CIBC World
Markets Corp.
Punk, Ziegel & Company, L.P.
ThinkEquity Partners LLC
as Representatives of the several
Underwriters named in Schedule I
hereto
c/o CIBC World Markets Corp.
300 Madison Avenue
New York, New York 10016
Repros
Therapeutics Inc., a Delaware corporation (the
“Company”), proposes, subject to the terms and
conditions contained herein, to sell to you and the other
underwriters named on Schedule I to this Agreement (the
“Underwriters”), for whom you are acting as
Representatives (the “Representatives”), an aggregate
of 2,610,000 shares (the “Firm Shares”) of the
Company’s common stock, $0.001 par value per share (the
“Common Stock”). The respective amounts of the Firm
Shares to be purchased by each of the several Underwriters are set
forth opposite their names on Schedule I hereto. In addition, the
Company proposes to grant to the Underwriters an option to purchase
up to an additional 390,000 shares (the “Option
Shares”) of Common Stock for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The
Firm Shares and the Option Shares are collectively called the
“Shares.”
The Company has
prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “Securities
Act”), and the published rules and regulations thereunder
(the “Rules”) adopted by the Securities and Exchange
Commission (the “Commission”) a Registration Statement
(as hereinafter defined) on Form S-3 (No. 333-137109),
including a related prospectus dated September 5, 2006 (the
“Base Prospectus”) relating to Common Stock that may be
sold from time to time by the Company in accordance with
Rule 415 of the Securities Act, and such amendments thereof as
may have been required to the date of this Agreement. Copies of
such Registration Statement (including all amendments thereof and
all documents deemed incorporated by reference therein) and of the
related Base Prospectus (as hereinafter defined) have heretofore
been delivered by the Company to you. The term
“Registration Statement” as used in
this Agreement means the registration statement (including all
exhibits, financial schedules and all documents and information
deemed to be a part of the Registration Statement through
incorporation by reference or otherwise), as amended from time to
time, including the information (if any) contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
of the Rules and deemed to be part thereof at the time of
effectiveness pursuant to Rule 430B of the Rules. If the
Company has filed an abbreviated registration statement to register
additional Shares pursuant to Rule 462(b) under the Rules (the
“462(b) Registration Statement”), then any reference
herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement. The term
“Preliminary Prospectus” means the Base Prospectus and
any preliminary prospectus supplement filed with the Commission
pursuant to Rule 424 of the Rules, for use in connection with
the offering of the Shares. The term “Prospectus” means
the Base Prospectus and shall also include the final prospectus
supplement (the “Prospectus Supplement”) filed with the
Commission pursuant to and within the time limits described in Rule
424(b) of the Rules in connection with the proposed sale of the
Shares contemplated by this Agreement. Reference made herein to any
Preliminary Prospectus, the Statutory Prospectus (as hereinafter
defined) or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein, including
pursuant to Item 12 of Form S-3 under the Securities Act, as
of the date of such Preliminary Prospectus, the Statutory
Prospectus, or the Prospectus, as the case may be, or thereafter,
and any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), after the date
of such Preliminary Prospectus or the Prospectus, as the case may
be, and incorporated by reference in such Preliminary Prospectus or
the Prospectus, as the case may be.
The Company
understands that the Underwriters propose to make a public offering
of the Shares, as set forth in and pursuant to the Statutory
Prospectus and the Prospectus, as soon after the Effective Date and
the date of this Agreement as the Representatives deems advisable.
The Company hereby confirms that the Underwriters and dealers have
been authorized to distribute or cause to be distributed each
Preliminary Prospectus, and each Issuer Free Writing Prospectus (as
hereinafter defined) and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the
Underwriters).
1.
Sale, Purchase, Delivery and Payment for the Shares . On the
basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this
Agreement:
(a) The Company agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at a purchase price of
$12.8563 per share (the “Initial Price”), the number of
Firm Shares set forth opposite the name of such Underwriter under
the column “Number of Firm Shares to be Purchased” on
Schedule I to this Agreement, subject to adjustment in
accordance with Section 8 hereof.
(b) The Company hereby grants to the several Underwriters an
option to purchase, severally and not jointly, all or any part of
the Option Shares at the Initial Price. The
2
number of
Option Shares to be purchased by each Underwriter shall be the same
percentage (adjusted by the Representatives to eliminate fractions)
of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares.
Such option may be exercised only to cover over-allotments in the
sales of the Firm Shares by the Underwriters and may be exercised
in whole or in part at any time on or before 12:00 noon, New York
City time, on the business day before the Firm Shares Closing Date
(as defined below), and from time to time thereafter within
30 days after the date of this Agreement, in each case upon
written, facsimile or telegraphic notice, or verbal or telephonic
notice confirmed by written, facsimile or telegraphic notice, by
the Representatives to the Company no later than 12:00 noon, New
York City time, on the business day before the Firm Shares Closing
Date or at least two business days before the Option Shares Closing
Date (as defined below), as the case may be, setting forth the
number of Option Shares to be purchased and the time and date (if
other than the Firm Shares Closing Date) of such
purchase.
(c) Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the offices of
CIBC World Markets Corp., 300 Madison Avenue, New York, New York
10016, at 10:00 a.m., New York City time, on the third
business day following the date of this Agreement or at such time
on such other date, not later than ten (10) business days
after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery and
payment are called the “Firm Shares Closing Date”). In
addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price, and
delivery of the certificates, for such Option Shares shall be made
at the above-mentioned offices, or at such other place as shall be
agreed upon by the Representatives and the Company, on each date of
delivery as specified in the notice from the Representatives to the
Company (such time and date of delivery and payment are called the
“Option Shares Closing Date”). The Firm Shares Closing
Date and any Option Shares Closing Date are called, individually, a
“Closing Date” and, together, the “Closing
Dates.”
(d) Payment shall be made to the Company by wire transfer of
immediately available funds or by certified or official bank check
or checks payable in New York Clearing House (same day) funds drawn
to the order of the Company, against delivery of the respective
certificates to the Representatives for the respective accounts of
the Underwriters of certificates for the Shares to be purchased by
them.
(e) Certificates evidencing the Shares shall be registered
in such names and shall be in such denominations as the
Representatives shall request at least two full business days
before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as described
in Section 1(b) and shall be delivered by or on behalf of the
Company to the Representatives through the facilities of the
Depository Trust Company (“DTC”) for the account of
such Underwriter. The Company will cause the certificates
representing the Shares to be made available for checking and
packaging, at such place as is designated by the Representatives,
on the full business day before the Firm Shares Closing Date (or
the Option Shares Closing Date in the case of the Option
Shares).
2.
Representations and Warranties of the Company . The Company
represents and warrants to each Underwriter as of the date hereof,
as of the Firm Shares Closing Date and as of each Option Shares
Closing Date (if any), as follows:
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(a) The Company meets the requirements for use of Form S-3
under the Securities Act and has filed with the Commission, the
Registration Statement on such form, including the Base Prospectus,
for registration under the Securities Act of the offering and sale
of the Shares, and the Company has prepared and used a Preliminary
Prospectus in connection with the offering and sale of the Shares.
When the Registration Statement or any amendment or supplement
thereto was or is declared effective it (i) complied or will
comply, in all material respects, with the requirements of the
Securities Act and the Rules and the Exchange Act and the rules and
regulations of the Commission thereunder and (ii) did not or
will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
When any Preliminary Prospectus or Prospectus was first filed with
the Commission (whether filed as part of the Registration Statement
or any amendment thereto or pursuant to Rule 424 of the Rules)
and when any amendment thereof or supplement thereto was first
filed with the Commission, such Preliminary Prospectus or
Prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the Securities Act and
the Rules and did not or will not, contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading. If applicable, each Preliminary Prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T. Notwithstanding the
foregoing, none of the representations and warranties in this
paragraph 2(a) shall apply to statements in, or omissions from, the
Registration Statement, any Preliminary Prospectus or the
Prospectus made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in
the Registration Statement, Preliminary Prospectus or the
Prospectus, as the case may be. With respect to the preceding
sentence, the Company acknowledges that the only information
furnished in writing by the Representatives on behalf of the
several Underwriters specifically for use in the Registration
Statement, any Preliminary Prospectus or the Prospectus, as the
case may be are the statements contained in the fourth and tenth
paragraphs under the caption “Underwriting” in the
Prospectus (collectively, the “Underwriter
Information”).
(b) As of the Applicable Time (as hereinafter defined
below), neither (i) the price to the public and the number of
shares offered and sold, as indicated on the cover page of the
Prospectus, and the Issuer Free Writing Prospectus(es) (as
hereinafter defined) issued at or prior to the Applicable Time, and
the Statutory Prospectus (as defined below), all considered
together (collectively, the “General Disclosure
Package”), nor (ii) any individual Issuer Free Writing
Prospectus when considered together with the General Disclosure
Package, included any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to statements in or omissions from any prospectus included in
the General Disclosure Package made in reliance upon and in
conformity with the Underwriter Information.
Free Writing
Prospectus, including any electronic road show (including without
limitation any “bona fide electronic road show” as
defined in Rule 433(h)(5) under the Securities Act) (each, a
“Road Show”) (i) is identified in
Schedule III hereto and (iii) complied when
4
issued, and
complies, in all material respects with the requirements of the
Securities Act and the Rules and the Exchange Act and the rules and
regulations of the Commission thereunder.
As used in this
Section and elsewhere in this Agreement:
“Applicable Time” means 6:00 p.m.
(Eastern time) on the date of this Underwriting
Agreement.
“Statutory Prospectus” as of any
time means the Preliminary Prospectus relating to the Shares that
is included in the Registration Statement immediately prior to the
Applicable Time, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part
thereof.
“Issuer
Free Writing Prospectus” means each “free writing
prospectus” (as defined in Rule 405 of the Rules) prepared by
or on behalf of the Company or used or referred to by the Company
in connection with the offering of the Shares, including, without
limitation, each Road Show.
(c) The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the
effectiveness of the Registration Statement or suspending or
preventing the use of any Preliminary Prospectus, the Prospectus or
any “free writing prospectus”, as defined in
Rule 405 under the Rules, has been issued by the Commission
and no proceedings for that purpose have been instituted or, to the
Company’s knowledge, are threatened under the Securities Act.
Any required filing of any Preliminary Prospectus and/or the
Prospectus and any supplement thereto pursuant to Rule 424(b) of
the Rules has been or will be made in the manner and within the
time period required by such Rule 424(b). Any material
required to be filed by the Company pursuant to Rule 433(d) or
Rule 163(b)(2) of the Rules has been or will be made in the
manner and within the time period required by such
Rules.
(d) The documents incorporated by reference in the
Registration Statement, any Preliminary Prospectus and the
Prospectus, at the time they became effective or were filed with
the Commission, as the case may be, complied in all material
respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, and any further documents so
filed and incorporated by reference in the Registration Statement,
any Preliminary Prospectus and the Prospectus, when such documents
become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and 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 are made, not misleading.
(e) Each Issuer Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the
public offer and sale of the Shares or until any earlier date that
the Company notified or notifies the Representatives as described
in the next
5
sentence, did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part
thereof that has not been superseded or modified, the Statutory
Prospectus or the Prospectus.
If at any time
following issuance of an Issuer Free Writing Prospectus there
occurred or occurs an event or development as a result of which
such Issuer Free Writing Prospectus conflicted or would conflict
with the information contained in the Registration Statement, the
Statutory Prospectus or the Prospectus or included or would include
an untrue statement of a material fact or omitted or would omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances prevailing at the subsequent time, not misleading,
the Company has promptly notified or will promptly notify the
Representatives and has promptly amended or will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or
omission.
(f) The financial statements of the Company (including all
notes and schedules thereto) included or incorporated by reference
in the Registration Statement, the Statutory Prospectus and
Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders’ equity and cash flows
of the Company and its consolidated subsidiaries for the periods
specified; and such financial statements and related schedules and
notes thereto, and the unaudited financial information filed with
the Commission as part of the Registration Statement, have been
prepared in conformity with U.S. generally accepted accounting
principles (“U.S. GAAP”), consistently applied
throughout the periods involved; provided that financial
statements included in the Company’s periodic reports on Form
10-Q are subject to normal recurring year-end adjustments that are
not expected to be material in the aggregate and although prepared
in accordance with the instructions to Form 10-Q and Rule 10
of Regulation S-X do not include all of the information and
footnotes required by U.S. GAAP for complete financial statements.
The summary and selected financial data included in the Statutory
Prospectus and Prospectus present fairly, in all material respects,
the information shown therein as at the respective dates and for
the respective periods specified and have been presented on a basis
consistent with the consolidated financial statements set forth in
the Prospectus and other financial information.
(g) PricewaterhouseCoopers LLP (the “Auditor”)
whose reports are filed with the Commission as a part of the
Registration Statement, the Statutory Prospectus and the
Prospectus, are and, during the periods covered by their reports,
were independent public accountants as required by the Securities
Act and the Rules.
(h) The Company is duly organized, validly existing and in
good standing under the laws of Delaware. The Company has no
subsidiaries and does not control, directly or indirectly, any
corporation, partnership, joint venture, association or other
business organization. The Company is duly qualified to do business
and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by
it requires such qualification, except for such jurisdictions where
the failure to so qualify individually or in the aggregate would
not reasonably be expected to have a material adverse effect on the
assets, properties, condition, financial or
6
otherwise, or
in the results of operations, business affairs or business
prospects of the Company considered as a whole (a “Material
Adverse Effect”); and to the Company’s knowledge, no
proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail,
such power and authority or qualification. The Company does not
own, lease or license any asset or property or conduct any business
outside the United States of America.
The Registration
Statement initially became effective within three years of the date
hereof. If, immediately prior to the third anniversary of the
initial effective date of the Registration Statement, any of the
Shares remain unsold by the Underwriters, the Company will, prior
to that third anniversary file, if it has not already done so, a
new shelf registration statement relating to the Shares, in a form
satisfactory to the Representatives, will use its best efforts to
cause such registration statement to be declared effective within
180 days after that third anniversary, and will take all other
action necessary or appropriate to permit the public offering and
sale of the Shares to continue as contemplated in the expired
Registration Statement. References herein to the registration
statement relating to the Shares shall include such new shelf
registration statement.
(i) The Company has all requisite corporate power and
authority, and all necessary authorizations, approvals, consents,
orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity
(collectively, the “Permits”), to own, lease and
license its assets and properties and conduct its business, all of
which are valid and in full force and effect, except where the lack
of such Permits, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The
Company has fulfilled and performed in all material respects all of
its material obligations with respect to such Permits and no event
has occurred that allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the Company thereunder. Except
as may be required under the Securities Act and state and foreign
Blue Sky laws, no other Permits are required to enter into, deliver
and perform this Agreement and to issue and sell the
Shares.
(j) At the earliest time after the filing of the
Registration Statement that the Company or another offering
participant (within the meaning of Rule 142 of the Rules) made
a bona fide offer (within the meaning of Rule 164(h)(2)
of the Rules) of the Shares and (ii) at the date hereof
, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 of the Rules, including
(but not limited to) the Company or any other subsidiary in the
preceding three years not having been convicted of a felony or
misdemeanor or having been made the subject of a judicial or
administrative decree or order as described in Rule 405 of the
Rules.
(k) The Company owns or possesses legally enforceable rights
to use all patents, patent rights, inventions, trademarks,
trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how and other similar rights
and proprietary knowledge (collectively, “Intangibles”)
necessary for the conduct of its business as described in the
Registration Statement, the Statutory Prospectus and the
Prospectus. To the Company’s knowledge, the Company has not
received any notice of, or is not aware of, any infringement of or
conflict with asserted rights of others with respect to any
Intangibles. To the Company’s knowledge, no action, suit,
arbitration or legal, administrative or other proceeding
or
7
investigation
to which the Company is a party is pending or threatened which
involves any Intangibles, and the Company does not believe that any
such action, if brought, would be successful on the merits and
result in a Material Adverse Effect. Except as disclosed in the
Registration Statement, the Statutory Prospectus and the
Prospectus, the Intangibles do not infringe or conflict with any
right or valid and enforceable patent of any third party, or any
discovery, invention, product or process which is the subject of a
patent application filed by any third party, known to the Company.
The Company is not subject to any judgment, order, writ, injunction
or decree of any court or any U.S. federal, state, local, foreign
or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, or any arbitrator, except
for such orders, writs, injunctions or decrees that, individually
or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect, nor, except as referenced in the
Registration Statement, the Statutory Prospectus and the
Prospectus, has it entered into or is a party to any contract which
restricts or impairs the use of any Intangible in a manner which
would reasonably be expected to have a material adverse effect on
the use of any of the Intangibles. The Company has complied with
its respective contractual obligations relating to the protection
of the Intangibles used pursuant to licenses, except for any such
noncompliance that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intangibles of any other person or
entity that are required to be set forth in the Registration
Statement, the Statutory Prospectus and the Prospectus and that are
not set forth therein. None of the Intangibles employed by the
Company has been obtained or is being used by it in violation of
any contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or
employees in violation of the contractual rights of any persons.
Except as set forth in the Registration Statement, the Statutory
Prospectus and the Prospectus, the Company is not obligated to pay
a royalty, grant a license or provide other consideration to any
third party in connection with its patents, patent rights,
licenses, inventions, trademarks, service marks, trade names,
copyrights and know-how which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect; and, except as set forth in the Registration Statement, the
Statutory Prospectus and the Prospectus, no third party, including
any academic or governmental organization, possess rights to the
Intangibles which, if exercised, would reasonably be expected to
have a Material Adverse Effect.
(l) The Company has good and marketable title in fee simple
to all real property, and good and marketable title to all other
property owned by it, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, except such
as do not materially affect the value of such property and do not
materially interfere with the use made or proposed to be made of
such property by the Company. All property held under lease by the
Company is held by it under valid, existing and enforceable leases,
free and clear of all liens, encumbrances, claims, security
interests and defects, except such as are not material and do not
materially interfere with the use made or proposed to be made of
such property by the Company. Subsequent to the respective dates as
of which information is given in the Registration Statement, the
Statutory Prospectus and the Prospectus, (i) there has not
been any event which would reasonably be expected to have a
Material Adverse Effect; (ii) the Company has not sustained
any loss or interference with its assets, businesses or properties
(whether owned or leased) from fire, explosion, earthquake, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or any court or legislative or other governmental
action, order or decree which would reasonably be expected to have
a Material Adverse Effect; and
8
(iii) since the date of the latest balance
sheet included or incorporated by reference in the Registration
Statement, the Statutory Prospectus and the Prospectus, the Company
has not (A) issued any securities except for issuances upon
the exercise of Stock Options (as defined below) or incurred any
liability or obligation, direct or contingent, for borrowed money,
except such liabilities or obligations incurred in the ordinary
course of business, (B) entered into any transaction not in
the ordinary course of business or (C) declared or paid any
dividend or made any distribution on any shares of its stock or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its capital
stock.
(m) There is no document, contract or other agreement
required to be described in the Registration Statement, the
Statutory Prospectus or the Prospectus or to be filed as an exhibit
to the Registration Statement which is not described or filed as
required by the Securities Act or Rules or incorporated by
reference therein as permitted by the Rules. Each description of a
contract, document or other agreement in the Registration
Statement, the Statutory Prospectus or the Prospectus accurately
reflects in all material respects the terms of the underlying
contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement, the
Statutory Prospectus or the Prospectus or listed in the Exhibits to
the Registration Statement or incorporated by reference is in full
force and effect and is valid and enforceable by and against the
Company in accordance with its terms. Neither the Company, nor to
the Company’s knowledge, any other party is in default in the
observance or performance of any term or obligation to be performed
by it under any such agreement, and no event has occurred which
with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or
in the aggregate, would reasonably be expected to have a Material
Adverse Effect. No default exists, and no event has occurred which
with notice or lapse of time or both would constitute a default, in
the due performance and observance of any term, covenant or
condition, by the Company of any other agreement or instrument to
which the Company is a party or by which the Company or its
properties or business may be bound or affected which default or
event, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
(n) The scientific (other than the Company’s clinical
trial results), statistical and market related data included in the
Registration Statement, the Statutory Prospectus or the Prospectus
are based on or derived from sources that are credible and which
the Company believes to be reliable and accurate.
(o) The Company is not (i) in violation of its
certificate of incorporation, by-laws or other organizational
documents, (ii) in default under, and no event has occurred
which, with notice or lapse of time, or both, would constitute a
default under, or result in the creation or imposition of any lien,
charge, mortgage, pledge, security interest, claim, limitation on
voting rights, equity, trust or other encumbrance, preferential
arrangement, defect or restriction of any kind whatsoever, upon,
any property or assets of the Company pursuant to, any bond,
debenture, note, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which it is a party or by which
it is bound or to which any of its properties or assets is subject
or (iii) in violation of any statute, law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial,
regulatory or other legal or governmental agency or body, foreign
or domestic, except (in the case of clauses (ii) and
(iii) above) for violations or defaults that would not
(individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect.
9
(p) This Agreement has been duly and validly authorized,
executed and delivered by the Company and will constitute a legal,
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting the enforcement of creditors’
rights generally and by general equitable principles.
(q) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation,
the issuance and sale by the Company of the Shares) will give rise
to a right to terminate or accelerate the due date of any payment
due under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under,
or require any consent or waiver under, or result in the execution
or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party or by which the Company or any of
its properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation
applicable to the Company, except where it would not reasonably be
expected to have a Material Adverse Effect, or violate any
provision of the charter or by-laws of the Company, except for such
consents or waivers which have already been obtained and are in
full force and effect.
(r) On the date set forth therein, the Company had the
authorized and outstanding capital stock as set forth under the
caption “Capitalization” in the Statutory Prospectus
and the Prospectus (and any similar sections or information, if
any, contained in any Issuer Free Writing Prospectus). The
certificates evidencing the Shares are in due and proper legal form
and have been duly authorized for issuance by the Company. All of
the issued and outstanding shares of Common Stock have been duly
and validly issued and are fully paid and nonassessable. Except as
disclosed in the Registration Statement, the Statutory Prospectus
and Prospectus, there are no statutory preemptive or other similar
rights to subscribe for or to purchase or acquire any shares of
Common Stock of the Company or any such rights pursuant to its
Certificate of Incorporation or by-laws or any agreement or
instrument to or by which the Company is a party or bound. The
Shares, when issued and sold pursuant to this Agreement, will be
duly and validly issued, fully paid and nonassessable and none of
them will be issued in violation of any preemptive or other similar
right granted by the Company. Except as disclosed in the
Registration Statement, the Statutory Prospectus and the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance by the Company of, and there is no
commitment, plan or arrangement by the Company to issue, any share
of stock of the Company or any security convertible into, or
exercisable or exchangeable for, such stock. The Common Stock and
the Shares conform in all material respects to all statements in
relation thereto contained in the Registration Statement, the
Statutory Prospectus and the Prospectus.
(s) With respect to stock options (the “Stock
Options”) granted pursuant to the stock-based compensation
plans of the Company (the “Company Stock Plans”),
(i) the Company believes that each Stock Option intended to
qualify as an “incentive stock option” under
Section 422 of the Code so qualifies, (ii) each grant of
a Stock Option was duly authorized no later than the date on which
the grant of such Stock Option was by its terms to be
effective
10
(the
“Grant Date”) by all necessary corporate action,
including, as applicable, approval by the board of directors of the
Company (or a duly constituted and authorized committee thereof)
and any required stockholder approval by the necessary number of
votes or written consents, and the award agreement governing such
grant (if any) was duly executed and delivered by each party
thereto, (iii) each such grant was made in accordance with the
terms of the Company Stock Plans, (iv) the per share exercise
price of each Stock Option was equal to the fair market value of a
share of Common Stock as determined in good faith by the Board of
Directors on the effective Grant Date and (v) each such grant
was properly accounted for in accordance with U.S. GAAP. There is
no and has been no policy or practice of the Company to coordinate
the grant of Stock Options with the release or other public
announcement of material information regarding the Company or its
results of operations or prospects to minimize the exercise price
of such Stock Options.
(t) No holder of any security of the Company has any right
granted by the Company, which has not been waived or previously
satisfied, to have any security owned by such holder included in
the Registration Statement or to demand registration of any
security owned by such holder for a period of 90 days after
the date of this Agreement. Each director and executive officer of
the Company listed on Schedule III hereto has delivered to the
Representatives his or her written executed lock-up agreement in
the form attached to this Agreement as Exhibit A hereto
(“Lock-Up Agreement”).
(u) There are no legal or governmental proceedings pending
to which the Company is a party or of which any property of the
Company is the subject which, if determined adversely to the
Company could individually or in the aggregate have a Material
Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(v) All necessary corporate action has been duly and validly
taken by the Company and to authorize the execution, delivery and
performance of this Agreement and the issuance and sale of the
Shares by the Company.
(w) The Company is not involved in any labor dispute nor, to
the knowledge of the Company, is any such dispute threatened, which
dispute would reasonably be expected to have a Material Adverse
Effect. The Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or
contractors which would reasonably be expected to have a Material
Adverse Effect. The Company is not aware of any threatened or
pending litigation between the Company and any of its executive
officers which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect and has no reason to
believe that such officers will not remain in the employment of the
Company.
(x) No transaction has occurred between or among the Company
and any of its officers or directors, stockholders or any affiliate
or affiliates of any such officer or director or stockholder that
is required to be described in and is not described in the
Registration Statement, the Statutory Prospectus and the
Prospectus.
(y) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has
11
constituted or
which might reasonably be expected to constitute, the stabilization
or manipulation of the price of the Common Stock or any security of
the Company to facilitate the sale or resale of any of the
Shares.
(z) The Company has accurately prepared and filed all
Federal, state, local and foreign tax returns which are required to
be filed through the date hereof, which returns are true and
correct in all material respects or has received timely extensions
thereof, and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are material
and have become due. There are no tax audits or investigations
pending, which if adversely determined would have a Material
Adverse Effect; nor, to the Company’s knowledge, are there
any material proposed additional tax assessments against the
Company.
(aa) The Shares have been duly authorized for quotation on
the Nasdaq Global Market.
(bb) The Company has taken no action designed to, or
reasonably likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or the
quotation of the Common Stock on the Nasdaq Global Market, nor has
the Company received any notification that the Commission or the
Nasdaq Global Market is contemplating terminating such registration
or quotation.
(cc) The books, records and accounts of the Company
accurately and fairly reflect, the transactions in, and
dispositions of, the assets of, and the results of operations of,
the Company. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances 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 U.S. GAAP
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.
(dd) The Company has established and maintains disclosure
controls and procedures (as such term is defined in
Rule 13a-15 under the Exchange Act), which: (i) are
designed to ensure that material information relating to the
Company is made known to the Company’s principal executive
officer and its principal financial officer by others within the
Company, particularly during the periods in which the periodic
reports required under the Exchange Act are required to be
prepared; (ii) provide for the periodic evaluation of the
effectiveness of such disclosure controls and procedures at the end
of the periods in which the periodic reports are required to be
prepared; and (iii) are effective in all material respects to
perform the functions for which they were established.
(ee) Based on the evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant
deficiency in the design or operation of internal controls which
could adversely affect the Company’s ability to record,
process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether
or
12
not material,
that involves management or other employees who have a role in the
Company’s internal controls.
(ff) Except as described in the Registration Statement, the
Statutory Prospectus and the Prospectus and as preapproved in
accordance with the requirements set forth in Section 10A of
the Exchange Act, the Auditor has not been engaged by the Company
to perform any “prohibited activities” (as defined in
Section 10A of the Exchange Act).
(gg) Except as described in the Registration Statement, the
Statutory Prospectus and the Prospectus, there are no material
off-balance sheet arrangements (as defined in Item 303 of
Regulation S-K) that have or are reasonably likely to have a
material current or future effect on the Company’s financial
condition, revenues or expenses, changes in financial condition,
results of operations, liquidity, capital expenditures or capital
resources.
(hh) The Company’s Board of Directors has validly
appointed an audit committee whose composition satisfies the
requirements of Rule 4350(d)(2) of the Nasdaq Marketplace
Rules (the “Nasdaq Rules”) and the Board of Directors
and/or the audit committee has adopted a charter that satisfies the
requirements of Rule 4350(d)(1) of the Nasdaq Rules. The audit
committee has reviewed the adequacy of its charter within the past
twelve months.
(ii) The Company is actively taking steps to ensure that it
will be in compliance with all other applicable provisions of the
Sarbanes-Oxley Act of 2002, any related rules and regulations
promulgated by the Commission and corporate governance requirements
under the Nasdaq Rules upon the effectiveness of such provisions
and has no reason to believe that it will not be able to comply
with such provisions at the time of effectiveness. There is and has
been no failure on the part of the Company, nor, to the
Company’s knowledge, any of its directors or officers, in
their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act, including, without limitation, Section 402
related to loans and Sections 302 and 906 related to
certifications.
(jj) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are
engaged or propose to engage after giving effect to the
transactions described in the Registration Statement, the Statutory
Prospectus and the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company or the
Company’s businesses, assets, employees, officers and
directors are in full force and effect; the Company is in
compliance with the terms of such policies and instruments in all
material respects; 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 is not materially greater than the current cost. The
Company has not been denied any insurance coverage which it has
sought or for which it has applied.
(kk) Each approval, consent, order, authorization,
designation, declaration or filing of, by or with any regulatory,
administrative or other governmental body necessary in connection
with the execution and delivery by the Company of this Agreement
and the consummation of the transactions herein contemplated
required to be obtained or performed by the Company (except such
additional steps as may be required by the NASD Regulation,
Inc.
13
(the
“NASD”) or may be necessary to qualify the Shares for
public offering by the Underwriters under the state securities or
Blue Sky laws) has been obtained or made and is in full force and
effect.
(ll) There are no affiliations with the NASD among the
Company’s officers, directors or, to the knowledge of the
Company, any five percent or greater stockholder of the Company,
except as set forth in the Registration Statement, or otherwise
disclosed in writing to the Representatives.
(mm) (i) The Company is not in violation of any
applicable rule, law or regulation relating to the use, treatment,
storage and disposal of toxic substances and protection of health
or the environment (“Environmental Law”) which are
applicable to its business, except for any violation which would
not reasonably be expected to have a Material Adverse Effect;
(ii) the Company has not received any notice from any
governmental authority or third party of an asserted claim under
Environmental Laws; (iii) the Company has received all
permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct its business and is in
compliance with all terms and conditions of any such permit,
license or approval, except where non-compliance would not
reasonably be expected to have a Material Adverse Effect;
(iv) to the Company’s knowledge, no facts currently
exist that will require the Company to make future material capital
expenditures to comply with Environmental Laws; and (v) no
property which is or has been owned, or to the Company’s
knowledge, leased or occupied by the Company has been designated as
a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq. ) (“CERCLA”)
or otherwise designated as a contaminated site under applicable
state or local law. To the Company’s knowledge, the Company
has not been named as a “potentially responsible party”
under CERCLA.
(nn) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the
business, operations and properties of the Company, in the course
of which the Company identifies and evaluates associated costs and
liabilities (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
potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
Material Adverse Effect.
(oo) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds
thereof as described in the Statutory Prospectus and the
Prospectus, will not be an “investment company” within
the meaning of the Investment Company Act of 1940, as amended (the
“Investment Company Act”).
(pp) Neither the Company nor any other person associated
with or acting on behalf of the Company including, without
limitation, any director, officer, agent or employee of the
Company, has not, directly or indirectly, while acting on behalf of
the Company (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (ii) made any unlawful payment
to foreign or domestic government
14
officials or
employees or to foreign or domestic political parties or campaigns
from corporate funds; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or
(iv) made any other unlawful payment.
(qq) The operations of the Company are and have been
conducted at all times in material compliance with applicable
financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions applicable to the
Company, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Money
Laundering Laws is pending, or to the best knowledge of the
Company, threatened.
(rr) Neither the Company nor, to the knowledge of the
Comp
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