Sachs & Co. 00 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the Company shall be
delivered, mailed or sent to XenoPort, Inc., 0000 Xxxxxxx Xxxxxxxxxx, Xxxxx Xxxxx, XX 00000, Fax
No. (000) 000-0000, Attention: Chief Executive Officer.
24
Very truly yours, XenoPort, Inc. |
||||
By: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx, PhD | |||
Title: | Chief Executive Officer | |||
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co
Xxxxxxx, Sachs & Co
Acting severally on behalf of themselves
and the several Underwriters named
in Schedule I hereto.
and the several Underwriters named
in Schedule I hereto.
By: | Xxxxxx Xxxxxxx & Co. Incorporated | |||||
By: | /s/ Xxxx X. Xxxxx | |||||
Name: | Xxxx X. Xxxxx | |||||
Title: | Managing Director | |||||
By: | Xxxxxxx, Sachs & Co | |||||
By: | /s/ Xxxxxxx, Xxxxx & Co. | |||||
25
SCHEDULE I
Number of Firm Shares | ||||
Underwriter | To Be Purchased | |||
Xxxxxx Xxxxxxx & Co. Incorporated |
1,375,000 | |||
Xxxxxxx, Sachs & Co. |
1,125,000 | |||
Total: |
2,500,000 | |||
SCHEDULE II
Time of Sale Prospectus
1. | Basic Prospectus, dated December 30, 2008 included in the Registration Statement on Form S-3 (file no. 333-156485). | |
2. | Preliminary Prospectus issued July 7, 2009. | |
3. | Final Term Sheet attached hereto as Exhibit B. | |
4. | Pricing information provided orally by the Underwriters, if any, including: |
• | Size: $47,500,000 | ||
• | Shares offered: 2,500,000 shares of Common Stock | ||
• | Over-allotment: 375,000 shares of Common Stock | ||
• | Price to public: $19.00 per share of Common Stock |
EXHIBIT A
June 30, 2009
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated (“Xxxxxx Xxxxxxx”) and
Xxxxxxx, Sachs & Co. (together with Xxxxxx Xxxxxxx, the “Underwriters”) propose to enter into an
Underwriting Agreement (the “Underwriting Agreement”) with XenoPort, Inc., a Delaware corporation
(the “Company”), providing for the public offering (the “Public Offering”) by the Underwriters of
shares (the “Shares”) of the Common Stock (par value $0.001 per share) of the Company (the “Common
Stock”).
To induce the Underwriters to continue their efforts in connection with the Public Offering,
the undersigned hereby agrees that, without the prior written consent of the Underwriters, it will
not, during the period (the “Lock-Up Period”) commencing on the date hereof and ending 90 days
after the date of the final prospectus supplement relating to the Public Offering (the
“Prospectus”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or (2) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to transactions relating to shares of Common
Stock or other securities acquired in open market transactions after the completion of the Public
Offering; provided that no filing by any party under Section 16(a) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) shall be required or shall be voluntarily made in
connection with subsequent sales of Common Stock or other securities acquired in such open market
transactions. In addition, the undersigned agrees that, without the prior written consent of the
Underwriters, it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions
with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of
Common Stock except in compliance with the foregoing restrictions.
Notwithstanding the foregoing, (1) if the undersigned is an individual, the undersigned may
transfer shares of Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock by gift or gifts, will or intestacy to a member or members of his or her immediate
family, to a trust formed for the benefit of any such person, or to a partnership, the partners of
which are exclusively the undersigned and/or a member or members of his or her immediate family
and/or a charity; (2) if the undersigned is a partnership, trust, corporation or similar entity,
the undersigned may transfer or distribute shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock to its partners, limited liability company members or
stockholders; (3) the undersigned may sell shares of Common Stock pursuant to a an existing 10b5-1
plan which is disclosed to the Underwriters prior to the date hereof; (4) the undersigned may enter
into a 10b5-1 plan during the Lock-Up Period if sales under such plan do not occur until after the
expiration of the Lock-Up Period; (5) the undersigned may “net” exercise outstanding options or
warrants to purchase Common Stock in accordance with their terms; (6) the undersigned may transfer
shares of Common Stock to the Company to satisfy tax withholding obligations pursuant to Company
equity compensation plans or arrangements and (7) the undersigned may transfer shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common Stock pursuant to a
sale or an offer to purchase 100% of the outstanding Common Stock, whether pursuant to a merger,
tender offer or otherwise, to a third party or group of third parties; provided, however, that in
each of (1) and (2) above, it shall be a condition to the transfer or distribution that (i) the
transferee execute a copy of this Lock-Up Agreement, (ii) no filing by any party (donor, donee,
transferor or transferee) under Section 16(a) of the Exchange Act shall be required or shall be
made voluntarily in connection with such transfer or distribution (other than a filing on Form 5
made after the expiration of the Lock-Up Period), and (iii) no such transfer or distribution may
include a disposition for value; and provided further that any Common Stock acquired upon the net
exercise of options or warrants described in clause (5) above shall be subject to the restrictions
imposed by this Lock-Up Agreement. For purposes of this paragraph, “immediate family” means the
spouse, domestic partner, lineal descendants, father, mother, brother or sister of the transferor.
The undersigned understands that the Company and the Underwriters are relying upon this
agreement in proceeding toward consummation of the Public Offering. The undersigned further
understands that this agreement is irrevocable
2
and shall be binding upon the undersigned’s heirs, legal representatives, successors and
assigns.
3
Whether or not the Public Offering actually occurs depends on a number of factors, including
market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement,
the terms of which are subject to negotiation between the Company and the Underwriters.
This Lock-Up Agreement shall lapse and become null and void if (a) no shares have been
purchased and paid for pursuant to the Underwriting Agreement by August 31, 2009, (b) the Company
notifies the Underwriters in writing that it does not intend to proceed with the Public Offering,
or (c) the registration statement filed in connection with the Public Offering is withdrawn.
Very truly yours, | ||
(Name) | ||
(Address) |
4
EXHIBIT B
FINAL TERM SHEET
XENOPORT, INC.
2,500,000 Shares of Common Stock
Issuer:
|
Xenoport, Inc. | |
Ticker/Exchange:
|
XNPT/ Nasdaq Global Select Market | |
Securities:
|
Common stock, par value $0.001 per share (“Common Stock”) | |
Size:
|
$47,500,000 | |
Shares offered:
|
2,500,000 shares of Common Stock | |
Over-allotment option:
|
375,000 shares of Common Stock | |
Price to public:
|
$19.00 per share of Common Stock | |
Trade date:
|
7/8/2009 | |
Closing date:
|
7/13/2009 | |
CUSIP No.:
|
00000X000 | |
Joint-Bookrunners:
|
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co. |
A copy of the final prospectus supplement and accompanying prospectus relating to the offering may
be obtained from Xxxxxx Xxxxxxx & Co. Incorporated, Attn: Prospectus Department, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Email xxxxxxxxxx@xxxxxxxxxxxxx.xxx) or Xxxxxxx, Sachs & Co., Attn:
Registration Department, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (Telephone number
0-000-000-0000 or xxxxxxxxxx-xx@xx.xxxxx.xx.xxx).