Exhibit 1.1
EXECUTION COPY
Acorda
Therapeutics, Inc.
3,300,000
Shares
Common Stock
UNDERWRITING
AGREEMENT
dated February 12,
2008
J.P.
Morgan Securities Inc.
Deutsche Bank Securities
Inc.
UNDERWRITING
AGREEMENT
February 12,
2008
J.P. MORGAN SECURITIES INC.
DEUTSCHE BANK
SECURITIES INC.
As Representatives of
the several Underwriters
c/o J.P. MORGAN
SECURITIES INC.
277 Park
Avenue
New York, New York
10172
Ladies and
Gentlemen:
Introductory. Acorda Therapeutics, Inc., a Delaware
corporation (the “Company”), proposes to issue and sell
to the several underwriters named in Schedule A (the
“Underwriters”) an aggregate of 3,217,000 shares of its
Common Stock, par value $0.001 per share (the “Common
Stock”); and the stockholder of the Company named in Schedule
B (the “Selling Stockholder”) proposes to sell to the
Underwriters an aggregate of 83,000 shares of Common Stock.
The 3,217,000 shares of Common Stock to be sold by the Company and
the 83,000 shares of Common Stock to be sold by the Selling
Stockholder are collectively called the “Firm Common
Shares”. In addition, the Company has granted to the
Underwriters an option to purchase up to an additional 495,000
shares (the “Optional Common Shares”) of Common Stock,
as provided in Section 2. The Firm Common Shares and, if
and to the extent such option is exercised, the Optional Common
Shares are collectively called the “Common
Shares”. J.P. Morgan Securities Inc.
(“JPMorgan”) and Deutsche Bank Securities Inc.
(“Deutsche Bank”) have agreed to act as representatives
of the several Underwriters (in such capacity, the
“Representatives”) in connection with the offering and
sale of the Common Shares.
The Company
and the Selling Stockholder hereby confirm their respective
agreements with the Underwriters as follows:
SECTION 1. Representations and
Warranties.
A.
Representations and Warranties of the Company. The
Company hereby represents, warrants and covenants to each
Underwriter, as of the date of this Underwriting Agreement (this
“Agreement”), as follows:
(a)
The
Company has prepared and filed with the Securities and Exchange
Commission (the “Commission”) a registration statement
on Form S-3 (File No. 333-147163), which contains a base
prospectus (the “Base Prospectus”), to be used in
connection with the public offering and sale of the Common
Shares. Such registration statement, as amended, including
the financial statements, exhibits and schedules thereto, at each
time of effectiveness
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under the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Securities Act”),
including any required information deemed to be a part thereof at
the time of effectiveness pursuant to Rule 430B under the
Securities Act or the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder
(collectively, the “Exchange Act”), is called the
“Registration Statement.” Any registration
statement filed by the Company pursuant to
Rule 462(b) under the Securities Act is called the
“Rule 462(b) Registration Statement,” and
from and after the date and time of filing of the
Rule 462(b) Registration Statement the term
“Registration Statement” shall include the
Rule 462(b) Registration Statement. Any preliminary
prospectus supplement to the Base Prospectus that describes the
Common Shares and the offering thereof and is used prior to filing
of the Final Prospectus is called, together with the Base
Prospectus, a “preliminary prospectus.” The term
“Prospectus” shall mean the final prospectus relating
to the Common Shares that is first filed pursuant to
Rule 424(b) after the date and time that this Agreement
is executed and delivered by the parties hereto (the
“Execution Time”). Any reference herein to the
Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act; any reference to any
amendment or supplement to any preliminary prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such preliminary prospectus or Prospectus,
as the case may be, under the Exchange Act, and incorporated by
reference in such preliminary prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement .
(b)
Compliance with
Registration and Exchange Act Requirements.
The
Registration Statement has been declared effective by the
Commission under the Securities Act. The Company has complied
to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information. No
stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the best knowledge of the
Company, are contemplated or threatened by the
Commission.
The final
preliminary prospectus included in the Disclosure Package (as
defined below) and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by
electronic transmission pursuant to the Commission’s
Electronic Data Gathering, Analysis and Retrieval System
(“EDGAR”) (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer
and sale of the Common Shares. Each of the Registration
Statement and any post-effective amendment thereto, at each time of
effectiveness and at the date hereof, complied and will comply in
all material respects with the Securities Act and did not and will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The
Prospectus (including any Prospectus wrapper), as amended or
supplemented, as of its date and at the date hereof, the Closing
Date (as defined herein) and any Subsequent Closing Date (as
defined herein), did not and will not contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of
the
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circumstances
under which they were made, not misleading. The
representations and warranties set forth in the two immediately
preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, based upon
and in conformity with written information furnished to the Company
by any Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 9 hereof. There
are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required.
The documents
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects with the requirements of the
Securities Act or the Exchange Act, as applicable. Any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when
such documents become effective or are filed with the Commission,
as the case may be, will conform 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.
(c)
Offering Materials
Furnished to Underwriters. The Company has delivered to
each of the Representatives one complete manually signed copy of
the Registration Statement and of each consent and certificate of
experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary
prospectuses and the Prospectus, as amended or supplemented, in
such quantities and at such places as any Representative reasonably
requests for each of the Underwriters.
(d)
Disclosure Package
.
The term “Disclosure Package” shall mean, collectively,
(i) the preliminary prospectus that is included in the
Registration Statement immediately prior to the Applicable Time (as
defined below), if any, as amended or supplemented, (ii) the
issuer free writing prospectuses as defined in Rule 433 under
the Securities Act (each, an “Issuer Free Writing
Prospectus”) identified in Schedule C hereto, (iii) any
other free writing prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the
Disclosure Package, and (iv) Schedule D hereto, which
indicates the number of Common Shares being sold and the price at
which the Common Shares will be sold to the public. As of
8:00 a.m. (New York time) on February 13, 2008 (the
“Applicable Time”), the Disclosure Package did not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply
to statements in or omissions from the Disclosure Package based
upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly
for use therein, it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists
of the information described as such in Section 9
hereof.
(e)
Company Not Ineligible
Issuer . (i) At the time of
filing of the Registration Statement and (ii) as of the date
of the execution and delivery of this Agreement (with such date
being used as the determination date for purposes of this clause
(ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405 under the Securities Act), without taking
account
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of any determination by the
Commission pursuant to Rule 405 under the Securities Act that
it is not necessary that the Company be considered an Ineligible
Issuer.
(f)
Issuer Free Writing
Prospectuses . Each Issuer Free
Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the offering or until any earlier
date that the Company notified or notifies the Representatives as
described in the next 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.
The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use therein,
it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described
as such in Section 9 hereof.
(g)
Distribution of Offering
Material by the Company. The Company has not
distributed and will not distribute, prior to the later of the last
Subsequent Closing Date (as defined below) and the completion of
the Underwriters’ distribution of the Common Shares, any
offering material in connection with the offering and sale of the
Common Shares other than a preliminary prospectus, the Prospectus,
any Issuer Free Writing Prospectus reviewed and consented to
by the Representatives
or
included in Schedule C hereto or the Registration
Statement.
(h)
The Underwriting
Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(i)
Authorization of the
Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly
authorized for issuance and sale pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this
Agreement, will be validly issued, fully paid and
nonassessable.
(j)
No Transfer
Taxes. There are no transfer taxes
or other similar fees or charges under federal law or the laws of
any state, or any political subdivision thereof, required to be
paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of
the Common Shares.
(k)
No Applicable Registration
or Other Similar Rights. There are no persons with
registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or
included in the offering contemplated by this Agreement, except for
such rights as have been duly waived.
(l)
No Material Adverse
Change. Except as otherwise
disclosed in the Disclosure Package, subsequent to the dates as of
which information is given in the Disclosure Package:
(i) there has been no material adverse change, or any
development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise,
or in the earnings, business, properties, operations or prospects,
whether or not arising from transactions in the ordinary course of
business, of the Company and its subsidiary, taken as a whole (any
such change is called a “Material Adverse Change”);
(ii) the Company and its subsidiary have not
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incurred any material
liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material
transaction or agreement not in the ordinary course of business;
and (iii) there has been no dividend or distribution of any
kind declared, paid or made by the Company, except for dividends
paid to the Company, on any class of capital stock or repurchase or
redemption by the Company of any class of capital
stock.
(m)
Independent
Accountants. KPMG LLP, who have expressed
their opinion with respect to the financial statements (which term
as used in this Agreement includes the related notes thereto) filed
with the Commission as a part of the Registration Statement and
included in the Disclosure Package and the Prospectus, are
independent public accountants with respect to the Company as
required by the Securities Act and the Exchange Act.
(n)
Preparation of the
Financial Statements. The financial
statements filed with the Commission as a part of or incorporated
by reference in the Registration Statement and included or
incorporated by reference in the Disclosure Package and the
Prospectus present fairly in all material
respects the consolidated financial
position of the Company and its subsidiary as of and at the dates
indicated and the results of its operations and cash flows for the
periods specified on the basis stated therein. Such financial
statements comply as to form with the applicable
accounting requirements of the Securities Act and have been
prepared in conformity with generally accepted accounting
principles (“GAAP”) applied on a consistent basis
throughout the periods involved, except as may be expressly stated
in the related notes thereto. No other financial statements
or supporting schedules are required to be included or incorporated
by reference in the Registration Statement. The financial
data with respect to the fiscal years ended June 30, 2002,
June 30, 2003, December 31, 2004, December 31, 2005
and December 31, 2006, and with respect to the six months
ended December 31, 2003, in each case, set forth, or
incorporated by reference, in each of the preliminary prospectus
included in the Disclosure Package and the Prospectus under the
captions “Prospectus Supplement Summary—Summary
Consolidated Financial Data” and “Selected Financial
Data” fairly present the information set forth
therein on a basis consistent with that of the audited financial
statements contained, or incorporated by reference, in the
Registration Statement. The unaudited
consolidated balance sheet and statement of operations as of and
for the year ended December 31, 2007, set forth in the press
release attached as Exhibit 99.1 to the Form 8-K filed by
the Company with the Commission on February 11, 2008 (the
“Unaudited 2007 Financial Statements”), are complete
and correct in all material respects, have been prepared in
conformity with GAAP consistent with methods used in prior periods,
and present fairly the consolidated financial condition and results
of operations of the Company and its subsidiary as of the dates and
for the periods indicated, subject to normal year-end audit
adjustments and except that the Unaudited 2007 Financial Statements
do not contain footnotes as would be required by GAAP.
(o)
Incorporation and Good
Standing of the Company and Its Subsidiary.
Each of
the Company and its subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to
conduct its business as described in the Disclosure Package and in
the Prospectus and, in the case of the Company, to enter into and
perform its obligations under this Agreement. Each of the
Company and its subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership
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or leasing of property or the
conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not,
individually or in the aggregate, result in a Material Adverse
Change. All of the issued and outstanding capital stock of
the Company’s subsidiary issued to the Company has been duly
authorized and validly issued, is fully paid and nonassessable and
is owned, as described in the Prospectus, by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance
or claim except (i) such as are described in the Disclosure
Packages and the Prospectus, (ii) such as do not materially
and adversely affect the value of such capital stock and
(iii) such as do not materially interfere with the use made or
proposed to be made of such property by the Company or such
subsidiary. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
the subsidiary listed in Exhibit 21 to the Registration
Statement.
(p)
Capitalization and Other
Capital Stock Matters. The authorized, issued and
outstanding capital stock of the Company is as set forth in each of
the Disclosure Package and the Prospectus under the caption
“Capitalization” (other than for subsequent issuances,
if any, pursuant to employee benefit plans described in the
Disclosure Package and the Prospectus or upon exercise of
outstanding options or warrants described in the Disclosure Package
and the Prospectus, as the case may be). The Common Stock
(including the Common Shares) conforms in all material respects to
the description thereof contained in each of the Disclosure Package
and the Prospectus. All of the issued and outstanding shares
of Common Stock (including the shares of Common Stock owned by the
Selling Stockholder) have been duly authorized and validly issued,
are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. None of the
outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. There
are no authorized or outstanding options, warrants, preemptive
rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or its subsidiary
other than those accurately described in all material respects in
the Disclosure Package and the Prospectus. The description of
the Company’s 1999 Employee Stock Option Plan and 2006
Employee Incentive Plan, and the options or other rights granted
thereunder, set forth in each of the Disclosure Package and the
Prospectus accurately and fairly summarizes in all material
respects the information required to be shown with respect to such
plans, arrangements, options and rights.
(q)
Listing.
The
Common Shares have been approved for inclusion on Nasdaq Global
Market, subject only to official notice of issuance.
(r)
Non-Contravention of
Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor its
subsidiary is (i) in violation or is in default (or, with the
giving of notice or lapse of time, would be in default)
(“Default”) under its charter or by-laws, (ii) is
in Default under any indenture, mortgage, loan or credit agreement,
deed of trust, note, contract, franchise, lease or other agreement,
obligation, condition, covenant or instrument to which the Company
or its subsidiary is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or
its subsidiary is subject (each, an “Existing
Instrument”), or (iii) is in violation
of any statute, law, rule, regulation, judgment, order or decree of
any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or its subsidiary or any
7
of its properties, as
applicable, except with respect to clauses (ii) and
(iii) only, for such violations as would not, individually or
in the aggregate, result in a Material Adverse
Change. The Company’s
execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby, by the
Disclosure Package and by the Prospectus (i) have been duly
authorized by all necessary corporate action and will not result in
any Default under the charter or by-laws of the Company or its
subsidiary, (ii) will not conflict with or constitute a breach
of, or Default or a Debt Repayment Triggering Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
its subsidiary pursuant to, or require the consent of any other
party to, any Existing Instrument, except for such conflicts,
breaches, Defaults, Debt Repayment Triggering Events (as defined
below), liens, charges or encumbrances as would not, individually
or in the aggregate, result in a Material Adverse Change and
(iii) will not result in any violation of any law, regulation,
order or decree applicable to the Company or its subsidiary of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company
or its subsidiary or any of its or their properties, except for
such violations as would not, individually or in the aggregate,
result in a Material Adverse Change. No consent, approval,
authorization or other order of, or registration or filing with,
any court or other governmental or regulatory authority or agency,
is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby, by the Disclosure Package and by the
Prospectus, except such as have been obtained or made by the
Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the Financial
Industry Regulatory Authority (the “FINRA”) and
(B) such consents, approvals, authorizations, orders,
registrations or qualifications that, if not obtained or made,
would not individually or in the aggregate result in a Material
Adverse Change. As used herein, a “Debt Repayment
Triggering Event” means any event or condition which gives,
or with the giving of notice or lapse of time would give, the
holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or its subsidiary.
(s)
No Material Actions or
Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best
of the Company’s knowledge, threatened (i) against or
affecting the Company or its subsidiary, (ii) which has as the
subject thereof any officer or director of, or property owned or
leased by, the Company or its subsidiary or (iii) relating to
environmental or discrimination matters, where in any such case
(A) there is a reasonable possibility that such action, suit
or proceeding might be determined adversely to the Company or its
subsidiary and (B) any such action, suit or proceeding, if so
determined adversely, would reasonably be expected to result in a
Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement.
(t)
Labor
Matters. No material labor problem or
dispute with the employees of the Company or its subsidiary exists
or, to the best of the Company’s knowledge, is threatened or
imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of its or its subsidiary’s
principal suppliers, contractors or customers, that could have a
Material Adverse Change.
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(u)
Intellectual Property
Rights. The Company and its
subsidiary own or possess, license or have the right to use
trademarks, servicemarks, trade names, patents, copyrights, and any
registrations and applications for any of the foregoing, domain
names, licenses, approvals, trade secrets, know—how,
inventions, technology and other similar rights (collectively,
“Intellectual Property Rights”) reasonably necessary to
conduct its business as now conducted and as proposed to be
conducted in each of the Disclosure Package and the
Prospectus. Except as has been disclosed in each of the
Disclosure Package and the Prospectus, neither the Company nor its
subsidiary has received any written notice from third-parties of
infringement, misappropriation or conflict with asserted
Intellectual Property Rights of others, and the Company is unaware
of any other facts which would form a reasonable basis for any such
claim. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property
Rights of any other person or entity that are required to be set
forth in the Prospectus and are not described therein accurately in
all material respects. The Company has not received any
written notice of and is not in material breach of any of its
obligations under any material options, licenses, or agreements
with respect to the Intellectual Property Rights and to the
Company’s knowledge, no other party to such options, licenses
or agreements is in material breach thereof. None of the
technology employed by the Company in any material respect has been
obtained or is being used by the Company in violation of any
material contractual obligation binding on the Company or, to the
Company’s knowledge, any of its officers, directors or
employees or otherwise in violation of the rights of any
persons. Except as set forth in the
Disclosure Package and the Prospectus, (a) no party has been
granted an exclusive license to use any material portion of any
Intellectual Property Rights owned by the Company; (b) to the
Company’s knowledge, there is no material infringement by
third parties of any Intellectual Property Rights owned by or
exclusively licensed to the Company; (c) there is no pending
or, to the Company’s knowledge, threatened action, suit,
proceeding or written claim by others challenging the
Company’s rights in or to any material Intellectual Property
Rights owned by or exclusively licensed to the Company, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim; and (d) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
written claim by others challenging the validity or scope of any
Intellectual Property Rights owned by or exclusively licensed to
the Company, and the Company is unaware of any facts which would
form a reasonable basis for any such claim and to the
Company’s knowledge, such Intellectual Property Rights are
valid and enforceable.
(v)
All Necessary Permits,
etc. The Company and its
subsidiary possess such valid and current licenses, certificates,
authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their
respective businesses, and neither the Company nor its subsidiary
has received any notice from such an agency or body seeking to
revoke, or asserting that the Company is in non-compliance with,
any such license, certificate, authorization or permit, which if
such license, certificate, authorization or permit were revoked or
found to be noncompliant would have a Material Adverse
Change.
(w)
Title to
Properties. The Company and its
subsidiary have good and marketable title to all the properties and
assets reflected as owned in the financial statements referred to
in Section 1(n) above, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities,
claims and other defects, except (i) such as are described in
the Disclosure Package and the Prospectus, (ii) such as do not
materially and adversely affect the
9
value of such property or
(iii) such as do not materially interfere with the use made or
proposed to be made of such property by the Company or its
subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or its subsidiary
are held under valid and enforceable leases, with such exceptions
as are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or its
subsidiary.
(x)
Tax Law
Compliance. The Company and its
consolidated subsidiary have filed all necessary federal, state,
local and foreign income and franchise tax returns and have paid
all taxes required to be paid by any of them and, if due and
payable, any related or similar assessment, fine or penalty levied
against any of them. The Company has made adequate charges,
accruals and reserves in the applicable financial statements
referred to in Section 1(n) above in respect of all
federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or its
consolidated subsidiary has not been finally determined.
(y)
Company Not an
“Investment Company.” The Company has been
advised of the requirements of the Investment Company Act of 1940,
as amended, and the rules and regulations promulgated
thereunder (the “Investment Company Act”). The
Company is not, and after receipt of payment for the Common Shares
and application of the proceeds thereof as contemplated under
“Use of Proceeds” in each of the Disclosure Package and
the Prospectus will not be, an “investment company”
within the meaning of the Investment Company Act.
(z)
Insurance.
Each of
the Company and its subsidiary are insured by recognized,
financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are
generally deemed adequate and customary for their businesses
including, but not limited to, policies covering real and personal
property owned or leased by the Company and its subsidiary against
theft, damage, destruction, acts of vandalism and
earthquakes. All policies of insurance and surety bonds
insuring the Company or its subsidiary or their respective
businesses, assets, employees, officers and directors are in full
force and effect; the Company and its subsidiary are in compliance
with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or its subsidiary
under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of
rights clause. The Company has no reason to believe that it
or its subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted
and at a cost that would not result in a Material Adverse
Change. Neither of the Company nor its subsidiary has been
denied any insurance coverage which it has sought or for which it
has applied.
(aa)
No Price Stabilization or
Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or
that might be reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Common Shares. The
Company acknowledges that the Underwriters may engage in passive
market making transactions in the Common Shares on the Nasdaq
Global Market in accordance with Regulation M under the Exchange
Act.
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(bb)
Related Party
Transactions. There are no business
relationships or related-party transactions involving the Company
or its subsidiary or any other person required to be described in
the Disclosure Package or the Prospectus that have not been
described as required.
(cc)
Internal Controls and
Procedures. The Company maintains
(i) effective internal control over financial reporting as
defined in Rule 13a-15 under the Exchange Act, and (ii) a
system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in
accordance with management’s general or specific
authorizations; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability; (C) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (D) 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)
Earnings Statement
. The Company agrees
with each of the Underwriters to make generally available to its
stockholders as soon as practicable an earnings statement or
statements satisfying the provisions of Section 11(a) of
the Securities Act.
(ee)
No Material Weakness in
Internal Controls . Except as disclosed in
the Disclosure Package and the Prospectus, or in any document
incorporated by reference therein, since the end of the
Company’s most recent audited fiscal year, there has been
(i) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and
(ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
(ff)
Disclosure Controls
.
The Company and its
subsidiary maintain an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15
under the Exchange Act) that is designed to ensure that information
required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company and its subsidiary
have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15
under the Exchange Act.
(gg)
Stock Options
.
Except as described
or reflected in the Disclosure Package and the Prospectus, or in
any document incorporated by reference therein, as of the date
hereof, with respect to the stock options (the “Stock
Options”) granted pursuant to the stock-based compensation
plans of the Company and its subsidiaries (the “Company Stock
Plans”), (i) each Stock Option designated by the Company
at the time of grant as an “incentive stock option”
under Section 422 of the Internal Revenue Code of 1986, as
amended (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 (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, the
Exchange Act and all other applicable laws and regulatory
rules or requirements, including the rules of the Nasdaq
Global
11
Market and any other exchange
on which Company securities are traded, (iv) the per share
exercise price of each Stock Option was equal to or greater than
the fair market value of a share of Common Stock on the applicable
Grant Date and (v) each such grant was properly accounted for
in accordance with GAAP in the financial statements (including the
related notes) of the Company and disclosed in the Company’s
filings with the Commission in accordance with the Exchange Act and
all other applicable laws. The Company has not knowingly
granted, and there is no and has been no policy or practice of the
Company of granting, Stock Options prior to, or otherwise
coordinating the grant of Stock Options with, the release or other
public announcement of material information regarding the Company
or its subsidiaries or their results of operations or
prospects.
(hh)
No Unlawful Contributions
or Other Payments. Neither the Company nor its
subsidiary nor, to the best of the Company’s knowledge, any
employee or agent of the Company or its subsidiary, has made any
contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of
the character required to be disclosed in the
Prospectus.
(ii)
Sarbanes-Oxley. The Company and each of
the Company’s directors and officers, in their capacities as
such, are in material compliance with all applicable provisions of
the U.S. Sarbanes-Oxley Act of 2002 that are effective and the
rules and regulations promulgated in connection therewith,
including Section 402 related to loans and Sections 302 and
906 related to certifications.
(jj)
Compliance with
Environmental Laws. Except as would not,
individually or in the aggregate, result in a Material Adverse
Change (i) neither the Company nor its subsidiary is in
violation of any federal, state, local or foreign law, regulation,
order, permit or other requirement relating to pollution or
protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including without limitation,
laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum and petroleum
products (collectively, “Materials of Environmental
Concern”), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern
(collectively, “Environmental Laws”), which violation
includes, but is not limited to, noncompliance with any permits or
other governmental authorizations required for the operation of the
business of the Company or its subsidiary under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or its subsidiary received any written
communication, whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or its
subsidiary is in violation of any Environmental Law;
(ii) there is no claim, action or cause of action filed with a
court or governmental authority, no investigation with respect to
which the Company has received written notice, and no written
notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs,
natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or
resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased
or operated by the Company or its subsidiary, now or in the past
(collectively, “Environmental Claims”), pending or, to
the best of the Company’s
12
knowledge, threatened against
the Company or its subsidiary or any person or entity whose
liability for any Environmental Claim the Company or its subsidiary
has retained or assumed either contractually or by operation of
law; (iii) to the best of the Company’s knowledge, there
are no past, present or anticipated future actions, activities,
circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that reasonably could
result in a violation of any Environmental Law, require
expenditures to be incurred pursuant to Environmental Law, or form
the basis of a potential Environmental Claim against the Company or
its subsidiary or against any person or entity whose liability for
any Environmental Claim the Company or its subsidiary has retained
or assumed either contractually or by operation of law, and
(iv) neither the Company nor its subsidiary is subject to any
pending or threatened proceeding under Environmental Law to which a
governmental authority is a party and which is reasonably likely to
result in monetary sanctions of $100,000 or more.
(kk)
ERISA Compliance.
None of the following
events has occurred or exists: (i) a failure to fulfill the
obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), and the
regulations and published interpretations thereunder with respect
to a Plan, determined without regard to any waiver of such
obligations or extension of any amortization period; (ii) an
audit or investigation by the Internal Revenue Service, the U.S.
Department of Labor, the Pension Benefit Guaranty Corporation or
any other federal or state governmental agency or any foreign
regulatory agency with respect to the employment or compensation of
employees by the Company or its subsidiary that could result in a
Material Adverse Change; (iii) any breach of any contractual
obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of
employees by the Company or its subsidiary that could result in a
Material Adverse Change. None of the following events has
occurred or is reasonably likely to occur: (i) a
material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company
or its subsidiary compared to the amount of such contributions made
in the Company’s and its subsidiary’s most recently
completed fiscal year; (ii) a material increase in the
Company’s and subsidiary’s “accumulated
post-retirement benefit obligations” (within the meaning of
Statement of Financial Accounting Standards 106) compared to the
amount of such obligations in the Company’s and its
subsidiary’s most recently completed fiscal year except for
any increases in the ordinary course of business related to the
increased number of employees of the Company and the addition of a
matching benefit under the Company’s 401(k) plan;
(iii) any event or condition giving rise to a liability under
Title IV of ERISA that could result in a Material Adverse Change;
or (iv) the filing of a claim by one or more employees or
former employees of the Company or its subsidiary related to its or
their employment that could result in a Material Adverse
Change. For purposes of this paragraph, the term
“Plan” means a plan (within the meaning of
Section 3(3) of ERISA) subject to Title IV of ERISA with
respect to which the Company or its subsidiary may have any
liability.
(ll)
Brokers.
Other
than as required by the terms of this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder’s fee or other fee or
commission as a result of any transactions contemplated by this
Agreement.
13
(mm)
Not a “Significant
Subsidiary”. The Company’s
subsidiary is not a “significant
subsidiary” as such term is defined in Rule 1-02 of
Regulation S-X under the Securities Act.
(nn)
No Outstanding Loans or
Other Indebtedness. There are no outstanding
loans, advances (except normal advances for business expenses in
the ordinary course of business) or guarantees or indebtedness by
the Company to, or for the benefit of, any of the officers or
directors of the Company.
(oo)
Strategic
Agreements. Except as otherwise
described in the Prospectus or as would not individually or in the
aggregate result in a Material Adverse Change, each of the
collaboration or strategic alliance agreements, including without
limitation, license and supply agreements, described in the
Prospectus (collectively, the “Strategic Agreements”)
is in full force and effect and constitutes a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency and reorganization, moratorium or other
similar laws.
(pp)
Prospectus
Statements . The statements
included, or incorporated by reference, in the Prospectus under the
caption “Business—Collaborations, Alliances and License
Agreements,” insofar as they purport to describe the
provisions of the agreements referred to therein, under the caption
“Business—Government Regulation,” insofar as they
purport to describe the provisions of the laws and regulations
referred to therein, are accurate descriptions or summaries in all
material respects.
Any certificate
signed by an officer of the Company and delivered to the
Representatives or to counsel for the Underwriters shall be deemed
to be a representation and warranty by the Company to each
Underwriter as to the matters set forth therein.
The Company
acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 6 hereof, counsel
to the Company and counsel to the Underwriters, will rely upon the
accuracy and truthfulness of the foregoing representations and
hereby consents to such reliance.
B.
Representations and Warranties of the Selling
Stockholder. The Selling Stockholder represents, warrants
and covenants to each Underwriter as follows:
(a)
The Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by or on behalf of the
Selling Stockholder.
(b)
Title to Common Shares to be Sold. The
Selling Stockholder is,
and on the Closing Date will be, the record and beneficial owner
of, and has, and on the Closing Date will have, good and valid
title to, the Common Shares to be sold by it free and clear of all
liens, encumbrances, or claims and has duly indorsed such Common
Shares in blank, and assuming that the Underwriters acquire their
interest in the Common Shares they have purchased without notice of
any adverse claim (within the meaning of Section 8-105 of the
Uniform Commercial Code (the “UCC”)), such Underwriters
that have purchased Common Shares delivered on the Closing Date to
DTC by making payment therefor, as provided herein, and that have
had such Common Shares credited to the securities account or
accounts of such Underwriters maintained
14
with DTC will have
acquired a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Shares purchased by
such Underwriters, and no action based on an adverse claim
will be able to be
asserted against such Underwriters with respect to such
Shares .
(c)
All Authorizations Obtained. The Selling Stockholder
has the legal right and power, and all authorizations and approvals
required by law and under its charter or by-laws, partnership
agreement, or other organizational documents, as applicable, to
enter into this Agreement, to sell, transfer and deliver all of the
Common Shares which may be sold by the Selling Stockholder pursuant
to this Agreement and to comply with its other obligations
hereunder and thereunder.
(d)
Delivery of the Common Shares to be Sold. Delivery of
the Common Shares which are sold by the Selling Stockholder
pursuant to this Agreement will pass good and valid title to such
Common Shares, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or other claim.
(e)
Non-Contravention; No Further Authorizations or Approvals
Required. The execution and delivery by the Selling
Stockholder of, and the performance by the Selling Stockholder of
its obligations under, this Agreement (i) will not result in
any Default under, or require the consent of any other party to,
the charter or by-laws, partnership agreement, or other
organizational documents, as applicable, of the Selling
Stockholder, (ii) will not conflict with or constitute a
breach of, or Default under, any other agreement or instrument to
which the Selling Stockholder is a party or by which it is bound or
under which it is entitled to any right or benefit and
(iii) will not result in any violation of any statute, law,
regulation, order or decree applicable to the Selling Stockholder
of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Selling Stockholder or its properties. No consent, approval,
authorization or other order of, or registration or filing with,
any court or other governmental authority or agency, is required
for the consummation by the Selling Stockholder of the transactions
contemplated in this Agreement, except such as have been obtained
or made and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the
FINRA.
(f)
No Registration or Other Similar Rights.
The Selling Stockholder
does not have any registration or other similar rights to have any
equity or debt securities registered for sale by the Company under
the Registration Statement or included in the offering contemplated
by this Agreement, other than demand and piggyback registration
rights relating to 595,846 shares of Common Stock beneficially
owned by it, (i) 83,000 shares of which are being sold
pursuant to the offering contemplated by this Agreement, and
(ii) which, with respect to the remaining 512,846 shares not
being sold pursuant to the offering contemplated by this Agreement,
Cross Atlantic Partners IV, K/S has waived with respect to the
offering contemplated by the Agreement.
(g)
No Further Consents, etc. No consent, approval or
waiver is required under any instrument or agreement to which the
Selling Stockholder is a party or by which it is bound or under
which it is entitled to any right or benefit, in connection with
the offering, sale or purchase by the Underwriters of any of the
Common Shares which may be sold by the Selling
Stockholder
15
under this
Agreement or the consummation by the Selling Stockholder of any of
the other transactions contemplated hereby.
(h)
Disclosure Made by the Selling Stockholder in the
Prospectus. All information furnished by or on behalf of
the Selling Stockholder in writing expressly for use in the
Registration Statement, the Prospectus or any Free Writing
Prospectus or any amendment or supplement thereto used by the
Company or any Underwriter, as the case may be, is, as of the
Applicable Time and on the Closing Date will be, true, correct and
complete in all material respects, and as of the Applicable Time
does not, and on the Closing Date will not, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make such information not misleading. In
addition, the Selling Stockholder confirms as accurate the number
of shares of Common Stock set forth opposite the Selling
Stockholder’s name in the preliminary prospectus and the
Prospectus under the caption “Selling Stockholder”
(both prior to and after giving effect to the sale of the Common
Shares proposed to be sold by the Selling Stockholder).
(i)
No Price Stabilization or Manipulation. The Selling
Stockholder has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
resale of the Common Shares.
(j)
No Inside Information. The Selling Stockholder is not
prompted to sell shares of Common Stock by any information
concerning the Company which is not set forth in the Registration
Statement and the Disclosure Package.
(k)
No Free Writing Prospectuses. The Selling Stockholder
represents that it has not prepared or had prepared on its behalf
or used or re
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