UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): May 27, 2010
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-33038
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84-1475642
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1180
Avenue of the Americas
19th
Floor
New
York, NY
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10036
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(646) 214-0700
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425).
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12).
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)).
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c)).
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Entry
into a Material Definitive
Agreement.
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On May
27, 2010, ZIOPHARM Oncology, Inc. (the “Company”) entered into an underwriting
agreement (the “Underwriting Agreement”) with Jefferies & Company, Inc.
(the “Representative”) relating to the issuance and sale of 7,000,000 shares of
the Company’s common stock, par value $0.001 per share. The
Representative, on behalf of itself and JMP Securities LLC, as underwriters for
the offering, purchased 7,000,000 shares from the Company pursuant to the
Underwriting Agreement and offered the shares to the public at a price of $5.00,
and to certain dealers at that price less a concession not in excess of $0.18
per share of common stock. The net proceeds to the Company from this offering
were approximately $32.8 million, after deducting underwriting discounts and
commissions and other estimated offering expenses. The offering was
completed on June 2, 2010. Under the terms of the Underwriting Agreement,
the Company has granted the Representative an option, exercisable for 30 days,
to purchase up to an additional 1,050,000 shares of common stock to cover
over-allotments, if any.
The
offering is being made pursuant to the Company’s effective registration
statement on Form S-3 (Registration Statement No. 333-166444) previously
filed with the Securities and Exchange Commission, a prospectus supplement and a
free writing prospectus thereunder. The Underwriting Agreement is filed as
Exhibit 1.1 to this report, and the description of the terms of the Underwriting
Agreement is qualified in its entirety by reference to such exhibit. The
benefits and representations and warranties set forth in the Underwriting
Agreement are not intended to and do not constitute continuing representations
and warranties of the Company to persons not a party thereto, including without
limitation, any future or other investors. A copy of the opinion of Maslon
Edelman Borman & Brand, LLP relating to the legality of the issuance and
sale of the shares in the offering is attached as Exhibit 5.1
hereto.
On May
26, 2010, the Company issued a press release announcing that it had commenced
the offering. On May 27, 2010, the Company issued a press release announcing
that it had priced the offering. The press releases are attached as Exhibits
99.1 and 99.2 hereto, respectively.
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Exhibit No.
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Description
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1.1
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Underwriting
Agreement dated May 27, 2010 between ZIOPHARM Oncology, Inc. and Jefferies
& Company, Inc., as representative of the several underwriters named
therein
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5.1
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Opinion
of Maslon Edelman Borman & Brand, LLP
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23.1
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Consent
of Maslon Edelman Borman & Brand, LLP (included as part of
Exhibit 5.1)
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99.1
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Press
Release, dated May 26, 2010
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99.2
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Press
Release, dated May 27,
2010
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
INDEX OF
EXHIBITS
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Exhibit No.
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Description
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1.1
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Underwriting
Agreement dated May 27, 2010 between ZIOPHARM Oncology, Inc. and Jefferies
& Company, Inc., as representative of the several underwriters named
therein
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5.1
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Opinion
of Maslon Edelman Borman & Brand, LLP
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99.1
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Press
Release, dated May 26, 2010
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99.2
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Press
Release, dated May 27,
2010
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Exhibit
1.1
7,000,000
Shares
ZIOPHARM
ONCOLOGY, INC.
Common
Stock
($0.001
par value per Share)
UNDERWRITING
AGREEMENT
May 27,
2010
JEFFERIES
& COMPANY, INC.
As
Representative of the several Underwriters
c/o
JEFFERIES & COMPANY, INC.
520
Madison Avenue
New York,
New York 10022
Ladies
and Gentlemen:
Introductory. ZIOPHARM
Oncology, Inc., a Delaware corporation (the “Company”), proposes to issue
and sell to the several Underwriters named on Schedule A (the “Underwriters”) an aggregate of
7,000,000 shares of its common stock, par value $0.001 per share (the “Shares”). The
7,000,000 Shares to be sold by the Company are collectively called the “Firm Shares.” In
addition, the Company has granted to the Underwriters an option to purchase up
to an additional 1,050,000 Shares. The additional 1,050,000 Shares to
be sold by the Company pursuant to such option are collectively called the
“Optional
Shares.” The Firm Shares and, if and to the extent such option
is exercised, the Optional Shares are collectively called the “Offered
Shares.” Jefferies & Company, Inc. (“Jefferies”) has agreed to act
as representative of the several Underwriters (in such capacity, the “Representative”) in connection
with the offering and sale of the Offered Shares.
The
Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a shelf
registration statement on Form S-3 (File No. 333-166444), which
contains a form of prospectus (the “Base Prospectus”) to be used
in connection with the public offering and sale of the Offered
Shares. Such registration statement, as amended, including the
financial statements, exhibits and schedules thereto, in the form in which it
was declared effective by the Commission under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (collectively, the
“Securities Act”),
including all documents incorporated or deemed to be incorporated by reference
therein and any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B under the Securities Act or the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the “Exchange Act”), is called the
“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. The preliminary prospectus
supplement dated May 26, 2010 describing the Offered Shares and the offering
thereof, together with the Base Prospectus, is called the “Preliminary Prospectus,” and
the Preliminary Prospectus and any other preliminary prospectus supplement to the Base Prospectus that
describes the Offered Shares and the offering thereof and is used prior to the
filing of the Prospectus (as defined below), together with the Base Prospectus,
is called a “preliminary
prospectus.” As
used herein, the term “Prospectus” shall mean the
final prospectus supplement to the Base Prospectus that describes the Offered
Shares and the offering thereof (the “Final Prospectus
Supplement”), together with the Base Prospectus, in the form
first used by the Underwriters to confirm sales of the Offered Shares or in the form first
made available to the Underwriters by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act. As used herein, “Applicable Time” is 9:25 a.m., New York time, on May 27, 2010. As used herein, “free writing prospectus” has
the meaning set forth in Rule 405 under the Securities Act, and “Time of Sale Prospectus” means
the preliminary prospectus, as amended or supplemented immediately prior to the
Applicable Time, together with the free writing prospectuses, if any, identified
in Schedule B hereto, each “road show” (as defined in Rule 433 under the
Securities Act), if any, related to the offering of the Shares contemplated
hereby that is a “written communication” (as defined in Rule 405 under the
Securities Act), and the pricing information set forth in Schedule C
hereto. As used herein, the terms “Registration Statement,” “Rule
462(b) Registration Statement”, “Preliminary Prospectus” “preliminary
prospectus,” “Base Prospectus,” “Time of Sale Prospectus,” “Prospectus,” and
“Applicable Prospectus” (as defined below) shall include the documents
incorporated and deemed to be incorporated by reference therein as of the date
thereof. All references in this Agreement to financial statements and
schedules and other information which are “contained,” “included” or “stated” in
the Registration Statement, the Rule 462(b) Registration Statement, the
Preliminary Prospectus, any preliminary prospectus, the Base Prospectus, the
Time of Sale Prospectus, the Prospectus, or an Applicable Prospectus (and all
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is or is deemed
to be incorporated by reference in the Registration Statement or the Prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any other preliminary prospectus, the
Base Prospectus, the Time of Sale Prospectus or the Prospectus, as the case may
be, and all references in this Agreement to amendments or supplements to the
Registration Statement, the Rule 462(b) Registration Statement, the Preliminary
Prospectus, any other preliminary prospectus, the Base Prospectus, the Time of
Sale Prospectus or the Prospectus shall be deemed to mean and include the filing
of any document under the Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement, the Rule 462(b) Registration
Statement, the Preliminary Prospectus, any other preliminary prospectus, the
Base Prospectus, the Time of Sale Prospectus or the Prospectus, as the case may
be. All references in this Agreement to the Registration Statement, the
462(b) Registration Statement, the Preliminary Prospectus, any other preliminary
prospectus, the Base Prospectus or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR”).
The
Company hereby confirms its agreements with the Underwriters as
follows:
Section 1. Representations and Warranties of the
Company. The Company hereby represents, warrants and covenants
to each Underwriter, as of the date of this Agreement, as of the First Closing
Date (as hereinafter defined) and as of each Option Closing Date (as hereafter
defined), if any, and covenants with each Underwriter, as follows:
(a) Compliance with Registration
Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have 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 or any Rule 462(b)
Registration Statement is in effect and no proceedings for such purpose have
been instituted or are pending or, to the Company’s knowledge, are contemplated
or threatened by the Commission.
2
Each preliminary prospectus and the
Prospectus when filed complied or will comply in all material respects with the
Securities Act and, if filed by electronic transmission pursuant to 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 Offered Shares. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and at all
subsequent times during the period beginning on the date hereof and ending on
the later of the Option Closing Date or such date as in the opinion of counsel
for the Underwriters, the Prospectus is no longer required by law to be
delivered (assuming the absence of Rule 172 under the Securities Act), in
connection with sales by the Underwriters or a dealer (the “Prospectus Delivery Period”),
complied and will comply in all material respects with the Securities Act and
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading. As of the Applicable Time, the
Time of Sale Prospectus (including any preliminary prospectus wrapper) did not,
and at the time of each sale of the Offered Shares and at the First Closing Date
(as hereinafter defined in Section 2), the Time of Sale Prospectus, as then
amended or supplemented by the Company, if applicable, will not, contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Prospectus (including any
Prospectus wrapper), as amended or
supplemented, as of its date and at all subsequent times during the Prospectus
Delivery Period, did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the three
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment thereto, or any preliminary prospectus, the Prospectus
or the Time of Sale Prospectus, or any amendments or supplements thereto, made
in reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by the Representative expressly for use
therein, it being understood and agreed that the only such information furnished
by the Representative to the Company consists of the information described in
Section 9(b) below. There are no contracts or other documents
required to be described in the Time of Sale Prospectus or the Prospectus or to
be filed as exhibits to the Registration Statement which have not been described
or filed as required.
The Company is not an “ineligible
issuer” in connection with the offering of the Offered Shares pursuant to Rules
164, 405 and 433 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act has been, or will be, filed with the Commission in accordance
with the requirements of the Securities Act. Each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or behalf of or used or
referred to by the Company complies or will comply in all material respects with
the requirements of Rule 433 under the Securities Act including timely filing
with the Commission or retention where required and legending, and each such
free writing prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Offered Shares did
not, does not and will not include any information that conflicted, conflicts
with or will conflict with the information contained in the Registration
Statement, the Prospectus or any preliminary prospectus, including any document
incorporated by reference therein. Except for the free writing
prospectuses, if any, identified in Schedule B hereto, and electronic road
shows, if any, furnished to you before first use, the Company has not prepared,
used or referred to, and will not, without your prior consent, prepare, use or
refer to, any free writing prospectus.
3
(b) Offering Materials Furnished to
Underwriters. If
so requested by the Representative, the Company has delivered to the
Representative two complete copies of the Registration Statement, each amendment
thereto and any Rule 462(b) Registration Statement and of each consent and
certificate of experts filed as a part thereof.
(c) Distribution of Offering Material By
the Company. The Company has
not distributed and will not distribute, prior to the later of (i) the
expiration or termination of the option granted to the several Underwriters in
Section 2 and (ii) the completion of the Underwriters’ distribution of the
Offered Shares, any offering material in connection with the offering and sale
of the Offered Shares other than a preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus reviewed and consented
to by the Representative, or the Registration Statement.
(d) The Underwriting
Agreement. This Agreement
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(e) Authorization of the Offered
Shares. The Offered
Shares have been duly authorized for issuance and sale pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, and the
issuance and sale of the Offered Shares is not subject to any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase the
Offered Shares, except for such rights as have been duly waived.
(f) No Applicable Registration or Other
Similar Rights.
There are no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by this Agreement, except for
such rights as have been duly waived.
(g) No Material Adverse
Change. Except as
otherwise disclosed in the Time of Sale Prospectus, subsequent to the respective
dates as of which information is given in the Time of Sale Prospectus: (i)
there has been no material adverse change, or any development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business, of
the Company (any such change is called a “Material Adverse Change”);
(ii) the Company has not incurred any material liability or obligation,
indirect, direct or contingent, not in the ordinary course of business nor
entered into any material transaction or agreement not in the ordinary course of
business; and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of capital stock or
repurchase or redemption by the Company of any class of capital
stock.
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(h) Independent Accountants. Caturano and
Company, P.C., who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) and supporting schedules filed with the Commission as a part of the
Registration Statement and incorporated by reference in the Preliminary
Prospectus, the Prospectus and Time of Sale Prospectus (each, an “Applicable Prospectus” and
collectively, the “Applicable
Prospectuses”), are (i) independent public or certified public
accountants as required by the Securities Act and the Exchange Act, (ii) in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X and (iii) a registered public
accounting firm as defined by the Public Company Accounting Oversight Board (the
“PCAOB”) whose
registration has not been suspended or revoked and, to the Company’s knowledge,
who has not requested such registration to be withdrawn.
(i) Preparation of the Financial
Statements. The financial
statements filed with the Commission as a part of the Registration Statement and
included in the Preliminary Prospectus, the Time of Sale Prospectus and the
Prospectus present fairly the financial position of the Company as of and at the
dates indicated and the results of its operations and cash flows for the periods
specified. The supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles as applied
in the United States applied on a consistent basis throughout the periods
involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement or any Applicable
Prospectus. The financial data set forth or incorporated by reference
in each Applicable Prospectus fairly present the information set forth therein
on a basis consistent with that of the audited financial statements contained in
the Registration Statement and each Applicable Prospectus. To the
Company’s knowledge, no person who has been suspended or barred from being
associated with a registered public accounting firm, or who has failed to comply
with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has
participated in or otherwise aided the preparation of, or audited, the financial
statements, supporting schedules or other financial data filed with the
Commission as a part of the Registration Statement and included in any
Applicable Prospectus.
(j) Company’s Accounting
System. The Company
makes and keeps accurate books and records and maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company is not aware of any material weakness in the
Company’s internal control over financial reporting (whether or not remediated)
as of December 31, 2009 and as of the date hereof, and since December 31, 2009,
there has been no change in the Company’s internal control over financial
reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial
reporting.
5
(k) Incorporation and Good Standing of
the Company. The Company has
been duly incorporated and is validly existing as a corporation in good standing
under the laws of Delaware and has the power and authority to own, lease and
operate its properties and to conduct its business as described in each
Applicable Prospectus and to enter into and perform its obligations under this
Agreement, except where the failure to be in good standing would not reasonably
be expected to result in a Material Adverse Change. The Company 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 or leasing of property or the conduct of business,
except where the failure to be so qualified or in good standing would not
reasonably be expected to result in a Material Adverse Change. The
Company does not own or control, directly or indirectly, any corporation,
association or other entity and the Company has no subsidiaries other than
ZIOPHARM Oncology Limited, a private limited company incorporated in England and
Wales under the Companies Act 1985. ZIOPHARM Oncology Limited, has no
assets (other than as statutorily required) or liabilities (contingent or
otherwise) and conducts no operations.
(l) Capitalization and Other Capital
Stock Matters.
The authorized, issued and outstanding capital stock of the Company is as
set forth in each Applicable Prospectus (other than for subsequent issuances, if
any, pursuant to employee benefit plans described in the Time of Sale Prospectus
or upon the exercise of outstanding options or warrants described in each
Applicable Prospectus). The Shares (including the Offered Shares)
conform in all material respects to the description thereof contained in the
Time of Sale Prospectus. All of the issued and outstanding Shares
have been duly authorized and validly issued, are fully paid and nonassessable
and have been issued in compliance with federal and state securities
laws. None of the outstanding Shares was issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. There are no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company other than
those accurately described in each Applicable Prospectus. The
description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth in
each Applicable Prospectus accurately and fairly presents the information
required to be shown therein with respect to such plans, arrangements, options
and rights. All grants of options to acquire Shares (each, a “Company Stock Option”) were
validly issued and approved by the Board of Directors of the Company, a
committee thereof or an individual with authority duly delegated by the Board of
Directors of the Company or a committee thereof. Grants of Company Stock Options
were (i) made in material compliance with all applicable laws and (ii) as a
whole, made in material compliance with the terms of the plans under which such
Company Stock Options were issued. There is no and has been no policy or
practice of the Company to coordinate the grant of Company Stock Options with
the release or other public announcement of material information regarding the
Company or its results of operations or prospects. Except as described in the
Time of Sale Prospectus and the Prospectus, the Company has not sold or issued
any Shares during the six-month period preceding the date of the Prospectus,
including any sales pursuant to Rule 144A under, or Regulations D or S of, the
Securities Act other than Shares issued pursuant to employee benefit plans,
qualified stock options plans or other employee compensation plans or pursuant
to outstanding options, rights or warrants.
(m) Stock Exchange Listing. The Shares are
registered pursuant to Section 12(b) of the Exchange Act and are listed on
the Nasdaq Capital Market, and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Shares under
the Exchange Act or delisting the Shares from the Nasdaq Capital Market, nor has
the Company received any notification that the Commission or the Nasdaq Capital
Market is contemplating terminating such registration or
listing.
6
(n) Non-Contravention of Existing
Instruments; No Further Authorizations or Approvals Required. The Company is
not in violation of its charter or by-laws and is not in default (or, with the
giving of notice or lapse of time, would be in default) (“Default”) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Company is a party or by which it may be bound
(including, without limitation, any credit agreement, indenture, pledge
agreement, security agreement or other instrument or agreement evidencing,
guaranteeing, securing or relating to indebtedness of the Company), or to which
any of the property or assets of the Company is subject (each, an “Existing Instrument”), except
for such Defaults as would not reasonably be expected to, individually or in the
aggregate, result in a Material Adverse Change. The Company’s
execution, delivery and performance of this Agreement, consummation of the
transactions contemplated hereby and by each Applicable Prospectus and the
issuance and sale of the Offered Shares (i) have been duly authorized by
all necessary corporate action and will not result in any violation of the
provisions of the charter or by-laws of the Company, (ii) will not conflict
with or constitute a breach of, or Default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, or require the consent of any other party to, any Existing
Instrument, except for consents that have been validly obtained and except for
such breaches, Defaults or results, or failure to obtain such consent, as would
not reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Change, and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company, except for such violations as would not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse
Change. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution, delivery and
performance of this Agreement and consummation of the transactions contemplated
hereby and by each Applicable Prospectus, except such as have been obtained or
made or will be made by the Company under the Securities Act, or that may be
required under applicable state securities or blue sky laws and from the
Financial Industry Regulatory Authority (“FINRA”).
(o) 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, (ii) which have as the subject thereof any officer
or director of, or property owned or leased by, the Company or
(iii) relating to environmental or discrimination matters, where in any
such case (A) such action, suit or proceeding (including without limitation, any
such action, suit or proceeding for which, to the Company’s knowledge, there is
a substantial likelihood that it will be determined adversely to the Company or
such officer or director), if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement or (B) any such
action, suit or proceeding is or would be material in the context of the sale of
Shares. No material labor dispute with the employees of the Company,
or to the Company’s knowledge, with the employees of any principal supplier,
manufacturer, customer or contractor of the Company, exists or, to the Company’s
knowledge, is threatened or imminent.
7
(p) Intellectual Property
Rights. The
Company owns, possesses or can acquire on reasonable terms sufficient
trademarks, trade names, patent rights, copyrights, domain names, licenses,
approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”)
reasonably necessary to conduct its businesses as now conducted; except to the
extent failure to own, possess or acquire such Intellectual Property Rights
would not result in a Material Adverse Change. The Company has not
received and has no reason to believe that it will receive, any notice of
infringement or conflict with asserted Intellectual Property Rights of
others. Except as would not be reasonably likely to result,
individually or in the aggregate, in a Material Adverse Change (A) to the
Company’s knowledge there is no infringement, misappropriation or violation by
third parties of any of the Intellectual Property Rights owned by the Company;
(B) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the rights of the Company in or to any
such Intellectual Property Rights, and the Company is unaware of any facts which
would form a reasonable basis for any such claim, that would reasonably be
expected, individually or in the aggregate, together with any other claims in
this subsection (p) to result in a Material Adverse Change; (C) the Intellectual
Property Rights owned by the Company and, to the Company’s knowledge, the
Intellectual Property Rights licensed to the Company have not been adjudged by a
court of competent jurisdiction invalid or unenforceable, in whole or in part,
and there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property Rights, and, except as described in the Time of Sale
Prospectus and the Prospectus, the Company is unaware of any facts which would
form a reasonable basis for any such claim that would reasonably be expected,
individually or in the aggregate, together with any other claims in this
subsection (p) to result in a Material Adverse Change; (D) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes, misappropriates or otherwise
violates any Intellectual Property Rights or other proprietary rights of others,
the Company has not received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for any such
claim that would reasonably be expected, individually or in the aggregate,
together with any other claims in this subsection (p) to result in a Material
Adverse Change; (E) the Company is not aware of any prior art that could
reasonably be expected to render any patent held by or licensed to the Company
invalid or any U.S. patent application held by or licensed to the Company
unpatentable which prior art was required to be disclosed to the U.S. Patent and
Trademark Office during the prosecution of the applicable patent application and
which was not so disclosed to the U.S. Patent and Trademark Office; (F) to
the Company’s knowledge, all prior art references relevant to the patentability
of any pending claim of any patent applications comprising or that have resulted
in Intellectual Property Rights known to the Company, applicable inventor(s) or
licensors, or any of their counsel during the prosecution of such patent
applications that were required to be disclosed to the relevant patent authority
were so disclosed by the required time, and, to the best of the Company’s
knowledge, neither the Company nor any such inventor, licensor or counsel made
any misrepresentation to, or omitted any material fact from, the relevant patent
authority during such prosecution; and (G) to the Company’s knowledge, no
employee of the Company is in or has ever been in violation in any material
respect of any term of any employment contract, patent disclosure agreement,
invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such employee’s
employment with the Company, or actions undertaken by the employee while
employed with the Company and would reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Change. To
the Company’s knowledge, all material technical information developed by and
belonging to the Company for which it has not sought, and does not intend to
seek, to patent or otherwise protect pursuant to applicable intellectual
property laws has been kept confidential or disclosed only under obligations of
confidentiality. 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. The Time of Sale Prospectus
contains in all material respects the same description of the matters set forth
in the preceding sentence contained in the Prospectus. None of the
technology employed by the Company has been obtained or is being used by the
Company in violation of any 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 in each case for
such violations that would not reasonably be expected to result in a Material
Adverse Change.
8
(q) All Necessary Permits,
etc. The
Company possesses such valid and current certificates, authorizations or permits
issued by the appropriate state, federal or foreign regulatory agencies or
bodies necessary to conduct their respective businesses as currently conducted
by them and described in the Time of Sale Prospectus and the Prospectus, and the
Company has not received and has no reason to believe that it will receive, any
notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would reasonably be expected to result in a Material Adverse
Change.
(r) Title to Properties. The Company has
good and marketable title to all of the real and personal property and other
assets reflected as owned in the financial statements referred to in
Section 1(i) above (or elsewhere in any Applicable Prospectus), in each
case free and clear of any security interests, mortgages, liens, encumbrances,
equities, adverse claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere with
the use made or proposed to be made of such property by the
Company. To the Company’s knowledge, the real property, improvements,
equipment and personal property held under lease by the Company 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.
(s) Tax Law Compliance. The Company has filed all
necessary federal, state and foreign income and franchise tax returns or has
properly requested extensions thereof and has paid all taxes required to be paid
by the Company and, if due and payable, any related or similar assessment, fine
or penalty levied against the Company except as may be being contested in good
faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 1(i) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability of the
Company has not been finally determined.
(t) Company Not an “Investment
Company”. The
Company is not, and will not be, either after receipt of payment for the Offered
Shares or after the application of the proceeds therefrom as described under
“Use of Proceeds” in each Applicable Prospectus, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended (the “Investment Company
Act”).
(u) Insurance. The Company is insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are reasonably
adequate and customary for its business as currently conducted and described in
the Time of Sale of Prospectus and the Prospectus, including, but not limited
to, policies covering real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and policies covering the
Company for product liability claims and clinical trial liability
claims. The Company has no reason to believe that it 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. The
Company has not been denied any insurance coverage material to the Company which
it has sought or for which it has applied.
9
(v) No Price Stabilization or
Manipulation; Compliance with Regulation M. The Company has
not taken, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Shares or any other “reference security” (as
defined in Rule 100 of Regulation M under the 1934 Act (“Regulation M”)) whether to
facilitate the sale or resale of the Offered Shares or otherwise, and has taken
no action which would directly or indirectly violate Regulation
M. The Company acknowledges that the Underwriters may engage in
passive market making transactions in the Offered Shares on the Nasdaq Capital
Market in accordance with Regulation M.
(w) Related Party Transactions.
There are no business relationships or related-party transactions
involving the Company or any other person required to be described in each
Applicable Prospectus which have not been described as required. The
Time of Sale Prospectus contains in all material respects the same description
of the matters set forth in the preceding sentence contained in the
Prospectus.
(x) S-3 Eligibility. At the time
the Registration Statement was originally declared effective and at the time the
Company’s Annual Report on Form 10-K for the year ended December 31, 2009 was
filed with the Commission, the Company met the then applicable requirements for
use of Form S-3 under the Securities Act. The company is eligible to
offer and sell securities under the Registration Statement (including the offer
and sale of the Offered Shares) without reliance on General Instruction I.B.6 of
Form S-3.
(y) Exchange Act
Compliance. The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material respects
with the requirements of the Exchange Act, and, when read together with the
other information in the Prospectus, at the time the Registration Statement and
any amendments thereto become effective and at the First Closing Date and the
applicable Option Closing Date, as the case may be, will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(z) FINRA Matters. All
of the information provided to the Underwriters or to counsel for the
Underwriters by the Company, its officers and directors and, to the Company’s
knowledge, the holders of any securities (debt or equity) or options to acquire
any securities of the Company in connection with letters, filings or other
supplemental information, if any, provided pursuant to FINRA Rule 5110 or the
National Association of Securities Dealers Inc. (the “NASD”) Conduct Rule 2710
or 2720 is true, complete and correct.
(aa) Parties to Lock-Up
Agreements. Each of the Company’s directors and executive
officers indicated in Exhibit A has
executed and delivered to the Representative a lock-up agreement in the form of
Exhibit B
hereto. Exhibit A hereto
contains a true, complete and correct list of all directors and executive
officers of the Company. If any additional persons shall become directors or
executive officers of the Company prior to the end of the Company Lock-up Period
(as defined below), the Company shall cause each such person, prior to or
contemporaneously with their appointment or election as a director or executive
officer of the Company, to execute and deliver to the
Representative an agreement in the form attached hereto as Exhibit
B.
(bb) Statistical and Market-Related Data.
The statistical, demographic and market-related data included in the
Registration Statement and each Applicable Prospectus are based on or derived
from sources that the Company believes to be reliable and accurate or represent
the Company’s good faith estimates that are made on the basis of data derived
from such sources.
10
(cc) No Unlawful Contributions or Other
Payments. The Company and,
to the Company’s knowledge, any employee or agent of the Company, have not made
any contribution or other payment to any official of, or candidate for, any
federal, state or foreign office in violation of any law or of the character
required to be disclosed in the Registration Statement and each Applicable
Prospectus.
(dd) Disclosure Controls and Procedures;
Deficiencies in or Changes to Internal Control Over Financial
Reporting. The
Company has established and maintains disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are designed
to ensure that material information relating to the Company 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 being prepared; (ii) have been
evaluated by management of the Company for effectiveness as of the end of the
Company’s most recent fiscal quarter; and (iii) the Company’s principal
executive officer and principal financial officer concluded to be effective at
the reasonable assurance level. Based on the most recent evaluation
of its internal control over financial reporting, the Company is not aware of
(i) any significant deficiencies or material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the Company’s ability to record, process, summarize
and report financial information or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company’s internal control over financial reporting. The Company is
not aware of any change in its internal control over financial reporting that
has occurred during its most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
(ee) Compliance with Environmental
Laws. Except as described in
each Applicable Prospectus and except as would not, reasonably be expected to,
singly or in the aggregate, result in a Material Adverse Change, (i) the Company
is not in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the
Company has all permits, authorizations and approvals required under any
applicable Environmental Laws and is in compliance with their requirements,
(iii) there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental Law
against the Company, and (iv) there are no events or circumstances known to the
Company that might reasonably be expected to form the basis of an order for
clean-up or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company relating to
Hazardous Materials or any Environmental Laws.
11
(ff) ERISA Compliance. The Company and
any “employee benefit
plan” (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, “ERISA”))
established or maintained by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with
respect to the Company, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the
“Code”) of which the
Company is a member. No “reportable event” (as defined
under ERISA) has occurred or is reasonably expected to occur with respect to any
“employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates. No “employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates, if such
“employee benefit plan”
were terminated, would have any “amount of unfunded benefit
liabilities” (as defined under ERISA). Neither the Company nor
any of its ERISA Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination of,
or withdrawal from, any “employee benefit plan” or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
“employee benefit plan”
established or maintained by the Company or any of its ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or failure to act, which would
reasonably be expected to result in the loss of such qualification.
(gg) Brokers. Except as contemplated by
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.
(hh) No Outstanding Loans or Other
Extensions of Credit. Since the adoption of Section 13(k) of the Exchange
Act, the Company has not extended or maintained credit, arranged for the
extension of credit, or renewed any extension of credit, in the form of a
personal loan, to or for any director or executive officer (or equivalent
thereof) of the Company except for such extensions of credit as are expressly
permitted by Section 13(k) of the Exchange Act.
(ii) Compliance with
Laws. The Company has not been advised, and has no reason to
believe, that it is not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance would not result in a
Material Adverse Change. The Company has not received any FDA Form 483, notice
of adverse finding, warning letter, untitled letter or other correspondence or
notice from the U.S. Food and Drug Administration or any other governmental
authority alleging or asserting noncompliance with any laws applicable to the
Company.
(jj) Clinical
Trials. The studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company were and, if still pending, are being
conducted in compliance with experimental protocols, procedures and controls
pursuant to accepted professional scientific standards and all applicable laws
and authorizations, including, without limitation, the Federal Food, Drug and
Cosmetic Act and the rules and regulations promulgated thereunder, except where
the failure to be in compliance has not resulted and would not reasonably be
expected to result in a Material Adverse Change; the descriptions of the results
of such studies, tests and trials contained in any Applicable Prospectus are
accurate and complete in all material respects and fairly present the data
derived from such studies, tests and trials; except to the extent disclosed in
any Applicable Prospectus, the Company is not aware of any studies, tests or
trials, the results of which the Company believes reasonably call into question
the study, test, or trial results described or referred to in any Applicable
Prospectus when viewed in the context in which such results are described and
the clinical state of development; and the Company has not received any notices
or correspondence from any applicable governmental authority requiring the
termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the
Company.
12
(kk) Foreign Corrupt Practices
Act. Neither the Company nor, to the Company’s knowledge, any
director, officer, agent, employee, affiliate or other person acting on behalf
of the Company is aware of or has taken any action, directly or indirectly, that
has resulted or would result in a violation of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA; and the Company and, to the Company’s
knowledge, the Company’s affiliates have conducted their respective businesses
in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
(ll) Money Laundering
Laws. The operations of the Company are, and have been
conducted at all times, in 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 applicable
jurisdictions, the rules and regulations thereunder and any related or similar
applicable rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(mm) OFAC. Neither the Company
nor, to the Company’s knowledge, any director, officer, agent, employee,
affiliate or person acting on behalf of the Company is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of this offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(nn) FINRA Filing
Exemption. To enable the Underwriters to rely on FINRA Rule
5110(b)(7)(C)(i), (i) the Company was subject to the requirements of Section 12
or 15(d) of the Exchange Act and filed all the material required to be filed
pursuant to Sections 13, 14 or 15(d) for a period of at least thirty-six
calendar months immediately preceding the date of this Agreement; (ii) the
Company filed in a timely manner all reports required to be filed pursuant to
Section 13, 14 or 15(d) of the Exchange Act during the twelve calendar months
and any portion of a month immediately preceding the date of this Agreement;
(iii) the last reported sale price of the Company’s common stock on the Nasdaq
Capital Market on May 26, 2010 was $5.58; (iv) as of such date, there were
greater than 30,000,000 shares of the Company’s common stock outstanding and
held by non-affiliates of the Company; and (v) the Company has annual trading
volume of 3 million share or more.
13
Any
certificate signed by any officer of the Company and delivered to the
Representative or
to counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
The
Company acknowledges that the Underwriters and, for purposes of the opinions to
be delivered pursuant to Section 6 hereof, counsel to the Company and counsel to
the Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.
Section
2. Purchase, Sale and Delivery of the Offered Shares.
(a) The Firm
Shares. Upon the terms herein set forth, the Company agrees to
issue and sell to the several Underwriters an aggregate of 7,000,000 Firm
Shares. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Underwriters agree, severally and not jointly, to purchase
from the Company the respective number of Firm Shares set forth opposite their
names on Schedule A. The
purchase price per Firm Share to be paid by the several Underwriters to the
Company shall be $4.70 per share.
(b) The First Closing
Date. Delivery of certificates for the Firm Shares to be
purchased by the Underwriters and payment therefor shall be made at the offices
of Jefferies, 520 Madison Avenue, New York, New York (or such other place
as may be agreed to by the Company and the Representative) at 9:00 a.m. New York
time, on June 2, 2010, or such other time and date not later than 1:30 p.m.
New York time, on June 16, 2010 as the Representative shall designate by notice
to the Company (the time and date of such closing are called the “First Closing
Date”).
(c) The Optional Shares; Option Closing
Date. In addition, on the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Company hereby grants an option to the
several Underwriters to purchase, severally and not jointly, up to an aggregate
of 1,050,000 Optional Shares from the Company at the purchase price per share to
be paid by the Underwriters for the Firm Shares. The option granted
hereunder is for use by the Underwriters solely in covering any over-allotments
in connection with the sale and distribution of the Firm Shares. The
option granted hereunder may be exercised at any time and from time to time in
whole or in part upon notice by the Representative to the Company, which notice
may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number
of Optional Shares as to which the Underwriters are exercising the option,
(ii) the names and denominations in which the certificates for the Optional
Shares are to be registered and (iii) the time, date and place at which
such certificates will be delivered (which time and date may be simultaneous
with, but not earlier than, the First Closing Date; and in the event that such
time and date are simultaneous with the First Closing Date, the term “First Closing Date” shall
refer to the time and date of delivery of certificates for the Firm Shares and
such Optional Shares). Any such time and date of delivery, if
subsequent to the First Closing Date, is called an “Option Closing Date” and shall
be determined by the Representative and shall not be earlier than three nor
later than five full business days after delivery of such notice of
exercise. The Representative may cancel the option at any time prior
to its expiration by giving written notice of such cancellation to the
Company.
(d) Public Offering of the Offered
Shares. The Representative hereby advises the Company that the
Underwriters intend to offer for sale to the public, initially on the terms set
forth in the Time of Sale Prospectus and the Prospectus, the Offered Shares as
soon after this Agreement has been executed as the Representative, in its sole
judgment, has determined is advisable and practicable.
14
(e) Payment for the Offered
Shares. Payment for the Offered Shares shall be made at the
First Closing Date (and, if applicable, at each Option Closing Date) by wire
transfer of immediately available funds to the order of the
Company.
It is
understood that the Representative has been authorized, for its own account and
the accounts of the several Underwriters, to accept delivery of and receipt for,
and make payment of the purchase price for, the Firm Shares and any Optional
Shares the Underwriters have agreed to purchase. Jefferies,
individually and not as the Representative of the Underwriters, may (but shall
not be obligated to) make payment for any Offered Shares to be purchased by any
Underwriter whose funds shall not have been received by the Representative by
the First Closing Date or the applicable Option Closing Date, as the case may
be, for the account of such Underwriter, but any such payment shall not relieve
such Underwriter from any of its obligations under this Agreement.
(f) Delivery of the Offered
Shares. The Company shall deliver, or cause to be delivered,
to the Representative for the accounts of the several Underwriters certificates
for the Firm Shares at the First Closing Date, against the irrevocable release
of a wire transfer of immediately available funds for the amount of the purchase
price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several Underwriters,
certificates for the Optional Shares the Underwriters have agreed to purchase at
the First Closing Date or the applicable Option Closing Date, as the case may
be, against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. If the
Representative so elects, delivery of the Firm Shares may be made by credit to
the accounts designated by the Representative though The Depository Trust
Company’s DWAC program. If the Representative elects delivery in the
form of certificates, the certificates for the Offered Shares shall be in
definitive form and registered in such names and denominations as the
Representative shall have requested at least two full business days prior to the
First Closing Date (or the applicable Option Closing Date, as the case may be)
and shall be made available for inspection on the business day preceding the
First Closing Date (or the applicable Option Closing Date, as the case may be)
at a location in New York City as the Representative may
designate. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
Section 3. Additional Covenants of the
Company. The Company further covenants and agrees with each
Underwriter as follows:
(a) Delivery of Registration Statement,
Time of Sale Prospectus and Prospectus. The Company
shall furnish to you, without charge and upon your request, two signed copies of
the Registration Statement, any amendments thereto and any Rule 462(b)
Registration Statement (including exhibits thereto) and shall furnish to you in
New York City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the period
mentioned in Section 3(e) or 3(f) below, as many copies of the Time of Sale
Prospectus, the Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Representative’s Review of Proposed
Amendments and Supplements. During the
Prospectus Delivery Period, prior to amending or supplementing the Registration
Statement (including any registration statement filed under Rule 462(b)
under the Securities Act), any preliminary prospectus, the Time of Sale
Prospectus or the Prospectus including any amendment or supplement through
incorporation of any report filed under the Exchange Act), the Company: (i)
shall furnish to the Representative for review, a reasonable amount of time
prior to the proposed time of filing or use thereof, a copy of each such
proposed amendment or supplement, (ii) shall not file or use any such proposed
amendment or supplement without the Representative’s consent, and (iii) shall
file with the Commission within the applicable period specified in Rule 424(b)
under the Securities Act any prospectus required to be filed pursuant to such
Rule.
15
(c) Free Writing
Prospectuses. The Company
shall furnish to the Representative for review, a reasonable amount of time
prior to the proposed time of filing or use thereof, a copy of each proposed
free writing prospectus or any amendment or supplement thereto to be prepared by
or on behalf of, used by, or referred to by the Company and the Company shall
not file, use or refer to any proposed free writing prospectus or any amendment
or supplement thereto without the Representative’s consent. The
Company shall furnish to each Underwriter, without charge, as many copies of any
free writing prospectus prepared by or on behalf of, or used by the Company, as
such Underwriter may reasonably request. If during the Prospectus
Delivery Period there occurred or occurs an event or development as a result of
which any free writing prospectus prepared by or on behalf of, used by, or
referred to by the Company conflicted or would conflict with the information
contained in the Registration Statement or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
shall promptly amend or supplement such free writing prospectus to eliminate or
correct such conflict or so that the statements in such free writing prospectus
as so amended or supplemented will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at such subsequent time,
not misleading, as the case may be; provided, however, that prior to amending or
supplementing any such free writing prospectus, the Company shall furnish to the
Representative for review, a reasonable amount of time prior to the proposed
time of filing or use thereof, a copy of such proposed amended or supplemented
free writing prospectus and the Company shall not file, use or refer to any such
amended or supplemented free writing prospectus without the Representative’s
consent.
(d) Filing of Underwriters Free Writing
Prospectuses. The Company
shall not take any action that would result in an Underwriter or the Company
being required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of the
Underwriters that the Underwriters otherwise would not have been required to
file thereunder.
(e) Amendments and Supplements to Time
of Sale Prospectus. If the Time of
Sale Prospectus is being used to solicit offers to buy the Shares at a time when
the Prospectus is not yet available to prospective purchasers and any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Time of Sale Prospectus so that the Time of Sale Prospectus does
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances when delivered to a prospective purchaser, not misleading, or if
any event shall occur or condition exist as a result of which the Time of Sale
Prospectus conflicts with the information contained in the Registration
Statement, or if, in the opinion of the Company, counsel for the Company, the
Representative or counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, including
the Securities Act, the Company shall (subject to Sections 3(b) and 3(c))
forthwith prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to any dealer upon request, amendments or supplements to
the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances when delivered to a
prospective purchaser, not misleading or so that the Time of Sale Prospectus, as
amended or supplemented, will no longer conflict with the Registration
Statement, or so that the Time of Sale Prospectus, as amended or supplemented,
will comply with applicable law including the Securities Act.
16
(f) Securities Act
Compliance. After the date of this
Agreement, the Company shall promptly advise the Representative in writing (i)
of the receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement, any Rule 462(b)
Registration Statement or any amendment or supplement to any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus or the
Prospectus, (iii) of the time and date that any post-effective amendment to the
Registration Statement or any Rule 462(b) Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto, any Rule 462(b) Registration Statement or any amendment or
supplement to any Preliminary Prospectus, the Time of Sale Prospectus or the
Prospectus or of any order preventing or suspending the use of any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from listing
or quotation the Shares from any securities exchange upon which they are listed
for trading or included or designated for quotation, or of the threatening or
initiation of any proceedings for any of such purposes. If the
Commission shall enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order at the earliest possible
moment. Additionally, the Company agrees that it shall comply with
the provisions of Rule 424(b) or Rule 433, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) or Rule 433 were received in a timely manner by
the Commission.
(g) Amendments and Supplements to the
Prospectus and Other Securities Act Matters. If any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus so that the Prospectus does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if in the opinion of
the Company, counsel for the Company, the Representative or counsel for the
Underwriters, it is otherwise necessary to amend or supplement the Prospectus to
comply with applicable law, including the Securities Act, the Company agrees
(subject to Section 3(b) and 3(c)) to promptly prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to any
dealer upon request, amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading or so that the
Prospectus, as amended or supplemented, will comply with applicable law
including the Securities Act. Neither the Representative’s consent
to, or delivery of, any such amendment or supplement shall constitute a waiver
of any of the Company’s obligations under Sections 3(b) or (c).
17
(h) Blue Sky Compliance. The Company
shall cooperate with the Representative and counsel for the Underwriters to
qualify or register the Offered Shares for sale under (or obtain exemptions from
the application of) the state securities or blue sky laws or Canadian provincial
securities laws of those jurisdictions designated by the Representative, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Offered
Shares; provided that the Company shall not be required to qualify as a foreign
corporation or to take any action that would subject it to general service of
process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company
will advise the Representative promptly of the suspension of the qualification
or registration of (or any such exemption relating to) the Offered Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company shall use
its best efforts to obtain the withdrawal thereof at the earliest possible
moment.
(i) Use of Proceeds. The Company shall apply the
net proceeds from the sale of the Offered Shares sold by it in the manner
described under the caption “Use of Proceeds” in each Applicable
Prospectus.
(j) Transfer Agent. The Company
shall engage and maintain, at its expense, a registrar and transfer agent for
the Shares.
(k) Earnings Statement. As soon as
practicable, but in any event not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of the Company during
which the most recent effective date of the Registration Statement occurs (or 90
days after the end of such 12-month period if such 12-month period coincides
with the Company’s fiscal year), the Company will make generally available to
its security holders and to the Underwriter an earnings statement (which need
not be audited) covering such 12-month period which shall satisfy the provisions
of Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(l) Exchange Act Compliance. The Company
shall file all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act in the manner and within the time
periods required by the Exchange Act.
(m) Listing. The Company will
use its best efforts to list, subject to notice of issuance, the Offered Shares
on the Nasdaq Capital Market and to maintain the listing of the Shares on the
Nasdaq Capital Market.
(n) Company to Provide Copy of the
Prospectus in Form That May be Downloaded from the Internet. The Company shall cause to
be prepared and delivered, at its expense, within one business day following the
effective date of this Agreement, to the Representative an “electronic Prospectus” to be
used by the Underwriters in connection with the offering and sale of the Offered
Shares. As used herein, the term “electronic Prospectus” means a
form of Time of Sale Prospectus, and any amendment or supplement thereto, that
meets each of the following conditions: (i) it shall be encoded in an electronic
format, reasonably satisfactory to the Representative, that may be transmitted
electronically by the Underwriters to offerees and purchasers of the Offered
Shares; (ii) it shall disclose the same information as the paper Time of
Sale Prospectus, except to the extent that graphic and image material cannot be
disseminated electronically, in which case such graphic and image material shall
be replaced in the electronic Prospectus with a fair and accurate narrative
description or tabular representation of such material, as appropriate; and
(iii) it shall be in or convertible into a paper format or an electronic
format, reasonably satisfactory to the Representative, that will allow investors
to store and have continuously ready access to the Time of Sale Prospectus at
any future time, without charge to investors (other than any fee charged for
subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the Prospectus
filed pursuant to EDGAR or otherwise with the Commission and in the Registration
Statement at the time it was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative, the Company
shall transmit or cause to be transmitted promptly, without charge, a paper copy
of the Time of Sale Prospectus.
18
(o) Agreement Not to Offer or Sell
Additional Shares. During the
period commencing on and including the date hereof and ending on and including
the 90th day following the date of the Prospectus (as the same may be extended
as described below, the “Lock-up Period”), the Company
will not, without the prior written consent of the Representative (which consent
may be withheld at the sole discretion of the Representative), directly or
indirectly, sell (including, without limitation, any short sale), offer,
contract or grant any option to sell, pledge, transfer or establish an open “put
equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any Shares,
options, rights or warrants to acquire Shares or securities exchangeable or
exercisable for or convertible into Shares (other than as contemplated by this
Agreement with respect to the Offered Shares and the filing of a registration
statement on Form S-8 with respect to an amendment to the Company’s 2003 Stock
Option Plan as proposed in the Company’s definitive proxy materials filed with
the Commission on May 14, 2010 and described in the Prospectus) or publicly
announce the intention to do any of the foregoing; provided, however, that the
Company may issue Shares (i) pursuant to transactions relating to any director
or employee stock option plan, stock ownership plan or dividend reinvestment
plan of the Company in effect at the date of the Prospectus or approved for
issuance under an amendment to the Company’s 2003 Stock Option Plan as proposed
in the Company’s definitive proxy materials filed with the Commission on May 14,
2010 and described in the Prospectus (including the issuance of securities
thereunder and the issuance of Shares upon the exercise of options issued
pursuant to such a plan), (ii) pursuant to the conversion of securities or the
exercise of warrants outstanding at the date of the Prospectus and described in
the Prospectus, (iii) to one or more counterparties in connection with the
consummation of a strategic partnership, joint venture, collaboration, merger or
the acquisition or license of any business products or technology; provided
that, with respect to this subsection (iii), (1) the sum of the aggregate number
of Shares so issued shall not exceed 5% of the total outstanding Shares
immediately following the completion of this offering of Shares and (2) prior to
the issuance of such Shares each recipient of such Shares agrees in writing not
to sell, offer, dispose of or otherwise transfer any such Shares during such
Lock-up Period without the prior written consent of the Representative (which
consent may be withheld at the sole discretion of the
Representative). Notwithstanding the foregoing, if (i) during the
last 17 days of the Lock-up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs or (ii) prior
to the expiration of the Lock-up Period, the Company announces that it will
release earnings results during the 16-day period beginning on the last day of
the Lock-up Period, then in each case the Lock-up Period will be extended until
the expiration of the 18-day period beginning on the date of the issuance of the
earnings release or the occurrence of the material news or material event, as
applicable, unless the Representative waives, in writing, such extension (which
waiver may be withheld at the sole discretion of the Representative), except
that such extension will not apply if (i) the Shares are “actively traded
securities” (as defined in Regulation M), (ii) the Company meets the applicable
requirements of paragraph (a)(1) of Rule 139 under the Securities Act
in the manner contemplated by NASD Conduct Rule 2711(f)(4), and (iii) the
provisions of NASD Conduct Rule 2711(f)(4) do not restrict the publishing
or distribution of any research reports relating to the Company published or
distributed by any of the Underwriters during the 15 days before or after the
last day of the Lock-up Period (before giving effect to such
extension). The Company will provide the Representative with prior
notice of any such announcement that gives rise to an extension of the Lock-up
Period.
19
(p) Future Reports to the Representative. During the
period of five years hereafter the Company will furnish or make available to the
Representative at 520 Madison Avenue, New York, New York Attention: Capital
Markets: (i) as soon as practicable after the end of each fiscal year, copies of
the Annual Report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income, stockholders’ equity
and cash flows for the year then ended and the opinion thereon of the Company’s
independent public or certified public accountants; (ii) as soon as practicable
after the filing thereof, copies of each proxy statement, Annual Report on Form
10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report
filed by the Company with the Commission, FINRA or any securities exchange; and
(iii) as soon as available, copies of any report or communication of the Company
furnished or made available generally to holders of its capital stock; provided
that the requirements of this subsection (p) shall be satisfied to the extent
the reports, communications, financial statements or other documents referenced
herein are available on EDGAR.
(q) Investment Limitation. The Company
shall not invest, or otherwise use the proceeds received by the Company from its
sale of the Offered Shares in such a manner as would require the Company to
register as an investment company under the Investment Company Act.
(r) No Stabilization or
Manipulation;
Compliance with Regulation M. The Company will
not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Shares or any other reference security, whether to facilitate the
sale or resale of the Offered Shares or otherwise, and the Company will, and
shall cause each of its affiliates to, comply with all applicable provisions of
Regulation M. If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with
respect to the Offered Shares or any other reference security pursuant to any
exception set forth in Section (d) of Rule 102, then promptly upon notice from
the Representative (or, if later, at the time stated in the notice), the Company
will, and shall cause each of its affiliates to, comply with Rule 102 as though
such exception were not available but the other provisions of Rule 102 (as
interpreted by the Commission) did apply.
(s) Existing Lock-Up
Agreements. During the
Lock-up Period, the Company will enforce all existing agreements between the
Company and any of its security holders that prohibit the sale, transfer,
assignment, pledge or hypothecation of any of the Company’s
securities. In addition, the Company will direct the transfer agent
to place stop transfer restrictions upon any such securities of the Company that
are bound by such existing “lock-up” agreements for the duration of the periods
contemplated in such agreements, including, without limitation, “lock-up”
agreements entered into by certain of the Company’s officers and directors
pursuant to Section 6(h).
20
Section 4. Payment of Expenses. The Company
agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the offering of
the Offered Shares hereunder, including without limitation (i) all expenses
incident to the issuance and delivery of the Offered Shares (including all
printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Shares, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Offered Shares
to the Underwriters, (iv) all fees and expenses of the Company’s counsel,
independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement
(including financial statements, exhibits, schedules, consents and certificates
of experts), the Time of Sale Prospectus, the Prospectus, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company,
and each preliminary prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred
by the Company or the Underwriters in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any
part of the Offered Shares for offer and sale under the state securities or blue
sky laws or the provincial securities laws of Canada, and, if requested by the
Representative, preparing and printing a “Blue Sky Survey” or memorandum
and a “Canadian wrapper”, and any supplements thereto, advising the Underwriters
of such qualifications, registrations, determinations and exemptions; provided
such fees and disbursements related to state securities law and distribution in
Canada do not exceed $10,000 in the aggregate, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, FINRA’s review, if any, and approval of the
Underwriters’ participation in the offering and distribution of the Offered
Shares; provided such fees and disbursements do not exceed $10,000 in the
aggregate, (viii) the costs and expenses of the Company relating to
investor presentations on any “road show” undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the preparation or dissemination of any electronic road show,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives, employees and officers of the Company and of
the Representative and any such consultants, (ix) the fees and expenses
associated with listing the Offered Shares on the Nasdaq Capital Market, and
(ix) all other fees, costs and expenses of the nature referred to in
Item 14 of Part II of the Registration Statement. Except as
provided in this Section 4, Section 7, Section 9 and
Section 10 hereof, the Underwriters shall pay their own expenses, including
the fees and disbursements of their counsel.
Section 5. Covenant of the
Underwriters. Each Underwriter, severally and not jointly,
covenants with the Company not to take any action that would result in the
Company being required to file with the Commission pursuant to Rule 433(d) under
the Securities Act a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed by the Company
thereunder, but for the action of the Underwriters.
Section 6. Conditions of the Obligations of the
Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Shares as
provided herein on the First Closing Date and, with respect to the Optional
Shares, each Option Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Shares, as of each Option
Closing Date as though then made, to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:
(a) Accountants’ Comfort
Letter. On the date
hereof, the Representative shall have received from Caturano and Company, P.C.,
independent public or certified public accountants for the Company, (i) a
letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representative, containing statements and
information of the type ordinarily included in accountant’s “comfort letters” to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement, the Preliminary Prospectus, and, with respect to each letter dated
the date hereof only, the Prospectus, and the Representative shall have received
an additional conformed copy of such accountants’ letter for each of the other
several Underwriters, and (ii) confirming that they are (A) independent public
or certified public accountants as required by the Securities Act and the
Exchange Act and (B) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X.
21
(b) Compliance with Registration
Requirements; No Stop Order; No Objection from FINRA. For the period
from and after effectiveness of this Agreement and prior to the First Closing
Date and, with respect to the Optional Shares, each Option Closing
Date:
(i) the
Company shall have filed the Prospectus with the Commission (including the
information previously omitted from the Registration Statement pursuant to Rule
430B under the Securities Act) in the manner and within the time period required
by Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information previously omitted pursuant to such Rule 430B, and such
post-effective amendment shall have become effective;
(ii) no
stop order suspending the effectiveness of the Registration Statement, any
Rule 462(b) Registration Statement, or any post-effective amendment to the
Registration Statement, shall be in effect and no proceedings for such purpose
shall have been instituted or threatened by the Commission; and
(iii) FINRA
shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c) No Material Adverse
Change. For the period
from and after the date of this Agreement and through and including the First
Closing Date and, with respect to the Optional Shares, each Option Closing Date,
in the judgment of the Representative, there shall not have occurred any
Material Adverse Change.
(d) Opinion of Counsel for the
Company. On each of the
First Closing Date and each Option Closing Date the Representative shall have
received the opinion and negative assurance letter of Maslon Edelman Borman
& Brand, LLP, counsel for the Company, dated as of such Closing Date, the
form of which is attached as Exhibits
C.
(e) Opinion of Intellectual Property
Counsel for the Company. On each of the
First Closing Date and each Option Closing Date the Representative shall have
received the opinion of Ropes & Gray LLP, intellectual property counsel for
the Company, dated as of such Closing Date, with respect to certain intellectual
property matters, the form of which is attached as Exhibit D.
(f) Opinion of Counsel for the
Underwriters. On each of the
First Closing Date and each Option Closing Date the Representative shall have
received the opinion and negative assurance letter of Cooley LLP, counsel for
the Underwriters, in form and substance satisfactory to the Representative,
dated as of such Closing Date.
(g) Officer’s Certificate. On each of the
First Closing Date and each Option Closing Date, the Representative shall have
received a written certificate executed by the Chief Executive Officer or
President of the Company, dated as of such Closing Date, to the effect set forth
in subsection (b)(ii) of this Section 6 and further to the effect
that:
(i) For
the period from and including the date of this Agreement through and including
such Closing Date, there has not occurred any Material Adverse
Change;
22
(ii) The
representations, warranties and covenants of the Company set forth in Section 1
of this Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and
(iii) The
Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.
(h) Bring-down Comfort
Letter. On each of the
First Closing Date and each Option Closing Date the Representative shall have
received from Caturano and Company, P.C., independent public or certified public
accountants for the Company, a letter dated such date, in form and substance
satisfactory to the Representative, to the effect that they reaffirm the
statements made in the letter furnished by them pursuant to subsection (a)
of this Section 6, except that the specified date referred to therein for
the carrying out of procedures shall be no more than five business days prior to
the First Closing Date or the applicable Option Closing Date, as the case may be
and the Representative shall have received an additional conformed copy of such
accountants’ letter for each of the other several Underwriters.
(i) Lock-Up Agreements. On or prior to the date
hereof, the Company shall have furnished to the Representative agreements in the
forms of Exhibit B,
hereto from the persons listed on Exhibit A hereto, as
applicable, and each such agreement shall be in full force and effect on each of
the First Closing Date and each Option Closing Date.
(j) Additional Documents. On or before
each of the First Closing Date and each Option Closing Date, the Representative
and counsel for the Underwriters shall have received such information, documents
and opinions as they may reasonably request for the purposes of enabling them to
pass upon the issuance and sale of the Offered Shares as contemplated herein, or
in order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Offered Shares as contemplated herein and in connection with the
other transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters.
If any
condition specified in this Section 6 is not satisfied when and as required to
be satisfied, this Agreement may be terminated by the Representative by notice to the
Company at any time on or prior to the First Closing Date and, with respect to
the Optional Shares, at any time on or prior to the applicable Option Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such
termination.
Section 7. Reimbursement of Underwriters’
Expenses. If this Agreement is terminated by the
Representative pursuant to Section 6, as a result of the failure of any of
the conditions of Section 6 to be satisfied when and as required to be
satisfied, other than subsection (f), or Section 12 prior to the First Closing
Date, or if the sale to the Underwriters of the Offered Shares on the First
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof, the Company agrees to reimburse the Representative and the
other Underwriters (or such Underwriters as have terminated this Agreement with
respect to themselves), severally upon demand for all out-of-pocket expenses
that shall have been reasonably incurred by the Representative and the other
Underwriters in connection with the proposed purchase and the offering and sale
of the Offered Shares, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
23
Section 8. Effectiveness of this
Agreement. This Agreement shall become effective upon the
execution of this Agreement by the parties hereto.
Section
9. Indemnification.
(a) Indemnification of the
Underwriters. The Company
agrees to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
officer, employee or controlling person may become subject, under the Securities
Act, the Exchange Act, other federal or state statutory law or regulation, or
the laws or regulations of foreign jurisdictions where Offered Shares have been
offered or sold or at common law or otherwise (including in settlement of
any litigation, if such settlement is effected in accordance with Section 9(d)
below), insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, including any
information deemed to be a part thereof pursuant to Rule 430B under the
Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not
misleading; or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus
that the Company has used, referred to or filed, or is required to file,
pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and to
reimburse such Underwriter and each such officer, employee and controlling
person for any and all expenses (including the fees and disbursements of counsel
chosen by the Representative) as such expenses are reasonably incurred by such
Underwriter or such officer, employee or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Representative expressly for use in the Registration
Statement, any preliminary prospectus, the Time of Sale Prospectus, any such
free writing prospectus or the Prospectus (or any amendment or supplement
thereto), it being understood and agreed that the only such information
furnished by the Representative to the Company consists of the information
described in subsection (b) below. The indemnity agreement set forth
in this Section 9(a) shall be in addition to any liabilities that the
Company may otherwise have.
24
(b) Indemnification of the Company, its
Directors and Officers. Each Underwriter
agrees, severally and not jointly, to indemnify and hold harmless the Company,
each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Securities Act, the
Exchange Act, or other federal or state statutory law or regulation, or at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any preliminary prospectus the Time of
Sale Prospectus, any free writing prospectus that the Company has used, referred
to or filed, or is required to file, pursuant to Rule 433(d) of the Securities
Act or the Prospectus (or such amendment or supplement thereto), or
arises out of or is based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, such preliminary
prospectus, the Time of Sale Prospectus, such free
writing prospectus that the Company has used, referred to or filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act, the
Prospectus (or such amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by the Underwriters
expressly for use therein; and to reimburse the Company, or any such director,
officer or controlling person for any legal and other expense as such expenses
are reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The Company hereby acknowledges that the only information
that the Underwriters have furnished to the Company expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus
that the Company has filed, or is required to file, pursuant to Rule 433(d) of
the Securities Act or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in the first two sentences of the first
paragraph under the section entitled “Commissions and Expenses” and the section
entitled “Stabilization” each under the caption “Underwriting” in the Final
Prospectus Supplement. The indemnity agreement set forth in this
Section 9(b) shall be in addition to any liabilities that each Underwriter
may otherwise have.
(c) Notifications and Other
Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 9 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 9,
notify the indemnifying party in writing of the commencement thereof, but the
failure to so notify the indemnifying party will not relieve the indemnifying
party from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 9 except to the extent such indemnifying party has been materially
prejudiced by such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party’s
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (together with local counsel),
representing the indemnified parties who are parties to such action), which
counsel (together with any local counsel) for the indemnified parties shall be
selected by the Representative (in the case of counsel for the indemnified
parties referred to in Section 9(a) above) or by the Company (in the case
of counsel for the indemnified parties referred to in Section 9(b) above)),
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, or (iii) the
indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party and shall be paid as they are incurred.
25
(d) Settlements. The indemnifying
party under this Section 9 shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
Section 9(c) hereof, the indemnifying party agrees that it shall be liable
for any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 60 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding.
Section 10. Contribution. If
the indemnification provided for in Section 9 is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party, as incurred, as a result of any
losses, claims, damages, liabilities or expenses referred to therein (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, from the
offering of the Offered Shares pursuant to this Agreement or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the
one hand, and the Underwriters, on the other hand, in connection with the
offering of the Offered Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Offered Shares pursuant to this Agreement (before deducting expenses)
received by the Company, and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth on the front cover page
of the Prospectus bear to the aggregate initial public offering price of the
Offered Shares as set forth on such cover. The relative fault of the
Company, on the one hand, and the Underwriters, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, on the one
hand, or the Underwriters, on the other hand, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
26
The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 9(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in
Section 9(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 10;
provided, however, that
no additional notice shall be required with respect to any action for which
notice has been given under Section 9(c) for purposes of
indemnification.
The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 10.
Section 11. Default of One or More of the Several
Underwriters. If, on the First Closing Date or the applicable
Option Closing Date, as the case may be, any one or more of the several
Underwriters shall fail or refuse to purchase Offered Shares that it or they
have agreed to purchase hereunder on such date, and the aggregate number of
Offered Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed 10% of the aggregate number of the
Offered Shares required to be purchased on such date by the Underwriters, the
Representative may make arrangements satisfactory to the Company for the
purchase of such Offered Shares by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
other Underwriters shall be obligated, severally and not jointly, in the
proportions that the number of Firm Shares set forth opposite their respective
names on Schedule A bears
to the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as may be specified by
the Representative with the consent of the non-defaulting Underwriters, to
purchase the Offered Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date. If, on the First Closing
Date or the applicable Option Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase Offered Shares and the
aggregate number of Offered Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Offered Shares required to be purchased
on such date by the Underwriters, and arrangements satisfactory to the
Representative and the Company for the purchase of such Offered Shares are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any non-defaulting party to any other party (provided that if such
default occurs with respect to Optional Shares after the First Closing Date,
this Agreement will not terminate as to the Firm Shares or any Optional Shares
purchased prior to such termination) except that the provisions of Section 4,
Section 9 and Section 10 shall at all times be effective and shall
survive such termination. In any such case either the Representative
or the Company shall have the right to postpone the First Closing Date or the
applicable Option Closing Date, as the case may be, but in no event for longer
than seven days in order that the required changes, if any, to the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. As used in this Agreement, the term “Underwriter” includes
any person substituted for an Underwriter under this Section
11. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
27
Section 12. Termination of this
Agreement. Prior to the
purchase of the Firm Shares by the Underwriters on the First Closing Date this
Agreement may be terminated by the Representative by notice given to the Company
if at any time (i) trading or quotation in any of the Company’s securities
shall have been suspended or materially limited by the Commission or by the
Nasdaq Capital Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
materially limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or FINRA;
(ii) a general banking moratorium shall have been declared by any of
federal, New York, Delaware or California authorities; (iii) there shall
have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States’ or international
political, financial or economic conditions, as in the judgment of the
Representative is material and adverse and makes it impracticable to market the
Offered Shares in the manner and on the terms described in the Time of Sale
Prospectus or the Prospectus or to enforce contracts for the sale of securities;
or (iv) in the judgment of the Representative there shall have occurred any
Material Adverse Change. Any termination pursuant to this
Section 12 shall be without liability on the part of (a) the Company
to any Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representative and the Underwriters pursuant to Sections 4
and 7 hereof, (b) any Underwriter to the Company, or (c) any
other party hereto to any other party except that the provisions of
Section 9 and Section 10 shall at all times be effective and shall
survive such termination.
Section 13. No Advisory or Fiduciary
Relationship. The Company acknowledges and agrees that (a) the purchase
and sale of the Offered Shares pursuant to this Agreement, including the
determination of the public offering price of the Offered Shares and any related
discounts and commissions, is an arm’s-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand, (b)
in connection with the offering contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal
and is not the agent or fiduciary of the Company, or its stockholders,
creditors, employees or any other party, (c) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the offering contemplated hereby or the process leading thereto
(irrespective of whether such Underwriter has advised or is currently advising
the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement, (d) the Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company, and (e) the Underwriters
have not provided any legal, accounting, regulatory or tax advice with respect
to the offering contemplated hereby and the Company has consulted its own legal,
accounting, regulatory and tax advisors to the extent it deemed
appropriate
28
Section 14. Representations and Indemnities to
Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of its or their partners, officers or directors or any controlling person, as
the case may be, and, anything herein to the contrary notwithstanding, will
survive delivery of and payment for the Offered Shares sold hereunder and any
termination of this Agreement.
Section 15. Notices. All
communications hereunder shall be in writing and shall be mailed, hand delivered
or telecopied and confirmed to the parties hereto as follows:
If to the
Representative:
Jefferies
& Company, Inc.
|
|
520
Madison Avenue
|
|
|
New
York, New York 10022
|
|
|
Facsimile: (212)
284-2280
|
|
|
Attention: General
Counsel
|
If to the
Company:
ZIOPHARM
Oncology, Inc.
1180
Avenue of the Americas
Suite
1920
New York,
NY 10036
|
|
Facsimile:
(646) 214-0711
|
|
|
Attention: Chief
Executive Officer
|
Any party
hereto may change the address for receipt of communications by giving written
notice to the others.
Section 16. Successors. This Agreement
will inure to the benefit of and be binding upon the parties hereto, including
any substitute Underwriters pursuant to Section 11 hereof, and to the
benefit of the employees, officers and directors and controlling persons
referred to in Section 9 and Section 10, and in each case their
respective successors, and no other person will have any right or obligation
hereunder. The term “successors” shall not include
any purchaser of the Offered Shares as such from any of the Underwriters merely
by reason of such purchase.
Section 17. Partial
Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
29
Section 18. Governing Law Provisions. This Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed in such
state. Any legal suit, action or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be
instituted in the federal courts of the United States of America located in the
Borough of Manhattan in the City of New York or the courts of the State of New
York in each case located in the Borough of Manhattan in the City of New York
(collectively, the “Specified
Courts”), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a “Related Judgment”), as to
which such jurisdiction is non-exclusive) of such courts in any such suit,
action or proceeding. Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient
forum.
With
respect to any Related Proceeding, each party irrevocably waives, to the fullest
extent permitted by applicable law, all immunity (whether on the basis of
sovereignty or otherwise) from jurisdiction, service of process, attachment
(both before and after judgment) and execution to which it might otherwise be
entitled in the Specified Courts, and with respect to any Related Judgment, each
party waives any such immunity in the Specified Courts or any other court of
competent jurisdiction, and will not raise or claim or cause to be pleaded any
such immunity at or in respect of any such Related Proceeding or Related
Judgment, including, without limitation, any immunity pursuant to the United
States Foreign Sovereign Immunities Act of 1976, as amended.
Section 19. General Provisions. This Agreement
constitutes the entire agreement of the parties to this Agreement and supersedes
all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts,
each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
Each of
the parties hereto acknowledges that it is a sophisticated business person who
was adequately represented by counsel during negotiations regarding the
provisions hereof, including, without limitation, the indemnification provisions
of Section 9 and the contribution provisions of Section 10, and is
fully informed regarding said provisions. Each of the parties hereto
further acknowledges that the provisions of Sections 9 and 10 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, each free writing prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
30
If the foregoing is in accordance with
your understanding of our agreement, kindly sign and return to the Company the
enclosed copies hereof, whereupon this instrument, along with all counterparts
hereof, shall become a binding agreement in accordance with its
terms.
|
Very truly
yours,
|
||
|
ZIOPHARM ONCOLOGY,
INC.
|
||
|
By:
|
/s/ Jonathan Lewis, M.D.,
Ph.D.
|
|
|
Name: Jonathan Lewis, M.D.,
Ph.D.
|
||
|
Title: Chief Executive
Officer
|
||
The foregoing Underwriting Agreement is
hereby confirmed and accepted by the Representative in New York, New York as of
the date first above written.
JEFFERIES & COMPANY,
INC.
Acting as Representative of
the
several Underwriters named
in
the attached
Schedule A.
|
By:
|
JEFFERIES & COMPANY,
INC.
|
|
|
By:
|
/s/ Kevin
Sheridan
|
|
|
Name: Kevin
Sheridan
|
||
|
Title: Managing
Director
|
31
SCHEDULE A
|
Underwriters
|
Number of
Firm Shares
to be Purchased
|
|||
|
Jefferies
& Company, Inc.
|
4,900,000 | |||
|
JMP
Securities LLC
|
2,100,000 | |||
| 7,000,000 | ||||
SCHEDULE
B
Schedule
of Free Writing Prospectuses Included in the Time of Sale
Prospectus
Free
Writing Prospectus filed with the SEC on May 27, 2010 (SEC Filed No.
333-166444)
SCHEDULE
C
Schedule
of Pricing Information Included in the Time of Sale Prospectus
Price per
share to the public: $5.00
Number of
shares being sold: 7,000,000
Number of
shares potentially issuable pursuant to the overallotment
option: 1,050,000
EXHIBIT A
LIST OF DIRCTORS AND
OFFICERS
Jonathan Lewis
Richard
Bagley
George B.
Abercrombie
Murray Brennan
James Cannon
Wyche Fowler, Jr.
Gary S. Fragin
Timothy McInerney
Michael
Weiser
LIST OF PERSONS AND ENTITIES EXECUTING
LOCK-UPS
Jonathan Lewis
Richard
Bagley
George B.
Abercrombie
Murray Brennan
James Cannon
Wyche Fowler, Jr.
Timothy McInerney
Michael Weiser
EXHIBIT B
May 24,
2010
Jefferies
& Company, Inc.
As Representatives of the Several
Underwriters
c/o
Jefferies & Company, Inc.
520
Madison Avenue
New York,
New York 10022
RE: ZIOPHARM
Oncology, Inc. (the “Company”)
Ladies
& Gentlemen:
The undersigned is an owner of record
or beneficially of certain shares of common stock, par value $.001 per share, of
the Company (“Shares”) or securities convertible into or exchangeable or
exercisable for Shares. The Company proposes to carry out a public
offering of Shares (the “Offering”) for which you will act as the representative
of the underwriters (the “Representative”). The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company by, among other things, raising additional capital for its
operations. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter agreement in carrying out the Offering and
in entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the
undersigned hereby agrees that the undersigned will not, (and will cause any
spouse or immediate family member of the spouse or the undersigned living in the
undersigned’s household not to), without the prior written consent of the
Representative (which consent may be withheld in its sole discretion), directly
or indirectly, sell, offer, contract or grant any option to sell (including
without limitation any short sale), pledge, transfer, establish an open “put
equivalent position” within the meaning of Rule 16a-1(h) under the Securities
Exchange Act of 1934, as amended, or otherwise dispose of any Shares, options or
warrants to acquire Shares, or securities exchangeable or exercisable for or
convertible into Shares currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) by the undersigned (or such spouse or family member), or
publicly announce an intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the
date 90 days after the date of the Prospectus (as defined in the Underwriting
Agreement relating to the Offering to which the Company is a party) (the
“Lock-up Period”); provided, that this paragraph shall not restrict after
September 22, 2010: (i) the disposition of shares of common stock by an
executive officer back to the Company upon the vesting of shares of
restricted common stock outstanding as of the date of this Lock-Up
Agreement as necessary to satisfy tax withholding obligations, or (ii) the sale
of shares of common stock by a member of the Board of Directors upon the vesting
of shares of restricted common stock outstanding as of the date of this Lock-Up
Agreement as necessary to satisfy tax withholding obligations; provided further,
that such dispositions and sales shall not exceed 40% of the number of shares of
restricted common stock so vesting. Notwithstanding the foregoing, if
(i) during the last 17 days of the Lock-up Period, the Company issues an
earnings release or material news or a material event relating to the Company
occurs or (ii) prior to the expiration of the Lock-up Period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-up Period, then in each case the Lock-up
Period will be extended until the expiration of the 18-day period beginning on
the date of the issuance of the earnings release or the occurrence of the
material news or material event, as applicable, unless the Representative waives,
in writing, such extension, except that such extension will not apply if, within
three business days prior to the 15th calendar day before the last day of the
Lock-up Period, the Company delivers a certificate, signed by the Chief
Financial Officer or Chief Executive Officer of the Company, certifying on
behalf of the Company that (A) the Shares are “actively traded securities” (as
defined in Regulation M), (B) the Company meets the applicable requirements of
paragraph (a)(1) of Rule 139 under the Securities Act in the manner contemplated
by NASD Conduct Rule 2711(f)(4), and (C) the provisions of NASD Conduct Rule
2711(f)(4) are not applicable to any research reports relating to the Company
published or distributed by any of the Underwriters during the 15 days before or
after the last day of the Lock-up Period (before giving effect to such
extension); provided, further, that the foregoing restrictions shall not apply
to the transfer of any or all of the Shares owned by the undersigned, either
during his or her lifetime or on death, by gift, will or intestate succession to
the immediate family of the undersigned or to
a trust the beneficiaries of which are exclusively the undersigned and/or a
member or members of his immediate family; provided, however, that in any such
case, it shall be a condition to such transfer that the transferee executes and
delivers to the
Representative an
agreement stating that the transferee is receiving and holding the Shares
subject to the provisions of this letter agreement, and there shall be no
further transfer of such Shares, except in accordance with this letter
agreement. The undersigned hereby acknowledges and agrees that
written notice of any extension of the Lock-up Period pursuant to the preceding
sentence will be delivered by the
Representative to the
Company and that any such notice properly delivered will be deemed to have been
given to, and received by, the undersigned.
The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company’s transfer
agent and registrar against the transfer of Shares or securities convertible
into or exchangeable or exercisable for Shares held by the undersigned except in
compliance with the foregoing restrictions.
With respect to the Offering only, the
undersigned waives any registration rights relating to registration under the
Securities Act of any Shares owned either of record or beneficially by the
undersigned, including any rights to receive notice of the
Offering.
This agreement is irrevocable and will
be binding on the undersigned and the respective successors, heirs, personal
representatives, and assigns of the undersigned.
[Remainder
of page intentionally left blank]
EXHIBIT C
Opinion of corporate counsel for the
Company to be delivered pursuant to Section 6(d) of the Underwriting
Agreement.
EXHIBIT D
Opinion of intellectual property counsel
for the Company to be delivered pursuant to Section 6(e) of the
Underwriting Agreement.
Exhibit
5.1
June 2,
2010
ZIOPHARM
Oncology, Inc.
1180
Avenue of the Americas, 19th Floor
New York,
NY 10036
|
|
RE:
|
ZIOPHARM
Oncology, Inc. Registration Statement on Form S-3
(File
Nos. 333-166444)
|
Ladies
and Gentlemen:
We have
acted as counsel to ZIOPHARM Oncology, Inc., a Delaware corporation (the “Company”), in connection with
the proposed issuance by the Company of up to 8,050,000 shares (the “Shares”) of the Company’s
common stock, $0.001 par value per share (the “Common Stock”). The Shares are
included in a registration statement on Form S-3 (File No. 333-166444) (the
“Registration
Statement”) filed by the Company with the Securities and Exchange
Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Act”), a base prospectus dated
May 10, 2010 filed with the Commission in the Registration Statement (the “Base Prospectus”), a
preliminary prospectus supplement dated May 26, 2010 filed with the Commission
pursuant to Rule 424(b) under the Act (together with the Base Prospectus, the
“Preliminary
Prospectus”), a free writing prospectus dated May 27, 2010 filed with the
Commission (the “Free Writing
Prospectus”), and a prospectus supplement dated May 27, 2010 filed with
the Commission pursuant to Rule 424(b) under the Act (together with the Base
Prospectus, the “Prospectus”). The
Shares are being sold pursuant to an underwriting agreement dated May 27, 2010
between the Company and Jefferies & Company, Inc., as representative of the
underwriters named therein (the “Underwriting
Agreement”).
In
connection with this opinion, we have examined and relied upon the Registration
Statement and the Prospectus, including the exhibits thereto, the Underwriting
Agreement, the Articles of Incorporation and Bylaws of the Company, each as
amended to date, and such other documents, corporate records and instruments,
and have examined such laws and regulations, as we have deemed necessary for
purposes of rendering the opinions set forth herein. In rendering this opinion,
we have assumed the genuineness and authenticity of all signatures on original
documents; the genuineness and authenticity of all documents submitted to us as
originals; the conformity to originals of all documents submitted to us as
copies; the accuracy, completeness and authenticity of certificates of public
officials; and the due authorization, execution and delivery of all documents
where due authorization, execution and delivery are prerequisites to the
effectiveness of such documents. As to any facts material to the
opinions expressed herein which we have not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Subject
to the foregoing and the other matters set forth herein, it is our opinion that,
as of the date hereof, when the Shares shall have been duly registered on the
books of the transfer agent and registrar therefor in the name or on behalf of
the purchasers, and have been issued by the Company against payment therefor
(not less than par value) in the circumstances contemplated by the Underwriting
Agreement, the issue and sale of the Shares will have been duly authorized by
all necessary corporate action of the Company, and the Shares will be validly
issued, fully paid and nonassessable.
This
opinion is being furnished in connection with the requirements of Item 601(b)(5)
of Regulation S-K promulgated under the Act, and no opinion is expressed herein
as to any matter pertaining to the contents of the Registration Statement, the
Preliminary Prospectus, the Free Writing Prospectus or the Prospectus, other
than as expressly stated herein with respect to the issue of
Shares.
The
opinions expressed herein are limited to the federal laws of the United States
and the General Corporation Law of the State of Delaware. Our opinion is based
on these laws as in effect on the date hereof. We express no opinion as to
whether the laws of any particular jurisdiction are applicable to the subject
matter hereof.
This
opinion is for your benefit in connection with the Registration Statement and
may be relied upon only by you and by persons entitled to rely upon it pursuant
to the applicable provisions of the Act. We consent to your filing
this opinion as an exhibit to the Company’s Form 8-K dated June 2, 2010 and to
the reference to our firm in the Prospectus under the heading “Legal Matters.”
In giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
|
Very
truly yours,
|
|
|
|
/s/
Maslon Edelman Borman & Brand,
LLP
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Exhibit
99.1
ZIOPHARM
announces proposed public offering of common stock
NEW YORK, NY – May 26, 2010 -
ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) today announced that it is offering to
sell shares of its common stock in an underwritten public offering. Jefferies
& Company, Inc. is acting as the sole book-running manager for this
offering. The co-manager for this offering is JMP Securities LLC. The offering
is subject to market conditions, and there can be no assurance as to whether or
when the offering may be completed, or as to the actual size or terms of the
offering.
The
securities described above are being offered by ZIOPHARM pursuant to a shelf
registration statement previously filed with and declared effective by the
Securities and Exchange Commission (the “SEC”) on May 13, 2010. A preliminary
prospectus supplement related to the offering has been filed with the SEC and is
available on the SEC’s Web site at http://www.sec.gov. Copies of the preliminary
prospectus supplement relating to these securities may be obtained from
Jefferies & Company, Inc., Attention: Syndicate Prospectus Department, 520
Madison Avenue, New York, NY, 10022 and at (888) 449-2342.
This
press release shall not constitute an offer to sell or the solicitation of an
offer to buy these securities, nor shall there be any sale of these securities
in any state or other jurisdiction which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the securities laws
of any such state or other jurisdiction.
About
ZIOPHARM Oncology, Inc.
ZIOPHARM
Oncology is a biopharmaceutical company engaged in the development and
commercialization of a diverse portfolio of cancer drugs. The Company is
currently focused on three clinical programs. Palifosfamide (ZymafosTM or
ZIO-201) references a novel composition (tris formulation) that is the
functional active metabolite of ifosfamide, a standard of care for treating
sarcoma, lymphoma, testicular, and other cancers. Darinaparsin (ZinaparTM or
ZIO-101) is a novel organic arsenic being developed for the treatment of various
hematologic and solid cancers. Indibulin (ZybulinTM or ZIO-301) is a novel, oral
tubulin binding agent that targets both mitosis and cancer cell migration.
ZIOPHARM’s operations are located in Boston, MA with an executive office in New
York.
Forward-Looking
Safe Harbor Statement
This
press release contains forward-looking statements that involve risks and
uncertainties, such as those, among others, relating to the Company’s
expectations regarding the completion, timing and size of its proposed public
offering. Among the factors that could cause actual results to differ
materially from those indicated in the forward-looking statements are risks and
uncertainties associated with market conditions and the satisfaction of
customary closing conditions related to the proposed offering, as well as risks
and uncertainties associated with the Company’s business and finances in
general, and the other risks described in the Company’s annual report on Form
10-K for the year ended December 31, 2009. The Company undertakes no obligation
to update the statements contained in this press release after the date
hereof.
Exhibit
99.2
ZIOPHARM
prices common stock offering
NEW YORK, NY – May 27, 2010 -
ZIOPHARM Oncology, Inc. (NASDAQ: ZIOP) today announced the pricing of an
underwritten public offering of 7,000,000 shares of its common stock at a price
to the public of $5.00 per share. The net proceeds from the sale of the shares,
after underwriting discounts and commissions and estimated offering expenses,
are expected to be approximately $32.8 million. The offering is expected to
close on or about June 2, 2010, subject to customary closing
conditions.
Jefferies
& Company, Inc. is acting as the sole book-running manager for this
offering. The co-manager for this offering is JMP Securities LLC. The Company
has granted the underwriters a 30-day option to purchase up to an aggregate of
1,050,000 additional shares of common stock to cover over-allotments, if any.
The Company anticipates using the net proceeds from the offering for the overall
development of its drug candidates, including further expansion of the clinical
trial programs, and for general corporate and working capital
purposes.
The
securities described above are being offered by ZIOPHARM pursuant to a shelf
registration statement previously filed with and declared effective by the
Securities and Exchange Commission (the “SEC”) on May 13, 2010. Copies of the
final prospectus supplement relating to these securities, when available, may be
obtained from Jefferies & Company, Inc., Attention: Syndicate Prospectus
Department, 520 Madison Avenue, New York, NY, 10022 and at (888) 449-2342. This
press release shall not constitute an offer to sell or the solicitation of an
offer to buy these securities, nor shall there be any sale of these securities
in any state or other jurisdiction which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the securities laws
of any such state or other jurisdiction.
About
ZIOPHARM Oncology, Inc.
ZIOPHARM
Oncology is a biopharmaceutical company engaged in the development and
commercialization of a diverse portfolio of cancer drugs. The Company is
currently focused on three clinical programs. Palifosfamide (ZymafosTM or
ZIO-201) references a novel composition (tris formulation) that is the
functional active metabolite of ifosfamide, a standard of care for treating
sarcoma, lymphoma, testicular, and other cancers. Darinaparsin (ZinaparTM or
ZIO-101) is a novel organic arsenic being developed for the treatment of various
hematologic and solid cancers. Indibulin (ZybulinTM or
ZIO-301) is a novel, oral tubulin binding agent that targets both mitosis and
cancer cell migration. ZIOPHARM’s operations are located in Boston, MA with an
executive office in New York.
Forward-Looking
Safe Harbor Statement
This
press release contains forward-looking statements that involve risks and
uncertainties, such as those, among others, relating to the Company’s
expectations regarding the completion, timing and size of its proposed public
offering. Among the factors that could cause actual results to differ
materially from those indicated in the forward-looking statements are risks and
uncertainties associated with market conditions and the satisfaction of
customary closing conditions related to the proposed offering, as well as risks
and uncertainties associated with the Company’s business and finances in
general, and the other risks described in the Company’s annual report on Form
10-K for the year ended December 31, 2009. The Company undertakes no obligation
to update the statements contained in this press release after the date
hereof.